As filed with the Securities and Exchange Commission on January 29, 2002
Registration Nos. 333-
333- -01
333- -02
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
-----------------
Radio One, Inc.*
Radio One Trust I
Radio One Trust II
(Exact name of Registrant as specified in its charter)
-----------------
Delaware 52-1166660 4832
Delaware TO BE APPLIED FOR
Delaware TO BE APPLIED FOR
(State of other jurisdiction of (I.R.S. Employer (Primary Standard Industry
incorporation or organization) Identification No.) Classification Number)
5900 Princess Garden Parkway, 7th Floor
Lanham, MD 20706
Telephone: (301) 306-1111
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
-----------------
ALFRED C. LIGGINS, III
Chief Executive Officer and President
Radio One, Inc.
5900 Princess Garden Parkway, 7th Floor
Lanham, MD 20706
Telephone: (301) 306-1111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copy to:
TERRANCE L. BESSEY, ESQ.
LAURA S. HARPER, ESQ.
Kirkland & Ellis
655 Fifteenth Street, N.W.
Washington, D.C. 20005
Telephone: (202) 879-5000
* The entities listed on the page following the Registration Fee Calculation
Table (on next page) are also included in this Registration Statement on
Form S-3 as additional Registrants.
-----------------
Approximate date of commencement of the proposed sale to the public: From
time to time after this Registration Statement becomes effective, as determined
by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule
434,please check the following box. [_]
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said section 8(a), may determine.

RADIO ONE, INC. AND SUBSIDIARIES

Form 10-K
For the Fiscal Year Ended December 31, 2001

TABLE OF CONTENTS

Page
----

PART I
Item 1. Business............................................................................ 4
Item 2. Properties and Facilities........................................................... 31
Item 3. Legal Proceedings................................................................... 31
Item 4. Submission of Matters to a Vote of Security Holders................................. 32

PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters............... 33
Item 6. Selected Financial Data............................................................. 34
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... 36
Item 7A. Quantitative and Qualitative Disclosure About Market Risk........................... 47
Item 8. Financial Statements and Supplementary Data......................................... 47
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 47

PART III
Item 10. Directors and Executive Officers of the Registrant.................................. 48
Item 11. Executive Compensation.............................................................. 50
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.................... 58

SIGNATURES

Report of Independent Public Accountants......................................................... F-1
Consolidated Balance Sheets as of December 31, 2000 and 2001..................................... F-2
Consolidated Statements of Operations for the years ended December 31, 1999, 2000 and 2001....... F-3
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1999,
2000 and 2001.................................................................................. F-4
Consolidated Statements of Cash Flows for the years ended December 31, 1999, 2000 and 2001....... F-5
Notes to Consolidated Financial Statements....................................................... F-6
Consolidating Financial Statements............................................................... F-24

INDEX TO SCHEDULES S-1

CERTAIN DEFINITIONS

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

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are not historical
facts, but rather reflect our current expectations concerning future results
and events. You can identify these forward-looking statements by our use of
words such as ''anticipates,'' ''expects,'' ''intends,'' ''plans,''
''believes,'' ''seeks,'' "likely," "may," ''estimates'' and similar
expressions. We cannot guarantee that we will achieve these plans, intentions
or expectations. Because these statements apply to future events, they are
subject to risks and uncertainties that could cause actual results to differ
materially from those forecast or anticipated in the forward-looking statement.
These risks, uncertainties and factors include, but are not limited to:

. economic conditions, both generally and relative to the radio
broadcasting industry;

. risks associated with our acquisition strategy;

. the highly competitive nature of the broadcast industry;

. our high degree of leverage; and

. the other factors described in Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operation."

You should not place undue reliance on these forward-looking statements,
which reflect our view as of the date of this report. We undertake no
obligation to publicly update or revise any forward-looking statements because
of new information, future events or otherwise.

PART I

ITEM 1. BUSINESS

Overview

Radio One was founded in 1980 and is the seventh largest radio broadcasting
company in the United States based on 2001 pro forma net revenue. We are also
the largest radio broadcasting company in the United States primarily targeting
African-Americans. After we complete our pending acquisition in the Atlanta
market, we will own and/or operate 65 radio stations in 22 markets. Thirty-six
of these stations (26 FM and 10 AM) are in 14 of the top 20 African-American
radio markets. We also program five channels on the XM Satellite Radio system.

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

Radio One is led by our Chairperson and co-founder, Catherine L. Hughes, and
her son, Alfred C. Liggins, III, our Chief Executive Officer and President, who
together have over 45 years of operating experience in radio broadcasting. Ms.
Hughes, Mr. Liggins and our strong management team have successfully
implemented a strategy of acquiring and turning around underperforming radio
stations. We believe that we are well positioned to apply our proven operating
strategy to our pending and recently acquired stations in Atlanta, Cincinnati,
Columbus, Dayton, Louisville and Minneapolis, and to other radio stations in
existing and new markets as attractive acquisition opportunities arise.

Significant 2001 Events

High Yield Bond Offering

On May 18, 2001, we completed a private offering of $300 million aggregate
principal amount of 8 7/8% senior subordinated notes due 2011 from which we
received net proceeds of approximately $291.8 million. We used these proceeds
to repay existing indebtedness and for other general corporate purposes. On
November 16, 2001, we consummated an exchange offer of outstanding 8 7/8%
senior subordinated notes for a like amount of 8 7/8% senior subordinated notes
which were registered under the Securities Act of 1933. In connection with this
transaction, we used $91.1 million of the proceeds to redeem our 12% senior
subordinated notes due 2004.

WHTA-FM Atlanta Acquisition

In June 2001, we entered into an agreement to acquire WHTA-FM (formerly
WPEZ-FM) licensed to Macon, Georgia, for approximately $55.0 million in cash.
Upon initiating our operation of this station under a local marketing agreement
in September 2001, we repositioned an existing format onto this stronger signal
to enhance our service to the Atlanta market. This acquisition increases the
number of stations that we own and/or operate in the Atlanta market to four. We
anticipate completing this acquisition during the second quarter of 2002.

Blue Chip Broadcasting Acquisition

On August 10, 2001, we completed the acquisition of Blue Chip Broadcasting,
Inc. for an aggregate purchase price of approximately $188.0 million in cash
and class D common stock. As a result of this acquisition, we own and/or
operate 16 radio stations in the following five markets: Cincinnati, Columbus,
Dayton, Louisville and Minneapolis. These stations complement our existing
business and are located in markets in which we did not previously operate.

Our Station Portfolio

We operate in many of the largest African-American markets. Since January 1,
2001, we have acquired or agreed to acquire and/or operate 26 radio stations
and have divested seven non-core stations. A more detailed description of the
acquisitions and divestitures of these stations is provided in this report
under the heading ''Recent and Pending Transactions.''

The table below provides information about the stations that we will own or
operate after giving effect to our pending Atlanta acquisition. Audience share
rank is determined by using a combination of African-American listenership
above a certain threshold in a given market and the average quarter hour share
rating for that station. Audience share data are for the 12+ demographic,
derived from the Arbitron Survey four book averages ending with the Fall 2001
Arbitron Survey. In the Miami market, we provide no audience share data because
we do not subscribe to the Arbitron service for our station, which is
programmed in a non-urban format. Except as otherwise noted above, information
in the table below is from BIA Investing in Radio Market Report ("BIA 2002
First Edition").

Radio One Stations and Markets

Radio One Market Data
----------------------------------- ---------------------------------------------
Number
of African-American Entire
Stations Market Market 2001 MSA Population
-------- ---------------- --------- ----------------------
Four Book
Average Estimated Ranking
(Ending 2001 by
Fall Annual Size of
Audience 2001) Radio African-
Share Audience Revenue American Total African-
Market FM AM Rank Share ($millions) Population (in millions) American%
------ -- -- ---------------- --------- ----------- ---------- ------------- ---------

Washington, DC 2 2 1 12.0 $347.7 3 4.6 28.5%
Atlanta....... 4 -- 2 6.6 326.3 4 4.2 29.9
Philadelphia.. 2 -- 3 5.3 287.0 5 5.1 21.2
Los Angeles... 1 -- 1 3.8 855.4 6 12.4 8.6
Detroit....... 2 1 2 6.3 252.1 7 4.6 22.6
Miami......... -- 1 n/a n/a 251.8 8 3.9 21.9
Houston....... 2 -- 1 12.6 309.8 9 4.7 17.3
Dallas........ 2 -- 3 4.0 374.6 10 5.2 14.3
Baltimore..... 2 2 1 16.2 126.4 11 2.6 28.1
St. Louis..... 1 -- 2 3.2 123.8 16 2.6 18.7
Cleveland..... 2 2 1 13.5 113.8 17 2.2 19.9
Boston........ 1 1 1 3.0 321.8 18 4.5 7.3
Charlotte..... 1 -- 2 3.2 110.3 19 1.5 21.0
Richmond...... 4 1 1 21.5 52.3 20 1.0 30.8
Raleigh-Durham 4 -- 1 19.9 77.9 22 1.2 23.2
Cincinnati.... 1 1 1 6.4 125.6 28 2.0 12.0
Indianapolis.. 3 1 1 14.6 90.7 31 1.5 15.0
Columbus...... 3 -- 1 11.6 94.6 32 1.6 13.9
Minneapolis... 1 -- 1 3.0 162.2 40 3.0 6.1
Augusta....... 4 1 1 14.3 16.3 44 0.5 35.1
Louisville.... 6 -- 1 24.0 53.1 48 1.1 14.2
Dayton........ 3 1 2 11.3 43.6 56 1.0 14.1
-- --
Total......... 51 14
== ==

The African-American Market Opportunity

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

Rapid African-American Population Growth. From 1990 to 2000, the
African-American population increased from approximately 30.0 million to 36.4
million, a 21.3% increase, compared to a 12.0% increase in the
non-African-American population. Furthermore, the African-American population
is expected to increase to approximately 40.0 million by 2010, a 9.9% increase
from 2000, compared to an expected increase during the same period of 8.3% for
the non-African-American population. (Source: U.S. Census Bureau, Statistical
Abstract of the United States: 2001).

Higher African-American Income Growth. The economic status of
African-Americans improved at an above-average rate over the past two decades.
The per capita income of African-Americans increased 59.0% between 1980 and
2000, while that of the overall population increased 43.3%. (Source: "The U.S.
African-American Market," MarketResearch.com). African-American buying power
was estimated at $572.1 billion for 2001, up 85.9% from 1990, compared to an
increase of 70.4% for the overall population. In 2001, African-Americans
accounted for 8.1% of the nation's total buying power, up from 7.4% in 1990.
(Source: ''Buying Power at the Beginning of a New Century: Projections for 2000
and 2001,'' Dr. Jeffrey M. Humphreys). In addition, the African-American
consumer tends to have a different consumption profile than
non-African-Americans. An annual report published by Target Market News
provides a list of products and services for which African-American households
spent more than white households. In the most recent such annual report, there
were dozens of such products and services listed in categories such as apparel
and accessories, books, cars and trucks, consumer electronics, food, personal
care products, telephone service and transportation. (Source: The 2001 Report
on the Buying Power of Black America, Target Market News).

Growth in Advertising Targeting the African-American Market. We believe
that large corporate advertisers are becoming more focused on reaching minority
consumers in the United States. The African-American community is considered an
emerging growth market within the mature domestic market. It is estimated that
major national advertisers spent $1.6 billion on advertising that targets
African-American consumers in 2001, up from $803 million in 1993. (Source:
Target Market News, 2001). We believe many large corporations are expanding
their commitment to ethnic advertising.

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

Growing Popularity of Radio Formats Primarily Targeting
African-Americans. We believe that urban programming has been expanded to
target a more diverse urban listener base and has become more popular with
listeners and advertisers over the past ten years. The number of urban radio
stations has increased from 450 in 1994 to 672 in 2001, or by 49.3%. (Source:
The M Street Corp., Format Trends from 1992 to 2001, Counts as of June 2001.)
In Fall 1999, urban formats were one of the top three formats in nine of the
top ten radio markets nationwide and the top format in four of these markets.
(Source: INTEREP, Research Division, June 2000 Regional Differences in Media
Usage Study).

Concentrated Presence of African-Americans in Urban Markets. In 2001,
approximately 71.1% of the African-American population was located in the top
60 African-American markets. (Source: BIA 2002 First Edition). Relative to
radio broadcasters targeting a broader audience, we believe we can cover the
various segments of our target market with fewer programming formats and
therefore fewer radio stations than the maximum per market allowed by the FCC.

Strong African-American Listenership and Loyalty. In 2001,
African-Americans, age 12 and older, spent 24.0 hours per week listening to
radio. This compares to 20.5 hours per week for all Americans, age 12 and
older. (Source: Arbitron 2001 Black Radio Today and Arbitron 2001 Radio Today,
2002). We believe that African-American radio listeners exhibit greater loyalty
to radio stations that target the African-American community because those
radio stations become a valuable source of entertainment and information
responsive to the community's interests and lifestyles.

