<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, 2000

                                       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: 000-24515

                       CITADEL COMMUNICATIONS CORPORATION
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                                               <C>
                           NEVADA                                                      86-0748219
              (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: common stock, $.001
                              par value per share

     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, based on the closing sale price of the common
stock on March 12, 2001 as reported by The Nasdaq Stock Market, was
approximately $809,983,253. Shares of common stock held by each executive
officer and director of the registrant and by each person who owns 5% or more of
the outstanding common stock have been excluded in that such persons may be
deemed to be affiliates of the registrant. This determination of affiliate
status is not necessarily a conclusive determination for other purposes.

     As of March 12, 2001, there were 37,150,172 shares of common stock, $.001
par value per share, outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

                                      None
<PAGE>   2

                       CITADEL COMMUNICATIONS CORPORATION

                                   FORM 10-K
                               DECEMBER 31, 2000

                                     INDEX

<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----
<S>            <C>                                                           <C>
PART I
     Item 1    - Business..................................................    4
     Item 2    - Properties................................................   24
     Item 3    - Legal Proceedings.........................................   24
     Item 4    - Submission of Matters to a Vote of Security Holders.......   26

PART II
     Item 5    - Market For Registrant's Common Equity and Related
               Stockholder Matters.........................................   27
     Item 6    - Selected Financial Data...................................   27
     Item 7    - Management's Discussion and Analysis of Financial
               Condition and Results of Operations.........................   29
     Item 7A   - Quantitative and Qualitative Disclosures About Market
               Risk........................................................   44
     Item 8    - Financial Statements and Supplementary Data...............   45
     Item 9    - Changes In and Disagreements with Accountants on
               Accounting and Financial Disclosure.........................   45

PART III
     Item 10   - Directors and Executive Officers of the Registrant........   46
     Item 11   - Executive Compensation....................................   49
     Item 12   - Security Ownership of Certain Beneficial Owners and
               Management..................................................   53
     Item 13   - Certain Relationships and Related Transactions............   55

PART IV
     Item 14   - Exhibits, Financial Statement Schedules and Reports on
               Form 8-K....................................................   56
</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 and phrases 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" and "Federal Regulation of Radio Broadcasting,"
       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.

CERTAIN ADDITIONAL INFORMATION

     In connection with the proposed acquisition of Citadel Communications
Corporation by an affiliate of Forstmann Little & Co. discussed in various
sections of this report, we will be filing a definitive proxy statement with the
Securities and Exchange Commission. INVESTORS AND STOCKHOLDERS ARE URGED TO READ
THIS PROXY STATEMENT RELATING TO THE STOCKHOLDER VOTE WHEN IT BECOMES AVAILABLE
BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and stockholders will
be able to obtain free copies of the proxy statement and any amendments thereto
when they become available as well as other material filed by us with the SEC at
the website maintained by the SEC at www.sec.gov. In addition, we will mail the
proxy statement to each stockholder of record on the record date established for
the stockholders meeting and will also make additional copies of the proxy
statement and any amendments thereto available for free to our stockholders.
Please direct your request for the proxy statement to the Secretary of Citadel
Communications at City Center West, Suite 400, 7201 West Lake Mead Boulevard,
Las Vegas, Nevada 89128, telephone (702) 804-5200.

     Citadel Communications, our directors, executive officers and certain other
members of management and employees may be deemed to be soliciting proxies of
our stockholders to approve the proposed merger agreement between Citadel
Communications and Forstmann Little's wholly owned subsidiary, FLCC Holdings,
Inc. A description of any interests that our directors, executive officers and
employees have in the transaction will be available in our proxy statement
referenced above.

INTRODUCTORY STATEMENT

     Our subsidiary, Citadel Broadcasting Company, owns and operates our radio
stations. Unless the context otherwise requires, references in this report to
Citadel Communications and the terms "we," "our" and "us" include Citadel
Broadcasting.

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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 140 FM and 65
AM radio stations in 42 markets, including clusters of four or more radio
stations in 32 markets. We also sell commercial advertising in the United States
for one FM radio station in Canada.

     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, 1999 and 2000. In the various transactions we completed in
2000, we acquired 85 radio stations in 25 markets, sold 3 radio stations in one
market, and exchanged one AM station for another AM station in one market.

     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. On December 19, 2000, we entered into an agreement with a
large internet service provider to sell our subscriber list. We plan to shut
down all internet services by April 30, 2001. 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.

     On January 15, 2001, we entered into an Agreement and Plan of Merger, with
FLCC Holdings, Inc., a Delaware corporation and an affiliate of Forstmann Little
& Co., which the parties subsequently amended on March 13, 2001 and March 22,
2001, under which FLCC Acquisition Corp., a Nevada corporation and a wholly
owned subsidiary of FLCC Holdings, will merge with and into Citadel
Communications. Pursuant to the merger, each issued and outstanding share of our
common stock will be converted into the right to receive $26.00 in cash.

     The completion of this transaction is subject to various conditions,
including approval of the Agreement and Plan of Merger by our stockholders and
consent of the Federal Communications Commission to transfer control of the
station licenses.

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<PAGE>   5

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 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

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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 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 heading "Federal Regulation
of Radio Broadcasting" and in Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations, under the heading "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

     In addition to our proposed merger with FLCC Acquisition discussed above
under the heading "Corporate History," there are several transactions currently
pending which, if completed, would result in our purchasing three FM and three
AM radio stations and selling six FM radio stations and one AM radio station and
the right to provide programming and sell commercial advertising for one FM
radio station pursuant to a program service and time brokerage agreement. The
aggregate purchase price for our pending acquisitions is approximately $66.5
million in cash, of which approximately $0.8 million has already been paid. The
aggregate sale price for our pending dispositions is approximately $23.7 million
in cash. If our proposed merger with FLCC Acquisition is not consummated prior
to the closing of our acquisition of one of the FM stations and one of the AM
stations in Tucson, Arizona as discussed below, we will replace $4.7 million in
cash purchase price with 181,820 shares of our common stock valued at
approximately $2.0 million, based on the closing price of our common stock on
December 21, 2000.

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<PAGE>   7

     The completion of each of our pending transactions is subject to various
conditions, including FCC consent to the assignment of the station licenses or
consent to transfer of control of the station licenses, as the case may be.
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 August 13, 1999, Broadcasting Partners Holdings, L.P., through an
       affiliate, entered into an agreement to purchase from Butler
       Communications Corporation one AM radio station in Buffalo/Niagara Falls
       for which Broadcasting Holdings Partners provided programming and sold
       commercial advertising pursuant to a time brokerage agreement. We were
       assigned Broadcasting Partners Holdings' rights under the purchase
       agreement and the time brokerage agreement when we acquired substantially
       all of its assets in 2000. We currently provide programming and sell
       commercial advertising for this station pursuant to the time brokerage
       agreement. The FCC has approved the assignment of the station's license,
       and has approved several requests for extensions of the period of time
       authorized for completion of the license assignment. Butler
       Communications is working to complete the relocation of the station
       antenna to a new tower, which is a condition precedent to closing. The
       entire purchase price of approximately $0.8 million has been advanced to
       Butler Communications or is otherwise deemed paid as a result of
       expenditures previously made by us. We anticipate that this acquisition
       will close in the second quarter of 2001.

     - On December 14, 2000, we entered into an asset purchase agreement with
       Monroe Radio Partners, Inc. to sell four FM radio stations serving
       Monroe, Louisiana for the sale price of approximately $4.3 million in
       cash. An application seeking FCC approval of assignment of the station
       licenses was filed on January 3, 2001, and an initial grant of the
       application was received on February 16, 2001. We anticipate that this
       disposition will close in March or April 2001. Commencing on December 18,
       2000, Monroe Radio Partners began providing programming and selling
       commercial advertising for these stations pursuant to a local marketing
       agreement dated December 14, 2000.

     - On December 21, 2000, we entered into an asset purchase agreement with
       Slone Broadcasting Inc. to acquire two FM radio stations and one AM radio
       station serving Tucson, Arizona for the purchase price of approximately
       $45.0 million in cash. We have delivered an irrevocable letter of credit
       in favor of Slone Broadcasting in the amount of $2.25 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 29, 2000, and an initial grant of the application was received
       on February 20, 2001. Pursuant to the terms of the asset purchase
       agreement, this acquisition will close the earlier of December 31, 2001
       or the date on which we have consummated a radio station disposition
       which, when aggregated with net proceeds received by us from other radio
       station dispositions consummated in 2001, results in our receipt of not
       less than $67.0 million in net proceeds. Commencing on February 1, 2001,
       we began providing programming and selling commercial advertising for
       these stations pursuant to a local marketing agreement entered into on
       December 21, 2000.

     - On December 21, 2000, we entered into purchase agreements, as amended on
       January 15, 2001, with each of the five members of Slone Radio, LLC to
       acquire all of the equity interests of Slone Radio LLC, which owns one FM
       radio station and one AM radio station, both serving Tucson, Arizona, for
       the aggregate purchase price of approximately $20.7 million in cash.
       However, if our merger with FLCC Acquisition is not consummated prior to
       the closing of our acquisition of these stations, we will replace $4.7
       million in cash purchase price with 181,820 shares of our common stock
       valued at approximately $2.0 million, based on the closing price of our
       common stock on December 21, 2000. An application seeking FCC approval of
       transfer of the station licenses was filed on December 29, 2000, and an
       initial grant of the application was received on February 20, 2001.
       Pursuant to the terms of the purchase agreements, this acquisition will
       close the earlier of December 31, 2001 or the date on which we have
       consummated a radio station disposition which, when aggregated with net
       proceeds received by us from other radio station dispositions consummated
       in 2001, results in our receipt of not less than $67.0 million in net
       proceeds. Commencing on February 1, 2001, we began providing programming
       and selling commercial advertising for these stations pursuant to a local
       marketing agreement entered into on December 21, 2000.

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<PAGE>   8

     - On March 14, 2001, we entered into an asset purchase agreement with
       Millennium Radio Group, LLC to sell two FM radio stations, one AM radio
       station, and the right to program and sell commercial advertising for one
       FM station, all of which serve Atlantic City/Cape May, New Jersey, for
       the sale price of approximately $19.4 million in cash.

     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 139 FM and 65
AM radio stations in 42 mid-sized markets, have the right to provide programming
and sell advertising for one additional FM radio station in Reno, Nevada
pursuant to a local marketing agreement, and sell commercial advertising in the
United States for one FM radio station in Canada. 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 Market Report 2000, 1st
Edition published by BIA Research, Inc.

<TABLE>
<CAPTION>
                                                                      NUMBER OF
                                                                       STATIONS
                                                              MSA     ----------
                                                              RANK    FM     AM
                                                              ----    ---    ---
<S>                                                           <C>     <C>    <C>
Providence, RI..............................................   33       4     2
Salt Lake City, UT..........................................   35       4     3
Nashville, TN...............................................   43       2    --
Buffalo/Niagara Falls, NY(1)(2).............................   45       3     2
Oklahoma City, OK...........................................   54       4     1
Birmingham, AL..............................................   55       3     2
Tucson, AZ(1)(3)............................................   61       3     2
Wilkes-Barre/Scranton, PA...................................   64       7     4
Grand Rapids, MI............................................   66       3     1
Allentown/Bethlehem, PA.....................................   67       2    --
Knoxville, TN...............................................   69       3     1
Albuquerque, NM.............................................   72       5     3
Syracuse, NY................................................   75       3     1
Harrisburg/Lebanon/Carlisle, PA and York, PA(4).............   77       3     2
Baton Rouge, LA.............................................   82       4     2
Little Rock, AR(5)..........................................   83       8     3
Charleston, SC..............................................   87       5     3
Columbia, SC................................................   89       3     1
Spokane, WA.................................................   91       4     3
Colorado Springs, CO........................................   94       3     2
Johnson City/Kingsport/Bristol, TN..........................   96       2     3
Lafayette, LA...............................................  100       5     3
Chattanooga, TN.............................................  104       3     1
Worcester, MA...............................................  110       4     1
Lansing/East Lansing, MI....................................  115       4     2
</TABLE>

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<TABLE>
<CAPTION>
                                                                      NUMBER OF
                                                                       STATIONS
                                                              MSA     ----------
                                                              RANK    FM     AM
                                                              ----    ---    ---
<S>                                                           <C>     <C>    <C>
Portsmouth/Dover/Rochester, NH..............................  117       4    --
Flint, MI...................................................  119       1     1
Modesto, CA.................................................  122       4     1
Boise, ID...................................................  124       4     1
Saginaw/Bay City/Midland, MI................................  125       5    --
Reno, NV(6).................................................  128       4     1
Tyler/Longview, TX(7).......................................  140       1     4
Portland, ME and Dennysville/Calais, ME(8)..................  160       7    --
New Bedford/Fall River, MA..................................  164       1     1
Binghamton, NY..............................................  166       3     2
New London, CT..............................................  167       2     1
Bloomington, IL.............................................  230       2     1
Augusta/Waterville, ME......................................  250       2     2
Ithaca, NY..................................................  262       1     1
Presque Isle, ME............................................   NA       3    --
Muncie, IN..................................................   NA       1     1
Kokomo, IN..................................................   NA       1    --
                                                              ---     ---    --
     TOTAL..................................................          140    65
</TABLE>

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

(1) The completion of our pending transaction in this market 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) Pending its acquisition, we operate one of the listed AM stations under a
    local marketing agreement. The stations indicated do not include one FM
    radio station in Niagara Falls, Ontario for which we sell advertising in the
    United States under a joint sales agreement.

(3) Pending their acquisition, we provide programming and sell commercial
    advertising for all of these stations under a local marketing agreement.

(4) Harrisburg/Lebanon/Carlisle and York are adjacent markets with numerous
    overlapping radio signals and have been combined by us for administrative
    and accounting purposes. The MSA Rank for York, PA is 103, and we own one AM
    radio station that primarily serves this market.

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

(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 own these stations, but they are operated by a third party under a local
    marketing agreement. This third party is obligated, except under limited
    circumstances, to purchase these stations from us prior to May 31, 2003.

(8) The Portland and Dennysville/Calais markets have been combined by us for
    administrative and accounting purposes. Dennysville/Calais, Maine, where we
    own one FM radio station, does not have an MSA rank.

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 2000,
approximately 85% 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 automotive, restaurants and fast
food, grocery and convenience stores,

                                        9
<PAGE>   10

telephone companies and department stores. 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.

     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
                                        10
<PAGE>   11

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
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 of 1996. 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."

                                        11
<PAGE>   12

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,

     - 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. Acting under the authority of the
Telecommunications Act, the FCC revised its rules to extend the maximum term for
radio license renewals from seven 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.

                                        12
<PAGE>   13

     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 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
                                    WZRA-FM          A       163        2.3        99.7 MHz    04-01-06
                                    WZRI-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          C        NA        1.0        1230 kHz    10-01-05

Nashville, TN.....................  WKDF-FM          C     375.8       100.0      103.3 MHz    08-01-04
                                    WGFX-FM         C1     399.9       48.9       104.5 MHz    08-01-04

Buffalo/Niagara Falls, NY(1)......  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
                                    KKWD-FM          A        96        6.0        97.9 MHz    06-01-05
                                    WWLS-FM          A       100        6.0       104.9 MHz    06-01-05
                                    WWLS-AM          B        NA        1.0         640 kHz    06-01-05
</TABLE>

                                        13
<PAGE>   14

<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>
Birmingham, AL....................  WRAX-FM          C       377       100.0      107.7 MHz    04-01-04
                                    WZRR-FM          C       309       100.0       99.5 MHz    04-01-04
                                    WYSF-FM          C       369       100.0       94.5 MHz    04-01-04
                                    WJOX-AM          B        NA     50.5/0.5       690 kHz    04-01-04
                                    WAPI-AM          B        NA     50.0/5.0      1070 kHz    04-01-04

Tucson, AZ(2).....................  *KIIM-FM         C     620.6       93.0        99.5 MHz    10-01-05
                                    *KHYT-FM         C       620       92.0       107.5 MHz    10-01-05
                                    *KCUB-AM         B        NA        1.0        1290 kHz    10-01-05
                                    *KOAZ-FM         A        93        6.0        97.5 MHz    10-01-05
                                    *KTUC-AM         C        NA        1.0        1400 kHz    10-01-05

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
                                    WBHD-FM          A       235       0.52        94.3 MHz    08-01-06
                                    WBSX-FM          A       207       1.45        93.7 MHz    08-01-06
                                    WKJN-AM          B        NA     5.0/0.037     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

Knoxville, TN.....................  WIVK-FM          C       381       91.0       107.7 MHz    08-01-04
                                    WNOX-AM          B        NA       10.0         990 kHz    08-01-04
                                    WNOX-FM          A       100        6.0        99.1 MHz    08-01-04
                                    WSMJ-FM         C3       174        8.0        98.7 MHz    08-01-04

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
                                    KTZO-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
                                    KTBL-AM          B        NA      1.0/0.5      1050 kHz    10-01-05
                                    KNML-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
</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>
Harrisburg/Lebanon/Carlisle, PA
  and York, PA(3).................  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
                                    WBBE-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

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

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

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

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

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
                                    KUBL-AM          B        NA      5.0/1.0      1300 kHz    04-01-05
                                    KVOR-AM          B        NA      3.3/1.5       740 kHz    04-01-05
</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>
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

Worcester, MA.....................  WXLO-FM          B       172       37.0       104.5 MHz    04-01-06
                                    WORC-FM          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

Portsmouth/Dover/Rochester, NH....  WOKQ-FM          B       150       50.0        97.5 MHz    04-01-06
                                    WSHK-FM          A     113.1        2.2       105.3 MHz    04-01-06
                                    WSAK-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

Flint, MI.........................  WFBE-FM          B       150       50.0        95.1 MHz    10-01-04
                                    WTRX-AM          B        NA      5.0/1.0      1330 kHz    10-01-04

Modesto, CA.......................  KESP-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

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
</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>
Saginaw/Bay City/Midland, MI......  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
                                    WHNN-FM          C       311       100.0       96.1 MHz    10-01-04
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
                                    KGVN-FM(4)       A       129        3.6        93.7 MHz    10-01-05
Tyler/Longview, TX(5).............  KTBB-AM          B        NA      5.0/2.5       600 kHz    08-01-05
                                    KDOK-FM         C3       135        9.6        92.1 MHz    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 and
  Dennysville/Calais, ME(6).......  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     140.9       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
                                    WCRQ-FM         C1       139       100.0      102.9 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
                                    WAAL-FM          B       332        7.1        99.1 MHz    06-01-06
                                    WNBF-AM          B        NA        5.0        1290 kHz    06-01-06
                                    WKOP-AM          B        NA      5.0/0.5      1360 kHz    06-01-06
                                    WYOS-FM          A       254       0.93       104.1 MHz    06-01-06
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
                                    WAXK-FM          A       100        3.0       102.3 MHz    04-01-06
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
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
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>

                                        17
<PAGE>   18

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

(1) Pending its acquisition, we provide programming and sell advertising for
    WHLD-AM pursuant to a local marketing agreement. The stations indicated do
    not include one FM radio station in Niagara Falls, Ontario for which we sell
    commercial advertising in the United States pursuant to a joint sales
    agreement.

(2) Pending their acquisition, we provide programming and sell commercial
    advertising for all of these stations pursuant to a local marketing
    agreement.

(3) Harrisburg/Lebanon/Carlisle and York are adjacent markets with numerous
    overlapping radio signals and have been combined by us for administrative
    and accounting purposes. We own one AM radio station primarily serving the
    York market.

(4) We provide programming and sell advertising for KGVN-FM pursuant to a local
    marketing agreement.

(5) We own these stations, but a third party provides programming and sells
    advertising pursuant to a local marketing agreement. The third party is
    obligated, except under limited circumstances, to purchase these stations
    from us prior to May 31, 2003.

(6) The Portland and Dennysville/Calais markets have been combined by us for
    administrative and accounting purposes.

     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 recently commenced a
rulemaking proceeding in which it proposes to change the definition of a "radio
market" for purposes of its multiple ownership rules. Action on certain
assignment and transfer applications may be delayed during the pendency of this
rulemaking proceeding.

     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 or if the FCC has other concerns, the processing period may be
delayed.

     Public notice of the FCC staff grant is usually issued within three to five
business days after the grant is actually 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 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.

                                        18
<PAGE>   19

     If no timely request for reconsideration, administrative review or judicial
review is made following the full FCC's determination to affirm the staff's
grant, the 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.

     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.

     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. Moreover, should the FCC change the way it defines "radio market"
for purposes of these multiple ownership rules pursuant to its pending
rulemaking proceeding discussed above, our ability to sell and purchase groups
of stations in any one market as a whole could be impacted.

                                        19
<PAGE>   20

     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).

     Recently, the FCC had been aggressive in examining issues of market revenue
share concentration when considering radio station acquisitions, delaying its
approval of numerous pending radio station purchases by various parties because
of market concentration concerns. Pursuant to an informal policy, the FCC gave
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. The policy did delay the completion
of several of our acquisitions in 1999 and 2000 and, pursuant to this informal
policy, the FCC invited public comment on our proposed merger with FLCC
Acquisition discussed above under the heading "Corporate History."

     However, while it had been the FCC's policy to conduct further competitive
review of transactions raising market revenue share concentration concerns
regardless of whether the agency received public comment about the proposed
license transfer, on March 12, 2001, the FCC approved a large number of radio
license transactions involving flagged markets, many of which had been pending
before the FCC for more than a year. In granting these applications, certain FCC
Commissioners have indicated that the FCC's actions should not be viewed as the
                                        20
<PAGE>   21

beginning of carte blanche approvals for applications raising market revenue
concentration concerns, but that such applications would no longer be subject to
undue regulatory delay.