Acquisition Strategy

Our acquisition strategy includes acquiring and turning around
underperforming radio stations principally in the top 60 African-American
markets. We also seek to make acquisitions in existing markets where expanded
coverage is desirable and in new markets where we believe it is advantageous to
establish a presence. For strategic reasons, or as a result of an acquisition
of multiple stations in a market, we may also acquire and operate stations with
formats that primarily target non-African-American segments of the population.

RECENT AND PENDING TRANSACTIONS

We have acquired or agreed to acquire and/or operate 26 radio stations since
January 1, 2001. These transactions diversify our net broadcast revenue,
broadcast cash flow and asset base. Since January 1, 2001, we have also
divested seven radio stations that were not core components of our business
strategy.

The table below sets forth information regarding each of the completed or
pending transactions since January 1, 2001.

Total
No. of Call Consideration Date
Stations Letters (in millions) Completed
- -------- ------- ------------- ---------

Completed Acquisitions
Dallas III......... 1 KTXQ-FM/(1)/ $ 52.6 2/01
Boston............. 1 WILD-AM 5.0/(2)/ 2/01
Indianapolis II.... 1 WTLC-AM 8.3/(3)/ 4/01
Cincinnati......... 2 WIZF-FM 188.0/(4)/ 8/01
WDBZ-AM/(5)/
Columbus........... 3 WCKX-FM
WXMG-FM
WJYD-FM
Dayton............. 4 WGTZ-FM
WDHT-FM/(6)/
WING-AM
WKSW-FM
Louisville......... 6 WDJX-FM
WBLO-FM/(7)/
WGZB-FM
WULV-FM
WMJM-FM
WLRS-FM
Minneapolis........ 1 KTTB-FM
Lexington.......... 1 WLXO-FM/(8)/
Richmond III....... 4 WCDX-FM 34.0 8/01
WJMO-FM/(9)/
WRHH-FM/(10)/
WGCV-AM/(11)/
Atlanta............ 1 WAMJ-FM/(12)/ -- --
-- ------
Subtotal........... 25 287.9
Pending Acquisition
Atlanta............ 1 WHTA-FM/(13)/ 55.0 --
-- ------
Total.............. 26 $342.9
== ======
Completed Divestitures
Richmond I......... 1 WDYL-FM $ 9.0 2/01
Richmond II........ 1 WARV-FM 1.0 2/01
Greenville......... 2 WJMZ-FM 43.5 2/01
WPEK-FM 2/01
Dallas............. 1 KJOI-AM/(14)/ 16.0 3/01
Kingsley........... 1 WJZZ-AM 0.2 7/01
Lexington.......... 1 WLXO-FM --/(15)/ 10/01
-- ------
Total.............. 7 $ 69.7
== ======

- --------
/(1)/ KTXQ-FM was formerly known as KDGE-FM.
/(2)/ We paid approximately $4.5 million in cash and issued 63,492 shares of
our class A common stock in this transaction.
/(3)/ The approximate purchase price of $8.3 million related to both the
acquisition of WTLC-AM and the acquisition of all of the intellectual
property of WTLC-FM (including the call letters). Approximately $1.1
million of the purchase price was allocated to the acquisition of WTLC-AM
and the remaining $7.2 million

was allocated to the completed acquisition of the intellectual property of
WTLC-FM. Prior to the acquisition of WTLC-AM, we operated the station under
a time brokerage agreement.
/(4)/ Total consideration of $188.0 million consisted of cash in the amount of
approximately $106.7 million and approximately 5.8 million shares of our
class D common stock. / /
/(5)/ We operate WDBZ-AM under a local marketing agreement.
/(6)/ WDHT-FM was formerly known as WING-FM.
/(7)/ We operate WBLO-FM under a local marketing agreement. As part of our
acquisition of Blue Chip Broadcasting, Inc., we obtained an option to
purchase WBLO-FM for a purchase price of $2.0 million. This option may
not be exercised until October 1, 2002.
/(8)/ We completed the sale of WLXO-FM during October 2001./ See footnote 15
below. /
/(9)/ WJMO-FM was formerly known as WJRV-FM.
/(10)/ WRHH-FM was formerly known as WPLZ-FM.
/(11)/ A third party currently operates WGCV-AM under a local marketing
agreement.
/(12) /We commenced operating WAMJ-FM under a local marketing agreement during
August 2001. WAMJ-FM was formerly known as WAWE-FM. We currently have no
rights to acquire WAMJ-FM.
/(13)/ We currently operate WHTA-FM under a local marketing agreement. WHTA-FM
was formerly known as WPEZ-FM.
/(14)/ KJOI-AM was formerly known as KLUV-AM.
/(15)/ In October 2001, we completed the sale of WLXO-FM for approximately
$400,000. All proceeds of the sale were paid to the former stockholders
of Blue Chip Broadcasting, Inc.

Completed Acquisitions

Dallas III--KTXQ-FM Acquisition

On February 1, 2001, we acquired the assets of KTXQ-FM (formerly KDGE-FM),
licensed to Gainesville, Texas, for approximately $52.6 million in cash. Prior
to the acquisition, we had been operating KTXQ-FM under a time brokerage
agreement.

Boston--WILD-AM Acquisition

On February 28, 2001, we acquired Nash Communications Corporation, which
owned and operated radio station WILD-AM, licensed to Boston, Massachusetts,
for approximately $4.5 million in cash and 63,492 shares of class A common
stock. Prior to the acquisition, we had been operating WILD-AM under a time
brokerage agreement since May 2000.

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

On January 30, 2001, we entered into a definitive agreement with Emmis
Communications to acquire all of the intellectual property of WTLC-FM
(including its call letters) and the assets of WTLC-AM, licensed to
Indianapolis, Indiana. The approximate purchase price of $8.3 million related
to both the acquisition of the intellectual property of WTLC-FM, which was
completed on February 15, 2001, and the acquisition of the assets of WTLC-AM,
which was completed on April 25, 2001. Prior to the acquisition, we had
operated WTLC-AM under a time brokerage agreement since February 16, 2001.
Following the acquisition of the WTLC-FM intellectual property, we commenced
operating our station formerly known as WBKS-FM under the call letters WTLC-FM.

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

On August 10, 2001, we completed the acquisition of Blue Chip Broadcasting,
Inc., owner and/or operator of 16 radio stations (WIZF-FM, licensed to
Erlanger, Kentucky, WMJM-FM, licensed to Jeffersontown, Kentucky, WDJX-FM and
WULV-FM, licensed to Louisville, Kentucky, WLRS-FM, licensed to Shepherdsville,
Kentucky, WLXO-FM,

licensed to Stamping Ground, Kentucky, WGZB-FM, licensed to Corydon, Indiana,
KTTB-FM, licensed to Glencoe, Minnesota, WDHT-FM (formerly WING-FM), licensed
to Dayton, Ohio, WING-AM, licensed to Springfield, Ohio, WGTZ-FM, licensed to
Eaton, Ohio, WKSW-FM, licensed to Urbana, Ohio, WJYD-FM, licensed to London,
Ohio, WCKX-FM, licensed to Columbus, Ohio, WXMG-FM, licensed to Upper
Arlington, Ohio and WBLO-FM, licensed to Charlestown, Kentucky, which was
operated under a local marketing agreement, for approximately $106.7 million in
cash, and approximately 5.8 million shares of class D common stock. In
connection with the transaction, we entered into a local marketing agreement
with Blue Chip Communications, Inc. for WDBZ-AM, licensed to Cincinnati, Ohio.
Also, as part of the transaction, we obtained an option to purchase WBLO-FM for
a purchase price of $2.0 million. This option may not be exercised until
October 1, 2002.

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

On August 1, 2001, we acquired the assets of WCDX-FM, licensed to
Mechanicsville, Virginia; WJMO-FM (formerly WJRV-FM), licensed to Petersburg,
Virginia; WRHH-FM (formerly WPLZ-FM), licensed to Richmond, Virginia; and
WGCV-AM, licensed to Petersburg, Virginia, for approximately $34.0 million in
cash. We had operated WCDX-FM, WRHH-FM and WJMO-FM under a time brokerage
agreement since June 1, 1999.

Atlanta--WAMJ-FM Local Marketing Agreement

In August 2001, we commenced the operation of WAMJ-FM (formerly WAWE-FM),
licensed to Mableton, Georgia, under a local marketing agreement with the
Mableton Investment Group, LLC, an entity in which one of our executive
officers and one of our directors have an interest.

Pending Acquisition

Atlanta--WHTA-FM Acquisition

Completed Divestitures

Richmond I--WDYL-FM Divestiture

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

Richmond II--WARV-FM Divestiture

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

Greenville--WJMZ-FM and WPEK-FM Divestiture

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

Dallas--KJOI-AM Divestiture

On March 29, 2001, we sold KJOI-AM (formerly KLUV-AM) to Clear Channel
Communications for approximately $16.0 million. As part of this transaction,
Clear Channel Communications began operating the station under a time brokerage
agreement on February 1, 2001.

Kingsley--WJZZ-AM Divestiture

On July 25, 2001, we sold WJZZ-AM, licensed to Kingsley, Michigan, to Fort
Bend Broadcasting, Inc. for approximately $225,000. As part of this
transaction, Fort Bend Broadcasting, Inc. began operating the station under a
time brokerage agreement on February 7, 2001.

Lexington--WLXO-FM Divestiture

On October 24, 2001, we completed the sale of WLXO-FM, licensed to Stamping
Ground, Kentucky, for approximately $400,000. We had acquired WLXO-FM as part
of our August 10, 2001 acquisition of Blue Chip Broadcasting, Inc. All proceeds
of the sale were paid to the former stockholders of Blue Chip Broadcasting, Inc.

Top 60 African-American Radio Markets in the United States

In the table below, boxes and bold text indicate markets where we own and/or
operate radio stations. Population estimates are for 2001 and are based upon
data provided by BIA 2002 First Edition.

African-Americans
as a Percentage of
African-American the Overall
Population in the Population in the
Rank Market Market Market
- ---- ------ ----------------- ------------------
(in thousands)

1. New York, NY 3,771 21.0%
2. Chicago, IL 1,752 19.4
- ---------------------------------------------------------------------------------
3. Washington, DC 1,309 28.5
4. Atlanta, GA 1,255 29.9
5. Philadelphia, PA 1,071 21.2
6. Los Angeles, CA 1,070 8.6
7. Detroit, MI 1,043 22.6
8. Miami-Ft. Lauderdale-Hollywood, FL 860 21.9
9. Houston-Galveston, TX 820 17.3
10. Dallas-Ft. Worth, TX 745 14.3
11. Baltimore, MD 721 28.1
- ---------------------------------------------------------------------------------
12. San Francisco, CA 561 8.2
13. Memphis, TN 538 43.7
14. New Orleans, LA 495 38.3
15. Norfolk-Virginia Beach-Newport News, VA 494 32.5
- ---------------------------------------------------------------------------------
16. St. Louis, MO 488 18.7
17. Cleveland, OH 428 19.9
18. Boston, MA 330 7.3
19. Charlotte-Gastonia-Rock Hill, NC 320 21.0
20. Richmond, VA 310 30.8
- ---------------------------------------------------------------------------------
21. Birmingham, AL 286 28.7
- ---------------------------------------------------------------------------------
22. Raleigh-Durham, NC 281 23.2
- ---------------------------------------------------------------------------------
23. Milwaukee-Racine, WI 268 15.8
24. Greensboro-Winston Salem-High Point, NC 263 20.8
25. Tampa-St. Petersburg-Clearwater, FL 261 10.8
26. Nassau-Suffolk, NY 257 9.3
27. Jacksonville, FL 251 22.1
- ---------------------------------------------------------------------------------
28. Cincinnati, OH 239 12.0
- ---------------------------------------------------------------------------------
29. Kansas City, MO 237 13.4
30. Orlando, FL 234 16.0
- ---------------------------------------------------------------------------------
31. Indianapolis, IN 224 15.0
32. Columbus, OH 222 13.9
- ---------------------------------------------------------------------------------
33. Middlesex-Somerset-Union, NJ 217 13.7
34. Jackson, MS 204 46.0
35. Nashville, TN 200 16.0
36. Pittsburgh, PA 198 8.4
37. Baton Rouge, LA 197 32.3
38. Seattle-Tacoma, WA 194 5.4
39. San Diego, CA 184 6.5
- ---------------------------------------------------------------------------------
40. Minneapolis-St. Paul, MN 182 6.1
- ---------------------------------------------------------------------------------
41. Columbia, SC 178 32.7
42. Charleston, SC 173 31.3
43. W. Palm Beach-Boca Raton, FL 173 15.0
- ---------------------------------------------------------------------------------
44. Augusta, GA 169 35.1
- ---------------------------------------------------------------------------------
45. Greenville-Spartanburg, SC 162 17.6
46. Riverside-San Bernardino, CA 157 8.4
47. Greenville-New Bern-Jacksonville, NC 156 26.7

African-Americans
as a Percentage of
African-American the Overall
Population in the Population in the
Rank Market Market Market
---- ------------------------- ----------------- ------------------
(in thousands)

-------------------------------------------------------------------
48. Louisville, KY 151 14.2
-------------------------------------------------------------------
49. Mobile, AL 150 27.6
50. Shreveport, LA 149 37.9
51. Sacramento, CA 146 7.9
52. Buffalo-Niagara Falls, NY 144 12.3
53. Westchester, NY 144 15.5
54. Fayetteville, NC 143 33.3
55. Lafayette, LA 141 27.4
-------------------------------------------------------------------
56. Dayton, OH 140 14.1
-------------------------------------------------------------------
57. Las Vegas, NV 139 9.8
58. Phoenix, AZ 135 4.3
59. Denver-Boulder, CO 134 5.5
60. Montgomery, AL 132 39.4

Operating Strategy

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

. market research, targeted programming and marketing;

. strong management and performance-based incentives;

. strategic sales efforts;

. radio station clustering, programming segmentation and sales bundling;

. marketing platform to national advertisers;

. advertising partnerships and special events; and

. significant community involvement.

Market Research, Targeted Programming and Marketing

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

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

Strong Management and Performance-based Incentives

Radio One focuses on hiring highly motivated and talented individuals in
each functional area of the organization who can effectively help us implement
our growth and operating strategies. Radio One's management team is comprised
of a diverse group of individuals who bring expertise to their respective

functional areas. We seek to hire and promote individuals with significant
potential, the ability to operate with high levels of autonomy and the
appropriate team orientation that will enable them to pursue their careers
within the organization.

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

Radio Station Clustering, Programming Segmentation and Sales Bundling

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

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

Strategic Sales Efforts

Radio One has assembled an effective, highly trained sales staff responsible
for converting audience share into revenue. We operate with a focused,
sales-oriented culture which rewards aggressive selling efforts through a
generous commission and bonus compensation structure. We hire and deploy large
teams of sales professionals for each of our stations or station clusters, and
we provide these teams with the resources necessary to compete effectively in
the markets in which we operate. We utilize various sales strategies to sell
and market our stations as stand-alones, in combination with other stations
within a given market and across markets, where appropriate.

Marketing Platform to National Advertisers

Through our acquisitions, we have created a national platform of radio
stations in some of the largest African-American markets. This platform reaches
over 10 million listeners weekly, more than any other media vehicle primarily
targeting African-Americans. Thus, national advertisers find advertising on all
our radio stations an efficient and cost-effective way to reach this target
audience. Through our corporate sales department we bundle and sell this
national platform of radio stations to national advertisers thereby enhancing
our revenue generating opportunities, expanding our base of advertisers,
creating greater demand for our advertising time inventory and increasing the
capacity utilization of our inventory and making our sales effort more
efficient.

Advertising Partnerships and Special Events

We believe that in order to create advertising loyalty, we must strive to be
the recognized expert in marketing to the African-American consumer in the
markets in which we operate. We believe that we have achieved this recognition
by focusing on serving the African-American consumer and by creating innovative
advertising campaigns and promotional tie-ins with our advertising clients and
sponsoring numerous entertainment events each year. In these events,
advertisers buy signage, booth space and broadcast promotions to sell a variety
of goods and services to African-American consumers. As we expand our presence
in our existing markets and into new markets, we plan to increase the number of
events and the number of markets in which we host these major events.

Significant Community Involvement

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

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

Turnaround Expertise

Many of the stations we have acquired have been, in our opinion,
underperforming. By implementing our operating strategy, we have succeeded in
increasing the ratings, net broadcast revenue and broadcast cash flow of many
of the FM stations we have owned and/or operated. We have achieved these
improvements while, in many instances, competing against larger media
companies. Our turnaround strategy has been especially successful with respect
to our operations in Washington, D.C., Los Angeles, Detroit, Atlanta,
Philadelphia, Baltimore, Dallas, Cleveland, Boston and Richmond.

Our Station Portfolio

The following table sets forth selected information about our portfolio of
radio stations. Market population data and revenue rank data are from BIA 2002
First Edition. Audience share and audience rank data are based on Arbitron
Survey four book averages ending with the Fall 2001 Arbitron Survey unless
otherwise noted. As used in this table, "n/a" means not applicable or not
available and ''t'' means tied with one or more radio stations.

Market Rank Four Book Average
------------------ --------------------------------
Audience Audience Audience Audience
Share in Rank in Share in Rank in
2001 2001 12+ 12+ Target Target
Metro Radio Year Target Age Demo- Demo- Demo- Demo-
Market Population Revenue Acquired Format Demographic Graphic Graphic Graphic Graphic
- -------------- ---------- ------- -------- ----------------- ----------- -------- -------- -------- --------

Washington, DC 7 6
WKYS-FM...... 1995 Urban 18-34 5.3 2(t) 10.7 2
WMMJ-FM...... 1987 Urban AC 25-54 5.3 2(t) 6.2 1
WYCB-AM...... 1998 Gospel 25-54 0.7 27(t) 0.5 31(t)
WOL-AM....... 1980 Urban Talk 25-54 0.7 27(t) 0.6 29(t)
Atlanta 11 7
WPZE-FM...... 1999 Gospel 25-54 n/a n/a n/a n/a
WJZZ-FM...... 1999 NAC/Jazz 25-54 2.7 17 3.4 13
WHTA-FM/(1)/. (pending) Urban 18-34 3.9 10 6.9 3(t)
WAMJ-FM/(2)/. n/a Urban AC 25-54 n/a n/a n/a n/a
Philadelphia 6 10
WPHI-FM...... 1997 Urban 18-34 2.8 14(t) 5.5 5(t)
WPLY-FM...... 2000 Alternative Rock 18-34 2.5 16 5.4 7
Los Angeles 2 1
KKBT-FM...... 2000 Urban 18-34 3.8 7 5.7 4
Detroit 10 11
WDTJ-FM...... 1998 Urban 18-34 4.1 10 7.7 4
WDMK-FM...... 1998 Urban AC 25-54 1.5 21 1.9 19
WCHB-AM...... 1998 Urban Talk/Gospel 35+ 0.6 27 0.8 26
Miami 12 12
WVCG-AM/(3)/. 2000 Ethnic 35-64 n/a n/a n/a n/a
Houston 9 9
KMJQ-FM...... 2000 Urban AC 25-54 6.1 3 7.3 2
KBXX-FM...... 2000 Urban 18-34 6.5 2 10.4 1
Dallas 5 5
KBFB-FM...... 2000 Urban 18-34 3.1 14 5.3 7
KTXQ-FM/(4)/. 2001 Urban AC 25-54 0.8 29(t) 1.0 25(t)
Baltimore 20 19
WERQ-FM...... 1993 Urban 18-34 9.6 1 17.9 1
WWIN-FM...... 1992 Urban AC 25-54 5.9 4 7.6 3
WOLB-AM...... 1992 Urban Talk 25-54 n/a n/a n/a n/a
WWIN-AM...... 1993 Gospel 35+ 0.7 18 0.8 17
St. Louis 19 21
WFUN-FM...... 1999 Urban 18-34 3.2 15(t) 6.8 4
Cleveland 25 23
WENZ-FM...... 1999 Urban 18-34 6.2 4 12.2 1
WERE-AM...... 1999 News/Talk 25-54 -- -- -- --
WZAK-FM...... 2000 Urban AC 25-54 5.9 6 7.1 4(t)
WJMO-AM...... 2000 Gospel 35-64 1.4 18 1.5 16(t)
Boston 8 8
WBOT-FM...... 1999 Urban 18-34 1.8 19 3.6 9
WILD-AM...... 2001 Urban AC 25-54 1.2 23(t) 1.5 20(t)
Charlotte 37 25
WCHH-FM/(5)/. 2000 Urban 18-34 3.2 14 5.3 5(t)
Richmond 56 48
WCDX-FM...... 2001 Urban 18-34 10.5 1 19.7 1
WKJS-FM...... 1999 Urban AC 25-54 5.3 6 6.4 5
WJMO-FM/(6)/. 2001 R&B/Oldies 25-54 4.9 8 5.8 6
WRHH-FM/(7)/. 2001 Urban 18-34 n/a n/a n/a n/a
WGCV-AM/(8)/. 2001 Gospel 35-64 0.7 23(t) 0.6 25
Raleigh-Durham 46 37
WQOK-FM...... 2000 Urban 18-34 8.4 1 14.2 1
WFXK-FM...... 2000 Urban AC 25-54 2.4 15 3.2 15
WFXC-FM...... 2000 Urban AC 25-54 3.0 13(t) 3.7 13(t)
WNNL-FM...... 2000 Gospel 25-54 6.1 4(t) 6.4 5

Market Rank Four Book Average
------------------ --------------------------------
Audience Audience Audience Audience
Target Share in Rank in Share in Rank in
2001 2001 Age 12+ 12+ Target Target
Metro Radio Year Demo- Demo- Demo- Demo- Demo-
Market Population Revenue Acquired Format Graphic Graphic Graphic Graphic Graphic
- ------------------ ---------- ------- -------- ---------------- ------- -------- -------- -------- --------

Cincinnati
- ---------- 26 20
WIZF-FM 2001 Urban 18-34 5.5 5 8.4 3
WDBZ-AM/(9)/ n/a Urban Talk 35-64 0.9 18 1.1 15
Indianapolis/(10)/ 40 30
WHHH-FM 2000 CHR 18-34 5.4 7 9.1 3
WTLC-FM/(11)/ 2000 Urban AC 25-54 5.7 5(t) 6.2 4
WYJZ-FM 2000 NAC/Jazz 25-54 2.2 15 2.1 15
WTLC-AM 2001 Young Gospel 25-54 1.3 18 0.9 19
Columbus
- -------- 36 29
WCKX-FM 2001 Urban 18-34 7.7 3 11.4 2
WXMG-FM 2001 R&B/Oldies 25-54 2.7 10 3.4 9
WJYD-FM 2001 Gospel 25-54 1.2 22 1.3 20(t)
Minneapolis
- ----------- 16 16
KTTB-FM 2001 Urban 18-34 3.0 12(t) 4.8 8
Augusta/(12)/ 112 117
WAEG-FM 2000 R&B/Oldies 25-54 0.4 25(t) 0.5 24
WAEJ-FM 2000 R&B/Oldies 25-54 0.7 22(t) 0.2 28
WAKB-FM 2000 Urban AC 25-54 3.7 12(t) 5.4 8
WFXA-FM 2000 Urban 18-34 8.0 2 10.8 3
WTHB-AM 2000 Gospel 35+ 1.5 17 1.8 16(t)
Louisville
- ---------- 55 47
WDJX-FM 2001 CHR 18-34 6.9 3 10.3 2
WBLO-FM/(13)/ n/a Urban 18-34 3.4 10 6.3 5(t)
WGZB-FM 2001 Urban AC 18-34 5.5 5 7.8 4
WULV-FM 2001 Soft AC 25-54 2.9 11(t) 3.6 11
WMJM-FM 2001 R&B/Oldies 25-54 2.4 15 2.6 12
WLRS-FM 2001 Alternative 18-34 2.9 11(t) 6.3 5(t)
Dayton
- ------ 58 51
WGTZ-FM 2001 CHR 18-34 4.8 6 8.0 5
WDHT-FM/(14)/ 2001 Urban 18-34 4.6 8(t) 5.9 8
WING-AM 2001 News/Sports/Talk 25-54 0.8 19 1.0 15
WKSW-FM 2001 Country 25-54 1.1 16 0.9 16(t)

- --------
/(1)/ We commenced operating WHTA-FM under a local marketing agreement during
September 2001. We have entered into an agreement to acquire WHTA-FM and
expect to complete the acquisition during the second quarter of 2002.
WHTA-FM was formerly known as WPEZ-FM.
/(2)/ We commenced operating WAMJ-FM under a local marketing agreement during
August 2001. WAMJ-FM was formerly known as WAWE-FM.
/(3)/ We do not subscribe to the Arbitron service for this market.
/(4)/ KTXQ-FM was formerly known as KDGE-FM.
/(5)/ WCHH-FM was formerly known as WCCJ-FM.
/(6)/ WJMO-FM was formerly known as WJRV-FM.
/(7)/ WRHH-FM was formerly known as WPLZ-FM.
/(8)/ A third party operates WGCV-AM under a local marketing agreement.
/(9)/ We operate WDBZ-AM pursuant to a local marketing agreement.
/(10) WDNI-LP (formerly W53AV), the low power television station that we
acquired in Indianapolis in June 2000, is not included in this table. /
/(11)/ WTLC-FM was formerly known as WBKS-FM.
/(12)/ For the Augusta market, Arbitron issues its radio market survey reports
on a semi-annual basis, rather than a quarterly basis as in our other
markets.
/(13)/ We currently operate WBLO-FM under a local marketing agreement. As part
of our acquisition of Blue Chip Broadcasting, Inc., we obtained an
option to purchase WBLO-FM for a purchase price of $2.0 million. This
option may not be exercised until October 1, 2002.
/(14)/ WDHT-FM was formerly known as WING-FM.