     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. 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 provide programming and sell
commercial advertising for eight radio stations pursuant to local marketing
agreements, six of which are being so operated pending our acquisition of the
stations, and one of which we will cease operating if we complete our pending
disposition of stations in Atlantic City. We also own five radio stations in one
market and, pending their disposition, four radio stations in one other market,
for which third parties provide programming and commercial advertising pursuant
to local marketing agreements.

     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. We currently sell commercial
advertising in the United States for one FM radio station, which is in Canada.

                                        21
<PAGE>   22

     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 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. The 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 we 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

                                        22
<PAGE>   23

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 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 either 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.

     The applicable waiting period under the Hart-Scott-Rodino Act for our
proposed merger with FLCC Acquisition discussed above under the heading
"Corporate History" expired on March 1, 2001. None of our pending transactions
discussed above under the heading "Pending Transactions" are subject to the
notification filing requirements or waiting periods under the Hart-Scott-Rodino
Act.

     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 in Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations, 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 calendar 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.

                                        23
<PAGE>   24

EMPLOYEES

     At March 1, 2001, we employed approximately 3,500 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.

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 lease our remaining studio and office facilities,
including office space in Las Vegas, Nevada 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 expect to
acquire additional real estate in connection with our pending acquisitions. 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.

     Substantially all of our properties and equipment serve as collateral for
Citadel Broadcasting's obligations under its 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.

     Following the announcement of our proposed merger with FLCC Acquisition
Corp. pursuant to an Agreement and Plan of Merger dated January 15, 2001 with
FLCC Holdings, Inc., the following lawsuits were filed against Citadel
Communications and certain other parties:

     On January 17, 2001, William P. Burcin, an alleged stockholder of Citadel
Communications, filed a purported class action under Nevada law in the District
Court, Clark County, Nevada. The suit names as defendants Citadel
Communications, several directors of Citadel Communications, unidentified
individuals (Does 1 through 100) and unidentified corporations (Roe Corporations
1 through 100). Plaintiff alleges, among other things, that Citadel
Communications and its Board of Directors caused plaintiff and other members of
the
                                        24
<PAGE>   25

purported class to be deprived of the value of their investment in Citadel
Communications, that Citadel Communications and its board of directors failed to
exercise ordinary care and diligence in the exercise of their fiduciary duties
to the public stockholders of Citadel Communications, and that plaintiff and the
other members of the purported class will be irreparably harmed by defendants'
actions. The complaint seeks the following relief: (i) class action status; (ii)
a declaration that the merger agreement is unenforceable; (iii) an order
enjoining the merger agreement and enjoining defendants from consummating the
merger until Citadel Communications discloses all material facts regarding the
merger and implements procedures to obtain the highest possible price for
Citadel Communications; (iv) an order directing the defendant directors to
exercise their fiduciary duties and rescinding any agreements to pay Forstmann
Little & Co. termination fees; (v) unspecified damages; and (vi) costs and
disbursements, including attorneys' and experts' fees.

     On January 17, 2001, Rolling Investor Group, Inc., an alleged stockholder
of Citadel Communications, filed a purported class action under Nevada law in
the District Court, Clark County, Nevada. The suit names as defendants Citadel
Communications, several directors of Citadel Communications, Forstmann Little &
Co., FLCC Holdings, Inc. and FLCC Acquisition Corp. Plaintiff's allegations
include the following: the merger is unfair to the stockholders of Citadel
Communications; the defendant directors have breached their fiduciary and common
law duties by failing to properly auction Citadel Communications and to ensure
the highest possible price is paid to Citadel Communications' public
stockholders; and plaintiff and the other members of the purported class will be
irreparably harmed by defendants' actions. The complaint seeks the following
relief: (i) class action status and certification of plaintiff as class
representative; (ii) a preliminary and permanent order enjoining the merger or,
in the event the merger is consummated, rescission thereof; (iii) unspecified
compensatory damages together with prejudgment interest at the maximum rate
allowable by law; and (iv) costs and disbursements, including attorneys' and
experts' fees.

     On January 18, 2001, John Newalanic, an alleged stockholder of Citadel
Communications, filed a purported class action in the District Court, Clark
County, Nevada, against Citadel Communications and several of its directors.
Plaintiff alleges, among other things, that defendants are attempting to deprive
plaintiff and other members of the purported class of the value of their
investment in Citadel Communications, that defendants have failed to exercise
ordinary care and diligence in the exercise of their fiduciary duties to the
public stockholders of Citadel Communications, and that plaintiff and the other
members of the purported class will be irreparably harmed by defendants'
actions. The complaint seeks the following relief: (i) class action status; (ii)
a declaration that the merger agreement is unenforceable; (iii) an order
enjoining defendants from proceeding with the merger agreement and from
consummating the merger until Citadel Communications implements procedures to
obtain the highest possible price for Citadel Communications; (iv) an order
directing the defendant directors to exercise their fiduciary duties until the
sale or auction of Citadel Communications is completed and rescinding any terms
of the merger agreement that have been implemented; (v) unspecified damages; and
(vi) costs and disbursements, including attorneys' and experts' fees.

     On January 19, 2001, Ray Jourdan, an alleged stockholder of Citadel
Communications, filed a purported class action in the District Court, Clark
County, Nevada. The suit names as defendants Citadel Communications, several of
its directors, unidentified individuals (Does 1 through 100) and unidentified
corporations (Roe Corporations 1 through 100). Plaintiff alleges, among other
things, that the director defendants have failed to announce an active auction
of Citadel Communications, that the director defendants are abiding by a process
that will deprive purported class members of the value of their investment in
Citadel Communications, that the directors have failed to exercise ordinary care
and diligence in the exercise of their fiduciary duties to the public
stockholders of Citadel Communications, and that plaintiff and the other members
of the purported class will be irreparably harmed by defendants' actions. The
complaint seeks the following relief: (i) class action status; (ii) a
declaration that the merger agreement is unenforceable; (iii) an order enjoining
the merger agreement and enjoining defendants from consummating the merger until
Citadel Communications discloses all material facts regarding the merger and
implements procedures to obtain the highest possible price for Citadel
Communications; (iv) an order directing the defendant directors to exercise
their fiduciary duties and rescinding any agreements to pay Forstmann Little &
Co. termination fees; (v) unspecified damages; and (vi) costs and disbursements,
including attorneys' and experts' fees.

                                        25
<PAGE>   26

     On February 13, 2001, Allan B. Bowdach, an alleged stockholder of Citadel
Communications, filed a purported class action in the District Court, Clark
County, Nevada. The suit names as defendants Citadel Communications, several
directors of Citadel Communications, Forstmann Little & Co., FLCC Holdings, Inc.
and FLCC Acquisition Corp. Plaintiff alleges, among other things, that the
defendant directors have conflicts of interest in the merger, that the defendant
directors have breached their fiduciary and common law duties by failing to
properly auction Citadel Communications and to ensure the highest possible price
is paid to Citadel Communications' public stockholders, and that plaintiff and
the other members of the purported class will be irreparably harmed by
defendants' actions. The complaint seeks the following relief: (i) class action
status and certification of plaintiff as class representative; (ii) a
preliminary and permanent order enjoining the merger or, in the event the merger
is consummated, rescission thereof; (iii) unspecified compensatory damages
together with prejudgment interest at the maximum rate allowable by law; and
(iv) costs and disbursements, including attorneys' and experts' fees.

     We believe that the allegations discussed above relating to our proposed
merger with FLCC Acquisition are without merit. The parties to the foregoing
proceedings have reached an agreement in principle to settle all claims arising
out of the proposed merger with FLCC Acquisition pursuant to which certain
changes were made to the terms of the Agreement and Plan of Merger and to the
proxy statement relating to the vote of Citadel Communications' stockholders
based on the suggestions and comments of plaintiffs' counsel. We expect that the
agreement will be memorialized in a formal settlement agreement and presented to
the court for its approval.

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.

                                        26
<PAGE>   27

                                    PART II

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

     The only outstanding common equity of Citadel Communications is its common
stock, par value $.001 per share. Our common stock is traded on the Nasdaq
National Market under the symbol "CITC." The high and low closing prices per
share for our common stock as reported by The Nasdaq Stock Market during 1999
and 2000 were as follows:

<TABLE>
<CAPTION>
1999                                                         HIGH      LOW
----                                                        ------    ------
<S>                                                         <C>       <C>
Quarter Ended March 31....................................  $33.25    $22.75
Quarter Ended June 30.....................................  $37.75    $27.50
Quarter Ended September 30................................  $39.75    $28.88
Quarter Ended December 31.................................  $64.88    $33.25

2000                                                          HIGH       LOW
----------------------------------------------------------  ------    ------
Quarter Ended March 31....................................  $59.00    $33.88
Quarter Ended June 30.....................................  $45.00    $31.00
Quarter Ended September 30................................  $34.75    $13.75
Quarter Ended December 31.................................  $19.88    $ 8.63
</TABLE>

     On March 12, 2001, there were 37,150,172 outstanding shares of our common
stock and there were approximately 53 record holders of our common stock.
However, we believe the number of beneficial owners is significantly greater.

     We have never declared or paid any cash dividends on our common stock. We
currently intend to retain earnings to finance the growth and development of our
business and do not anticipate declaring or paying cash dividends on our common
stock in the foreseeable future. Additionally, the terms of Citadel
Broadcasting's credit facility prohibit Citadel Communications from declaring or
paying any such cash dividends without consent of the lenders under the
facility. Declaration or payment of future permitted dividends, if any, will be
at the discretion of our Board of Directors after taking into account various
factors, including our financial condition, operating results, current and
anticipated cash needs and other factors our Board of Directors deems relevant.
The terms of the various documents governing Citadel Broadcasting's indebtedness
and its exchangeable preferred stock impose significant restrictions on the
payment of dividends and the making of loans by Citadel Broadcasting to Citadel
Communications. See Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations. Because we are a holding company, we do not
have any other source from which to pay cash dividends on our common stock.

ITEM 6. SELECTED FINANCIAL DATA.

     The selected consolidated historical financial data presented below as of
and for each of the years ended December 31, 1996, 1997, 1998, 1999, and 2000
are derived from the consolidated financial statements of Citadel
Communications. These consolidated financial statements have been audited by
KPMG LLP, independent certified public accountants. Our consolidated financial
statements as of December 31, 1999 and 2000 and for each of the years in the
three-year period ended December 31, 2000 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 $0.4 million, $0.4 million, $0.7
       million, $1.8 million and $1.4 million for the years ended December 31,
       1996, 1997, 1998, 1999 and 2000, respectively.

                                        27
<PAGE>   28

     - 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 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 not declared cash dividends on our common stock
       in the last five fiscal years.

     - 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 an insignificant amount for the
       years ended December 31, 1996 and 1997, and approximately $1.0 million,
       $(1.2) million and $0.8 million for the years ended December 31, 1998,
       1999, and 2000, respectively.

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

                                        28
<PAGE>   29

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                         ------------------------------------------------------------
                                           1996        1997         1998         1999         2000
                                         ---------   ---------   ----------   ----------   ----------
                                          (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AND SHARE AMOUNTS)
<S>                                      <C>         <C>         <C>          <C>          <C>
STATEMENT OF OPERATIONS
DATA:
Net broadcasting revenue...............  $  45,413   $  89,249   $  133,312   $  178,495   $  284,824
Station operating expenses.............     33,232      64,764       91,845      115,312      177,359
Depreciation and amortization..........      5,189      14,485       25,970       35,749       76,502
Corporate general and administrative...      3,248       3,530        4,295        7,010        9,092
Non-cash deferred stock compensation...         --          --           74        1,727       12,246
                                         ---------   ---------   ----------   ----------   ----------
Operating income.......................      3,744       6,470       11,128       18,697        9,625
Interest expense.......................      6,155      12,873       18,126       25,385       53,135
Other income, net......................        414         450        1,651          388        4,598
                                         ---------   ---------   ----------   ----------   ----------
Loss before income taxes, extraordinary
  item and discontinued operations.....     (1,997)     (5,953)      (5,347)      (6,300)     (38,912)
Income tax benefit.....................         --        (770)      (1,395)      (1,647)      (4,022)
                                         ---------   ---------   ----------   ----------   ----------
Loss before extraordinary item and
  discontinued operations..............     (1,997)     (5,183)      (3,952)      (4,653)     (34,890)
Extraordinary loss.....................     (1,769)         --           --           --           --
Income (loss) from discontinued
  operations, net of tax...............         --        (102)          21       (4,275)      (4,334)
                                         ---------   ---------   ----------   ----------   ----------
Net loss...............................  $  (3,766)  $  (5,285)  $   (3,931)  $   (8,928)     (39,224)
Dividend requirement for exchangeable
  preferred stock......................         --       6,633       14,586       14,103       12,050
                                         ---------   ---------   ----------   ----------   ----------
Net loss applicable to common shares...  $  (3,766)  $ (11,918)  $  (18,517)  $  (23,031)  $  (51,274)
                                         =========   =========   ==========   ==========   ==========
Basic and diluted net loss per common
  share................................  $   (1.18)  $   (3.72)  $    (1.51)  $     (.80)  $    (1.41)
Weighted average common shares
  outstanding..........................  3,196,551   3,199,467   12,297,588   28,779,712   36,340,978

<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                         ------------------------------------------------------------
                                           1996        1997         1998         1999         2000
                                         ---------   ---------   ----------   ----------   ----------
                                                            (DOLLARS IN THOUSANDS)
<S>                                      <C>         <C>         <C>          <C>          <C>
BALANCE SHEET DATA:
Cash and cash equivalents..............  $   1,588   $   7,685   $  102,655   $   17,981   $    8,092
Working capital (deficiency)...........     (4,195)     22,594      153,000       54,777       41,829
Intangible assets, net.................     51,802     268,690      266,446      538,664    1,273,520
Total assets...........................    102,315     344,172      471,768      716,613    1,485,564
Long-term debt (including current
  portion).............................     90,714     189,699      211,299      345,867      864,131
Exchangeable preferred stock...........         --     102,010      116,775       85,362       96,158
Shareholders' equity...................      6,070      16,132      103,963      219,209      414,271
</TABLE>

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

GENERAL

     Citadel Communications Corporation was formed March 24, 1993 as a Nevada
corporation and is a holding company, which owns all of the issued and
outstanding common stock of Citadel Broadcasting Company. Citadel Broadcasting
owns and operates radio stations and holds FCC licenses in Alabama, Arkansas,
California, Colorado, Connecticut, Idaho, Illinois, Indiana, Louisiana, Maine,
Massachusetts, Michigan, Nevada, New Hampshire, New Jersey, New Mexico, New
York, Oklahoma, Pennsylvania, Rhode Island, South Carolina,

                                        29
<PAGE>   30

Tennessee, Utah and Washington and has entered into a local marketing agreements
for the stations it owns in Tyler, Texas and Monroe, Louisiana.

     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. In December of 2000, Citadel
Broadcasting entered into an agreement to sell its subscriber list to a large
internet service provider and expects to shut down its internet operations by
April 30, 2001.

     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 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 recognize barter expense upon utilization. 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, which we recognize as the advertisements are aired.

     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

                                        30
<PAGE>   31

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. We entered into an agreement dated December 19, 2000 with a
large internet service provider to sell our subscriber list based on a per
subscriber amount assuming the subscribers remained with the acquiror for two
months of service. In late February 2001, we provided the acquiror with our
subscriber database and received approximately $0.9 million, one-half of the
purchase price based on the number of subscribers at that time. The purchase
price will be finalized in May 2001 and we will receive any additional amounts
owed based on the number of subscribers that continue internet service for two
months. We plan to shut down all internet services by April 30, 2001 and will
transfer (to our radio stations), sell or otherwise dispose of the related fixed
assets.

     Our internet service provider recorded gross revenue and net loss of $2.8
million and $(4.3) million, respectively, for the year ended December 31, 2000
and $4.5 million and $(4.3) million, respectively, for the year ended December
31, 1999. 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 2000 from discontinued operations
includes an estimate of operational losses for 2001 of approximately $0.7
million and an estimated loss on disposal of all assets of the operation of $2.4
million.

     In 2000, our radio stations derived approximately 85% 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, 2000 and 1999, no single advertiser accounted for
more than 10% of our net broadcasting revenue.

     Our advertising revenue is generally 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. The Financial Accounting Standards Board has
recently issued an exposure draft that could change the amortization of certain
intangible assets with an indefinite economic life. Until the final
pronouncement is issued it is uncertain what the final outcome will be and the
impact cannot yet be determined. We expect that we will continue to incur net
losses through at least 2001.

     We consolidate the operations of stations we operate 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 agreements do not
meet the proposed control requirements, if the Emerging Issues Task Force
proposal is approved as drafted, consolidation of the stations operated under
the local marketing agreements 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, 2000 and 1999, 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:

     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
                                        31
<PAGE>   32

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.

     2000 Acquisitions and Dispositions. WXLO-FM in Worcester, Massachusetts was
acquired on February 10, 2000 and WORC-FM also in Worcester was acquired on
April 7, 2000. WORC-FM was operated under a local marketing agreement from
February 10, 2000 until April 7, 2000. On March 31, 2000, we acquired two FM and
two AM radio stations serving Lafayette, Louisiana. On April 6, 2000, we
acquired one AM radio station in Albuquerque, New Mexico in exchange for one of
our AM radio stations in Albuquerque. On April 15, 2000, we completed an
acquisition from Broadcasting Partners Holdings, L.P. of a total of 23 FM
stations and 12 AM radio stations serving the markets of 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. On
April 18, 2000, we acquired one AM station serving Salt Lake City, Utah. On May
22, 2000, we acquired one AM station and one FM station in Worcester,
Massachusetts, and an additional FM station in Worcester was acquired on June
19, 2000. On June 1, 2000, we entered into a local marketing agreement with
Gleiser Communications, LLC with respect to five radio stations owned in Tyler,
Texas. In addition, Gleiser Communications is obligated, except under certain
circumstances, to purchase the radio stations from us prior to May 31, 2003. On
June 28, 2000, we purchased all of the issued and outstanding capital stock of
Bloomington Broadcasting Holdings, Inc. Through its subsidiaries, Bloomington
Broadcasting Holdings owned and operated 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 July 31, 2000, we acquired 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, one FM radio station serving the
Flint, Michigan market and the right to operate one AM radio station serving
Flint under a time brokerage agreement (as well as the right to acquire such
station). In addition and on the same date, we sold one AM station and two FM
stations serving the Saginaw/Bay City/Midland, Michigan market. On October 2,
2000, we acquired assets from Dick Broadcasting Company, Inc. of Tennessee and
related entities. The assets acquired included eight FM and three AM radio
stations serving the markets of Nashville and Knoxville, Tennessee and
Birmingham, Alabama.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

     Net Broadcasting Revenue. Net broadcasting revenue increased $106.3 million
or 59.6% to $284.8 million for the year ended December 31, 2000 from $178.5
million for the year ended December 31, 1999, primarily due to the inclusion of
revenue from radio stations acquired in 2000. Barter revenue, which is included
in net
                                        32
<PAGE>   33

broadcasting revenue, increased $.9 million to $19.2 million for the year ended
December 31, 2000 from $18.3 million for the year ended December 31, 1999. For
markets where we operated stations for the full 2000 and 1999 periods, excluding
one market in the early stages of development and excluding barter revenue, net
broadcasting revenue for the stations operated in such markets improved $9.1
million or 7.6% to $129.5 million in 2000 from $120.4 million in 1999, primarily
due to increased ratings and improved selling efforts.

     Station Operating Expenses. Station operating expenses increased $62.1
million or 53.9% to $177.4 million for the year ended December 31, 2000 from
$115.3 million for the year ended December 31, 1999. Barter expenses, which are
included in station operating expenses, increased $5.1 million to $16.8 million
for the year ended December 31, 2000 from $11.7 million for the year ended
December 31, 1999. The increase in station operating expenses was primarily
attributable to the inclusion of station operating expenses of the radio
stations we acquired in 2000.

     Broadcast Cash Flow. As a result of the factors described above, broadcast
cash flow increased $44.3 million or 70.1% to $107.5 million for the year ended
December 31, 2000 from $63.2 million for the year ended December 31, 1999. For
markets where we operated stations for the full 2000 and 1999 periods, excluding
one market in its early stages of development and excluding barter revenue and
barter expense, broadcast cash flow for the stations operated in such markets
increased $7.5 million or 16.7% to $52.4 million in 2000 from $44.9 million in
1999. As a percentage of net broadcasting revenue, broadcast cash flow improved
to 37.7% for the year ended December 31, 2000 compared to 35.4% for the year
ended December 31, 1999.

     Corporate General and Administrative Expenses (Includes Non-Cash Deferred
Stock Compensation). Corporate general and administrative expenses increased
$12.6 million or 144.8% to $21.3 million for the year ended December 31, 2000
from $8.7 million for the year ended December 31, 1999. The increase was due
primarily to a $10.5 million increase in amortization of non-cash deferred
compensation related to stock options. The remaining increase is due to
increased staffing levels and associated costs needed to support our growth.

     EBITDA. As a result of the factors described above, EBITDA increased $31.7
million or 58.3% to $86.1 million for the year ended December 31, 2000 from
$54.4 million for the year ended December 31, 1999.

     Depreciation and Amortization. Depreciation and amortization expense
increased $40.8 million or 114.3% to $76.5 million for the year ended December
31, 2000 from $35.7 million for the year ended December 31, 1999, primarily due
to radio station acquisitions completed during 2000.

     Interest Expense. Interest expense increased approximately $27.7 million or
109.1% to $53.1 million for the year ended December 31, 2000 from $25.4 million
for the year ended December 31, 1999, primarily due to interest expense
associated with increased borrowings and commitment fees under our credit
facility.

     Loss (Gain) on Sale of Assets. The gain on sale of assets in 2000 of $0.8
million resulted primarily from the gain on the sale of three radio stations in
one market in August 2000. 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.

     Income Tax Benefit. The income tax benefit in 2000 and 1999 represents the
utilization 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 $2.4 million when comparing the year ended December 31, 2000 to
1999 is primarily due to the stock acquisition completed in 2000.

     Income (Loss) From Discontinued Operations, Net of Tax. The loss from
discontinued operations is comprised of two components for the year ended
December 31, 2000, which are the loss from discontinued operations and the loss
on disposal of discontinued operations. The loss from discontinued operations
decreased approximately $2.4 million from the year ended December 31, 1999 to
2000. This decrease is primarily due to reductions in depreciation and
amortization expense and losses from customer accounts. Depreciation and
amortization expense was recorded through September 30, 1999 during the year
ended December 31, 1999 and then no further depreciation or amortization was
recorded as the underlying assets are considered to be held for disposal and
were classified as discontinued operations beginning in the fourth quarter of
1999. The loss on disposal of discontinued operations increased approximately
$2.4 million from the year ended December 31,

                                        33
<PAGE>   34

1999 to 2000. This increase is due to the fact that at December 31, 1999,
management had estimated no loss on disposal of the discontinued operations as
compared to management's estimate of a $2.4 million loss on the sale of the
discontinued operations at December 31, 2000. The estimate at the end of 1999
was based on selling all of the assets of the division. The estimated loss at
the end of 2000 is based on selling the subscriber list only. The general market
for the sale of internet service providers deteriorated in 2000 due primarily to
the shortage of funding for internet related companies. Potential buyers with
which we had been negotiating were unable to raise the funds required for the
purchase of the entire division and we were forced to sell the subscribe list
only, which produced a lower purchase price and resulted in a loss.

     Net Loss. As a result of the factors described above, net loss increased
$30.3 million or 340.5% to $39.2 million for the year ended December 31, 2000
from $8.9 million for the year ended December 31, 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 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 markets where we operated stations for the full 1999 and 1998 periods,
excluding barter revenue, net broadcasting revenue for the stations operated in
such markets improved $12.9 million or 11.9% to $121.0 million in 1999 from
$108.1 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 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
stations we acquired 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
markets where we operated stations for the full 1999 and 1998 periods, excluding
barter revenue and barter expense, broadcast cash flow for the stations operated
in such markets increased $6.7 million or 17.4% to $45.1 million in 1999 from
$38.4 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
Stock 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 $9.7 million or 37.3% to $35.7 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 Citadel Broadcasting's 9 1/4% Senior Subordinated Notes issued
on November 19, 1998.

                                        34
<PAGE>   35

     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
utilization 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.

LIQUIDITY AND CAPITAL RESOURCES

     Overview. On January 15, 2001, we entered into an Agreement and Plan of
Merger, with FLCC Holdings, Inc., a Delaware corporation and an affiliate of
Forstmann Little & Co., which the parties subsequently amended on March 13, 2001
and March 22, 2001, under which FLCC Acquisition Corp., a Nevada corporation and
a wholly-owned subsidiary of FLCC Holdings, will merge with and into Citadel
Communications. Pursuant to the merger, each issued and outstanding share of our
common stock will be converted into the right to receive $26.00 in cash. The
completion of this transaction is subject to various conditions, including
approval of the Agreement and Plan of Merger by our stockholders and consent of
the Federal Communications Commission to transfer control of the station
licenses. The discussion in this Item 7 does not give effect to the completion
of our proposed merger with FLCC Acquisition and related financing transactions.

     Historically our liquidity needs have been driven by our acquisition
strategy. Our principal liquidity requirements are for debt service, working
capital, any future acquisitions and general corporate purposes, including
capital expenditures. Our acquisition strategy has historically required a
significant portion of our capital resources. We expect that our debt service
obligations within the next twelve months, without regard to further
acquisitions, will be approximately $83.5 million, including approximately $21.0
million for interest on Citadel Broadcasting's 10 1/4% Senior Subordinated Notes
and Citadel Broadcasting's 9 1/4% Senior Subordinated Notes and approximately
$62.5 million for interest on Citadel Broadcasting's credit facility, excluding
any commitment fees and interest due under rate swap transactions. Citadel
Broadcasting's 13 1/4% Exchangeable Preferred Stock does not require cash
dividends through July 1, 2002.

     We 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.

                                        35
<PAGE>   36

     At December 31, 2000, we held approximately $8.1 million in cash and cash
equivalents and had approximately $96.8 million in unborrowed availability under
Citadel Broadcasting's credit facility. This unborrowed availability has been
reduced for outstanding letters of credit of approximately $3.2 million at
December 31, 2000.

     Net Cash Provided by Operating Activities. For the twelve months ended
December 31, 2000, net cash provided by operating activities increased $27.7
million to $43.0 million from $15.3 million in 1999. This increase is primarily
due to the operating activities of the stations acquired in 2000.

     Net Cash Used in Investing Activities. For the twelve months ended December
31, 2000, net cash used in investing activities, primarily for station
acquisitions, increased $476.8 million to $795.2 million from $318.4 million in
1999. The increase is primarily due to the acquisition of 86 radio stations in
2000, whereas 57 radio stations were acquired in 1999.

     Net Cash Provided by Financing Activities. For the twelve months ended
December 31, 2000, net cash provided by financing activities increased $523.9
million to $742.3 million from $218.4 million in 1999. This increase is
primarily the result of the 2000 stock offering described below and additional
borrowings under Citadel Broadcasting's credit facility.

     2000 Stock Offering. On February 11, 2000, we sold 4,750,000 shares of our
common stock at $51.50 per share. The proceeds to us 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
Citadel Broadcasting's credit facility and the remainder was used to fund radio
station acquisitions during the first and second quarter of 2000.

     Credit Facility. On December 17, 1999, we entered into a credit facility
with Credit Suisse First Boston, as the lead arranger, administrative agent and
collateral agent, and the lenders named therein, which provided for the making
to Citadel Broadcasting 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 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.

     On October 2, 2000, we completed a Second Amended and Restated Credit
Agreement, which replaced the original credit facility. This credit facility
provides for (a) term loans (the "Tranche A Term Loans") at any time prior to
December 15, 2000 in an aggregate principal amount not in excess of $325.0
million, (b) a term loan (the "Tranche B Term Loan" and together with the
Tranche A Term Loans, the "Term Loan Facility") in the principal amount of
$200.0 million, and (c) revolving loans at any time and from time to time prior
to March 31, 2006, in an aggregate principal amount at any one time outstanding
not in excess of $225.0 million (the "Revolving Credit Facility"). Of the $225.0
million, which is available in the form of revolving loans under the Revolving
Credit Facility, up to $50.0 million may be made available in the form of
letters of credit. In addition, we may request up to $150.0 million in
additional loans, which loans may be made at the sole discretion of the lenders.
The lenders are under no obligation whatsoever to make such additional loans.

     The credit facility bears interest at a rate equal to the applicable margin
plus either (a) the greater of (i) the per annum rate of interest publicly
announced from time to time by Credit Suisse First Boston in New York, New York,
as its prime rate of interest (the "Prime Rate") or (ii) the federal funds
effective rate as in effect plus 1/2 of 1% (with the greater of (i) or (ii)
being referred to as the "Alternative Base Rate"), or (b) a rate determined by
Credit Suisse First Boston to be the Adjusted LIBO Rate for the respective
interest period. The LIBO Rate is determined by reference to the British
Bankers' Association Interest Settlement Rates for deposits in dollars. The
applicable margin for the Tranche B Term Loan is 2.0% and 3.0%, respectively,
for Alternative Base Rate and

                                        36
<PAGE>   37

Adjusted LIBO Rate. The applicable margins for the Tranche A Term Loans and
revolving loans are expected to range between 0.00% and 1.75% for the
Alternative Base Rate and 0.75% and 2.75% for the Adjusted LIBO Rate, depending
on our consolidated leverage ratio.

     During the first quarter of 2000, we borrowed $24.0 million and repaid
$156.0 million in revolving loans under the credit facility with $120.0 million
in term borrowings, internally generated funds and a portion of the funds
received from the 2000 Stock Offering. On June 15, 2000, we borrowed $160.0
million as revolving loans under the credit facility. The funds were used to
purchase the outstanding stock of Bloomington Broadcasting Holdings, Inc. On
July 31, 2000, we borrowed an additional $25.0 million as revolving loans and
$74.0 million as term loans under the credit facility. These funds along with
the proceeds received from the sale of three radio stations in Saginaw/Bay
City/Midland, Michigan were used to complete the July 31, 2000 acquisition of
other radio stations in Michigan. On October 2, 2000, we borrowed (a) $200.0
million as a Tranche B Term loan, (b) $55.0 million as a Tranche A Term Loan and
(c) $35.0 million as a revolving loan under the credit facility. The funds were
used to complete our acquisition of eleven radio stations and related real
estate from Dick Broadcasting Company, Inc. of Tennessee and related entities.
On October 30, 2000, we repaid $12.0 million under the Revolving Credit Facility
and on December 15, 2000, we borrowed $76.0 million as a term loan and utilized
the funds along with internally generated funds to repay $83.0 million under the
Revolving Credit Facility. Below is a table that sets forth the current rates
and terms of the amounts borrowed under the credit facility as of December 31,
2000.

<TABLE>
<CAPTION>
   TYPE AND AMOUNT                               NEXT INTEREST
     OF BORROWING           INTEREST RATE         RATE CHANGE
   ---------------          -------------         -----------
    (In Thousands)
<S>                         <C>                <C>
Tranche A - $120,000           9.3750%         June 5, 2001
Tranche A - $74,000            9.6875%         January 31, 2001
Tranche A - $55,000            9.6250%         January 2, 2001
Tranche A - $76,000            9.3750%         March 15, 2001
Tranche B - $200,000           9.8750%         January 2, 2001
Revolving - $125,000           9.5625%         January 15, 2001
</TABLE>

     The maturity date for the Tranche A Term Loans is December 31, 2006
(subject to extension to December 17, 2007). The amount of any Tranche A Term
Loans outstanding on December 17, 2002 must be repaid in varying quarterly
installments ranging from 3.75% of the amount on March 31, 2003 to 6.25% of the
amount on December 31, 2007 (if maturity is extended to such date).

     The maturity date of the Tranche B Term Loan is March 31, 2007 (subject to
extension to June 30, 2008). The Tranche B Term Loan must be repaid in quarterly
installments ranging from .25% of the amount from March 31, 2003 to March 31,
2008 and 94.75% of the amount on June 30, 2008 (if maturity is extended to such
date).

     In addition, mandatory prepayments must be made under the Term Loan
Facility upon the happening of certain events. One such event relates to the
excess of cash flow as defined in the credit facility. The prepayment is 50% of
the excess cash flow computed on a fiscal year end basis and is only required if
our maximum leverage test is greater than 5.0 to 1.0. At December 31, 2000, the
excess cash flow computation requires a prepayment of approximately $16.5
million under the Term Loan Facility. However, for as long as the Tranche B Term
Loan is outstanding, lenders with any portion of such outstanding loan may
decline to accept any mandatory prepayment of such loan and cause all or a
portion of the prepayment to instead be allocated to the then-outstanding
Tranche A Term Loans. We have assumed that the prepayment will be applied 100%
to the Tranche A Term Loan. The prepayment is due 90 days after the fiscal year
end. We plan to borrow approximately $16.0 million under the Revolving Credit
Facility and use internally generate funds to repay the Tranche A Term Loan.
This required prepayment of the Tranche A Term Loan will reduce our total
borrowing capacity under the credit facility by approximately $16.5 million as
prepayments under the Term Loan Facility are no longer available for future
borrowings.

                                        37
<PAGE>   38

     Additional draws may be made under the Revolving Credit Facility, subject
to the satisfaction of certain conditions, for general corporate purposes,
including for working capital, capital expenditures, and to finance permitted
acquisitions. The Revolving Credit Facility must be paid in full on or before
December 31, 2006 (subject to extension to December 31, 2007). In addition, the
mandatory prepayments must be made under the Revolving Credit Facility upon the
happening of certain events.

     The credit facility provides for a letter of credit facility up to $50.0
million, which is a sub facility of the Revolving Credit Facility. The letter of
credit facility provides for the issuance of letters of credit by Citadel
Broadcasting as security for the obligations of Citadel Broadcasting under
agreements entered into in connection with certain radio station acquisitions
and for any other purpose related to the business of Citadel Broadcasting. As of
March 12, 2001, we had $3.2 million outstanding under the letter of credit
facility.

     The credit facility also requires that no less than 50% of our long-term
indebtedness be subject to fixed interest rates. We have entered into the
following one year interest rate swap transactions in order to convert a portion
of our variable rate debt into fixed rate debt.

<TABLE>
<CAPTION>
                                                                       VARIABLE RATE
                                                                       DECEMBER 31,
          TRANSACTION DATE            NOTIONAL AMOUNT    FIXED RATE        2000
          ----------------            ---------------    ----------    -------------
                                      (In Thousands)
<S>                                   <C>                <C>           <C>
June 30, 2000.......................     $ 25,000          7.055%         6.4381%
August 31, 2000.....................     $ 40,000          6.855%         6.7488%
November 21, 2000...................     $135,000          6.530%         6.7506%
</TABLE>

     We will incur interest expense based on the notional amounts at the fixed
rates and will receive interest income at the variable rates. The variable rates
are based on LIBO Rate and are adjusted quarterly.

     Subject to permitted liens, the credit facility is secured by: (a) a first
priority pledge on all of Citadel Broadcasting's capital stock other than its
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 permitted acquisitions, pay dividends, redeem or
repurchase capital stock, enter into certain sale and leaseback transactions,
consolidate, merge or effect asset sales, issue additional equity, make capital
expenditures, make investments, loans or prepayments or change the nature of our
business. We are also required to satisfy certain financial ratios and comply
with financial tests, including ratios with respect to maximum leverage, minimum
interest coverage and minimum fixed charge coverage. At December 31, 2000,
Citadel Communications and Citadel Broadcasting were in compliance with all
covenants under the credit facility.

     As of March 12, 2001, we had $125.0 million outstanding as revolving loans
with $96.8 million still available as revolving loans, $325.0 million
outstanding as Tranche A Term Loan and $200.0 million outstanding as a Tranche B
Term Loan under the credit facility. The remaining amount available under the
revolving loans is net of the outstanding letters of credit of $3.2 million.
These amounts do not reflect the additional borrowing of approximately $16.0
million under the Revolving Credit Facility to make the mandatory prepayment of
a portion of the Term Loan Facility as discussed above.

     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

                                        38
<PAGE>   39

ratio through September 30, 2001 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,
2001 to 2.50x beginning January 1, 2004.

     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, Citadel Broadcasting 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 the
option of Citadel Broadcasting, 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.

     On November 19, 1998, Citadel Broadcasting 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 the option of Citadel
Broadcasting, 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, Citadel Broadcasting may, at
its 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 the ability
of Citadel Broadcasting 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, 2000 Citadel
Broadcasting was in compliance with all covenants under the indentures.

     Exchangeable Preferred Stock. On July 3, 1997, Citadel Broadcasting sold an
aggregate of 1,000,000 shares of its 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 the option
of Citadel Broadcasting, in cash. Thereafter, all dividends will be payable only
in cash. To date, Citadel Broadcasting has paid all dividends in additional
shares of exchangeable preferred stock. Citadel Broadcasting 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.

     Citadel Broadcasting may redeem the exchangeable preferred stock, in whole
or in part, at the option of Citadel Broadcasting, 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.

     On August 2, 1999, Citadel Broadcasting redeemed approximately 35% of its
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. On April 6, 2000, Citadel Broadcasting repurchased
approximately 14,900 shares at a price of $112.75 per share for a total of
approximately $1.7 million. Available working capital was used to complete the
April 6, 2000 repurchase, and we received a waiver from the lenders under the
credit facility allowing the repurchase.

     The Certificate of Designation governing the exchangeable preferred stock
also contains covenants that restrict Citadel Broadcasting 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

                                        39
<PAGE>   40

capital expenditures. At December 31, 2000, Citadel Broadcasting was in
compliance with all covenants under the Certificate of Designation.

     Pending Acquisitions and Dispositions and Recently Completed
Transaction. We have five transactions currently pending, which if completed,
would result in the purchase of three FM radio stations, three AM radio stations
and the sale of six FM radio stations and one AM radio station and the right to
provide programming and sell commercial advertising for one FM radio station
pursuant to a program service and time brokerage agreement. The total cash
required to fund the pending acquisitions is expected to be approximately $61.8
million, of which approximately $0.8 million has already been paid. In addition
to the cash, the purchase price also includes 181,820 shares of our common stock
valued at approximately $2.0 million, based on the closing price of our stock on
December 21, 2000. If the proposed merger with FLCC Holdings, Inc. described
above occurs prior to the closing of our acquisition of certain stations in
Tucson, Arizona, the cash purchase price for such stations will increase by $4.7
million, which replaces the 181,820 shares of our common stock. The sale price
of the six FM stations, one AM station and the right to provide programming and
sell commercial advertising for one FM station under a program service and time
brokerage agreement is approximately $23.7 million in cash. The funding for the
acquisitions is expected from internally generated funds, borrowings under the
credit facility and proceeds from radio station sales. The consummation of each
of the pending transactions is subject to certain conditions. Although we
believe that all closing conditions will be satisfied in each case, there can be
no assurance that this will be the case.

     On January 18, 2001, we completed our acquisition of WTRX-FM in Flint,
Michigan. The total purchase price was approximately $0.6 million of which $0.4
million had already been paid as part of the stations acquired in Flint,
Michigan on July 31, 2000. The remaining purchase price was funded from
internally generated cash.

     Capital Expenditures. We had capital expenditures of approximately $5.5
million for the year ended December 31, 2000 compared to $16.6 million in 1999.
This decrease is due primarily to the acquisition of a corporate jet in 1999.
Our capital expenditures consist primarily of construction in progress related
to facilities, office furniture and equipment, 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 and revolving loans under our
credit facility 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.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 1998 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." In June 2000 the FASB issued
SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an Amendment of SFAS 133." SFAS No. 133 and SFAS No. 138 require
that all derivative instruments be recorded on the balance sheet at their
respective fair values. Citadel Communications has previously adopted SFAS No.
133 and as such will comply with any changes under SFAS No. 138.

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.

                                        40
<PAGE>   41

     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, 2000, we had:

     - outstanding total debt of approximately $869.2 million, excluding the
       discount on Citadel Broadcasting's 10 1/4% notes and its 9 1/4% notes,

     - Citadel Broadcasting's exchangeable preferred stock with an aggregate
       liquidation preference of approximately $100.1 million, and

     - shareholders' equity of approximately $414.3 million.

     We anticipate that we will incur additional indebtedness in connection with
any further implementation of our acquisition strategy. For more information
about our indebtedness, see the discussion above 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 any planned acquisitions and capital expenditures or
sell assets. 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 THAT COULD SIGNIFICANTLY
     IMPACT OUR ABILITY TO OPERATE OUR BUSINESS.

     The covenants in our credit facility and the agreements governing our other
outstanding debt and exchangeable preferred stock restrict, among other things,
our ability to incur additional debt, make particular types of investments or
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. We
have pledged the outstanding shares of common stock of Citadel Broadcasting
owned by us to secure our 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 lenders' consent before
making acquisitions or 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 Citadel Broadcasting's 9 1/4% notes and 10 1/4%
notes and its credit facility restrict, with certain exceptions, Citadel
Broadcasting's ability to pay dividends on or to repurchase, redeem or otherwise
                                        41
<PAGE>   42

acquire any shares of its capital stock. In the event that, after July 1, 2002,
cash dividends on Citadel Broadcasting's 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. This right to elect directors could
limit our control over Citadel Broadcasting.

     For more information about our indebtedness, see the discussion above 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 2001.

     We had a net loss of $8.9 million and $39.2 million for the years ended
December 31, 1999 and 2000, respectively. The primary reasons for these losses
are significant charges for depreciation and amortization relating to the
acquisition of radio stations, interest charges on our outstanding debt and
non-cash deferred compensation related to stock options. If we acquire
additional stations, these charges will probably increase further. We expect to
continue to experience net losses through at least 2001.

     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 have grown, and expect to continue 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, and

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

     Also, the amount that remains available for borrowing under the credit
facility for acquisitions is $96.8 million. We may be unable to obtain
additional required financing for acquisitions on terms favorable to us or at
all.

     In addition, our credit facility permits us to make acquisitions of radio
stations without the consent of our lenders 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 if we are unable to comply with these financial ratios and
tests.

     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. In addition, we may find fewer acceptable
acquisition opportunities in the future.

     POTENTIAL DIFFICULTIES IN COMPLETING 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 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
                                        42
<PAGE>   43

to prevent completion of transactions or negotiate modifications to the proposed
terms. Review by the FCC 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.

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

     Our Albuquerque, Providence and Salt Lake City 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 for the year ended December 31,
2000:

<TABLE>
<CAPTION>
           MARKET             % OF NET BROADCASTING REVENUE    % OF BROADCAST CASH FLOW
           ------             -----------------------------    ------------------------
<S>                           <C>                              <C>
Albuquerque.................               7.6%                           8.0%
Providence..................               6.9%                           7.9%
Salt Lake City..............               6.5%                           6.6%
</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 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

                                        43
<PAGE>   44

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 Item 1, Business, 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 in Item 1, Business, under the
heading "Federal Regulation of Radio Broadcasting" and the subheading "Ownership
Matters."

ITEM 7A. QUALITATIVE AND QUANTITATIVE 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 market risks and have established policies and
practices to protect against the adverse effects of these and other potential
exposures. In addition, we are exposed to foreign currency risk with respect to
Canadian accounts receivable. However, management believes that those foreign
receivables are insignificant relative to our total accounts receivable and do
not represent a material market risk. We do not use derivative financial
instruments for trading purposes. Although we do not anticipate any material
losses in any of 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 are exposed to interest rate changes under the
credit facility and interest rate swap transactions. Management constantly
monitors interest rate changes to determine the impact any change will have on
its 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 these 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.