Advertising Revenue

Substantially all of our net broadcast revenue is generated from the sale of
local and national advertising for broadcast on our radio stations. Additional
net broadcast revenue is generated from network compensation payments and other
miscellaneous transactions. Local sales are made by the sales staffs located in
our markets. National sales are made by firms specializing in radio advertising
sales on the national level, in exchange for a commission from Radio One that
is based on a percentage of our net broadcast revenue from the advertising
obtained. Approximately 73% of our net broadcast revenue for the year ended
December 31, 2001 was generated from the sale of local advertising and 25% from
sales to national advertisers, including network advertising. The balance of
net broadcast revenue is derived from tower rental income, ticket and other
revenue related to special events hosted by Radio One.

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

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

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

. the supply and demand for radio advertising time.

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

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

Strategic Diversification

We continue to explore opportunities in other forms of media that are
complementary to our core radio business which will allow us to leverage our
expertise in marketing to African-Americans and our significant listener base.
Such opportunities could include an urban-oriented cable network, an
urban-oriented radio network, outdoor advertising in urban environments, music
production, publishing and other related businesses. To that end we currently
have investments in:

. iBiquity Digital Corporation, a leading developer of in-band on-channel
digital broadcast technology;

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

. New Urban Entertainment Television, an urban-oriented cable television
programmer; and

. Quetzal/J.P. Morgan Partners, L.P., an entity formed for the purpose of
investing in minority-owned telecommunications entities.

Competition

The radio broadcasting industry is highly competitive. Radio One's stations
compete for audiences and advertising revenue with other radio stations and
with other media such as television, the Internet, newspapers, direct mail and
outdoor advertising, some of which may be controlled by horizontally-integrated
companies. Audience ratings and advertising revenue are subject to change and
any adverse change in a market could adversely affect our net broadcast revenue
in that market. If a competing station converts to a format similar to that of
one of our stations, or if one of our competitors strengthens its operations,
our stations could suffer a reduction in ratings and advertising revenue. Other
radio companies which are larger and have more resources

may also enter markets where we operate. Although we believe our stations are
well positioned to compete, we cannot assure you that our stations will
maintain or increase their current ratings or advertising revenue.

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

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

. satellite digital audio radio service, which has resulted in the
introduction of two new subscriber-based satellite radio services with
numerous channels and sound quality equivalent to that of compact discs;

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

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

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

Antitrust Regulation

An important part of our growth strategy is the acquisition of additional
radio stations. The agencies responsible for enforcing the federal antitrust
laws, the Federal Trade Commission and the Department of Justice, may
investigate certain acquisitions. After the passage of the Telecommunications
Act of 1996, the Department of Justice became more aggressive in reviewing
proposed acquisitions of radio stations. The Justice Department is particularly
aggressive when the proposed buyer already owns one or more radio stations in
the market of the station it is seeking to buy. The Justice Department has
challenged a number of radio broadcasting transactions. Some of those
challenges ultimately resulted in consent decrees requiring, among other
things, divestitures of certain stations. In general, the Justice Department
has more closely scrutinized radio broadcasting acquisitions that would result
in local market shares as a significant percentage of radio advertising
revenue. Pursuant to a recent Memorandum of Agreement between the Justice
Department and the FTC, the Justice Department will now have primary
responsibility for merger reviews and antitrust enforcement in the media,
including the broadcast industry.

We cannot predict the outcome of any specific Department of Justice or FTC
investigation. Any decision by the Department of Justice or FTC to challenge a
proposed acquisition could affect our ability to consummate an acquisition or
to consummate it on the proposed terms. For an acquisition meeting certain size
thresholds, the Hart-Scott-Rodino Act requires the parties to file Notification
and Report Forms concerning antitrust issues with the Department of Justice and
the FTC and to observe specified waiting period requirements before
consummating the acquisition. If the investigating agency raises substantive
issues in connection with a proposed transaction, then the parties frequently
engage in lengthy discussions or negotiations with the investigating agency
concerning possible means of addressing those issues, including restructuring
the proposed acquisition or divesting assets. In addition, the investigating
agency could file suit in federal court to enjoin the acquisition or to require
the divestiture of assets, among other remedies. Acquisitions that are not
required to be reported under the Hart-Scott-Rodino Act may be investigated by
the Department of Justice or the FTC under the antitrust laws before or after
consummation. In addition, private parties may under certain circumstances
bring legal action to challenge an acquisition under the antitrust laws. As
part of its increased scrutiny of radio station acquisitions, the Department of
Justice has stated publicly that it believes that local marketing agreements,
joint sales

agreements, time brokerage agreements and other similar agreements customarily
entered into in connection with radio station transfers could violate the
Hart-Scott-Rodino Act if such agreements take effect prior to the expiration of
the waiting period under the Hart-Scott-Rodino Act. Furthermore, the Department
of Justice has noted that joint sales agreements may raise antitrust concerns
under Section 1 of the Sherman Act and has challenged joint sales agreements in
certain locations. As indicated above, the Department of Justice also has
stated publicly that it has established certain revenue and audience share
concentration benchmarks with respect to radio station acquisitions, above
which a transaction may receive additional antitrust scrutiny. However, to
date, the Department of Justice has also investigated transactions that do not
meet or exceed these benchmarks and has cleared transactions that do exceed
these benchmarks.

Similarly, the Federal Communications Commission staff has adopted
procedures to review proposed radio broadcasting transactions even if the
proposed acquisition otherwise complies with the FCC's ownership limitations.
In particular, the FCC may "flag" assignment and transfer control applications
that raise competitive concerns, and the staff may conduct a public interest
analysis, including a competitive analysis of the particular market. However,
the FCC has expressed its intent to resolve expeditiously those applications
that require a competitive analysis, and has established a timetable for staff
review and disposition of such applications.

Federal Regulation of Radio Broadcasting

The radio broadcasting industry is subject to extensive and changing
regulation by the FCC of programming, technical operations, employment and
other business practices. The FCC regulates radio broadcast stations pursuant
to the Communications Act of 1934, as amended. The Communications Act permits
the operation of radio broadcast stations only in accordance with a license
issued by the FCC upon a finding that the grant of a license would serve the
public interest, convenience and necessity. The Communications Act provides for
the FCC to exercise its licensing authority to provide a fair, efficient and
equitable distribution of broadcast service throughout the United States. Among
other things, the FCC:

. assigns frequency bands for radio broadcasting;

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

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

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

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

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

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

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

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

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

. changes to the license authorization and renewal process;

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

. fees for radio stations streaming audio over the Internet;

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

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

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

. technical and frequency allocation matters;

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

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

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

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

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

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

FCC License Grants and Renewals

The Communications Act provides that a broadcast station license may be
granted to any applicant if the public interest, convenience and necessity will
be served thereby, subject to certain limitations. In making licensing
determinations, the FCC considers an applicant's legal, technical, financial
and other qualifications. The FCC grants radio broadcast station licenses for
specific periods of time and, upon application, may renew them for additional
terms. A station may continue to operate beyond the expiration date of its
license if a timely filed license renewal application is pending. Under the
Communications Act, radio broadcast station licenses may be granted for a
maximum term of eight years.

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

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

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

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

After considering these factors, the FCC may grant the license renewal
application with or without conditions, including renewal for a term less than
the maximum otherwise permitted, or hold an evidentiary hearing to determine
whether, or under what conditions, the renewal should be granted.

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

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

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

Radio One's Licenses. The following table sets forth information with
respect to each of our radio stations. A broadcast station's market may be
different from its community of license. "ERP" refers to the effective radiated
power of an FM radio station. "HAAT" refers to the antenna height above average
terrain of an FM radio station. The coverage of an AM radio station is chiefly
a function of the power of the radio station's transmitter, less dissipative
power losses and any directional antenna adjustments. For FM radio stations,
signal coverage area is chiefly a function of the ERP of the radio station's
antenna and the HAAT of the radio station's antenna. The height of an AM radio
station's antenna is measured in meters and the height of an FM radio station's
antenna is measured by reference to HAAT.

ERP (FM) Antenna
Power Height (AM) Expiration
Station Call Year of FCC (AM) in HAAT (FM) Operating Date of FCC
Market Letters Acquisition Class Kilowatts in Meters Frequency License
- ------ ------------ ----------- ----- --------- ----------- --------- -----------

Washington, DC WOL-AM 1980 C 1.0 90.8 1450 kHz 10/01/2003
WMMJ-FM 1987 A 2.9 146.0 102.3 MHz 10/01/2003
WKYS-FM 1995 B 24.5 215.0 93.9 MHz 10/01/2003
WYCB-AM 1998 C 1.0 81.9 1340 kHz 10/01/2003
Atlanta WPZE-FM 1999 C3 7.9 175.0 97.5 MHz 04/01/2004
WJZZ-FM 1999 C3 25.0 100.0 107.5 MHz 04/01/2004
WHTA-FM /(1)/ C2 41.0 150.0 107.9 MHz 04/01/2004
WAMJ-FM /(2)/ A 3.0 143.0 102.5 MHz 04/01/2004
Philadelphia WPHI-FM 1997 A 0.34/(3)/ 305.0 103.9 MHz 08/01/2006
WPLY-FM 2000 B 35.0 183.0 100.3 MHz 08/01/2006
Los Angeles KKBT-FM/(4)/ 2000 B 5.3 916.0 100.3 MHz 12/01/2005
Detroit WDTJ-FM 1998 B 20.0 221.0 105.9 MHz 10/01/2004
WCHB-AM 1998 B 50.0 71.1 1200 kHz 10/01/2004
WDMK-FM 1998 B 50.0 152.0 102.7 MHz 10/01/2004
Miami WVCG-AM 2000 B 50.0 90.0 1080 kHz 02/01/2004
Houston KMJQ-FM 2000 C 100.0 524.0 102.1 MHz 08/01/2005
KBXX-FM 2000 C 100.0 585.0 97.9 MHz 08/01/2005
Dallas KBFB-FM 2000 C 100.0 491.0 97.9 MHz 08/01/2005
KTXQ-FM 2001 C 100.0 578.0 94.5 MHz 08/01/2005
Baltimore WWIN-AM 1992 C 1.0 102.5 1400 kHz 10/01/2003
WWIN-FM 1992 A 3.0 91.0 95.9 MHz 10/01/2003
WOLB-AM 1993 D 1.0 103.5 1010 kHz 10/01/2003
WERQ-FM 1993 B 37.0 174.0 92.3 MHz 10/01/2003
St. Louis WFUN-FM 1999 C3 24.5 102.0 95.5 MHz 12/01/2004
Cleveland WERE-AM 1999 B 5.0 200.0 1300 kHz 10/01/2004
WENZ-FM 1999 B 16.0 272.0 107.9 MHz 10/01/2004
WZAK-FM 2000 B 27.5 189.0 93.1 MHz 10/01/2004
WJMO-AM 2000 C 1.0 190.9 1490 kHz 10/01/2004
Boston WBOT-FM 1999 A 2.7 150.0 97.7 MHz 04/01/2006
WILD-AM 2001 D 1.0 101.3 1090 kHz 04/01/2006
Charlotte WCHH-FM 2000 A 6.0 100.0 92.7 MHz 12/01/2003
Richmond WKJS-FM 1999 C1 100.0 299.0 104.7 MHz 10/01/2003
WCDX-FM 2001 B1 4.5 235.0 92.1 MHz 10/01/2003
WRHH-FM 2001 A 6.0 100.0 99.3 MHz 10/01/2003
WJMO-FM 2001 A 2.3 162.0 105.7 MHz 10/01/2003
WGCV-AM/(5)/ 2001 C 1.0 181.5 1240 kHz 10/01/2003
Raleigh-Durham WQOK-FM 2000 C1 100.0 299.0 97.5 MHz 10/01/2003
WFXK-FM 2000 C1 100.0 299.0 107.1 MHz 12/01/2003
WFXC-FM 2000 A 2.59 153.0 104.3 MHz 12/01/2003
WNNL-FM 2000 C3 7.9 176.0 103.9 MHz 12/01/2003
Cincinnati WIZF-FM 2001 A 1.25 155.0 100.9 MHz 10/01/2004
WDBZ-AM /(6)/ C 1.0 89.6 1230 kHz 10/01/2004
Indianapolis WHHH-FM 2000 A 3.3 87.0 96.3 MHz 08/01/2004
WTLC-FM 2000 A 6.0 85.0 106.7 MHz 08/01/2004
WYJZ-FM 2000 A 6.0 100.0 100.9 MHz 08/01/2004
WTLC-AM 2001 B 5.0 221.0 1310 kHz 08/01/2004