     Citadel Broadcasting's credit facility, which we maintain to provide
liquidity and to fund capital expenditures and acquisitions, bears interest
equal to an applicable margin plus a variable rate based on either (a) the
greater of (i) the per annum rate of interest publicly announced from time to
time by Credit Suisse First Boston in New York, New York, as its prime rate of
interest (the "Prime Rate") or (ii) the federal funds effective rate as in
effect plus 1/2 of 1% (with the greater of (i) or (ii) being referred to as the
"Alternative Base Rate"), or (b) a rate determined by Credit Suisse First Boston
to be the Adjusted LIBO Rate for the respective interest period. The LIBO Rate
is determined by reference to the British Bankers' Association Interest
Settlement rates for deposits in dollars. For further discussion of Citadel
Broadcasting's interest rate under the credit facility, see Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations, under
the heading "Liquidity and Capital Resources -- Credit Facility." Citadel
Broadcasting's credit facility consists of revolving loans and Tranche A and
Tranche B term loans. The revolving loans mature on December 31, 2006 (subject
to extension until December 31, 2007). The Tranche A term loans are subject to
quarterly principal repayments staring in March 2003 and ending December 31,
2006 (subject to an extension to December 17, 2007). The quarterly repayments
are based on a percentage of the Tranche A term loan borrowings and the
percentage ranges from 3.75% in 2003 to 6.25% in 2007 (if maturity is extended
to such date). The Tranche B term loan is also subject to quarterly principal
repayments starting in March 2003 and ending March 31, 2007 (subject to an
extension to June 30, 2008). The quarterly repayments are based on a percentage
of the Tranche B term loan borrowings and the percentage ranges from .25% from
March 31, 2003 to March 31, 2008 and 94.75% on June 30, 2008 (if maturity is
extended to such date).

                                        44
<PAGE>   45

     At December 31, 2000, there was $325.0 million outstanding under the
Tranche A term loans at interest rates of 9.375% to 9.6875%, $125.0 million
outstanding under the revolving loans at an interest rate of 9.5625% and $200.0
million under the Tranche B term loan at an interest rate of 9.875%.

     In addition, the credit facility requires that no less than 50% of Citadel
Broadcasting's long-term indebtedness be subject to fixed interest rates. If
Citadel Broadcasting's total variable debt under the credit facility exceeds
this 50% threshold, Citadel Broadcasting is required to enter into a hedging
contract that will convert a portion of the variable rate into a fixed rate.
Based on Citadel Broadcasting's variable rate borrowings during 2000, Citadel
Broadcasting has entered into the following one year interest rate swap
transactions in order to convert a portion of its variable rate debt into fixed
rate debt.

<TABLE>
<CAPTION>
                                                                               VARIABLE RATE
              TRANSACTION DATE                NOTIONAL AMOUNT   FIXED RATE   DECEMBER 31, 2000
              ----------------                ---------------   ----------   -----------------
                                              (IN THOUSANDS)
<S>                                           <C>               <C>          <C>
June 30, 2000...............................     $ 25,000         7.055%          6.4381%
August 31, 2000.............................     $ 40,000         6.855%          6.7488%
November 21, 2000...........................     $135,000         6.530%          6.7506%
</TABLE>

     Citadel Broadcasting will incur interest expense based on the notional
amounts at the fixed rates and will receive interest income at the variable
rates. The variable rates are based on the LIBO Rate and are adjusted quarterly.

     Through Citadel Broadcasting's credit facility and related interest swap
transactions, we may be vulnerable to changes in the U.S. prime rates, the
federal funds effective rate and the LIBO rate. We have performed a sensitivity
analysis assuming a hypothetical increase in the interest rate of 10% applied to
the $650.0 million of outstanding variable debt and the interest rate swap
transactions as of December 31, 2000.

     Based on this analysis, as of December 31, 2000, the impact on future
earnings for the next twelve months would be approximately $5.8 million of
increased interest expense, which amount includes a reduction in interest
expense of approximately $0.5 million related to the interest rate swap
transactions. Comparatively, assuming the same hypothetical 10% increase in the
interest rate applied to the $132.0 million of outstanding variable debt as of
December 31, 1999, the impact on future earnings would have been approximately
$1.1 million of increased interest expense. There were no interest rate swap
transactions outstanding as of December 31, 1999.

     Such potential increases are based on certain simplifying assumptions,
including a constant level of variable-rate debt and related interest rate swap
transactions during the period and a constant interest rate based on the
variable rates in place as of December 31, 2000 and 1999.

     Settlement of our interest rate swap transactions are recorded as
adjustments to interest expense or income on a monthly basis. A mark-to-market
adjustment is recorded as a component of shareholders' equity to reflect the
fair market value of the interest rate swap agreement. The estimated fair market
value of the interest rate swap transactions, net of tax, based on their current
market rates, approximated a net payable of $0.6 million as of December 31,
2000.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

     Citadel Communications Corporation'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. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

     None.

                                        45
<PAGE>   46

                                    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 Communications:

<TABLE>
<CAPTION>
        NAME                AGE                                   POSITION
        ----                ---                                   --------
<S>                         <C>       <C>
Lawrence R. Wilson          55        Chief Executive Officer, Chairman and President
Donna L. Heffner            41        Executive Vice President, Chief Financial Officer and Secretary
D. Robert Proffitt          48        Executive Vice President
Stuart R. Stanek            45        Executive Vice President
Peter J. Benedetti          37        Executive Vice President
Kenneth H. Maness           52        Executive Vice President
Wayne P. Leland             36        Executive Vice President
Kenneth R. Benson           36        Executive Vice President
Randy L. Taylor             38        Vice President Finance
Robert F. Fuller            60        Director
Ike Kalangis                63        Director
Robert G. Liggett,          58        Director
  Jr.
Ted L. Snider, Sr.          72        Director
John E. von Schlegell       46        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 and in November 2000, she
became Executive 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 and he became Executive Vice President of Citadel Communications in
November 2000.

                                        46
<PAGE>   47

     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 and Executive
Vice President of Citadel Communications and Citadel Broadcasting in November
2000.

     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 then consolidated into East and
West Regions. In November 2000, he became Executive Vice President of Citadel
Communications and Citadel Broadcasting. Prior to joining Citadel
Communications, he served as an account executive for Jacor Communications in
Denver, Colorado.

     Kenneth H. Maness joined Citadel Communications in June 2000 and became
Vice President of Citadel Communications and Vice President and President of the
Southeast Region for Citadel Broadcasting in July 2000. In November 2000, he
became Executive Vice President of each of Citadel Communications and Citadel
Broadcasting. Prior to joining Citadel Communications, Mr. Maness was employed
by Bloomington Broadcasting Holdings, Inc. and its affiliates in various
capacities since 1981, most recently as Chief Executive Officer and President
from 1995 until Citadel Broadcasting acquired Bloomington Broadcasting in June
2000. Mr. Maness served as the President of Tri-Cities Radio Corp., a subsidiary
of Bloomington Broadcasting, and the General Manager for its four radio stations
in Tri-Cities, Tennessee from 1981 to 1995. Mr. Maness also serves as a director
of Bank of Tennessee.

     Wayne P. Leland joined Citadel Communications in April 2000 and became Vice
President of Citadel Communications and Vice President and President of the
Northeast Region for Citadel Broadcasting in July 2000. In November 2000, he
became Executive Vice President of each of Citadel Communications and Citadel
Broadcasting. Prior to joining Citadel Communications, Mr. Leland was the Chief
Operating Officer for Spring Broadcasting, LLC, a subsidiary of Broadcast
Partners Holdings, L.P., from 1997 to 2000. He also served as the cluster
manager for Capstar Broadcasting Corporation from 1995 to 1997 and as General
Sales Manager for Berkshire Broadcasting in Danbury, Connecticut from 1986 to
1995.

     Kenneth R. Benson joined Citadel Communications in November 2000 as
Executive Vice President of Programming of each of Citadel Communications and
Citadel Broadcasting. From 1998 to 2000, Mr. Benson served as Senior Vice
President of Programming for AMFM, Inc., where he was responsible for the
strategic planning and programming of 42 radio stations. For a portion of 1998,
he served as Vice President of Music Programming for MTV Networks, a division of
Viacom, Inc. From 1992 to 1997, he served as Program Director for station
KKRZ-FM in Portland, Oregon. Prior to such time, Mr. Benson held various
programming and promotions positions for various radio stations.

     Randy L. Taylor joined Citadel Communications in April 1999 as Controller
of Citadel Communications and Citadel Broadcasting. In January 2001, he became
Vice President of Finance of Citadel Communications and Citadel Broadcasting.
Prior to joining Citadel Communications, Mr. Taylor served as Controller of
Aladdin Gaming, LLC from July 1998 to April 1999. From October 1994 to June
1998, he was employed by Showboat Operating Company in various capacities
including Vice President of Taxation. At Showboat, Mr. Taylor had oversight
responsibility for tax matters and company reporting to the Securities and
Exchange Commission. From 1984 to 1994, Mr. Taylor was employed in various
capacities with KPMG LLP, most recently as Senior Tax Manager.

                                        47
<PAGE>   48

     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.

     Robert G. Liggett, Jr. became a director of Citadel Communications and
Citadel Broadcasting in August 2000 following Citadel Broadcasting's August 2000
acquisition of substantially all of the assets of Liggett Broadcasting, Inc. and
related entities. Mr. Liggett founded Liggett Broadcasting in 1970 and was its
sole stockholder. Liggett Broadcasting and related entities owned seven FM radio
stations and two AM radio stations and operated an additional AM radio station
under a time brokerage agreement.

     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 six persons presently constituting the Board of Directors of
Citadel Communications 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
was terminated during 2000. Robert G. Liggett, Jr. was originally appointed as a
director of Citadel Communications and Citadel Broadcasting in August 2000 in
accordance with the terms of the Asset Purchase Agreement pursuant to which
Citadel Broadcasting purchased various radio stations and related assets from
Liggett Broadcast, Inc. and certain related entities.

     Each director of Citadel Communications 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.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
that Citadel Communications' directors and executive officers, and any persons
who own more than ten percent of Citadel Communications' common stock, file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of the common stock and other equity securities of
Citadel Communications. Such persons are required by the Securities and Exchange
Commission regulations to furnish Citadel Communications with a copy of all
Section 16 forms they file.

     To our knowledge, based solely on a review of the copies of reports filed
and written representations that no other reports were required, during or with
respect to the year ended December 31, 2000, all such Section 16(a) filing
requirements were met.
                                        48
<PAGE>   49

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 2000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                    LONG-TERM
                                                                                   COMPENSATION
                                                    ANNUAL COMPENSATION            ------------
                                           -------------------------------------    SECURITIES
             NAME AND                                             OTHER ANNUAL      UNDERLYING       ALL OTHER
        PRINCIPAL POSITION          YEAR    SALARY     BONUS     COMPENSATION(2)     OPTIONS      COMPENSATION(1)
        ------------------          ----   --------   --------   ---------------   ------------   ---------------
<S>                                 <C>    <C>        <C>        <C>               <C>            <C>
Lawrence R. Wilson................  2000   $438,319   $    -0-       $   -0-          40,000          $8,904
  Chairman,                         1999    438,319        -0-           -0-         875,000           3,413
  Chief Executive Officer           1998    358,319    214,370(3)         -0-         60,000           3,046
  and President

Donna L. Heffner..................  2000   $230,000   $    -0-       $   -0-          30,000          $4,566
  Executive Vice President,         1999    230,000        -0-           -0-         250,000           3,489
  Chief Financial Officer           1998    175,000     80,000(3)         -0-         12,000           4,537
  and Secretary

D. Robert Proffitt................  2000   $250,000   $    -0-       $   -0-          30,000          $5,090
  Executive Vice President          1999    250,000        -0-           -0-         250,000           3,849
                                    1998    200,000     40,000(3)         -0-         12,000           3,161

Stuart R. Stanek..................  2000   $230,000   $    -0-       $25,776          15,000          $2,685
  Executive Vice President          1999    230,000        -0-        26,216         250,000           2,598
                                    1998    210,000     50,000(3)         -0-         12,000           2,635

Peter J. Benedetti................  2000   $200,000   $    -0-       $   -0-          15,000          $2,154
  Executive >Vice President         1999    200,000        -0-        69,402         125,000           2,202
                                    1998    160,000(4) $ 65,000(3)         -0-        21,005           2,093
</TABLE>

---------------
(1) Included for 2000 are our contributions to the Citadel Broadcasting Company
    401(k) Retirement Savings Plan (Mr. Wilson -- $8,766, Ms. Heffner -- $4,506,
    Mr. Proffitt -- $5,000, Mr. Stanek -- $2,625 and Mr. Benedetti -- $2,100),
    which contributions vest over five years, and the payment of premiums for
    term life insurance (Mr. Wilson -- $138, Ms. Heffner -- $60, Mr.
    Proffitt -- $90, Mr. Stanek -- $60 and Mr. Benedetti -- $54).

(2) 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 in
    2000 represents $19,685 for mortgage payments made on behalf of Mr. Stanek
    and $6,091 for personal motor vehicle use and an auto allowance paid to Mr.
    Stanek. The amount shown for Mr. Stanek in 1999 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 in 1999 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.

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

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

                                        49
<PAGE>   50

     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,
2000.

                         OPTIONS GRANTED IN FISCAL 2000

<TABLE>
<CAPTION>
                                                                                          POTENTIAL REALIZABLE
                                                 PERCENT OF                              VALUE AT ASSUMED RATES
                                   NUMBER OF       TOTAL       EXERCISE                      OF STOCK PRICE
                                   SECURITIES     OPTIONS         OR                        APPRECIATION FOR
                                   UNDERLYING    GRANTED TO      BASE                        OPTION TERM(1)
                                    OPTIONS      EMPLOYEES      PRICE      EXPIRATION    ----------------------
              NAME                  GRANTED       IN 2000       ($/SH)        DATE         5%($)       10%($)
              ----                 ----------    ----------    --------    ----------    ---------    ---------
<S>                                <C>           <C>           <C>         <C>           <C>          <C>
Lawrence R. Wilson(2)............    40,000         4.48%       $9.44      12-6-2010     $237,471     $601,797
Donna L. Heffner(2)..............    30,000         3.36         9.44      12-6-2010      178,103      451,348
D. Robert Proffitt(2)............    30,000         3.36         9.44      12-6-2010      178,103      451,348
Stuart R. Stanek(2)..............    15,000         1.68         9.44      12-6-2010       89,051      225,674
Peter J. Benedetti(2)............    15,000         1.68         9.44      12-6-2010       89,051      225,674
</TABLE>

---------------
(1) 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 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.

(2) Each option vests 20% each year on the first through fifth anniversaries of
    the date of the grant. Vesting accelerates in the event of a change in
    control of Citadel Communications, as provided for in the option award
    agreements.

     The following table shows the number of shares of common stock acquired and
the value realized upon exercise in 2000 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 of all unexercised options and the
value of unexercised in-the-money options (rounded to the nearest whole share)
held by such persons as of December 31, 2000.

                    AGGREGATED OPTION EXERCISES IN 2000 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).....       -0-            -0-         653,254/885,623              $3,817,053/$571,032
Donna L. Heffner..........       -0-            -0-         114,262/260,400                  652,331/159,696
D. Robert Proffitt........       -0-            -0-          76,421/262,800                  257,502/178,896
Stuart R. Stanek..........    20,000       $220,600         182,834/246,600                1,371,771/130,896
Peter J. Benedetti........       -0-            -0-          33,802/136,203                    10,800/45,600
</TABLE>

---------------
(1) These values have been calculated on the basis of the December 31, 2000
    closing price per share of $12.00, 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.

                                        50
<PAGE>   51

EMPLOYMENT AGREEMENT

     In June 1996, we entered into an employment agreement with Lawrence R.
Wilson which has an initial term ending in June 2001, which term will be
automatically renewed for one year. The agreement provides for annual base
salary compensation, annual increases to base salary and an annual bonus
calculated as a percentage of 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, 2000 and, therefore, no bonus was
earned for 2000. For 1999 and 2000, the Compensation Committee of 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. (a former significant stockholder of Citadel Communications) 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, consultants, independent contractors and
advisors of Citadel Communications and its subsidiaries 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 has been granted to date. The Equity Incentive
Plan is administered by the Compensation Committee of Citadel Communications'
Board of Directors and in certain cases Citadel 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, 2000, 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 1,986,298 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
                                        51
<PAGE>   52

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 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. Four-fifths of each of
these options have been earned.

401(K) PLAN

     Effective in 1993, we adopted a 401(k) Retirement Savings Plan for the
purpose of providing, at the option of the employee, retirement benefits to
full-time 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 $1.0 million was made by
us during the year ended December 31, 2000.

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.

     Additionally, for their services as directors, each non-employee director
was granted an option on December 6, 2000 to purchase 5,000 shares of Citadel
Communications' common stock at an exercise price of $9.44 per share.

                                        52
<PAGE>   53

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     During 2000, John E. von Schlegell, Robert F. Fuller, Ike Kalangis, Robert
G. Liggett, Jr. and Ted L. Snider, Sr. 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.,
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 The Endeavour Capital Fund
Limited Partnership and its general partner and Ted L. Snider, Sr. Mr. von
Schlegell is President and a shareholder of the general partner of The Endeavour
Capital Fund Limited Partnership. 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
offering in 2000.

     Transactions with Connect Communications. Connect Communications
Corporation provided telephone service to Citadel Broadcasting during 2000. The
amount paid by Citadel Broadcasting in 2000 for such services was approximately
$0.6 million. In addition, Connect Communications paid Citadel Broadcasting
approximately $0.1 million for the reimbursement of third party telephone
charges and rent for space on one of Citadel Broadcasting's towers in Little
Rock, Arkansas. 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. 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 and we
expect to continue to do business with Connect Communications Corporation.

     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 approximately $0.3 million each year. In 2000,
Citadel Broadcasting paid Mr. Fuller approximately $0.3 million 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.

     Acquisition of Assets from Liggett Broadcast, Inc. In August 2000, Citadel
Broadcasting completed its acquisition from Liggett Broadcast, Inc., Rainbow
Radio, LLC, New Tower, Inc. and LLJ Realty, LLC of various radio stations and
related assets for the aggregate purchase price of approximately $120.9 million
in cash. Following the acquisition, Robert G. Liggett, Jr., who together with
his immediate family members or trusts for the benefit of his immediate family
members directly or indirectly owned at the time of the acquisition all or a
majority of the equity interests of each selling entity, was appointed as a
director of each of Citadel Communications and Citadel Broadcasting.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth information with respect to the beneficial
ownership of Citadel Communications' common stock as of March 12, 2001 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.
                                        53
<PAGE>   54

     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, 2001, 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 -- 653,254 shares (including options to purchase
       470,033 shares held by Rio Bravo Enterprise Associates, L.P.);

     - Donna L. Heffner -- 114,262 shares;

     - D. Robert Proffitt -- 78,821 shares;

     - Peter J. Benedetti -- 33,802 shares;

     - each of Robert F. Fuller, Ike Kalangis, Robert G. Liggett, Jr., Ted L.
       Snider, Sr. and John E. von Schlegell -- 5,000 shares; and

     - all directors and executive officers as a group -- 910,739 shares.

<TABLE>
<CAPTION>
                                                              SHARES OF COMMON STOCK
                                                                BENEFICIALLY OWNED
                                                              -----------------------
                                                                           PERCENT OF
                                                                             COMMON
BENEFICIAL OWNER                                               NUMBER        STOCK
----------------                                              ---------    ----------
<S>                                                           <C>          <C>
FIVE PERCENT STOCKHOLDERS:
Capital Group International, Inc.(1)........................  2,197,000        5.9%
  11100 Santa Monica Boulevard
  Los Angeles, CA 90025

DIRECTORS AND EXECUTIVE OFFICERS:
Lawrence R. Wilson(2).......................................  2,547,800        6.7%
  City Center West
  Suite 400
  7201 West Lake Mead Boulevard
  Las Vegas, NV 89128
Donna L. Heffner(3).........................................    235,813          *
D. Robert Proffitt(4).......................................    232,055          *
Stuart R. Stanek............................................         --         --
Peter J. Benedetti(5).......................................     37,629          *
Robert F. Fuller............................................     70,000          *
Ike Kalangis................................................      6,000          *
Robert G. Liggett, Jr.(6)...................................     73,000          *
Ted L. Snider, Sr.(7).......................................     53,617          *
John E. von Schlegell.......................................      5,000          *
All directors and executive officers as a group (14           3,308,314        8.7%
  persons)(8)...............................................
</TABLE>

                                        54
<PAGE>   55

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

(1)   As reported on Schedule 13G filed with the Securities and Exchange
      Commission on February 12, 2001 by Capital Group International, Inc. on
      behalf of itself and Capital Guardian Trust Company, Capital Guardian
      Trust Company has sole voting power with respect to 1,607,300 of the
      shares indicated and sole dispositive power with respect to all of the
      shares indicated. Capital Group International, Inc. is the parent holding
      company of a group of investment management companies, including Capital
      Guardian Trust Company. 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.

(2)   The number of shares includes 1,822,883 shares held by Rio Bravo
      Enterprise Associates, L.P. and 14,000 shares held by Molly and
      Associates, LLC. The number of shares also includes 470,033 shares of
      common stock which may be acquired upon exercise of options held by Rio
      Bravo Enterprise Associates. Rio Bravo Enterprise Associates therefore
      beneficially owns 2,292,916 shares or 6.1% 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. Mr. Wilson is the managing member of Molly and Associates, and
      Rio Bravo Enterprise Associates owns 50% of the equity interests of Molly
      and Associates. 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.

(3)   Ms. Heffner's shares are jointly owned by Ms. Heffner and her spouse,
      Timothy Heffner. The number of shares shown does not include 3,500 shares
      held by Molly and Associates, which are allocated to Ms. Heffner's
      ownership interest in Molly and Associates. Beneficial ownership of these
      shares is attributed to Lawrence R. Wilson as discussed in Note 2.

(4)   Mr. Proffitt's shares are jointly owned by Mr. Proffitt and his spouse,
      Lynette Proffitt. The number of shares shown does not include 3,500 shares
      held by Molly and Associates, which are allocated to Mr. Proffitt's
      ownership interest in Molly and Associates. Beneficial ownership of these
      shares is attributed to Lawrence R. Wilson as discussed in Note 2.

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

(6)   The number of shares includes 68,000 shares held by Liggett Ventures, LLC.
      Mr. Liggett is the managing member of Liggett Ventures, and he and his
      spouse own all of the equity interests in Liggett Ventures.

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

(8)   Includes shares discussed in footnotes (2) and (6).

     As discussed elsewhere in this report, we have entered into an Agreement
and Plan of Merger with FLCC Holdings, Inc. and its subsidiary FLCC Acquisition
Corp., under which FLCC Acquisition Corp. will be merged with and into Citadel
Communications and our stockholders will receive $26.00 for each outstanding
share of our common stock that they hold. Consummation of this merger, which is
subject to various conditions, including consent of the Federal Communications
Commission to the transfer of control of our broadcast licenses and approval of
our stockholders, will result in a change of control of Citadel Communications.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     In June 2000, Citadel Broadcasting completed its acquisition of all of the
capital stock of Bloomington Broadcasting Holdings, Inc. for the aggregate
purchase price of approximately $175.9 million in cash. Following the
acquisition, Kenneth H. Maness, who was a shareholder, executive officer and the
sole director of Bloomington Broadcasting and who received approximately $4.8
million in transaction consideration, became an executive officer of Citadel
Communications and Citadel Broadcasting.

     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.

                                        55
<PAGE>   56

                                    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 Communications Corporation 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, 1999 and
     2000...................................................    F-3
  Consolidated Statements of Operations for the years ended
     December 31, 1998, 1999 and 2000.......................    F-4
  Consolidated Statements of Shareholders' Equity for the
     years ended December 31, 1998, 1999 and 2000...........    F-6
  Consolidated Statements of Cash Flows for the years ended
     December 31, 1998, 1999 and 2000.......................    F-8
  Notes to Consolidated Financial Statements................    F-9
</TABLE>

     (a)(2) Financial Statement Schedules --

           Schedule II: Valuation and Qualifying Accounts. Information required
           by Schedule II is included in the Notes to Citadel Communications
           Corporation's Consolidated Financial Statements as Note 14.

     (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, 2000,
           Citadel Communications Corporation filed the following report on Form
           8-K:

           Form 8-K filed on October 17, 2000 reporting (i) Citadel Broadcasting
           Company's October 2, 2000 acquisition of eleven radio stations
           serving three markets in Alabama and Tennessee and (ii) the Amended
           and Restated Credit Facility entered into on October 2, 2000 by and
           among Citadel Communications Corporation, Citadel Broadcasting
           Company, Credit Suisse First Boston, as Lead Arranger, Administrative
           Agent and Collateral Agent, and the lenders named therein. The
           following audited combined financial statements of Dick Broadcasting
           Company, Inc. of Tennessee and Subsidiaries, Dick Broadcasting
           Company, Inc. of Nashville and Dick Radio Alabama, Inc. were filed
           with this report on Form 8-K:

           Independent Auditors' Report

           Combined Balance Sheets as of December 31, 1999 and 1998

           Combined Statements of Income for the years ended December 31, 1999
           and 1998

           Combined Statements of Stockholders' Equity for the years ended
           December 31, 1999 and 1998

           Combined Statements of Cash Flows for the years ended December 31,
           1999 and 1998

           Notes to Combined Financial Statements

           The following unaudited consolidated financial statements of Dick
           Broadcasting Company, Inc. of Tennessee and Subsidiaries were filed
           with this report:

           Consolidated Balance Sheets as of June 30, 2000 and 1999

           Consolidated Statements of Income for the six months ended June 30,
           2000 and 1999

           Consolidated Statements of Stockholders' Equity for the six months
           ended June 30, 2000 and 1999

           Consolidated Statements of Cash Flows for the six months ended June
           30, 2000 and 1999

           Notes to Consolidated Financial Statements

                                        56
<PAGE>   57

           The following pro forma financial information of Citadel
           Communications Corporation and Subsidiary was filed with this report:

           Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June
           30, 2000

           Unaudited Pro Forma Condensed Consolidated Statement of Operations
           for the six months ended June 30, 2000

           Unaudited Pro Forma Condensed Consolidated Statement of Operations
           for the year ended December 31, 1999

                                        57
<PAGE>   58

                                   SIGNATURES

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

                                          CITADEL COMMUNICATIONS CORPORATION

Date: March 23, 2001                      By: /s/ LAWRENCE R. WILSON
                                            ------------------------------------
                                            Lawrence R. Wilson
                                            Chairman of the Board,
                                            Chief Executive Officer and
                                              President

     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
Communications Corporation 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, Chief Executive    March 23, 2001
---------------------------------------      Officer and President (Principal
          Lawrence R. Wilson                 Executive Officer)

         /s/ DONNA L. HEFFNER              Executive Vice President and Chief        March 23, 2001
---------------------------------------      Financial Officer (Principal Financial
           Donna L. Heffner                  and Accounting Officer)

         /s/ ROBERT F. FULLER              Director                                  March 23, 2001
---------------------------------------
           Robert F. Fuller

           /s/ IKE KALANGIS                Director                                  March 23, 2001
---------------------------------------
             Ike Kalangis

      /s/ ROBERT G. LIGGETT, JR.           Director                                  March 23, 2001
---------------------------------------
        Robert G. Liggett, Jr.

       /s/ JOHN E. VON SCHLEGELL           Director                                  March 23, 2001
---------------------------------------
         John E. von Schlegell

        /s/ TED L. SNIDER, SR.             Director                                  March 23, 2001
---------------------------------------
          Ted L. Snider, Sr.
</TABLE>

                                        58
<PAGE>   59

                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Independent Auditors' Report................................   F-2

Consolidated Balance Sheets as of December 31, 1999 and
  2000......................................................   F-3

Consolidated Statements of Operations for the years ended
  December 31, 1998, 1999 and 2000..........................   F-4

Consolidated Statements of Shareholders' Equity for the
  years ended December 31, 1998, 1999 and 2000..............   F-6

Consolidated Statements of Cash Flows for the years ended
  December 31, 1998, 1999 and 2000..........................   F-8

Notes to Consolidated Financial Statements..................   F-9
</TABLE>

                                       F-1
<PAGE>   60

                          INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Citadel Communications Corporation:

We have audited the accompanying consolidated balance sheets of Citadel
Communications Corporation and subsidiary as of December 31, 1999 and 2000 and
the related consolidated statements of operations, shareholders' equity and cash
flows for each of the years in the three-year period ended December 31, 2000.
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 auditing standards generally accepted
in the United States of America. 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
Communications Corporation and subsidiary as of December 31, 1999 and 2000 and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America.

/s/ KPMG LLP

Phoenix, Arizona
February 23, 2001, except as to note 18,
which is as of March 14, 2001

                                       F-2
<PAGE>   61

                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

                          Consolidated Balance Sheets

                           December 31, 1999 and 2000
                    (In thousands, except for share amounts)

<TABLE>
<CAPTION>
                                                                1999         2000
                                                              --------    ----------
<S>                                                           <C>         <C>
                                       ASSETS
Current assets:
  Cash and cash equivalents.................................  $ 17,981    $    8,092
  Accounts receivable, less allowance for doubtful accounts
     of $2,435 in 1999 and $2,821 in 2000...................    52,728        77,974
  Due from related parties..................................       236           202
  Income taxes receivable...................................       226           182
  Prepaid expenses..........................................     2,708         5,938
  Net assets of discontinued operations.....................     2,275            --
  Assets held for sale......................................        --         3,448
                                                              --------    ----------
       Total current assets.................................    76,154        95,836
Property and equipment, net.................................    68,035       104,834
Intangible assets, net......................................   538,664     1,273,520
Restricted cash.............................................    26,192            --
Deposits for pending acquisitions...........................        --         1,121
Other assets................................................     7,568        10,253
                                                              --------    ----------
                                                              $716,613    $1,485,564
                                                              ========    ==========

         LIABILITIES, EXCHANGEABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable..........................................  $  1,696    $    3,745
  Accrued liabilities.......................................    13,344        32,384
  Current maturities of notes payable.......................     5,495        16,512
  Current maturities of other long-term obligations.........       842         1,366
                                                              --------    ----------
       Total current liabilities............................    21,377        54,007
Note payable................................................   132,000       633,488
Senior subordinated notes payable, net of unamortized
  discount..................................................   210,509       210,969
Other long-term obligations, less current maturities........     2,516         1,796
Deferred tax liability......................................    45,640        74,875
                                                              --------    ----------
     Total liabilities......................................   412,042       975,135
                                                              --------    ----------
Exchangeable preferred stock................................    85,362        96,158
Commitments and contingencies (note 17)
Shareholders' equity:
  Common stock, $.001 par value; authorized 200,000,000
     shares, issued and outstanding 31,831,212 and
     36,978,138 shares in 1999 and 2000, respectively.......        32            37
  Additional paid-in capital................................   287,711       510,439
  Deferred compensation.....................................   (26,924)      (14,751)
  Accumulated deficit.......................................   (41,610)      (80,834)
  Accumulated other comprehensive loss......................        --          (620)
                                                              --------    ----------
       Total shareholders' equity...........................   219,209       414,271
                                                              --------    ----------
                                                              $716,613    $1,485,564
                                                              ========    ==========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-3
<PAGE>   62

                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

                     Consolidated Statements of Operations

                  Years ended December 31, 1998, 1999 and 2000
               (In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
                                                        1998           1999           2000
                                                     -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>
Gross broadcasting revenue.........................  $   147,191    $   196,204    $   314,439
  Less agency commissions..........................       13,879         17,709         29,615
                                                     -----------    -----------    -----------
     Net broadcasting revenue......................      133,312        178,495        284,824
                                                     -----------    -----------    -----------
Operating expenses:
  Station operating expenses.......................       91,845        115,312        177,359
  Depreciation and amortization....................       25,970         35,749         76,502
  Corporate general and administrative.............        4,295          7,010          9,092
  Non-cash deferred stock compensation.............           74          1,727         12,246
                                                     -----------    -----------    -----------
     Operating expenses............................      122,184        159,798        275,199
                                                     -----------    -----------    -----------
     Operating income..............................       11,128         18,697          9,625
                                                     -----------    -----------    -----------
Non-operating expenses (income):
  Interest expense.................................       18,126         25,385         53,135
  Interest income..................................         (822)        (1,877)        (3,914)
  Loss (gain) on sale of assets....................       (1,045)         1,208           (818)
  Other, net.......................................          216            281            134
                                                     -----------    -----------    -----------
     Non-operating expenses, net...................       16,475         24,997         48,537
                                                     -----------    -----------    -----------
     Loss from continuing operations before income
       taxes.......................................       (5,347)        (6,300)       (38,912)
Income tax (benefit)...............................       (1,395)        (1,647)        (4,022)
                                                     -----------    -----------    -----------
     Loss from continuing operations...............       (3,952)        (4,653)       (34,890)
Income (loss) from discontinued operations, net of
  tax..............................................           21         (4,275)        (1,904)
Loss on disposal of discontinued operations, net of
  tax..............................................           --             --         (2,430)
                                                     -----------    -----------    -----------
     Net loss......................................       (3,931)        (8,928)       (39,224)
Dividend requirement for exchangeable preferred
  stock............................................       14,586         14,103         12,050
                                                     -----------    -----------    -----------
     Net loss applicable to common shares..........  $   (18,517)   $   (23,031)   $   (51,274)
                                                     ===========    ===========    ===========
Basic and diluted loss from continuing operations
  after dividend requirement per common share......  $     (1.51)   $      (.65)   $     (1.29)
Basic and diluted net loss per common share........  $     (1.51)   $      (.80)   $     (1.41)
Weighted average common shares outstanding.........   12,297,588     28,779,712     36,340,978
                                                     ===========    ===========    ===========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-4
<PAGE>   63

                      (This page intentionally left blank)

                                       F-5
<PAGE>   64

                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

                Consolidated Statements of Shareholders' Equity

                  Years ended December 31, 1998, 1999 and 2000
                      (In thousands, except share amounts)

<TABLE>
<CAPTION>
                                                              CONVERTIBLE PREFERRED STOCK                       CLASS A   CLASS C
                                           ------------------------------------------------------------------   COMMON    COMMON
                                            SERIES A     SERIES C   SERIES D   SERIES E   SERIES F   SERIES G    STOCK     STOCK
                                           -----------   --------   --------   --------   --------   --------   -------   -------
<S>                                        <C>           <C>        <C>        <C>        <C>        <C>        <C>       <C>
Balances at December 31, 1997............      $ 2         $ 6        $ 3        $ 1        $ 1        $ 1        $ 3       $ 1
Comprehensive loss:
  Net loss...............................       --          --         --         --         --         --         --        --
  Unrealized loss on hedging contract,
    net of tax...........................       --          --         --         --         --         --         --        --
    Total comprehensive loss.............       --          --         --         --         --         --         --        --
Proceeds of initial public offering......       --          --         --         --         --         --         --        --
Initial public offering conversion and
  split of common stock and preferred
  stock..................................       (2)         --         --         (1)        (1)        (1)        (3)       (1)
Initial public offering conversion and
  split of Series C and Series D
  preferred stock........................       --          (6)        (3)        --         --         --         --        --
Conversion of preferred stock to common
  stock..................................       --          --         --         --         --         --         --        --
Cash payments of initial public offering
  costs..................................       --          --         --         --         --         --         --        --
Exercise of options......................       --          --         --         --         --         --         --        --
Exercise of warrants.....................       --          --         --         --         --         --         --        --
Deferred stock compensation..............       --          --         --         --         --         --         --        --
Accretion of exchangeable preferred stock
  costs..................................       --          --         --         --         --         --         --        --
Exchangeable preferred stock dividend
  requirement............................       --          --         --         --         --         --         --        --
                                               ---         ---        ---        ---        ---        ---        ---       ---
Balances at December 31, 1998............       --          --         --         --         --         --         --        --
Comprehensive loss:
  Net loss...............................       --          --         --         --         --         --         --        --
  Unrealized gain on hedging contract,
    net of tax...........................       --          --         --         --         --         --         --        --
    Total comprehensive loss.............       --          --         --         --         --         --         --        --
Proceeds from public offering, net of
  offering costs of $1,366...............       --          --         --         --         --         --         --        --
Exercise of options......................       --          --         --         --         --         --         --        --
Tax benefit of option exercises..........       --          --         --         --         --         --         --        --
Deferred stock compensation..............       --          --         --         --         --         --         --        --
Accretion of exchangeable preferred stock
  costs..................................       --          --         --         --         --         --         --        --
Exchangeable preferred stock dividend
  requirement............................       --          --         --         --         --         --         --        --
Premium paid on partial retirement of
  preferred stock........................       --          --         --         --         --         --         --        --
                                               ---         ---        ---        ---        ---        ---        ---       ---
Balances at December 31, 1999............       --          --         --         --         --         --         --        --
Comprehensive loss:
  Net loss...............................       --          --         --         --         --         --         --        --
  Unrealized loss on hedging contracts,
    net of tax...........................       --          --         --         --         --         --         --        --
    Total comprehensive loss.............       --          --         --         --         --         --         --        --
Proceeds from public offering, net of
  offering costs of $1,269...............       --          --         --         --         --         --         --        --
Exercise of options......................       --          --         --         --         --         --         --        --
Reversal of tax benefit of option
  exercises..............................       --          --         --         --         --         --         --        --
Deferred stock compensation..............       --          --         --         --         --         --         --        --
Accretion of exchangeable preferred stock
  costs..................................       --          --         --         --         --         --         --        --
Exchangeable preferred stock dividend
  requirement............................       --          --         --         --         --         --         --        --
Equity costs related to offering of
  Company's stock as part of employee
  retirement plan........................       --          --         --         --         --         --         --        --
Premium paid on partial retirement of
  preferred stock........................       --          --         --         --         --         --         --        --
                                               ---         ---        ---        ---        ---        ---        ---       ---
Balances at December 31, 2000............      $--         $--        $--        $--        $--        $          $--       $--
                                               ===         ===        ===        ===        ===        ===        ===       ===
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-6
<PAGE>   65

<TABLE>
<CAPTION>
                                                                               ACCUMULATED
   COMMON STOCK       CONVERTIBLE   ADDITIONAL                                    OTHER           TOTAL
-------------------    PREFERRED     PAID-IN       DEFERRED     ACCUMULATED   COMPREHENSIVE   SHAREHOLDERS'
  SHARES     AMOUNT      STOCK       CAPITAL     COMPENSATION     DEFICIT         LOSS           EQUITY
  ------     ------   -----------   ----------   ------------   -----------   -------------   -------------
<S>          <C>      <C>           <C>          <C>            <C>           <C>             <C>
        --    $--         $--        $ 44,865      $     --      $(28,751)      $     --        $ 16,132
        --     --          --              --            --        (3,931)            --          (3,931)
        --     --          --              --            --            --           (236)           (236)
                                                                                                --------
        --     --          --              --            --            --             --          (4,167)
                                                                                                --------
 7,282,119      7          --         116,507            --            --             --         116,514
 8,516,357      9          --              --            --            --             --              --
        --     --           9              --            --            --             --              --
 9,506,561      9          (9)             --            --            --             --              --
        --     --          --          (9,877)           --            --             --          (9,877)
     9,431     --          --              52            --            --             --              52
   414,303      1          --              --            --            --             --               1
        --     --          --           1,118        (1,044)           --             --              74
        --     --          --            (180)           --            --             --            (180)
        --     --          --         (14,586)           --            --             --         (14,586)
----------    ---         ---        --------      --------      --------       --------        --------
25,728,771     26          --         137,899        (1,044)      (32,682)          (236)        103,963
        --     --          --              --            --        (8,928)            --          (8,928)
        --     --          --              --            --            --            236             236
                                                                                                --------
        --     --          --              --            --            --             --          (8,692)
                                                                                                --------
 5,000,000      5          --         139,029            --            --             --         139,034
 1,102,441      1          --           2,996            --            --             --           2,997
        --     --          --             479            --            --             --             479
        --     --          --          27,607       (25,880)           --             --           1,727
        --     --          --            (206)           --            --             --            (206)
        --     --          --         (14,103)           --            --             --         (14,103)
        --     --          --          (5,990)           --            --             --          (5,990)
----------    ---         ---        --------      --------      --------       --------        --------
31,831,212     32          --         287,711       (26,924)      (41,610)            --         219,209
        --     --          --              --            --       (39,224)            --         (39,224)
        --     --          --              --            --            --           (620)           (620)
                                                                                                --------
        --     --          --              --            --            --             --         (39,844)
                                                                                                --------
 4,750,000      5          --         233,567            --            --             --         233,572
   396,926     --          --           1,869            --            --             --           1,869
        --     --          --            (234)           --            --             --            (234)
        --     --          --              73        12,173            --             --          12,246
        --     --          --            (234)           --            --             --            (234)
        --     --          --         (12,050)           --            --             --         (12,050)
        --     --          --             (73)           --            --             --             (73)
        --     --          --            (190)           --            --             --            (190)
----------    ---         ---        --------      --------      --------       --------        --------
36,978,138    $37         $--        $510,439      $(14,751)     $(80,834)      $   (620)       $414,271
==========    ===         ===        ========      ========      ========       ========        ========
</TABLE>

                                       F-7
<PAGE>   66

                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

                     Consolidated Statements of Cash Flows

                  Years ended December 31, 1998, 1999 and 2000
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                1998         1999         2000
                                                              ---------    ---------    ---------
<S>                                                           <C>          <C>          <C>
Cash flows from operating activities:
  Net loss..................................................  $  (3,931)   $  (8,928)   $ (39,224)
  Adjustments to reconcile net loss to net cash provided by
    operating activities:
       Amortization of deferred revenue.....................         --         (100)        (300)
       Depreciation and amortization........................     26,414       35,749       76,502
       Deferred income taxes................................     (1,806)      (2,593)      (4,528)
       Deferred stock compensation expense..................         74        1,727       12,246
       Amortization of debt issuance costs and debt
         discounts..........................................        717        1,849        1,368
       Bad debt expense.....................................      1,201        5,787        7,507
       Loss/(gain) on sale of assets........................     (1,045)       1,208         (818)
       Changes in assets and liabilities, net of
         acquisitions:
         Increase in accounts receivable and notes
           receivable from related parties..................     (9,586)     (18,483)     (28,175)
         Increase in prepaid expenses.......................       (424)        (528)      (1,127)
         Increase (decrease) in accounts payable............        359       (4,238)       1,752
         Increase in accrued liabilities....................      1,565        1,508       15,022
         Decrease in net assets of discontinued
           operations.......................................        413        2,388        2,781
                                                              ---------    ---------    ---------
         Net cash provided by operating activities..........     13,951       15,346       43,006
                                                              ---------    ---------    ---------
Cash flows from investing activities:
  Capital expenditures......................................     (4,511)     (16,609)      (5,453)
  Capitalized acquisition costs.............................     (1,242)      (5,579)      (4,458)
  Cash paid to acquire stations.............................    (39,128)    (293,334)    (825,176)
  Other assets, net.........................................       (390)         (32)        (733)
  Deposits for pending acquisitions.........................         --       (1,600)      (1,121)
  Proceeds from sales of assets.............................      2,440       25,965       15,834
  Cash (held in) disbursed from escrow for acquisitions and
    prepayments.............................................         --      (26,192)      26,192
  Capital expenditures for discontinued operations..........     (3,581)      (1,046)        (327)
                                                              ---------    ---------    ---------
    Net cash used in investing activities...................    (46,412)    (318,427)    (795,242)
                                                              ---------    ---------    ---------
Cash flows from financing activities:
  Principal payments on notes payable.......................   (125,084)          --      (55,000)
  Proceeds from notes payable...............................     35,000      132,000      573,000
  Proceeds from senior subordinated notes payable...........    111,550           --           --
  Proceeds from public offerings............................    116,514      140,400      234,840
  Cash payments of public offering costs and costs related
    to offering of Company's stock as part of employee
    retirement plan.........................................     (9,877)      (1,366)        (911)
  Payment of debt issuance costs............................       (689)      (3,779)      (3,733)
  Principal payments on other long-term obligations.........       (442)        (133)      (6,040)
  Proceeds from other obligations...........................        407           --           --
  Payment of dividends on exchangeable preferred stock......         --         (515)          --
  Redemption and repurchase of exchangeable preferred stock
    including premiums......................................         --      (51,197)      (1,678)
  Proceeds from the exercise of stock options...............         52        2,997        1,869
                                                              ---------    ---------    ---------
    Net cash provided by financing activities...............    127,431      218,407      742,347
                                                              ---------    ---------    ---------
    Net increase (decrease) in cash and cash equivalents....     94,970      (84,674)      (9,889)
Cash and cash equivalents, beginning of year................      7,685      102,655       17,981
                                                              ---------    ---------    ---------
Cash and cash equivalents, end of year......................  $ 102,655    $  17,981    $   8,092
                                                              =========    =========    =========
</TABLE>

          See accompanying notes to consolidated financial statements.
                                       F-8
<PAGE>   67

                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

     Citadel Communications Corporation was formed March 24, 1993 as a Nevada
corporation and is a holding company that owns all of the issued and outstanding
common stock of Citadel Broadcasting Company ("Citadel Broadcasting"). Citadel
License, Inc. was a wholly-owned subsidiary of Citadel Broadcasting. On December
28, 1999, Citadel License, Inc. was merged into Citadel Broadcasting. Citadel
Broadcasting owns and operates radio stations and holds Federal Communications
Commission ("FCC") licenses in Alabama, Arkansas, California, Colorado,
Connecticut, Idaho, Illinois, Indiana, Louisiana, Maine, Massachusetts,
Michigan, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oklahoma,
Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah and Washington, and
has entered into a local marketing agreements for the stations it owns in Tyler,
Texas and Monroe, Louisiana.