Columbus WCKX-FM 2001 A 1.9 126.0 107.5 MHz 10/01/2004
WXMG-FM 2001 A 2.59 154.0 98.9 MHz 10/01/2004
WJYD-FM 2001 A 6.0 100.0 106.3 MHz 10/01/2004
Minneapolis KTTB-FM 2001 C1 100.0 176.0 96.3 MHz 04/01/2005
Augusta WAEG-FM 2000 A 3.0 100.0 92.3 MHz 04/01/2004
WAEJ-FM 2000 A 6.0 100.0 100.9 MHz 04/01/2004
WAKB-FM 2000 C3 0.75 416.0 96.7 MHz 04/01/2004
WFXA-FM 2000 A 6.0 92.0 103.1 MHz 04/01/2004
WTHB-AM 2000 D 5.0 154.9 1550 kHz 04/01/2004
Louisville WDJX-FM 2001 B 24.0 218.0 99.7 MHz 08/01/2004
WBLO-FM /(7)/ A 3.0 100.0 104.3 MHz 08/01/2004
WGZB-FM/(8)/ 2001 A 3.0 100.0 96.5 MHz 08/01/2004
WULV-FM 2001 A 4.3 87.0 102.3 MHz 08/01/2004
WMJM-FM 2001 A 2.0 59.0 101.3 MHz 08/01/2004
WLRS-FM 2001 A 1.55 136.0 105.1 MHz 08/01/2004
Dayton WGTZ-FM 2001 B 40.0 168.0 92.9 MHz 10/01/2004
WDHT-FM 2001 B 50.0 150.0 102.9 MHz 10/01/2004
WING-AM 2001 B 5.0 200.0 1410 kHz 10/01/2004
WKSW-FM 2001 A 3.2 124.0 101.7 MHz 10/01/2004

- --------
/(1)/ We entered into an agreement to acquire WHTA-FM during June 2001. We
commenced operating WHTA under a local marketing agreement during October
2001. We expect to acquire WHTA during 2002.
/(2)/ We commenced the operation of WAMJ-FM under a local marketing agreement
during August 2001.
/(3)/ WPHI-FM operates with facilities equivalent to 3 kW at 100 meters
/(4)/ We also hold a license for K261AB, a translator for KKBT-FM.
/(5)/ WGCV-AM is currently operated by a third party under a local marketing
agreement.
/(6)/ We currently operate WDBZ-AM under a local marketing agreement.
/(7)/ We currently operate WBLO-FM under a local marketing agreement. As part
of our acquisition of Blue Chip Broadcasting, Inc., we have an option to
purchase WBLO-FM.
/(8)/ We also hold a license for WGZB-FM1, a booster for WGZB-FM.

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

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

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

. the history of the parties' compliance with FCC operating rules; and

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

To obtain the FCC's prior consent to assign or transfer a broadcast license,
appropriate applications must be filed with the FCC. If the application to
assign or transfer the license involves a substantial change in ownership or
control of the licensee, for example, the transfer or acquisition of more than
50% of the voting stock, the application must be placed on an FCC public notice
for a period of 30 days during which petitions to deny the application may be
filed by interested parties, including members of the public. Informal
objections may be filed any time until the FCC acts upon the application. If an
assignment application does not involve new parties, or if

a transfer of control application does not involve a "substantial change" in
ownership or control, it is a pro forma application, which is not subject to
the public notice and 30-day petition to deny procedure. The pro forma
application is nevertheless subject to informal objections that may be filed
any time until the FCC acts on the application. If the FCC grants an assignment
or transfer application, interested parties have 30 days from public notice of
the grant to seek reconsideration of that grant. The FCC usually has an
additional 10 days (from the end of the 30-day period) to set aside such grant
on its own motion. When ruling on an assignment or transfer application, the
FCC is prohibited from considering whether the public interest might be served
by an assignment or transfer to any party other than the assignee or transferee
specified in the application.

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

The FCC generally applies its broadcast ownership limits to "attributable"
interests held by an individual, corporation, partnership or other association
or entity, including limited liability companies. In the case of a corporation
holding broadcast licenses, the interests of officers, directors and those who,
directly or indirectly have the right to vote five percent or more of the stock
of a licensee corporation are generally deemed attributable interests, as are
positions as an officer or director of a corporate parent of a broadcast
licensee. The FCC treats all partnership interests as attributable, except for
those limited partnership interests that under FCC policies are considered
"insulated" from "material involvement" in the management or operation of the
media-related activities of the partnership. The FCC currently treats limited
liability companies like limited partnerships for purposes of attribution.
Stock interests held by insurance companies, mutual funds, bank trust
departments and certain other passive investors that hold stock for investment
purposes only become attributable with the ownership of 20% or more of the
voting stock of the corporation holding broadcast licenses. In March 2001, the
FCC revoked a rule that had provided that interests of minority shareholders in
a corporation were not attributable if a single entity or individual held 50%
or more of that corporation's voting stock. However, in December 2001 the FCC
suspended the elimination of the "single majority shareholder" exemption for
broadcasters and cable operators, pending resolution of related issues in a
cable rule making proceeding. Currently, for purposes of the multiple ownership
rules, no minority voting interest is attributable if there is a single holder
of more than 50% of the outstanding voting stock of the corporate broadcast
licensee, cable television system, or daily newspaper in which the minority
interest is held. This rule could be upheld, modified, or eliminated again
depending upon the outcome of the cable proceeding.

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

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

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

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

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

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

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

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

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

Under these "cross-ownership" rules, we, absent waivers from the FCC, would
not be permitted to own a radio broadcast station and acquire an attributable
interest in any daily newspaper in the same market where we then owned any
radio broadcast station. Our stockholders, officers or directors, absent a
waiver from the FCC, may not hold an attributable interest in a daily newspaper
in those same markets. However, the FCC has initiated a review of whether it
should revise or revoke its rule barring common ownership of a broadcast
station and a daily newspaper in the same market.

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

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

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

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

Although current FCC nationwide radio broadcast ownership rules allow one
entity to own, control or hold attributable interests in an unlimited number of
FM radio stations and AM radio stations nationwide, the

Communications Act and the FCC's rules limit the number of radio broadcast
stations in local markets in which a single entity may own an attributable
interest as follows:

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

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

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

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

Recently, the FCC launched a comprehensive examination of its rules and
policies concerning multiple ownership of radio stations in local markets. In a
rule making proceeding initiated in November 2001, the FCC has sought public
comment on a wide range of matters relating to local ownership limits,
including the public interest mandate for such limits and the impact of the
limits on diversity and competition. The FCC has also invited comments on how
it should define local "market" for purposes of its numerical limits. It
currently uses a complex formula based on the mutual overlap of principal
community contours of radio stations to determine how many stations are in a
particular radio market and the number of stations that a single entity may own
within the market. The FCC has proposed to consider alternate methods of
defining markets, including using geographic boundaries based on Arbitron
markets. The FCC will also consider how it should measure the market share of
competitors, whether by revenues or audience share, and how market
concentration impacts local ownership limits. The FCC has sought comment on
whether it should use numerical limits in evaluating market concentration, or
whether it should review transactions on a case-by-case basis. If the latter,
the FCC has asked how it should evaluate local marketing agreements, time
brokerage agreements and joint sales agreements in the context of analyzing
market concentration.

The FCC has established an interim policy for processing assignment
applications while the multiple ownership rule making is pending. Under the
interim processing procedures, the FCC will examine the potential competitive
effects of proposed radio station combinations. Where the proposed assignment
would give one owner 50% or more, or two owners 70% or more, of the radio
advertising revenue share of the relevant Arbitron metro market, the
application will be marked for further FCC review. This is similar to the
"flagging" procedure the FCC has used informally in the past. The FCC continues
to have discretion to review individual cases that involve what it views as
excessive market concentration issues, or that present unusual cross-interest
relationships, on a case-by case basis.

The outcome of this FCC proceeding could affect our business in a number of
ways, including, but not limited to, the following:

. If the FCC adopts a market definition based upon Arbitron or other
geographic measures, it could have an adverse effect on our ability to
accumulate stations in a given area.

. If the FCC changes its policies with respect to local marketing, time
brokerage or joint sales agreements (for example, if it should decide to
"attribute" joint sales agreements for multiple ownership purposes), we
could be limited in our ability to buy or sell time on certain stations.

. In general terms, if the FCC changes the way it defines markets or
determines excess market concentration for purposes of the broadcast
multiple ownership rules, we could be limited in our ability to acquire
new stations in certain markets, in our ability to operate stations
pursuant to certain agreements, and in our ability to improve the
coverage contours of our existing stations.

Because of these multiple and cross-ownership rules, if a stockholder,
officer or director of Radio One holds an ''attributable'' interest in Radio
One, such stockholder, officer or director may violate the FCC's rules if such
person or entity also holds or acquires an attributable interest in other radio
stations, television stations, daily

newspapers, or cable systems, depending on their number and location. If an
attributable stockholder, officer or director of Radio One violates any of
these ownership rules, it may affect our ability to obtain from the FCC one or
more authorizations needed to conduct our radio station business and our
ability to obtain FCC consents for certain future acquisitions.

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

In December 2000, the United States Copyright Office ruled that broadcasters
that simulcast (by a process known as streaming) their over-the-air signals on
the Internet would incur copyright liability for the use of copyrighted
materials, including music programming, with such liability perhaps extending
retroactively to 1998. In response to the December 2000 ruling, the National
Association of Broadcasters filed suit in federal court seeking to overturn the
ruling. The court declined to overturn the ruling, and the matter has been
appealed. The outcome of the proceeding, which does not affect our over-the-air
broadcasting operations, cannot be predicted.

In February 2002, the Copyright Office announced the royalty fees to be
charged for streaming radio signals on the Internet. The fees are to apply
retroactively to 1998, and to future Internet streaming. A group of broadcast
companies has filed a petition to set aside or reduce the announced rates. We
cannot predict the outcome of this proceeding or its effect on our future
streaming activity, nor have we calculated our potential liability for
streaming royalty fees. Internet streaming is not and has not been a material
part of our operations.

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

The FCC requires that licensees not discriminate in hiring practices. For
many years, it also required that licensees develop and implement programs
designed to promote equal employment opportunities, and submit reports to the
FCC on these matters annually and in connection with each license renewal
application. However, the FCC's employment rules, as they related to outreach
efforts for recruitment of minorities and the reporting of such outreach
efforts, were struck down as unconstitutional by the U.S. Court of Appeals for
the D.C. Circuit in 1999. The FCC responded with new EEO rules in 2000, but in
2001 the Court found a portion of the new rules unconstitutional. In December
2001, the FCC issued a new rule making proceeding, proposing rules similar to
the 2000 rules, but modified in response to the Court's concerns. The proposed
new rules prohibit employment discrimination by broadcast stations on the basis
of race, religion, color, national origin, and gender, and require broadcasters
to implement programs to promote equal employment opportunities at their
stations. The proposed rules generally require broadcast stations to
disseminate information about job openings widely so that all qualified
applicants, including minorities and women, have an adequate opportunity to
compete for the job. Broadcasters would be required to fulfill this requirement
by sending the station's job vacancy information to organizations that request
it, and by implementing a number of job recruitment efforts from a specific
list of choices, such as participating in community outreach programs and job
fairs, and sponsoring internships at the station. Broadcasters with five or
more full-time employees would have to keep records of their recruitment
efforts, and place a report of those efforts in their public files annually.
Radio broadcasters with 10 or more full-time employees must file their annual
reports with the FCC midway through their license term. Broadcasters also would
be required to file employment information annually with the FCC, for
statistical purposes.

From time to time, complaints may be filed against Radio One's radio
stations alleging violations of these or other rules. In addition, the FCC
recently has proposed to establish a system of random audits to ensure and
verify licensee compliance with FCC rules and regulations. Failure to observe
these or other rules and policies can result in the imposition of various
sanctions, including fines or conditions, the grant of ''short'' (less than the
maximum eight year) renewal terms or, for particularly egregious violations,
the denial of a license renewal application or the revocation of a license.

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

A radio broadcast station that brokers time on another radio broadcast
station or enters into a time brokerage agreement with a radio broadcast
station in the same market will be considered to have an attributable ownership
interest in the brokered radio station for purposes of the FCC's local
ownership rules if the time brokerage arrangement covers more than 15% of the
brokered station's weekly broadcast hours. As a result, a radio broadcast
station may not enter into a time brokerage agreement that allows it to program
more than 15% of the broadcast time, on a weekly basis, of another local radio
broadcast station that it could not own under the FCC's local multiple
ownership rules. Attribution for radio time brokerage agreements applies to all
of the FCC's multiple ownership rules applicable to radio stations (daily
newspaper/radio cross-ownership and radio/television cross-ownership) and not
only the local radio ownership rules. In addition, such agreements are
attributable for purposes of the FCC's prohibition against simulcasting a
commonly-owned, same-service station serving the same geographic area,
discussed above.