     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 operations. In December 2000, Citadel Broadcasting
entered into an agreement to sell its subscriber list to a large internet
service provider and expects to shut down its internet operations by April 30,
2001.

Principles of Consolidation and Presentation

     The accompanying consolidated financial statements include Citadel
Communications Corporation and its wholly-owned subsidiary, Citadel Broadcasting
(collectively referred to as the "Company"). The assets and liabilities and
operating information for Citadel Broadcasting Company are identical to Citadel
Communications Corporation. 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 were 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

     The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. During 1998, 1999 and
2000, the Company utilized interest rate swap agreements to hedge the effects of
fluctuations in interest rates. Amounts receivable or payable due to settlement
of the interest rate swap

                                       F-9
<PAGE>   68
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

agreements are recognized as interest expense or income on a monthly basis. A
mark-to-market adjustment is recorded as a component of shareholders' equity to
reflect the fair value of the interest rate swap agreements.

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 net book value. 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, trade name and
call letters, 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.

Stock Option Plan

     Prior to January 1, 1996, the Company accounted for its stock option plans
in accordance with the provisions of APB Opinion No. 25, "Accounting for Stock
Issued to Employees," and related interpretations. As such, compensation expense
would be recorded on the date of grant only if the current market price of the
underlying stock exceeded the exercise price. On January 1, 1996, the Company
adopted SFAS No. 123, "Accounting for Stock-Based Compensation," (SFAS No. 123)
which permits entities to recognize as expense over the vesting period the fair
value of all stock-based awards on the date of grant. Alternatively, SFAS No.
123 also allows entities to continue to apply the provisions of APB Opinion No.
25 and provide pro forma net income and pro forma earnings per share disclosures
for employee stock option grants made in 1995 and future years as if the

                                       F-10
<PAGE>   69
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

fair-value based method defined in SFAS No. 123 had been applied. The Company
has elected to continue to apply the provisions of APB Opinion No. 25 and
provide the pro forma disclosure provisions of SFAS No. 123.

     In March 2000, the Financial Accounting Standards Board issued FASB
Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation (an interpretation of APB 25). This interpretation clarifies the
application of APB No. 25 by clarifying the definition of an employee, the
determination of non-compensatory plans and the effect of modifications to stock
options. This interpretation was effective July 1, 2000 and did not have a
material effect on the Company's consolidated financial statements.

Earnings Per Share

     Basic earnings (loss) per share is computed by dividing income (loss)
available to common stockholders 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. The assumed
exercise of outstanding stock options of 2,824,633, 3,407,419 and 3,830,593 in
1998, 1999 and 2000, respectively, have been excluded from the calculations of
diluted net loss per share as their effect is antidilutive.

Revenue Recognition

     Broadcasting operations derive revenue primarily 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.

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 hedging
contracts which are 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
                                       F-11
<PAGE>   70
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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, 1999 and 2000, 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 the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell. Management believes that
no material impairment in the value of long-lived assets existed at December 31,
2000.

Recent Accounting Pronouncements

     In June 1998 the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." In June 2000 the FASB issued
SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an Amendment of SFAS 133." SFAS No. 133 and SFAS No. 138 require
that all derivative instruments be recorded on the balance sheet at their
respective fair values. The Company has previously adopted SFAS No. 133 and as
such will comply with any changes under SFAS No. 138. In accordance with SFAS
No. 133 and 138, the Company has recorded a net liability of approximately $0.6
million net of tax, as of December 31, 2000 to recognize its derivatives at fair
value.

Reclassifications

     Certain 1998 and 1999 balances have been reclassified to conform to the
2000 presentation.

                                       F-12
<PAGE>   71
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(2)  ACQUISITIONS AND DISPOSITIONS

                       2000 ACQUISITIONS AND DISPOSITIONS

2000 Acquisitions

     During 2000, the Company acquired the assets of 57 FM and 29 AM radio
stations from various parties as follows:

<TABLE>
<CAPTION>
                                                                                                 PURCHASE
   ACQUISITION DATE            SELLER             STATIONS            MARKET SERVED               PRICE
----------------------  ---------------------  --------------  ----------------------------   --------------
                                                                                              (IN THOUSANDS)
<S>                     <C>                    <C>             <C>                            <C>
RADIO STATIONS:
February 10, 2000.....  Montachusett           1 FM            Worcester, MA                     $ 21,000
                        Broadcasting, Inc.
March 31, 2000........  KSMB/KDYS Radio        2 FM and 2 AM   Lafayette, LA                        8,500
                        Broadcasting Company
                        and KVOL Radio
                        Broadcasting Company
April 6, 2000.........  LifeTalk Broadcasting  1 AM            Albuquerque, NM                      5,400
                        Association
April 7, 2000.........  Montachusett           1 FM            Worcester, MA                        3,500
                        Broadcasting, Inc
April 15, 2000........  Broadcasting Partners  3 FM and 1 AM   Buffalo/Niagara Falls, NY          189,000
                        Holdings, L.P. and     3 FM and 1 AM   Syracuse, NY
                        subsidiaries           1 FM and 1 AM   Ithaca, NY
                                               2 FM and 1 AM   Atlantic City/Cape May, NJ
                                               1 FM and 4 AM   Tyler/Longview, TX
                                               4 FM            Monroe, LA
                                               2 FM and 1 AM   New London, CT
                                               1 FM and 1 AM   New Bedford/Fall River, MA
                                               2 FM and 2 AM   Augusta/Waterville, ME
                                               3 FM            Presque Isle, ME
                                               1 FM            Dennysville/Calais, ME
April 18, 2000........  Venture Broadcasting,  1 AM            Salt Lake City, UT                     600
                        Inc
May 22, 2000..........  CAT Communications     1 FM and 1 AM   Worcester, MA                          900
                        Corporation
June 19, 2000.........  WBA, Inc               1 FM            Worcester, MA                       12,800
June 28, 2000.........  Bloomington            3 FM and 1 AM   Grand Rapids, MI                   175,900
                        Broadcasting           3 FM and 1 AM   Columbia, SC
                        Holdings, Inc.         3 FM and 1 AM   Chattanooga, TN
                                                               Johnson City/Kingsport/
                                               2 FM and 3 AM   Bristol, TN
                                               2 FM and 1 AM   Bloomington, IL
July 31, 2000.........  Liggett Broadcast,     4 FM and 2 AM   Lansing/East Lansing, MI           120,900
                        Inc. and related       2 FM            Saginaw/Bay City/Midland, MI
                        entities               1 FM            Flint, MI
October 2, 2000.......  Dick Broadcasting      3 FM and 1 AM   Knoxville, TN                      288,600
                        Company, Inc. of       2 FM            Nashville, TN
                        Tennessee and related  3 FM and 2 AM   Birmingham, AL
                        entities
</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

                                       F-13
<PAGE>   72
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

as determined by management. The acquisitions were funded with borrowings under
the credit facility, proceeds from the Company's February 2000 stock offering
proceeds, from the disposition of stations in 1999 and operating funds. The
aggregate purchase price, including acquisition costs of approximately $5.2
million, was allocated as follows (numbers shown in thousands):

<TABLE>
<S>                                                         <C>
Property and equipment....................................  $ 46,276
Intangible assets.........................................   779,049
Other assets..............................................     6,966
                                                            --------
                                                            $832,291
                                                            ========
</TABLE>

2000 Dispositions

     On April 6, 2000, one Albuquerque, New Mexico AM station owned by the
Company was exchanged for one AM station owned by LifeTalk Broadcasting
Association in connection with the April 6, 2000 acquisition disclosed above.

     On July 31, 2000, the Company sold one AM station and two FM stations
serving the Saginaw/Bay City/Midland, Michigan market for approximately $16.1
million.

                       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 Company   1 FM and 1 AM  Harrisburg/Carlisle, PA         4,500
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 Co  1 FM           Baton Rouge, LA                 9,500
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>

                                       F-14
<PAGE>   73
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     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, proceeds from Citadel Broadcasting's 9 1/4% Senior Subordinated
Notes and proceeds from the Company's June 1999 stock offering. The aggregate
purchase price, including acquisition costs of approximately $7.0 million, 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.

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
completed in 1999 and 2000 had been completed as of January 1, 1999.

<TABLE>
<CAPTION>
                                                             UNAUDITED
                                                    ----------------------------
                                                     YEAR ENDED      YEAR ENDED
                                                    DECEMBER 31,    DECEMBER 31,
                                                        1999            2000
                                                    ------------    ------------
                                                           (IN THOUSANDS)
<S>                                                 <C>             <C>
Net broadcasting revenue..........................    $322,588        $347,994
Operating income..................................       1,745           2,359
Net loss..........................................     (79,244)        (77,346)
</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 and Dispositions

     On April 15, 2000, the Company was assigned the rights under a purchase
agreement to acquire one AM radio station in Buffalo/Niagara Falls. This
assignment was in connection with the stations acquired from Broadcasting
Partners Holdings. L.P. and subsidiaries previously discussed under the heading
"2000 Acquisitions". The aggregate consideration paid or to be paid for this AM
radio station is expected to be approximately $0.8 million. On April 15, 2000,
the Company also began providing programming and selling commercial advertising
for this station pursuant to a time brokerage agreement assigned to the Company.

     On June 1, 2000, the Company entered into a local marketing agreement with
Gleiser Communications, LLC with respect to five radio stations owned by the
Company in Tyler, Texas. Under the agreement, Gleiser

                                       F-15
<PAGE>   74
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Communications operates the stations and receives all revenue and pays all
expenses associated with the stations. The Company receives reimbursement for
all reasonable and prudent operating costs of the stations incurred by the
Company, a fee of $15,000 per month plus 30% of broadcast cash flow (generally
defined as station operating income excluding amortization and depreciation) in
excess of the $15,000 dollar fee. In addition, Gleiser Communications is
obligated, except under certain circumstances, to purchase the radio stations
from the Company prior to May 31, 2003. The purchase price ranges from $5.0
million to $6.5 million based on when the asset purchase agreement is finalized
by both parties.

     On December 14, 2000, the Company entered into an asset purchase agreement
with Monroe Radio Partners, Inc. to sell four FM radio stations serving Monroe,
Louisiana for the sale price of approximately $4.3 million in cash. Commencing
on December 18, 2000, Monroe Radio Partners began providing programming and
selling commercial advertising for these stations pursuant to a local marketing
agreement dated December 14, 2000. The Company receives a fee of $18,000 per
month under the local marketing agreement. As of December 31, 2000, the net
assets of the radio stations serving Monroe, Louisiana are presented in the
accompanying consolidated balance sheet as "Assets held for sale".

     On December 21, 2000, the Company entered into an asset purchase agreement
with Slone Broadcasting Inc. to acquire two FM radio stations and one AM radio
station serving Tucson, Arizona for the purchase price of approximately $45.0
million in cash. The Company has delivered an irrevocable letter of credit in
favor of Slone Broadcasting in the amount of $2.25 million to secure its
obligations under the asset purchase agreement. Pursuant to the terms of the
asset purchase agreement, this acquisition will close the earlier of December
31, 2001 or the date on which the Company has consummated a radio station
disposition which, when aggregated with net proceeds received from other radio
station dispositions consummated in 2001, results in receipt of not less than
$67.0 million in net proceeds. Commencing on February 1, 2001, the Company began
providing programming and selling commercial advertising for these stations
pursuant to a local marketing agreement entered into on December 21, 2000.

     On December 21, 2000, the Company entered into purchase agreements, as
amended on January 15, 2001, with each of the five members of Slone Radio, LLC
to acquire all of the equity interests of Slone Radio LLC, which owns one FM
radio station and one AM radio station, both serving Tucson, Arizona, for the
aggregate purchase price of approximately $16.0 million in cash and 181,820
shares of the Company's common stock valued at approximately $2.0 million, based
on the closing price of the Company's common stock on December 21, 2000. If the
proposed merger with FLCC Holdings, Inc., described below at note 18, occurs
prior to the completion of this acquisition, the cash purchase price for this
acquisition will increase by $4.7 million, which replaces 181,820 shares of the
Company's common stock. Pursuant to the terms of the purchase agreements, this
acquisition will close the earlier of December 31, 2001 or the date on which the
Company has consummated a radio station disposition which, when aggregated with
net proceeds received from other radio station dispositions consummated in 2001,
results in receipt of not less than $67.0 million in net proceeds. Commencing on
February 1, 2001, the Company began providing programming and selling commercial
advertising for these stations pursuant to a local marketing agreement entered
into on December 21, 2000.

     The pending transactions 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 adopted a plan for the disposition by sale of eFortress.
During 2000, the Company had a number of offers that were either unacceptable to
the Company or the purchaser was unable to raise the required funds to complete
the transaction. On December 19, 2000, the Company entered into an agreement
with a large internet service provider. The Company agreed to sell its
                                       F-16
<PAGE>   75
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

subscriber list based on a per subscriber amount assuming the subscribers
remained with the acquiror for two months of service. In late February 2001, the
Company provided the acquiror with its subscriber database and received
approximately $0.9 million, one-half of the purchase price based on the number
of subscribers at that time. The purchase price will be finalized in May 2001
and the Company will receive any additional amounts owed based on the number of
subscribers that continue internet service for two months. The Company plans to
shut down all internet services by April 30, 2001 and will transfer (to its
radio stations), sell or otherwise dispose of the related fixed assets.

     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>
                                                          1998      1999       2000
                                                         ------    -------    -------
                                                                (IN THOUSANDS)
<S>                                                      <C>       <C>        <C>
Revenue................................................  $2,114    $ 4,488    $ 2,801
                                                         ------    -------    -------
Income (loss) from discontinued operations before
  taxes................................................      30     (4,437)    (1,904)
Loss on disposal of discontinued operations............      --         --     (2,430)
Income tax expense (benefit)...........................       9       (162)        --
                                                         ------    -------    -------
Income (loss) and loss on disposal from discontinued
  operations, net of taxes.............................  $   21    $(4,275)   $(4,334)
                                                         ======    =======    =======
</TABLE>

     The net assets of the discontinued operations at December 31, 1999 and 2000
have been reclassified in the accompanying consolidated balance sheet as
follows:

<TABLE>
<CAPTION>
                                          1999                                                   2000
                                     --------------                                         --------------
                                     (IN THOUSANDS)                                         (IN THOUSANDS)
<S>                                  <C>               <C>                                  <C>
Accounts receivable, net...........     $    42        Accounts receivable, net...........     $    30
Other current assets...............           3        Other current assets...............        (117)
Property and equipment, net........       1,522        Property and equipment, net........       1,522
Intangibles, net...................       2,085        Intangibles, net...................       2,085
Current liabilities................      (1,377)       Current liabilities................      (3,699)
                                        -------                                                -------
Net assets of discontinued              $ 2,275        Accrued liabilities................     $  (179)
  operations.......................
                                        =======                                                =======
</TABLE>

(4)  PROPERTY AND EQUIPMENT

     Property and equipment at December 31, 1999 and 2000 consists of the
following:

<TABLE>
<CAPTION>
                                                                             ESTIMATED
                                                      1999        2000      USEFUL LIFE
                                                    --------    --------    -----------
                                                       (IN THOUSANDS)
<S>                                                 <C>         <C>         <C>
Land..............................................  $  5,257    $ 15,586            --
Buildings and improvements........................    16,894      28,441    5-30 years
Transmitters, towers and equipment................    45,805      64,497    5-15 years
Office furniture and equipment....................     8,247      15,172     3-5 years
Airplane..........................................     9,131       8,372       5 years
Construction in progress..........................     1,316       1,544            --
                                                    --------    --------
                                                      86,650     133,612
Less accumulated depreciation and amortization....   (18,615)    (28,778)
                                                    --------    --------
                                                    $ 68,035    $104,834
                                                    ========    ========
</TABLE>

                                       F-17
<PAGE>   76
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(5)  INTANGIBLE ASSETS

     Intangible assets at December 31, 1999 and 2000 consist of the following:

<TABLE>
<CAPTION>
                                                                             ESTIMATED
                                                    1999         2000       USEFUL LIFE
                                                  --------    ----------    -----------
                                                      (IN THOUSANDS)
<S>                                               <C>         <C>           <C>
Goodwill and broadcast licenses.................  $594,801    $1,374,888      15 years
Noncompetition agreements.......................     5,929         6,965     3-7 years
Premium lease space.............................        50            50    1-13 years
Subcarrier antenna income.......................       104           104     1-4 years
Trade name and call letters.....................        --        18,258      15 years
                                                  --------    ----------
                                                   600,884     1,400,265
Less accumulated amortization...................   (62,220)     (126,745)
                                                  --------    ----------
                                                  $538,664    $1,273,520
                                                  ========    ==========
</TABLE>

(6)  ACCRUED LIABILITIES

     Accrued liabilities at December 31, 1999 and 2000 consist of the following:

<TABLE>
<CAPTION>
                                                               1999       2000
                                                              -------    -------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
Interest....................................................  $ 6,815    $17,734
Compensation and commissions................................    2,170      5,467
Music license fees..........................................      262      1,072
Employee benefits...........................................      333      1,198
National agency fees........................................      373        646
Other.......................................................    3,391      6,267
                                                              -------    -------
                                                              $13,344    $32,384
                                                              =======    =======
</TABLE>

(7)  NOTE PAYABLE

     On December 17, 1999, the Company repaid all amounts borrowed under its
previous financing agreement and entered into a new credit facility, which
provided 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 was 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 was available in the form of letters of
credit and after March 31, 2000, up to $50 million was available in the form of
letters of credit.

     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 October 2, 2000, the Company completed a Second Amended and Restated
Credit Agreement, which replaced the original credit facility. This credit
facility provides for (a) term loans (the "Tranche A Term Loans") at any time
prior to December 15, 2000 in an aggregate principal amount not in excess of
$325.0 million, (b) a term loan (the "Tranche B Term Loan" and together with the
Tranche A Term Loans, the "Term Loan Facility") in the principal amount of
$200.0 million, and (c) revolving loans at any time and from time to time prior
to

                                       F-18
<PAGE>   77
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

March 31, 2006, in an aggregate principal amount at any one time outstanding not
in excess of $225.0 million (the "Revolving Credit Facility"). Of the $225.0
million which is available in the form of revolving loans under the Revolving
Credit Facility, up to $50.0 million of the Revolving Credit Facility may be
made available in the form of letters of credit. In addition, the Company may
request up to $150.0 million in additional loans, which loans may be made at the
sole discretion of the lenders. The lenders are under no obligation whatsoever
to make such additional loans.

     The credit facility bears interest at a rate equal to the applicable margin
plus either (a) the greater of (i) the per annum rate of interest publicly
announced from time to time by Credit Suisse First Boston in New York, New York,
as its prime rate of interest (the "Prime Rate") or (ii) the federal funds
effective rate as in effect plus 1/2 of 1% (with the greater of (i) or (ii)
being referred to as the "Alternative Base Rate"), or (b) a rate determined by
Credit Suisse First Boston to be the Adjusted LIBO Rate for the respective
interest period. The LIBO Rate is determined by reference to the British
Bankers' Association Interest Settlement Rates for deposits in dollars. The
applicable margin for the Tranche B Term Loan is 2.0% and 3.0% respectively, for
Alternative Base Rate and Adjusted LIBO Rate. The applicable margins for the
Tranche A Term Loans and revolving loans are expected to range between 0.00% and
1.75% for the Alternative Base Rate and 0.75% and 2.75% for the Adjusted LIBO
Rate, depending on the Company's consolidated leverage ratio. As of December 31,
2000, the Company has selected the Adjusted LIBO Rate on all outstanding loans
and the margin for Tranche A and revolving loans is 2.75%. Below is a table that
sets forth the current rates and terms of the amounts borrowed under the credit
facility as of December 31, 2000.

<TABLE>
<CAPTION>
                                            AMOUNT OF       INTEREST         NEXT INTEREST
           TYPE OF BORROWING                BORROWING         RATE            RATE CHANGE
           -----------------              --------------    --------        ----------------
                                          (IN THOUSANDS)
<S>                                       <C>               <C>             <C>
Tranche A...............................     $120,000        9.3750%            June 5, 2001
Tranche A...............................     $ 74,000        9.6875%        January 31, 2001
Tranche A...............................     $ 55,000        9.6250%         January 2, 2001
Tranche A...............................     $ 76,000        9.3750%          March 15, 2001
Tranche B...............................     $200,000        9.8750%         January 2, 2001
Revolving...............................     $125,000        9.5625%        January 15, 2001
</TABLE>

     The required aggregate principal payments for Tranches A and B as of
December 31, 2000 are as follows:

<TABLE>
<CAPTION>
                                                        TRANCHE A    TRANCHE B
                                                        ---------    ---------
                                                            (IN THOUSANDS)
<S>                                                     <C>          <C>
2001..................................................  $ 16,512     $     --
2002..................................................        --           --
2003..................................................    46,273        2,000
2004..................................................    61,698        2,000
2005..................................................    61,698        2,000
Thereafter............................................   138,819      194,000
                                                        --------     --------
                                                        $325,000     $200,000
                                                        ========     ========
</TABLE>

     The maturity date for the Tranche A Term Loans is December 31, 2006
(subject to extension to December 17, 2007). The maturity date of the Tranche B
Term Loan is March 31, 2007 (subject to extension to June 30, 2008).

     In addition, mandatory prepayments must be made under the Term Loan
Facility upon the happening of certain events. One such event relates to the
Company's excess cash flow as defined in the credit facility. The prepayment is
50% of the Company's excess cash flow computed on a fiscal year end basis and is
only required if the Company's leverage test is greater than 5.0 to 1.0. At
December 31, 2000, the excess cash flow computation

                                       F-19
<PAGE>   78
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

requires the Company to prepay approximately $16.5 million under the Term Loan
Facility. However, for as long as the Tranche B Term Loan is outstanding,
lenders with any portion of such outstanding loan may decline to accept any
mandatory prepayment of such loan and cause all or a portion of the prepayment
to instead be allocated to the then-outstanding Tranche A Term Loans. The table
above, assumes that the lenders will require the prepayment to be applied 100%
to the Tranche A Term Loan. The prepayment is due 90 days after the fiscal year
end. The Company plans to borrow approximately $16.0 million under the Revolving
Credit Facility and use internally generated funds to prepay the Tranche A Term
Loan. This required prepayment of the Tranche A Term Loan will reduce the
Company's total borrowing capacity under the credit facility by approximately
$16.5 million as prepayments under the Term Loan Facility are no longer
available for future borrowings.

     Additional draws may be made under the Revolving Credit Facility, subject
to the satisfaction of certain conditions, for general corporate purposes,
including for working capital, capital expenditures, and to finance permitted
acquisitions. The Revolving Credit Facility must be paid in full on or before
December 31, 2006 (subject to extension to December 31, 2007). In addition, the
mandatory prepayments must be made under the Revolving Credit Facility upon the
happening of certain events. As of December 31, 2000, $96.8 million is available
under the Revolving Credit Facility, such amount is net of the outstanding
letters of credit of $3.2 million but has not been reduced by the additional
$16.0 million needed to comply with the mandatory prepayment discussed above.

     The credit facility provides for up to $50.0 million of letters of credit.
The letters of credit are a subfacility of the Revolving Credit Facility and the
total amount of letters of credit and revolving loans outstanding at any one
time cannot exceed the total amount available under the Revolving Credit
Facility. On December 31, 1999 and 2000, letters of credit in the aggregate
amount of approximately $20.4 million and $3.2 million, respectively, were
issued and outstanding.

     At December 31, 1999 and 2000, the Company's outstanding balance under the
credit facility was $132.0 million and $650.0 million, respectively. Interest
was payable at 8.125% as of December 31, 1999, and between 9.375% and 9.875% as
of December 31, 2000.

     The 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, 2000, the Company was in compliance with all debt covenant
provisions.

     The credit facility also requires that no less than 50% of the Company's
long-term indebtedness be subject to fixed interest rates. The Company has
entered into the following one year interest rate swap transactions in order to
convert a portion of its variable rate debt into fixed rate debt.

<TABLE>
<CAPTION>
                                                                               VARIABLE RATE
              TRANSACTION DATE                NOTIONAL AMOUNT   FIXED RATE   DECEMBER 31, 2000
              ----------------                ---------------   ----------   -----------------
                                              (IN THOUSANDS)
<S>                                           <C>               <C>          <C>
June 30, 2000...............................     $ 25,000         7.055%          6.4381%
August 31, 2000.............................     $ 40,000         6.855%          6.7488%
November 21, 2000...........................     $135,000         6.530%          6.7506%
</TABLE>

     The Company will incur interest expense based on the notional amounts at
the fixed rates and will receive interest income at the variable rates. The
variable rates are based on the LIBO Rate and are adjusted quarterly.

                                       F-20
<PAGE>   79
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(8)  SENIOR SUBORDINATED NOTES PAYABLE

     On July 3, 1997, Citadel Broadcasting 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 are shown net of unamortized
discount of $2.3 million and $2.1 million at December 31, 1999 and 2000,
respectively. The 1997 Notes may be redeemed at the option of Citadel
Broadcasting, 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>

     The indenture governing the 1997 Notes contains certain restrictive
covenants, including limitations which restrict the ability of Citadel
Broadcasting 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, 2000, Citadel Broadcasting was
in compliance with all debt covenants.

     On November 19, 1998, Citadel Broadcasting completed the issuance of $115.0
million of its 9 1/4% Senior Subordinated Notes ("1998 Notes") due in 2008.
Interest is payable semi-annually. The 1998 Notes are shown net of unamortized
discount of $3.2 million and $2.9 million at December 31, 1999 and 2000,
respectively. The 1998 Notes may be redeemed at the option of Citadel
Broadcasting, 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, Citadel Broadcasting
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 indenture governing the 1998 Notes contains certain restrictive
covenants, including limitations which restrict the ability of Citadel
Broadcasting 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, 2000, Citadel Broadcasting was
in compliance with all covenants.

                                       F-21
<PAGE>   80
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The aggregate Senior Subordinated Notes payable at December 31, 2000 are as
follows:

<TABLE>
<CAPTION>
                                                               1999        2000
                                                             --------    --------
                                                                (IN THOUSANDS)
<S>                                                          <C>         <C>
1997 Notes.................................................  $101,000    $101,000
1998 Notes.................................................   115,000     115,000
                                                             --------    --------
                                                              216,000     216,000
Less unamortized discount..................................    (5,491)     (5,031)
                                                             --------    --------
                                                             $210,509    $210,969
                                                             ========    ========
</TABLE>

(9)  OTHER LONG-TERM OBLIGATIONS

     Other long-term obligations at December 31, 1999 and 2000 consist of the
following:

<TABLE>
<CAPTION>
                                                               1999      2000
                                                              ------    -------
                                                               (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 $3,478,000 and
  $2,752,000 at December 31, 1999 and 2000, respectively,
  non-interest bearing with interest imputed at 8.0% to
  9.0%, net of discount of $660,000 and $453,000 in 1999 and
  2000, respectively........................................  $2,818    $ 2,299
Capital leases..............................................      40         13
Other.......................................................     500        850
                                                              ------    -------
                                                               3,358      3,162
Less current maturities.....................................    (842)    (1,366)
                                                              ------    -------
Long-term portion...........................................  $2,516    $ 1,796
                                                              ======    =======
</TABLE>

     The required aggregate principal payments as of December 31, 2000,
excluding the amortization of debt discount, are as follows:

<TABLE>
<CAPTION>
                                                             (IN THOUSANDS)
<S>                                                          <C>
2001.......................................................      $1,366
2002.......................................................         485
2003.......................................................         440
2004.......................................................         449
2005.......................................................         227
Thereafter.................................................         195
                                                                 ------
                                                                 $3,162
                                                                 ======
</TABLE>

(10)  SHAREHOLDERS' EQUITY

Common and Preferred Stock

     Prior to the consummation of the Company's initial public offering ("IPO")
in July 1998, the Company engaged in a series of transactions (collectively, the
"Recapitalization") which resulted in the Company having outstanding capital
stock consisting of common stock and convertible preferred stock, par value
$.001 per share. In conjunction with the Recapitalization, (i) each share of
outstanding capital stock of the Company, other than those held by ABRY
Broadcast Partners II, L.P. ("ABRY II") and ABRY/Citadel Investment Partners,
L.P. ("ABRY/CIP"), was converted into three shares of new common stock, (ii)
each share of capital stock of the Company held by ABRY II or ABRY/CIP was
converted into three shares of new convertible preferred stock and
                                       F-22
<PAGE>   81
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(iii) each outstanding option or warrant to acquire shares of common stock was
converted into an option or warrant to acquire three times the number of shares
of new common stock. All share amounts and earnings (loss) per share have been
restated in the accompanying consolidated financial statements with respect to
the Recapitalization.

     In connection with the Recapitalization, the Company amended its
Certificate of Incorporation to authorize the Company to issue 200,000,000
shares of new common stock, 19,013,122 shares of new convertible preferred stock
and 20,000 shares of undesignated preferred stock.

     All outstanding Series A, B, E, F and G preferred shares were converted to
5,280,726 shares of new common stock in the Recapitalization. All outstanding
Series C and D preferred shares were converted to 9,506,561 shares of new
convertible preferred stock, which were subsequently converted into the same
number of shares of new common stock during September 1998.

     The holders of the new common stock are entitled to one vote per share on
all matters submitted to a vote of shareholders. Additionally, the Company has
entered into a registration rights agreement with certain shareholders, under
which the Company may be required to register their shares of common stock upon
demand by these shareholders.

     On July 7, 1998, the Company consummated an 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 the Company and 630,796 shares were sold
by certain stockholders of the Company. On July 14, 1998, the Company sold an
additional 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 the Company 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, the Company 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 the Company and 6,500,000 shares were sold by certain stockholders
of the Company. Total proceeds of the offering, net of underwriting discounts
and commissions, were approximately $322.9 million, of which proceeds to the
Company 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 February 11, 2000, the Company sold 4,750,000 shares of its common stock
at a price of $51.50 per share. On February 17, 2000, an additional 300,000
shares of common stock were sold by certain stockholders of the Company at the
same price following a partial exercise of the underwriters' overallotment
option. Total proceeds of the offering, net of underwriting discounts and
commissions, were approximately $249.6 million, of which proceeds to the Company
were approximately $234.8 million and proceeds to the selling stockholders were
approximately $14.8 million. The total underwriting discounts and commissions
were approximately $10.5 million.

Deferred Stock Compensation

     In September 1998, the Company entered into stock option award agreements
with several key employees. The terms of the agreements provide for options to
purchase 114,000 shares of 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 $0.2
million for each of the years ended December 31, 1999 and 2000.
                                       F-23
<PAGE>   82
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     In July of 1999, the shareholders approved the Company's 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 earned portions of 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.

     Options to purchase a total of 1,750,000 shares of common stock at an
exercise price of $29.25 were authorized under the 1999 Incentive Plan. As of
December 31, 1999 and 2000, 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 the Company's 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 $1.5
million and $11.9 million for the years ended December 31, 1999 and 2000,
respectively.

Stock Warrants

     In connection with the issuance of the Company's old senior subordinated
notes payable to a shareholder in October 1993, warrants to acquire 1,096,128
shares of the Company's Class C non-voting common stock at an exercise price of
$.001 per share were issued. The warrants entitled the holders to purchase the
Class C common stock at any time prior to October 1, 1999 or until the related
notes were paid in full, whichever was later. Subsequent to issuance, in 1993,
warrants to purchase 131,532 shares were exercised. On June 29, 1996, the
warrant holder sold to the Company a warrant to purchase 550,293 shares of Class
C common stock for an aggregate purchase price of approximately $2.9 million.
Class C common stock subject to the remaining warrant was reclassified as Class
B common stock at the same time. A warrant to purchase 414,303 shares of Class B
common stock was outstanding at December 31, 1997. During the Recapitalization,
the outstanding warrant was converted into a warrant to purchase 414,303 shares
of new common stock. In connection with the IPO, the warrant was exercised,
therefore there were no outstanding warrants remaining at December 31, 1999 and
2000.

Stock Option Plan

     Prior to the adoption of the Company's 1996 Equity Incentive Plan, the
Company granted options, including performance options, to a principal
shareholder and employees. The options to acquire shares of Class A common stock
had an exercise price which represented the Company's Board of Directors'
estimate of the fair market value of the shares at the date of grant. In the
Recapitalization, these options were converted into options to purchase three
times the number of shares of new common stock. Generally, the options vest over
a five-year period commencing one year from the date of grant and expire on the
earlier of ten years from the date granted or termination of employment.

     On June 28, 1996, the Company adopted the Citadel Communications
Corporation 1996 Equity Incentive Plan ("Plan") pursuant to which the Company's
Board of Directors may grant stock options to officers, employees, directors,
consultants and advisors. At December 31, 2000, the total number of shares of
common stock that remain authorized, reserved and available for issuance under
the Plan, as amended, was 88,692 shares, not including shares underlying
outstanding grants. Stock options are generally granted with an exercise price
equal to the new common stock's fair market value at the date of grant, with the
exception of the 114,000 options granted during September 1998 for which
compensation expense was recorded. Generally, stock options granted under the
Plan vest ratably over a five-year period commencing one year after the date of
grant or vest

                                       F-24
<PAGE>   83
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

immediately, as determined by the Company's Board of Directors at the date of
grant, and expire on the earlier of ten years from the date of grant or
termination of employment.

     On July 27, 1999, the Company's stockholders approved the 1999 Incentive
Plan pursuant to which the Company's Board of Directors granted options to
purchase 1,750,000 shares of common stock to certain executive officers of the
Company, subject to meeting certain performance criteria under the plan. As of
December 31, 1999 and 2000, options to purchase 1,400,000 shares of common stock
were earned as the performance criteria under the 1999 Incentive Plan were met.
The options vest over a five-year period commencing one year from the date the
options were earned and expire on the earlier of ten years from the date granted
or termination of employment.

     Stock option activity is summarized as follows:

<TABLE>
<CAPTION>
                                                                  WEIGHTED
                                                                  AVERAGE
                                                               EXERCISE PRICE    EXERCISABLE
                                                  OPTIONS        PER SHARE         OPTIONS
                                                 ----------    --------------    -----------
<S>                                              <C>           <C>               <C>
Outstanding December 31, 1997..................   2,688,610        $ 3.46         1,273,542
  Granted......................................     203,960         15.56                --
  Exercised....................................     (36,377)         1.42                --
  Canceled.....................................     (31,560)         1.54                --
                                                 ----------        ------         ---------
Outstanding December 31, 1998..................   2,824,633          4.38         1,753,681
  Granted(1)...................................   1,712,400         30.05                --
  Exercised....................................  (1,102,441)         2.72                --
  Canceled.....................................     (27,173)        13.27                --
                                                 ----------        ------         ---------
Outstanding December 31, 1999..................   3,407,419         17.75         1,167,002
  Granted......................................     916,250         20.97                --
  Exercised....................................    (396,926)         4.71                --
  Canceled.....................................     (96,150)        21.85                --
                                                 ----------        ------         ---------
Outstanding December 31, 2000..................   3,830,593        $19.77         1,384,950
                                                 ==========        ======         =========
</TABLE>

---------------
(1) Only 1,400,000 options, which met the performance criteria under the 1999
    Incentive Plan, are reflected in the total for granted options.

     The weighted average fair value of options granted in 1998, 1999 and 2000
are $21.04, $46.18 and $20.97 per share, respectively. Options held by a
principal shareholder and an entity controlled by such principal

                                       F-25
<PAGE>   84
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

stockholder total 1,363,880 of which 653,254 were exercisable at December 31,
2000 at a weighted average exercise price of $10.00 per share.

<TABLE>
<CAPTION>
                                        OPTIONS OUTSTANDING                      OPTIONS EXERCISABLE
                            --------------------------------------------    -----------------------------
                                                  WEIGHTED
                                                   AVERAGE      WEIGHTED                         WEIGHTED
                                                  REMAINING     AVERAGE                          AVERAGE
                             OUTSTANDING AT      CONTRACTUAL    EXERCISE     EXERCISABLE AT      EXERCISE
                            DECEMBER 31, 2000       LIFE         PRICE      DECEMBER 31, 2000     PRICE
                            -----------------    -----------    --------    -----------------    --------
<S>                         <C>                  <C>            <C>         <C>                  <C>
$ 0.97....................        165,356            2.9         $ 0.97           165,356         $ 0.97
$ 1.64--$ 1.79............        298,325            4.0           1.79           298,325           1.79
$ 4.00--$ 5.72............        590,743            5.5           5.67           451,320           5.68
$ 9.44--$10.94............        524,900            9.7          10.32            39,400           9.64
$16.00--$25.25............        192,519            7.7          16.90            69,999          16.38
$29.25--$33.25............      2,001,000            8.9          30.29           325,400          29.81
$38.25--$50.75............         57,750            9.0          41.47            35,150          39.30
                                ---------            ---         ------         ---------         ------
$ 0.97--$50.75............      3,830,593            7.8         $19.77         1,384,950         $11.46
                                =========            ===         ======         =========         ======
</TABLE>

     The fair value of each option grant was estimated on the date of grant
using the Black-Scholes option-pricing model with the following assumptions for
the year ended December 31, 2000: risk-free interest rate of 5.0 percent;
dividend yield of $0; expected life of 4 years; and volatility of 87.38 percent.
For the year ended December 31, 1999, the following assumptions were utilized:
risk-free interest rate of 6.4 percent; dividend yield of $0; expected life of
4.0 years; and volatility of 83.5 percent. For the year ended December 31, 1998,
the following assumptions were utilized: risk-free interest rate of 4.53
percent; dividend yield of $0; expected life of 3.4 years; and a volatility of
42.0 percent.

     The Company applies APB Opinion No. 25 in accounting for its Plan and,
accordingly, no compensation expense has been recognized for its stock options
in the accompanying consolidated financial statements, with the exception of the
options discussed under the heading "Deferred Compensation." Had the Company
determined compensation expense based on the fair value at the grant date for
its stock options under SFAS No. 123, the Company's net loss applicable to
common shares and net loss per common share would have been increased to the pro
forma amounts indicated below:

<TABLE>
<CAPTION>
                                                         1998           1999           2000
                                                      -----------    -----------    -----------
                                                      (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                   <C>            <C>            <C>
Net loss applicable to common shares:
  As reported.......................................   $(18,517)      $(23,031)      $(51,274)
  Pro forma.........................................    (19,045)       (27,262)       (67,370)
Net loss per common share:
  As reported.......................................      (1.51)          (.80)         (1.41)
  Pro forma.........................................      (1.55)          (.95)         (1.85)
</TABLE>

(11)  EXCHANGEABLE PREFERRED STOCK

     On July 3, 1997, Citadel Broadcasting 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 Citadel Broadcasting, in cash. Thereafter, all dividends will be payable only
in cash. Citadel

                                       F-26
<PAGE>   85
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Broadcasting 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, Citadel Broadcasting redeemed approximately 35% of its
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, Citadel Broadcasting paid
approximately $0.5 million of accrued dividends on the redeemed shares.

     On April 6, 2000, Citadel Broadcasting repurchased approximately 14,900
shares of its issued and outstanding Exchangeable Preferred Stock at a price of
$112.75 per share for a total of approximately $1.7 million.

     The Exchangeable Preferred Stock is presented net of unamortized issuance
costs of approximately $4.2 million and $3.9 million at December 31, 1999 and
2000, respectively. The Exchangeable Preferred Stock includes accrued dividends
at December 31, 2000 of approximately $6.2 million which were paid in 62,183
additional shares of Exchangeable Preferred Stock on January 1, 2001. During
2000, dividends were paid in 55,621 additional shares on January 1, 2000 and
58,319 additional shares on July 1, 2000. At December 31, 1999 and 2000, 839,556
and 938,609 shares were issued and outstanding, respectively.

     The Certificate of Designation for the Exchangeable Preferred Stock
contains certain covenants, which, among other things, restrict the ability of
Citadel Broadcasting with respect to the incurrence of additional debt,
restricted payments, issuances and sales of stock of certain subsidiaries and
consolidations, mergers or sales of assets. Citadel Broadcasting was in
compliance with these covenants at December 31, 2000.

(12)  INCOME TAXES

     The income tax benefit in 1998, 1999 and 2000 represents the utilization 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, 2000, the
Company has net operating loss carry forwards for federal income tax purposes of
approximately $81.1 million, which begin to expire in 2011.

     On June 28, 1996 and June 25, 1999, the Company underwent an ownership
change in accordance with Section 382 of the Internal Revenue Code. Due to these
changes, the net operating losses of the Company generated prior to the date of
the ownership change are subject to limitation in future years. The approximate
amount of the net operating losses, which are limited at December 31, 2000, is
$7.5 million, which limitation will expire in the years 2001 through 2003.