Joint Sales Agreements. Over the past few years, a number of radio stations
have entered into cooperative arrangements commonly known as joint sales
agreements. While these agreements may take varying forms, under the typical
joint sales agreement a station licensee obtains, for a fee, the right to sell
substantially all of the commercial advertising on a separately-owned and
licensed station in the same market. The typical joint sales agreement also
customarily involves the provision by the selling party of certain sales,
accounting and services to the station whose advertising is being sold. The
typical joint sales agreement is distinct from a local marketing agreement in
that a joint sales agreement normally does not involve programming other than
advertising content. The FCC has determined that issues of joint advertising
sales should be left to enforcement by antitrust authorities, and therefore
does not generally regulate joint sales practices between stations. Currently,
stations for which another licensee sells time under a joint sales agreement
are not deemed by the FCC to be an attributable interest of that licensee.

In general, radio stations have operated under local marketing, time
brokerage and joint sales agreements with very little regulation by, or
scrutiny from, the FCC with respect to such agreements. However, in the context
of its review of multiple ownership of radio stations in local markets, the FCC
has sought public comment on the relevance of such agreements to its analysis
of market concentration, and on whether such agreements should be attributed
for purposes of the multiple ownership rules. Thus far, the FCC has not
determined what relevance, if any, such agreements may have upon its evaluation
at license renewal time of a licensee's performance.

RF Radiation. In 1985, the FCC adopted rules based on a 1982 American
National Standards Institute (''ANSI'') standard regarding human exposure to
levels of radio frequency (''RF'') radiation. These rules

require applicants for renewal of broadcast licenses or modification of
existing licenses to inform the FCC at the time of filing such applications
whether an existing broadcast facility would expose people to RF radiation in
excess of certain limits. In 1992, ANSI adopted a new standard for RF exposure
that, in some respects, was more restrictive in the amount of environmental RF
exposure permitted. The FCC has since adopted more restrictive radiation limits
which became effective October 15, 1997, based in part on the revised ANSI
standard, and which were to be fully complied with by September 1, 2000.

Digital Audio Radio Service. The FCC allocated spectrum to a new
technology, digital audio radio service (''DARS''), to deliver satellite-based
audio programming to a national or regional audience and issued regulations for
a DARS service in early 1997. DARS was intended to provide a medium for the
delivery by satellite or terrestrial means of multiple new audio programming
formats with compact disc quality sound to local and national audiences. The
nationwide reach of satellite DARS could allow niche programming aimed at
diverse communities that Radio One is targeting. Two companies that hold
licenses for authority to offer multiple channels of digital,
satellite-delivered S-Band aural services could compete with conventional
terrestrial radio broadcasting. The licensees may sell advertising and lease
channels in these media. Both of the satellite radio licensees have launched
satellites, and have begun providing service.

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

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

Digital Audio Broadcasting. The FCC has proposed to implement a new
terrestrial digital audio broadcasting ("DAB") service, which could provide
enhanced radio sound quality, reduced interference, and other benefits to radio
broadcasting. The FCC is considering in-band, on-channel AM and FM DAB which,
if adopted, could allow broadcasters to transmit digital signals on their
existing frequencies. The outcome of this proceeding or the effect DAB could
have on our operations cannot be predicted.

Low Power Radio Broadcast Service. In January 2000, the FCC created a class
of radio stations designed to serve very localized communities or
underrepresented groups within communities by authorizing two new classes of
noncommercial low power FM radio stations which will be permitted to operate on
commercial FM frequencies. As adopted by the FCC, there will be two types of
LPFM stations, LP100 stations with power from 50 to 100 watts and a service
radius of approximately 3.5 miles and LP10 stations with power from one to 10
watts and a service radius of approximately 1-2 miles. LPFM stations will have
to protect the signals of all other authorized FM stations and may be
authorized on any FM frequency. Eligible licensees will be limited to
noncommercial government or private educational organizations, associations or
entities; non-profit entities with educational purposes; or government or
non-profit entities providing local public safety or transportation services.
No existing broadcasters or other media entities can own an LPFM station. For
the first two years of the LPFM service, licensees will be limited to local
entities headquartered within 10 miles of the LPFM station transmitters and no
entity will be permitted to operate more than one LPFM station. After two
years, the ownership limit will be five LPFM stations nationwide and after
three years, the ownership limit will be 10 LPFM stations nationwide.

On December 21, 2000, the President signed an appropriations bill including
provisions that limited the scope of the FCC's LPFM order. Among other things,
it restored certain interference protection to full power FM stations in a
manner that reduced the potential number of LPFM stations by approximately 75%.
In April 2001, the FCC modified its LPFM rules to implement the provisions of
the appropriations legislation.

During 2000 and 2001, the FCC implemented a five-part national filing window
for new LP100 station applications. Hundreds of applications filed during the
early windows were impacted by the April 2001 interference protection
modifications to the FCC's rules. Those applications remain pending until the
FCC opens

a filing window allowing curative amendments. To date, more than 200 LP100
construction permits have been granted in communities across the country,
though only a small number have begun operating. The FCC has not announced when
it will accept applications for LP10 stations.

At this time, it is difficult to assess the competitive impact of new LPFM
stations. LPFM stations must comply with certain technical requirements aimed
at protecting existing FM radio stations from interference, although the level
of interference that low power stations will cause after they begin operating
is uncertain. If LP FM stations are licensed in the markets in which we operate
our stations, the low power stations may compete for listeners. The low power
stations may also limit our ability to obtain new licenses or to modify
existing facilities. Nevertheless, the effect of this newly created low power
radio service on Radio One cannot be predicted.

Employees

As of March 5, 2002, we employed approximately 1,550 people. Our employees
are not unionized except for some of our employees who are covered by
collective bargaining agreements that we assumed in connection with certain of
our station acquisitions. We have not experienced any work stoppages and
believe relations with our employees are satisfactory. Each radio station has
its own on-air personalities and clerical staff. However, in an effort to
control broadcast and corporate expenses, we centralize certain radio station
functions by market location. For example, in each of our markets we typically
employ one general manager who is responsible for all of our radio stations
located in such market.

Industry Segments

We consider radio broadcasting to be our only business segment.

ITEM 2. PROPERTIES AND FACILITIES

Properties

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

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

The tangible personal property owned by Radio One and the real property
owned or leased by Radio One is the subject of a security interest held
pursuant to the terms of our amended and restated credit agreement, dated as of
July 17, 2000, as amended on March 18, 2002.

ITEM 3. LEGAL PROCEEDINGS

In November 2001, Radio One and certain of its officers and directors were
named as defendants in a class action shareholder complaint filed in the United
States District Court for the Southern District of New York. Similar complaints
were filed in the same Court against hundreds of other public companies that
conducted initial public offerings of their common stock in the late 1990s. The
complaint alleges that our registration

statements and prospectuses filed with the SEC in May 1999 and November 1999
contained untrue statements of material fact or omissions of material fact in
violation of the federal securities laws. In particular, the complaint alleges
that our registration statements and prospectuses failed to disclose that
certain underwriters required several investors who wanted large allocations of
our initial public offering to pay excessive underwriters' compensation in the
form of increased brokerage commissions and that such underwriters required
investors to agree to buy shares of our securities after the initial public
offering was completed at predetermined prices as a precondition to obtaining
initial public offering allocations. The plaintiffs claim that we violated
Sections 11 and 12 of the Securities Act of 1933. The plaintiffs seek
unspecified monetary damages and other relief. We believe these claims are
without merit and intend to vigorously defend ourselves. We also maintain
directors and officers liability insurance that we believe will be applicable
to this litigation, and we may also be entitled to indemnification by our
underwriters in the event of an adverse result.

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

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

No matters were submitted to our stockholders for vote during the fourth
quarter of 2001.

PART II

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

Price Range of Our Class A and Class D Common Stock

Our class A common stock is traded on The Nasdaq Stock Market's National
Market under the symbol ''ROIA.'' The tables below show, for the quarters
indicated, the reported high and low bid quotes for our class A common stock on
The Nasdaq Stock Market's National Market (as adjusted for our three-for-one
stock split in the form of a June 6, 2000 dividend of two shares of class D
common stock for each share of class A common stock outstanding on May 30, 2000
(the ''Stock Split'')).

High Low
------ ------

Fiscal Year 2000
First Quarter.. $33.77 $19.90
Second Quarter. $29.88 $15.05
Third Quarter.. $32.00 $ 7.50
Fourth Quarter. $13.81 $ 5.56

High Low
------ ------
Fiscal Year 2001
First Quarter.. $19.56 $ 9.50
Second Quarter. $23.38 $14.88
Third Quarter.. $22.92 $ 9.11
Fourth Quarter. $19.05 $10.86

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

High Low
------ ------

Fiscal Year 2000
Second Quarter (beginning June 7). $28.00 $16.31
Third Quarter..................... $24.50 $ 5.63
Fourth Quarter.................... $13.75 $ 5.56

High Low
------ ------
Fiscal Year 2001
First Quarter..................... $17.94 $ 9.72
Second Quarter.................... $22.05 $13.44
Third Quarter..................... $21.91 $ 9.20
Fourth Quarter.................... $18.64 $10.75

Dividends

Since becoming a public company in May 1999, we have not declared any
dividends on our common stock. We intend to retain future earnings for use in
our business and do not anticipate declaring or paying any cash or stock
dividends on shares of our common stock in the foreseeable future. In addition,
any determination to declare and pay dividends will be made by our board of
directors in light of our earnings, financial position, capital requirements,
our bank credit facility, and the indenture governing our 8 7/8% senior
subordinated notes, and such other factors as the board of directors deems
relevant. See Note 1 to the Consolidated Financial Statements of Radio One
included elsewhere in this Form 10-K.

Number of Stockholders

Based upon a survey of record holders and a review of our stock transfer
records, as of March 13, 2002, there were approximately 9,600 holders of Radio
One's class A common stock, three holders of Radio One's class B common stock,
two holders of Radio One's class C common stock, and approximately 9,300
holders of Radio One's class D common stock.

ITEM 6. SELECTED FINANCIAL DATA

The following table contains selected historical consolidated financial data
with respect to Radio One. The selected historical consolidated financial data
have been derived from the Consolidated Financial Statements of Radio One for
each of the fiscal years in the five year period ended December 31, 2001, which
have been audited by Arthur Andersen LLP, independent public accountants. The
selected historical consolidated financial data should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and the Consolidated Financial Statements of Radio One included
elsewhere in this report.

Non-GAAP Measures

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

Fiscal Years Ended December 31,/(1)/
------------------------------------------------------
1997 1998 1999 2000 2001
-------- -------- --------- ----------- ----------
(In Thousands)

Statement of Operations:
Net broadcast revenue......................... $ 32,367 $ 46,109 $ 81,703 $ 155,666 $ 243,804
Operating expenses............................ 18,848 24,501 44,259 77,280 120,463
Corporate expenses and non-cash compensation.. 2,155 2,800 4,380 6,303 10,065
Depreciation and amortization................. 5,828 8,445 17,073 63,207 129,723
-------- -------- --------- ----------- ----------
Operating income (loss).................... 5,536 10,363 15,991 8,876 (16,447)
Interest expense/(2)/......................... 8,910 11,455 15,279 32,407 63,358
Gain on sale of assets, net................... -- -- -- -- 4,224
Other income, net............................. 415 358 2,149 20,084 991
Income tax benefit (provision)/(3)/........... -- 1,575 (2,728) (804) 24,550
-------- -------- --------- ----------- ----------
(Loss) income before extraordinary item.... (2,959) 841 133 (4,251) (50,040)
Extraordinary loss............................ 1,985 -- -- -- 5,207
-------- -------- --------- ----------- ----------
Net (loss) income.......................... $ (4,944) $ 841 $ 133 $ (4,251) $ (55,247)
======== ======== ========= =========== ==========
Net loss applicable to common stockholders. $ (6,981) $ (2,875) $ (1,343) $ (13,487) $ (75,387)
======== ======== ========= =========== ==========

Statement of Cash Flows:
Cash Flows From--
Operating activities....................... $ 4,937 $ 9,299 $ 18,221 $ 55,686 $ 59,783
Investing activities....................... (23,199) (61,171) (346,571) (1,220,023) (146,928)
Financing activities....................... 25,054 47,827 330,116 1,178,995 98,381

Other Data:
Broadcast cash flow........................... $ 13,519 $ 21,608 $ 37,444 $ 78,386 $ 123,341
Broadcast cash flow margin/(4)/............... 42% 47% 46% 50% 51%
EBITDA (before non-cash compensation)......... $ 11,364 $ 18,808 $ 33,289 $ 72,271 $ 114,227
After-tax cash flow........................... 2,869 7,248 16,303 48,712 37,330
Cash interest expense/(5)/.................... 4,413 7,192 10,762 28,581 58,477
Capital expenditures.......................... 2,035 2,236 3,252 3,665 9,283

Balance Sheet Data (at period end):
Cash and cash equivalents..................... $ 8,500 $ 4,455 $ 6,221 $ 20,879 $ 32,115
Intangible assets, net........................ 54,942 127,639 218,460 1,637,180 1,776,201
Total assets.................................. 79,225 153,856 527,536 1,765,218 1,923,915
Total debt (including current portion)........ 74,954 131,739 82,626 646,956 780,022
Preferred stock............................... 22,968 26,684 -- -- --
Total stockholders' equity.................... (21,984) (24,859) 420,256 1,057,069 1,052,947

- --------
/(1)/ Year-to-year comparisons are significantly affected by Radio One's
acquisition of various radio stations during the periods covered.
/(2)/ Interest expense includes non-cash interest, such as the accretion of
principal, the amortization of discounts on debt and the amortization of
deferred financing costs.
/(3)/ From January 1, 1996 to May 19, 1997, Radio One elected to be treated as
an S corporation for U.S. federal and state income tax purposes and,
therefore, generally was not subject to income tax at the corporate level
during that period.
/(4)/ Broadcast cash flow margin is defined as broadcast cash flow divided by
net broadcast revenue.
/(5)/ Cash interest expense is calculated as interest expense less non-cash
interest, including the accretion of principal, the amortization of
discounts on debt and the amortization of deferred financing costs, for
the indicated period.

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

The following information should be read in conjunction with ''Selected
Financial Data'' and the Consolidated Financial Statements and Notes thereto
included elsewhere in this report.

Introduction

Our net broadcast revenue is derived primarily from local and national
advertisers and, to a much lesser extent, tower rental income, ticket and other
revenue related to special events we sponsor throughout the year. Our net
broadcast revenue is affected primarily by the advertising rates our radio
stations are able to charge as well as the overall demand for radio advertising
time in a market. Advertising rates are based primarily on:

. a radio station's audience share in the demographic groups targeted by
advertisers, as measured principally by quarterly reports issued by
Arbitron;

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

. the supply of and demand for radio advertising time.

Advertising rates are generally highest during morning and afternoon
commuting hours. In 2001, approximately 73% of our net revenue was generated
from local advertising and 25% was generated from national spot advertising,
including network advertising. The balance of 2001 revenue was generated
primarily from tower rental income, ticket and other revenue related to our
sponsored events.

Our significant broadcast expenses are (i) employee salaries and
commissions, (ii) programming expenses, (iii) advertising and promotion
expenses, (iv) rental of premises for studios, (v) rental of transmission tower
space and (vi) music license royalty fees. We strive to control these expenses
by centralizing certain functions such as finance, accounting, legal, human
resources and management information systems and the overall programming
management function. We also use our multiple stations, market presence and
purchasing power to negotiate favorable rates with certain vendors and national
representative selling agencies.

We generally incur advertising and promotional expenses to increase our
audiences. However, because Arbitron reports ratings quarterly, any changed
ratings and therefore the effect on advertising revenues tends to lag behind
the incurrence of advertising and promotional expenditures.

Depreciation and amortization of costs associated with the acquisition of
radio stations and interest carrying charges have historically been significant
factors in determining our overall profitability. However, with the adoption of
SFAS 141 and SFAS 142, the impact of depreciation and amortization is expected
to be greatly reduced in 2002 and future periods (see "Liquidity - Recent
Accounting Pronouncements" below).

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

In the broadcasting industry, radio stations often utilize trade or barter
agreements to reduce expenses by exchanging advertising time for goods or
services. In order to maximize cash revenue from our spot inventory, we
minimize the use of trade agreements and have reduced trade revenue to
approximately 1% of our gross revenue in 2001, down from approximately 2% in
1999.

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

RADIO ONE, INC. AND SUBSIDIARIES
RESULTS OF OPERATIONS

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

Fiscal Years Ended December 31,
------------------------------
1999 2000 2001
------- -------- --------
(in thousands)

Statement of Operations:
Net broadcast revenue........................................ $81,703 $155,666 $243,804
Operating expenses........................................... 44,259 77,280 120,463
Corporate expenses........................................... 4,155 6,115 9,114
Non-cash compensation........................................ 225 188 951
Depreciation and amortization................................ 17,073 63,207 129,723
------- -------- --------
Operating income (loss)................................... 15,991 8,876 (16,447)
Interest expense............................................. 15,279 32,407 63,358
Gain on sale of assets, net.................................. -- -- 4,224
Other income, net............................................ 2,149 20,084 991
------- -------- --------
Income (loss) before (provision) benefit for income taxes and
extraordinary item......................................... 2,861 (3,447) (74,590)
Income tax (provision) benefit............................... (2,728) (804) 24,550
------- -------- --------
Income (loss) before extraordinary item................... 133 (4,251) (50,040)
Extraordinary loss........................................... -- -- 5,207
------- -------- --------
Net income (loss)......................................... $ 133 $ (4,251) $(55,247)
======= ======== ========
Net loss applicable to common stockholders................ $(1,343) $(13,487) $(75,387)
======= ======== ========
Broadcast cash flow/(1)/..................................... $37,444 $ 78,386 $123,341
Broadcast cash flow margin/(1)/.............................. 46% 50% 51%
EBITDA/(1)/.................................................. $33,289 $ 72,271 $114,227
After-tax cash flow/(1)/..................................... $16,303 $ 48,712 $ 37,330

- --------
/(1) See "Selected Financial Data--Non-GAAP Measures." /

Fiscal Year Ended December 31, 2001 Compared to Fiscal Year Ended December 31,
2000

Net Broadcast Revenue. Net broadcast revenue increased to approximately
$243.8 million for the fiscal year ended December 31, 2001 from approximately
$155.7 million for the fiscal year ended December 31, 2000, or 57%. The
increase in net broadcast revenue was the result of continuing broadcast
revenue growth in some of our markets in which we have operated for at least
one year, as we benefited from historical ratings increases at certain of our
radio stations. Additional revenue gains were derived from acquisitions made
during 2000 and 2001, including gains of $59.7 million derived from our August
2000 acquisition of radio stations from Clear Channel Communications and AMFM
and $12.7 million derived from our August 2001 acquisition of Blue Chip
Broadcasting, Inc.

Operating Expenses. Operating expenses increased to approximately $120.5
million for the fiscal year ended December 31, 2001 from approximately $77.3
million for the fiscal year ended December 31, 2000, or 56%. This increase in
expenses was related to our expansion within the markets in which we operate,
including increased variable costs associated with increased revenue, start-up
and expansion expenses in our newer markets, and operating expenses associated
with acquisitions made during 2000 and 2001, including expenses of
approximately $26.1 million associated with the stations acquired from Clear
Channel Communications and AMFM in 2000 and expenses of $8.3 million associated
with the stations acquired from Blue Chip Broadcasting, Inc. in 2001.

Corporate Expenses. Corporate expenses (including non-cash compensation)
increased to approximately $10.1 million for the fiscal year ended December 31,
2001 from approximately $6.3 million for the fiscal year ended December 31,
2000, or 60%. This increase was due primarily to growth in our corporate staff,
consistent with our overall expansion.

Depreciation and Amortization. Depreciation and amortization increased to
approximately $129.7 million for the fiscal year ended December 31, 2001 from
approximately $63.2 million for the fiscal year ended December 31, 2000, or
105%. This increase was due primarily to our asset growth as well as our
acquisitions in 2000 and 2001. There was no amortization expense related to
Richmond III or Blue Chip intangible assets with indefinite lives due to the
adoption of SFAS 142. In addition, we expect amortization expense to decrease
by approximately $114.1 million, annually, as a result of the adoption of SFAS
142. See "Recent Accounting Pronouncements" below.

Operating Income (Loss). Operating loss for the fiscal year ended December
31, 2001 was approximately $16.4 million compared to operating income of $8.9
million for the fiscal year ended December 31, 2000. This decrease was
attributable to higher operating and corporate expenses as described above, as
well as higher depreciation and amortization expenses associated with several
of our acquisitions during 2000 and 2001.

Interest Expense. Interest expense increased to approximately $63.4 million
for the fiscal year ended December 31, 2001 from approximately $32.4 million
for the fiscal year ended December 31, 2000, or 96%. This increase related
primarily to borrowings associated with the acquisition of radio stations from
Clear Channel and AMFM and the acquisition of Blue Chip Broadcasting, Inc.,
somewhat offset by lower interest rates on our 2001 subordinated debt issuance
and on our bank credit facility due to declining interest rates throughout much
of 2001.

Gain on Sale of Assets. Gain on sale of assets was approximately $4.2
million for the fiscal year ended December 31, 2001. This gain resulted from
the divestiture of our non-core stations as previously described. See "Recent
and Pending Transactions."

Other Income. Other income decreased to approximately $991,000 for the
fiscal year ended December 31, 2001 from approximately $20.1 million for the
fiscal year ended December 31, 2000, or 95%. This decrease was due primarily to
lower interest income from having normalized cash balance levels during 2001 as
compared to high cash and investment balances resulting from our follow-on
equity offerings in November 1999, March 2000 and July 2000. These offerings
were completed in anticipation of the acquisition of radio stations from Clear
Channel and AMFM, which was consummated in August 2000. Additionally, in 2001
we incurred losses resulting from the write-down of certain of our investments.

Income (Loss) before (Provision) Benefit for Income Taxes and Extraordinary
Item. Loss before benefit for income taxes was approximately $74.6 million for
the fiscal year ended December 31, 2001 compared to loss before provision for
income taxes of approximately $3.4 million for the fiscal year ended December
31, 2000. This loss before benefit for income taxes was due primarily to an
increase in depreciation and amortization expense and interest expense related
to the acquisition of radio stations from Clear Channel and AMFM as discussed
above.

Extraordinary Loss. Extraordinary loss was approximately $5.2 million for
the fiscal year ended December 31, 2001. This loss, net of income tax benefit
of approximately $2.6 million, related to the early retirement of our 12%
senior subordinated notes due 2004. This loss included the write-off of the
remaining deferred offering costs, underwriters' discount and prepayment
penalties associated with these notes.

Net Loss. Net loss increased to approximately $55.2 million for the fiscal
year ended December 31, 2001 compared to approximately $4.3 million for the
fiscal year ended December 31, 2000, or 1,184%. This increase was due primarily
to the higher losses before benefit (provision) for income taxes compared to
the previous year's period, as well as the extraordinary loss of $5.2 million
as previously described.

Net Loss Applicable to Common Stockholders. Net loss applicable to common
stockholders increased to $75.4 million for the fiscal year ended December 31,
2001 from $13.5 million for the fiscal year ended December 31, 2000. The
increase was attributable to higher losses compared to the previous year's
period as well as an increase in accrued dividends related to the issuance of
$310.0 million of 6 1/2% Convertible Preferred Remarketable Term Income
Deferrable Equity Securities (HIGH TIDES).

Broadcast Cash Flow. Broadcast cash flow (see "Selected Financial
Data--Non-GAAP Measures") increased to approximately $123.3 million for the
fiscal year ended December 31, 2001 from approximately $78.4 million for the
fiscal year ended December 31, 2000, or 57%. This increase was primarily
attributable to an increase in broadcast revenue, partially offset by higher
operating expenses as described above.

Broadcast Cash Flow Margin. Our broadcast cash flow margin increased to
approximately 51% for the fiscal year ended December 31, 2001 from 50% for the
fiscal year ended December 31, 2000. This increase was primarily the result of
our revenue growth exceeding our expense growth and the acquisition of certain
radio stations with higher broadcast cash flow margins. On a same station
basis, broadcast cash flow margin increased to approximately 51% in 2001 from
approximately 50% in 2000. This increase was the result of revenue gains in our
more mature markets, partially offset by slower expense growth in those markets.

EBITDA. Earnings before interest, taxes, depreciation, and amortization,
and excluding non-cash compensation expense ("EBITDA") (see "Selected Financial
Data--Non-GAAP Measures") increased to approximately $114.2 million for the
fiscal year ended December 31, 2001 from approximately $72.3 million for the
fiscal year ended December 31, 2000, or 58%. This increase was attributable to
the increase in broadcast revenue partially offset by higher operating expenses
and higher corporate expenses associated with our overall growth.

After-tax Cash Flow. After-tax cash flow decreased to approximately $37.3
million for the fiscal year ended December 31, 2001 from approximately $48.7
million for the fiscal year ended December 31, 2000, or 23%. This decrease was
primarily attributable to higher EBITDA more than offset by higher interest
expense and lower interest income, as described above.

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

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

Operating Expenses. Operating expenses increased to approximately $77.3
million for the fiscal year ended December 31, 2000 from approximately $44.3
million for the fiscal year ended December 31, 1999, or 75%. This increase in
expenses was related to our rapid expansion within all of the markets in which
we operate, including increased variable costs associated with increased
revenue, as well as start-up, expansion and operating expenses of approximately
$14.3 million associated with the stations acquired from Clear Channel and AMFM.