                                       F-27
<PAGE>   86
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     The components of the Company's income tax benefit for the year ended
December 31, 1998, 1999 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                          1998       1999       2000
                                                         -------    -------    -------
                                                                (IN THOUSANDS)
<S>                                                      <C>        <C>        <C>
Current tax expense/(benefit):
  Federal..............................................  $    87    $   143    $  (234)
  State................................................      324        803        740
                                                         -------    -------    -------
                                                             411        946        506
                                                         -------    -------    -------
Deferred tax benefit:
  Federal..............................................   (1,535)    (2,204)    (3,849)
  State................................................     (271)      (389)      (679)
                                                         -------    -------    -------
                                                          (1,806)    (2,593)    (4,528)
                                                         -------    -------    -------
Total income tax benefit...............................  $(1,395)   $(1,647)   $(4,022)
                                                         =======    =======    =======
</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, 1998,
1999 and 2000 are as follows:

<TABLE>
<CAPTION>
                                                         1998       1999        2000
                                                        -------    -------    --------
                                                                (IN THOUSANDS)
<S>                                                     <C>        <C>        <C>
Federal statutory rate applied to the loss from
  continuing operations before income taxes...........  $(1,818)   $(2,142)   $(13,230)
State tax, net of federal benefit.....................      214        530         488
Amortization of non-deductible goodwill...............      778      1,045       1,703
Nondeductible meals and entertainment.................       88         78         255
Effect of the ability to utilize net operating loss
  carryforwards.......................................     (657)    (1,158)      6,762
                                                        -------    -------    --------
                                                        $(1,395)   $(1,647)     (4,022)
                                                        =======    =======    ========
</TABLE>

                                       F-28
<PAGE>   87
                       CITADEL COMMUNICATIONS CORPORATION
                                 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>
                                                                1999        2000
                                                              --------    --------
                                                                 (IN THOUSANDS)
<S>                                                           <C>         <C>
Deferred tax assets:
Receivables, principally due to allowance for doubtful
  accounts..................................................  $    977    $  1,132
Net operating loss carryforwards............................    16,871      32,447
Accrued liabilities not currently deductible................       354       1,982
Unrealized loss on hedging contract.........................        --         413
Intangible assets; differences in book and tax
  amortization..............................................     3,043       5,159
Compensation related to stock options.......................       720       5,619
Other.......................................................       200         564
                                                              --------    --------
     Total deferred tax assets..............................    22,165      47,316
Valuation allowance.........................................   (17,798)    (39,688)
                                                              --------    --------
     Net deferred tax assets................................     4,367       7,628
                                                              --------    --------
Deferred tax liabilities:
Property and equipment, principally due to accelerated
  depreciation..............................................    (4,367)     (7,628)
Differences between the tax basis and fair value of
  intangibles and fixed assets acquired in stock-based
  acquisitions..............................................   (45,640)    (74,875)
                                                              --------    --------
     Total deferred tax liabilities.........................   (50,007)    (82,503)
                                                              --------    --------
Net deferred tax liability..................................  $(45,640)   $(74,875)
                                                              ========    ========
</TABLE>

     The valuation allowance has increased (decreased) by approximately $(1.2)
million, $11.5 million and $21.9 million for the years ended December 31, 1998,
1999 and 2000, 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, 2000, the Company has an alternative minimum tax (AMT)
credit carry forward of approximately $0.5 million. 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-29
<PAGE>   88
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

(13)  QUARTERLY RESULTS (UNAUDITED)

     The following table presents the Company's selected unaudited quarterly
results for eight quarters ended December 31, 2000. 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, 1999
<S>                                        <C>         <C>         <C>         <C>         <C>
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..................................  $  (0.36)   $  (0.13)   $  (0.09)   $  (0.24)   $   (0.80)

                                                                FOR THE YEAR ENDED DECEMBER 31, 2000

Net broadcasting revenue.................  $ 46,137    $ 68,212    $ 78,182    $ 92,293    $ 284,824
Operating income/(loss)..................    (4,534)      7,037       4,433       2,689        9,625
Net income (loss)........................   (11,052)     (1,048)     (8,127)(3)  (18,997)(3)   (39,224)
Net loss applicable to common shares.....   (14,017)     (3,915)    (11,236)    (22,106)     (51,274)
Basic and diluted net loss per common
  share..................................  $  (0.41)   $  (0.11)   $  (0.30)   $  (0.60)   $   (1.41)
</TABLE>

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

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

(3) Increase in net loss primarily due to increased depreciation, amortization
    and interest expense due to acquisitions.

(14)  SUPPLEMENTAL FINANCIAL INFORMATION

     The Company paid cash of approximately $16.1 million, $23.1 million and
$40.8 million for interest and approximately $0.3 million, $0.7 million and $1.0
million for taxes for the years ended December 31, 1998, 1999 and 2000,
respectively.

     Barter revenue included in gross broadcasting revenue and barter expenses
included in station operating expenses, respectively, amounted to approximately
$11.0 million, $18.3 million and $19.2 million and $9.5 million, $11.7 million
and $16.8 million for the years ended December 31, 1998, 1999 and 2000,
respectively.

     A summary of additions and deductions related to the allowance for doubtful
accounts for the years ended December 31, 1998, 1999 and 2000 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, 1998................     $  809        $1,201       $  (823)        $1,187
Year ended December 31, 1999................      1,187         6,694        (5,446)         2,435
Year ended December 31, 2000................      2,435         7,615        (7,229)         2,821
</TABLE>

                                       F-30
<PAGE>   89
                       CITADEL COMMUNICATIONS CORPORATION
                                 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, 1998, 1999 and 2000:

<TABLE>
<CAPTION>
                                                               1998       1999        2000
                                                              -------    -------    --------
                                                                      (IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
Difference between tax basis and fair value of intangible
  assets and fixed assets acquired in stock-based
  acquisitions..............................................  $ 3,445    $23,857    $ 33,764
                                                              =======    =======    ========
Dividends for exchangeable preferred stock..................  $14,586    $14,103      12,050
                                                              =======    =======    ========
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    $    --    $  3,448
                                                              =======    =======    ========
Unrealized loss on hedging contract, net of tax.............  $   236    $    --    $    620
                                                              =======    =======    ========
Accretion of exchangeable preferred stock issuance costs....  $   180    $   206    $    234
                                                              =======    =======    ========
Accrued liabilities for other investments...................  $    --    $    --    $    648
                                                              =======    =======    ========
Fixed assets acquired through barter transactions...........  $    --    $    --    $    503
                                                              =======    =======    ========
</TABLE>

(15)  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."

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, 2000, the amounts that
will actually be realized, or paid at settlement or maturity of the instruments,
could be significantly different.

     The Company's significant financial instruments and the methods used to
estimate their fair values are as follows:

        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.

        Note Payable, Senior Subordinated Notes, Exchangeable Preferred Stock
        and Other Long-Term Obligations: The fair value of the Company's Note
        Payable, Senior Subordinated Notes, Exchangeable Preferred Stock and
        other long-term obligations (other than for hedge agreements which are
        discussed below) approximate the terms in the marketplace at which they
        could be replaced. Therefore, the fair value approximates the carrying
        value of these financial instruments.

        Hedge Agreements: The Company has entered into various agreements to
        hedge against the potential impact of increases in interest rates under
        the credit facility. These agreements are accounted for under

                                       F-31
<PAGE>   90
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

        the provision of SFAS Nos. 133 and 138. These agreements as of December
        31, 2000 are summarized as follows:

     These agreements as of December 31, 2000 are summarized as follows:

<TABLE>
<CAPTION>
                                                      VARIABLE
                                                       RATE AT                               ESTIMATED
                           NOTIONAL      FIXED      DECEMBER 31,          EXPIRATION         FAIR VALUE
      AGREEMENT             AMOUNT        RATE          2000                 DATE            NET OF TAX
      ---------         --------------   ------   -----------------   ------------------   --------------
                        (IN THOUSANDS)                                                     (IN THOUSANDS)
<S>                     <C>              <C>      <C>                 <C>                  <C>
Interest rate swap....     $ 25,000       7.055%        6.4381%            June 29, 2001       $ (67)
Interest rate swap....       40,000       6.855%        6.7488%          August 31, 2001        (127)
Interest rate swap....      135,000       6.530%        6.7506%        November 21, 2001        (426)
</TABLE>

     The Company is exposed to credit loss in the event of nonperformance by the
other parties to the agreements. The Company, however, does not anticipate
nonperformance by the counterparties. The fair value of the interest rate swap
agreements is estimated using the difference between the present value of
discounted cash flows using the fixed rate stated in the swap agreement and the
present value of discounted cash flows using the variable rate.

(16)  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. The
Company made payments of approximately $0.2 million and $0.3 million in 1998 and
1999, respectively. This operating lease was terminated effective January 1,
2000.

Noncompetition Agreements

     In connection with an acquisition, the Company entered into a
noncompetition agreement with an entity whose president is also a director of
the Company. In consideration for such noncompetition agreement, the Company
paid the entity $0.1 million in 1998 and 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 the Company, which provides for compensation of approximately $0.3
million per year. In consideration for such noncompetition agreement, the
Company paid the individual approximately $0.1 million and $0.3 million in 1999
and 2000, respectively.

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 $0.1 million in
accounts receivable and certain equipment owned by the Company. The son of a
director of 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 for eFortress during 1999 and 2000. The value
of the telephone service provided in 1999 and 2000 was approximately $0.1
million and $0.6 million, respectively. In addition, Connect Communications
Corporation paid the Company approximately $0.1 million for the reimbursement of
third party telephone charges and rent for space on one of the Company's towers
in Little Rock, Arkansas during 2000.

                                       F-32
<PAGE>   91
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Corporate Events

     During 1998, the Company paid an aggregate of approximately $0.1 million 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.

(17)  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 a civil investigative demand ("CID") from the
Antitrust Division of the U.S. Department of Justice. The CID addresses the
Company's acquisition of station KRST in Albuquerque, New Mexico. The Company
has provided the requested information in response to the CID, and at present
has been given no indication from the Department of Justice regarding its
intended future actions, involving KRST in Albuquerque.

     Following the announcement of the Company's proposed merger with FLCC
Acquisition Corp., see the discussion below under note 18, pursuant to an
Agreement and Plan of Merger dated January 15, 2001 with FLCC Holdings, Inc.,
five lawsuits were filed against the Company.

     The suits name as defendants the Company, several directors of the Company
and, in some cases, Forstmann Little & Co. and its affiliates. Plaintiffs
allege, among other things, that the Company and several of its directors have
caused plaintiffs and other members of the purported class to lose the
opportunity to maximize the value of their investment in the Company and have
failed to exercise ordinary care and diligence in the exercise of their
fiduciary duties to the public stockholders of the Company. Plaintiffs further
allege that they and the other members of the purported class will be
irreparably harmed by defendants' actions. The complaints seek various relief,
including, but not limited to: (i) class action status; (ii) an injunction
enjoining the proposed merger; (iii) unspecified damages; and (iv) costs and
disbursements, including attorneys' and experts' fees.

     The Company believes the allegations relating to the proposed merger with
FLCC Acquisition are without merit. The parties to the foregoing proceedings
have reached an agreement in principle to settle all claims arising out of the
proposed merger with FLCC Acquisition pursuant to which certain changes were
made to the terms of the Agreement and Plan of Merger and to the proxy statement
relating to the vote of the Company's stockholders based on the suggestions and
comments of plaintiffs' counsel. The Company expects that the agreement will be
memorialized in a formal settlement agreement and presented to the court for its
approval.

Local Marketing Agreements

     At December 31, 2000, the Company has four local marketing agreements. 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 acquisition by the Company. The Company's consolidated financial
statements include the broadcasting revenue and station operating expenses of
the brokered stations. The fees paid under these and other local marketing

                                       F-33
<PAGE>   92
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

agreements amounted to approximately $0.8 million, $0.3 million and $0.3 million
for the years ended December 31, 1998, 1999 and 2000, respectively.

     In addition, the Company has entered into two local marketing agreements in
connection with its expected sale of the radio stations in Monroe, Louisiana and
the possible sale of the radio stations in Tyler, Texas, as previously described
in Note 2, Acquisitions and Dispositions. The Company has recorded approximately
$0.2 million of fees related to these agreements, for the year ended December
31, 2000. The fees are included in net broadcasting revenue.

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.

     On April 15, 2000, the Company completed its acquisition from Broadcasting
Partners Holdings, L.P. of a total of 23 FM and 12 AM radio stations. In
connection with this acquisition, the Company acquired the right to sell
advertising in the United States for one FM radio station in Niagara Falls,
Ontario under a JSA. Under the JSA, the Company receives 50% of all revenue
generated and pays 50% of the related expenses, primarily sales commissions.

LEASE COMMITMENTS

     The Company leases certain tower sites, transmitters and equipment,
automobiles and office equipment. 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,
2000:

<TABLE>
<CAPTION>
                                                    (IN THOUSANDS)
<S>                                                 <C>
2001..............................................     $ 4,319
2002..............................................       3,823
2003..............................................       3,575
2004..............................................       3,323
2005..............................................       2,106
Thereafter........................................       9,799
                                                       -------
                                                       $26,945
                                                       =======
</TABLE>

     Total rental expense was approximately $2.7 million, $3.5 million and $4.1
million for the years ended December 31, 1998, 1999 and 2000, respectively.

                                       F-34
<PAGE>   93
                       CITADEL COMMUNICATIONS CORPORATION
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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 1998, 1999 and 2000 the Company contributed $0.4
million, $0.5 million and $1.0 million, respectively, which represented a two
percent matching of employee contributions to the 401(k) plan.

(18)  SUBSEQUENT EVENTS

     On January 15, 2001, the Company entered into an Agreement and Plan of
Merger, with FLCC Holdings, Inc., a Delaware corporation and an affiliate of
Forstmann Little & Co., which the parties subsequently amended on March 13, 2001
and March 22, 2001, under which FLCC Acquisition Corp., a Nevada corporation and
a wholly owned subsidiary of FLCC Holdings, will merge with and into Citadel
Communications. Pursuant to the merger, each issued and outstanding share of the
Company's common stock will be converted into the right to receive $26.00 in
cash.

     The completion of this transaction is subject to various conditions,
including approval of the Agreement and Plan of Merger by the Company's
stockholders and Federal Communications Commission consent to transfer control
of the station licenses.

     On January 18, 2001, the Company completed its acquisition of WTRX-FM in
Flint Michigan. The total purchase price was approximately $0.6 million of which
$0.4 million had already been paid as part of the stations acquired in Flint,
Michigan on July 31, 2000. The acquisition will be accounted for using the
purchase method of accounting.

     On March 14, 2001, the Company entered into an asset purchase agreement
with Millennium Radio Group, LLC to sell two FM radio stations, one AM radio
station, and the right to program and sell commercial advertising for one FM
station, all of which serve Atlantic City/Cape May, New Jersey, for the sale
price of approximately $19.4 million in cash.

                                       F-35
<PAGE>   94

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 (incorporated by reference to Exhibit
          2.7 to Citadel Communications Corporation's Annual Report on
          Form 10-K for the fiscal year ended December 31, 1999).
 2.8      Asset Purchase Agreement, made effective as of April 30,
          2000, by and among Dick Broadcasting Company, Inc. of
          Tennessee, Dick Broadcasting Company, Inc. of Alabama, Dick
          Broadcasting Company, Inc. of Nashville, Dick Radio Alabama,
          Inc., DFT Realty, DFT Realty II, LLC, James Allen Dick, Sr.,
          James Allen Dick, Jr., Charles Arthur Dick, Emily Dick
          McAlister, Jeannette Dick Hundley and Citadel Broadcasting
          Company (incorporated by reference to Exhibit 2.1 to Citadel
          Communications Corporation's Quarterly Report on Form 10-Q
          for the fiscal quarter ended June 30, 2000).
 2.9      First Amendment to Asset Purchase Agreement dated September
          30, 2000 among Dick Broadcasting Company, Inc. of Tennessee,
          Dick Broadcasting Company, Inc. of Alabama, DFT Realty, DFT
          Realty II, LLC, James Allen Dick, Sr., James Allen Dick,
          Jr., Charles Arthur Dick, Emily Dick McAlister, Jeannette
          Dick Hundley and Citadel Broadcasting Company (incorporated
          by reference to Exhibit 2.1 to Citadel Communications
          Corporation's Current Report on Form 8-K filed on October
          17, 2000).
 2.10     Agreement and Plan of Merger dated as of January 15, 2001 by
          and between Citadel Communications Corporation and FLCC
          Holdings, Inc. (incorporated by reference to Exhibit 2.1 to
          Citadel Communications Corporation's Current Report on Form
          8-K filed on January 24, 2001).
 2.11     Letter Agreement dated January 15, 2001 by and between
          Citadel Communications Corporation and FLCC Holdings, Inc.
          (incorporated by reference to Exhibit 2.2 to Citadel
          Communications Corporation's Current Report on Form 8-K
          filed on January 24, 2001).
</TABLE>
<PAGE>   95

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                     DESCRIPTION OF EXHIBIT(1)
-------                    -------------------------
<S>       <C>
 2.12     Guarantee dated February 15, 2001 made by Forstmann Little &
          Co. Subordinated Debt and Equity Management Buyout
          Partnership - VII, L.P. and Forstmann Little & Co. Equity
          Partnership - VI, L.P. (incorporated by reference to Exhibit
          2.3 to Citadel Communications Corporation's Current Report
          on Form 8-K filed on January 24, 2001).
 2.13     Amendment No. 1, dated March 13, 2001, to Merger Agreement
          dated as of January 15, 2001 by and among FLCC Holdings,
          Inc., Citadel Communications Corporation and FLCC
          Acquisition Corp.
 2.14     Letter Agreement dated March 22, 2001 by and among Citadel
          Communications Corporation, FLCC Holdings, Inc. and FLCC
          Acquisition Corp.
 3(i)     Amended and Restated Certificate of Incorporation of Citadel
          Communications Corporation (incorporated by reference to
          Exhibit 3(i) to Citadel Communications Corporation's
          Quarterly Report on Form 10-Q for the fiscal quarter ended
          June 30, 1998).
 3(ii)    Amendment to Amended and Restated Certificate of
          Incorporation of Citadel Communications Corporation
          (incorporated by reference to Exhibit 3(i) to Citadel
          Communications Corporation's Quarterly Report on Form 10-Q
          for the fiscal quarter ended June 30, 2000).
 3(iii)   Bylaws of Citadel Communications Corporation (incorporated
          by reference to Exhibit 3(ii) to Citadel Communications
          Corporation's Quarterly Report on Form 10-Q for the fiscal
          quarter ended June 30, 1998).
 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).
 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      Second Amended and Restated Credit Agreement dated as of
          October 2, 2000 among Citadel Broadcasting Company, Citadel
          Communications Corporation, Credit Suisse First Boston, as
          lead Arranger, Administrative Agent and Collateral Agent,
          FINOVA Capital Corporation, as Syndication Agent, First
          Union National Bank and Fleet National Bank, as
          Documentation Agents, and the lenders named therein
          (incorporated by reference to Exhibit 4.1 to Citadel
          Communications Corporation's Current Report on Form 8-K
          filed on October 17, 2000).
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).
</TABLE>
<PAGE>   96

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                     DESCRIPTION OF EXHIBIT(1)
-------                    -------------------------
<S>       <C>
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).
</TABLE>
<PAGE>   97

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                     DESCRIPTION OF EXHIBIT(1)
-------                    -------------------------
<S>       <C>
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      Third Amended and Restated Registration Rights Agreement
          dated as of June 28, 1996 among Citadel Communications
          Corporation and certain of its stockholders (incorporated by
          reference to Exhibit 10.24 to Citadel Communications
          Corporation's Registration Statement No. 333-51011 on Form
          S-1).
10.8      First Amendment to Third Amended and Restated Registration
          Rights Agreement dated as of December 31, 1996 among Citadel
          Communications Corporation and certain of its stockholders
          (incorporated by reference to Exhibit 10.25 to Citadel
          Communications Corporation's Registration Statement No.
          333-51011 on Form S-1).
10.9      Second Amendment to Third Amended and Restated Registration
          Rights Agreement dated as of September 26, 1997 among
          Citadel Communications Corporation and certain of its
          stockholders (incorporated by reference to Exhibit 10.26 to
          Citadel Communications Corporation's Registration Statement
          No. 333-51011 on Form S-1).
10.10     Third Amendment to Third Amended and Restated Registration
          Rights Agreement dated as of October 15, 1997 among Citadel
          Communications Corporation and certain of its stockholders
          (incorporated by reference to Exhibit 10.27 to Citadel
          Communications Corporation's Registration Statement No.
          333-51011 on Form S-1).
10.11     Fourth Amendment to Third Amended and Restated Registration
          Rights Agreement dated as of December 2, 1999 among Citadel
          Communications Corporation and certain of its stockholders
          (incorporated by reference to Exhibit 10.11 to Citadel
          Communications Corporation's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1999).
10.12 *   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).
10.13     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).
10.14     Parent Guarantee Agreement dated as of December 17, 1999
          between Citadel Communications Corporation and Credit Suisse
          First Boston, as Collateral Agent (incorporated by reference
          to Exhibit 10.1 to Citadel Communications Corporation's
          Current Report on Form 8-K filed January 6, 2000).
</TABLE>
<PAGE>   98

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                     DESCRIPTION OF EXHIBIT(1)
-------                    -------------------------
<S>       <C>
10.15     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).
10.16     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).
10.17 *   Amendment to Citadel Communications Corporation's 1996
          Equity Incentive Plan.
21        Subsidiaries of Citadel Communications Corporation.
23.1      Consent of KPMG LLP.
</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 000-24515.