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

Depreciation and Amortization. Depreciation and amortization increased to
approximately $63.2 million for the fiscal year ended December 31, 2000 from
approximately $17.1 million for the fiscal year ended

December 31, 1999, or 270%. This increase was due primarily to our asset growth
as well as our acquisitions in 1999 and 2000.

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

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

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

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

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

Net Loss Applicable to Common Stockholders. Net loss applicable to common
stockholders increased to $13.5 million for the fiscal year ended December 31,
2000 from $1.3 million for the fiscal year ended December 31, 1999. The
increase was attributable to higher losses compared to the previous year's
period, and the redemption of preferred stock in 2000 was more than offset by
the accrual of dividends related to the issuance of $310.0 million of 6 1/2%
Convertible Preferred Remarketable Term Income Deferrable Equity Securities
(HIGH TIDES).

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

Broadcast Cash Flow Margin. Our broadcast cash flow margin increased to
approximately 50% for the fiscal year ended December 31, 2000 from 46% for the
fiscal year ended December 31, 1999. This increase was primarily the result of
our revenue growth exceeding our expense growth and the acquisition of certain
radio stations with higher broadcast cash flow margins. On a same station
basis, broadcast cash flow margin for the period increased to approximately 51%
in 2000 from approximately 46% in 1999. This increase was the result of revenue
gains in our more mature markets partially offset by slower expense growth in
those markets.

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

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

After-tax Cash Flow. After-tax cash flow increased to approximately $48.7
million for the fiscal year ended December 31, 2000 from approximately $16.3
million for the fiscal year ended December 31, 1999, or 199%. This increase was
primarily attributable to higher EBITDA and higher interest income, partially
offset by higher interest charges associated with the financings of our various
acquisitions, as described above.

Liquidity and Capital Resources

Our primary source of liquidity is cash provided by operations and, to the
extent necessary, undrawn commitments available under our bank credit facility.
Our ability to borrow in excess of the commitments set forth in our credit
agreement is limited by the terms of the indenture governing our 8 7/8% senior
subordinated notes. Additionally, such terms place restrictions on Radio One
with respect to the sale of assets, liens, investments, dividends, debt
repayments, capital expenditures, transactions with affiliates, consolidation
and mergers, and the issuance of equity interests among other things.

We have used, and will continue to use, a significant portion of our capital
resources to consummate acquisitions. These acquisitions were or will be funded
from:

. our bank credit facility;

. the proceeds of the historical offerings of our common stock and preferred
stock;

. the proceeds of future common and/or preferred stock, and/or debt
offerings; and

. internally generated cash flow.

Radio One's balance of cash and cash equivalents was approximately $32.1
million as of December 31, 2001, and approximately $20.9 million as of December
31, 2000. This increase in cash resulted primarily from higher cash generated
from operations. We have entered into a bank credit facility under which we
have borrowed $350.0 million in term loans and may borrow up to $250.0 million
on a revolving basis, and which we have historically drawn down as capital was
required, primarily for acquisitions. As of December 31, 2001, $120.0 million
was available to be drawn down from our bank credit facility, subject to
certain restrictions. Our ability to draw down on the revolver is limited by
our ability to comply with certain financial covenants and leverage ratios that
are defined terms within the credit facility agreement. As of December 31,
2001, we were in compliance with covenants under our bank credit facility. On
March 18, 2002, we entered into an amendment with our lenders under our bank
credit facility to modify favorably certain financial covenants, for the period
from March 31, 2002 to December 31, 2004.

Net cash flow from operating activities increased to approximately $59.8
million for the fiscal year ended December 31, 2001 from approximately $55.7
million for the fiscal year ended December 31, 2000, or 7%. This increase was
due primarily to an increase in our net loss and reduction in accounts payable
more than offset by higher non-cash expenses and an increase in accounts
payable. Non-cash expenses of depreciation and amortization increased to
approximately $129.7 million for the fiscal year ended December 31, 2001 from
approximately $63.2 million for the fiscal year ended December 31, 2000, or
105%, due primarily to our acquisitions in 2000, particularly the Clear Channel
and AMFM acquisitions. Non-cash expenses of amortization of debt financing
costs, unamortized discount and deferred interest decreased to approximately
$2.0 million for the fiscal year ended December 31, 2001 from approximately
$2.8 million for the fiscal year ended December 31, 2000, or 29%, due primarily
to the redemption of our 12% senior subordinated notes.

Net cash flow used in investing activities decreased to approximately $146.9
million for the fiscal year ended December 31, 2001 compared to approximately
$1,220.0 million for the fiscal year ended December 31,

2000, or 88%. During the fiscal year ended December 31, 2001, we used $206.5
million of cash to acquire radio stations or make deposits on radio stations we
have agreed to acquire. We also received net proceeds of approximately $69.4
million from the sale of seven non-core stations that we have divested or
agreed to divest. Additionally, we made purchases of capital equipment totaling
approximately $9.3 million of which approximately $0.9 million was related to
our investment in Satellite One, L.L.C. and made approximately $0.6 million
worth of investments in other companies. Satellite One, L.L.C. is a
wholly-owned subsidiary that provides programming for five channels on the XM
Satellite Radio system. During the fiscal year ended December 31, 2000, we used
$1,469.6 million of cash to acquire radio stations or make deposits on radio
stations we had agreed to acquire. Additionally, we sold $256.4 million worth
of short-term investment securities, made purchases of capital equipment
totaling approximately $3.7 million and made approximately $1.2 million worth
of investments in other companies.

Net cash flows from financing activities decreased to approximately $98.4
million for the fiscal year ended December 31, 2001 compared to approximately
$1,179.0 million for the fiscal year ended December 31, 2000, or 92%. During
the fiscal year ended December 31, 2001, we completed an offering of $300.0
million aggregate principal amount of 8 7/8% senior subordinated notes and
borrowed approximately $135.0 million under our credit facility. These
proceeds, coupled with cash from operations, were used to redeem our 12% senior
subordinated notes, to repay approximately $150 million in term loans, to repay
approximately $62.5 million in revolving credit and to fund various
acquisitions. In connection with these borrowings and as a result of
amortization expenses related to our 8 7/8% senior subordinated notes, we
incurred approximately $8.2 million in deferred debt financing costs. Also
during the fiscal year ended December 31, 2001, we paid approximately $20.1
million in preferred stock dividends. During the fiscal year ended December 31,
2000, we completed a common stock offering and a convertible preferred stock
offering and raised approximately $635.9 million, net of offering costs. Also
during the fiscal year ended December 31, 2000, we borrowed approximately
$570.0 million to fund various acquisitions and repaid $7.6 million of debt
with cash from operations and from our two equity offerings. In connection with
these borrowings and as a result of amortization expenses related to our 12%
senior subordinated notes, we incurred approximately $6.2 million in deferred
debt financing costs. Also during the fiscal year ended December 31, 2000, we
paid approximately $5.0 million in preferred stock dividends. As a result, cash
and cash equivalents increased by approximately $11.2 million during the fiscal
year ended December 31, 2001, compared to an increase of approximately $14.7
million during the fiscal year ended December 31, 2000.

We continuously review opportunities to acquire additional radio stations,
primarily in the top 60 African-American markets, and to make strategic
investments. As of the date of this report, other than our pending acquisition
of WHTA-FM in the Atlanta market and our option to purchase WBLO-FM in the
Louisville market, we have no written or oral understandings, letters of intent
or contracts to make acquisitions or strategic investments. We anticipate that
any future acquisitions and strategic investments will be financed through
funds generated from operations, equity financings, permitted debt financings,
debt financings through unrestricted subsidiaries or a combination of these
sources. However, there can be no assurance that financing from any of these
sources, if available, will be available on favorable terms.

Our ability to meet our debt service obligations and reduce our total debt,
and our ability to refinance the 8 7/8% senior subordinated notes at or prior
to their scheduled maturity date in 2011, will depend upon our future
performance which, in turn, will be subject to general economic conditions and
to financial, business and other factors, including factors beyond our control.
In addition to debt service and the dividends related to our preferred stock,
our principal liquidity requirements will be for working capital, continued
business development, strategic investment opportunities and for general
corporate purposes, including capital expenditures. For 2002, capital
expenditures are expected to total approximately $10.0 to $12.0 million.

Management believes that, based on current levels of operations and
anticipated internal growth, for the foreseeable future, cash flow from
operations together with other available sources of funds will be adequate to

make required payments of interest on our indebtedness, to fund our pending
acquisition, to pay dividends on our preferred stock, to fund anticipated
capital expenditures and working capital requirements and to enable us to
comply with the terms of our debt agreements. However, in order to finance
future acquisitions or investments, if any, we may require additional financing
and there can be no assurance that we will be able to obtain such financing on
terms acceptable to us.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141 (SFAS 141) "Business
Combinations," which is effective for all business combinations initiated after
June 30, 2001. This pronouncement requires all business combinations to be
accounted for using the purchase method and broadens the criteria for recording
intangible assets separate from goodwill. Recorded goodwill and intangibles
will be evaluated against this new criteria and may result in certain
intangibles being subsumed into goodwill, or alternatively, amounts initially
recorded as goodwill may be separately identified and recognized apart from
goodwill. We adopted this statement on July 1, 2001.

Also, in June 2001, FASB issued Statement of Financial Accounting Standard
No. 142 (SFAS 142) "Goodwill and Other Intangible Assets." This pronouncement
requires a non-amortization approach to account for purchased goodwill and
certain other intangible assets. Under a non-amortization approach, goodwill
and certain intangibles will not be amortized into results of operations but,
instead, would be reviewed for impairment and written down and charged to
results of operations only in the periods in which the recorded value of
goodwill and certain intangibles is more than their fair value. We adopted the
provisions of this statement, which apply to goodwill and intangible assets
acquired prior to June 30, 2001, on January 1, 2002. We adopted the provisions
of this statement, which apply to goodwill and other indefinite life intangible
assets acquired after June 30, 2001, on July 1, 2001. As a result of our
adoption of SFAS 142, we did not record amortization expense related to the
Blue Chip Broadcasting, Inc. acquisition. Amortization expense would have
approximated $5.0 million related to the goodwill and FCC licenses had we not
adopted this non-amortization approach. The adoption of these accounting
standards will eliminate the amortization of goodwill and FCC broadcast
licenses commencing January 1, 2002. SFAS 142 will have a material impact on
Radio One's financial statements, as the amounts previously recorded for the
amortization of goodwill and FCC broadcast licenses is significant. For the
years ended December 31, 1999, 2000 and 2001, we recorded amortization expense
for goodwill of $4.6 million, $6.1 million and $7.1 million, respectively. For
the years ended December 31, 1999, 2000 and 2001, we recorded amortization
expense for FCC broadcast licenses of $8.4 million, $48.4 million and $107.0
million, respectively. We expect amortization expense to decrease by
approximately $114.1 million annually as a result of this pronouncement.

In August 2001, FASB issued Statement of Financial Accounting Standard No.
144 (SFAS 144), "Accounting for the Impairment or Disposal of Long-Lived
Assets." This statement addresses financial accounting and reporting for the
impairment or disposal of long-lived assets and supersedes Statement of
Financial Accounting Standards No. 121 (SFAS 121), "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of," and
ABP Opinion No. 30. This statement retains the fundamental provisions of SFAS
121 that require Radio One to test long-lived assets for impairment using
undiscounted cash flows; however, the statement eliminates the requirement to
allocate goodwill to these long-lived assets. The statement also requires that
long-lived assets to be disposed of by a sale must be recorded at the lower of
the carrying amount or the fair value, less the cost to sell the asset, and
depreciation should cease to be recorded on such assets. Any loss resulting
from the write-down of the assets shall be recognized in income from continuing
operations. Additionally, long-lived assets to be disposed of other than by
sale may no longer be classified as discontinued until they are disposed of.
The provisions of this statement are effective for financial statements issued
for fiscal years beginning after December 15, 2001. Radio One will apply this
guidance prospectively.

Critical Accounting Policies

Our accounting policies are described in Note 1 of the consolidated
financial statements in Item 8. We prepare our consolidated financial
statements in conformity with accounting principles generally accepted in the

United States, which require us to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the year. Actual results could differ
from those estimates. We consider the following policies to be most critical in
understanding the judgments involved in preparing our financial statements and
the uncertainties that could affect our results of operations, financial
condition and cash flows.

Goodwill and Intangible Assets

Radio One has made acquisitions in the past for which a significant portion
of the purchase price was allocated to goodwill and identifiable intangible
assets. Under accounting principles generally accepted in the United States
through December 31, 2001, these assets (excluding the assets acquired from
Blue Chip Broadcasting, Inc. and Sinclair Telecable, Inc.) were amortized over
their estimated useful lives and were tested periodically to determine if they
were recoverable from undiscounted cash flows over their useful lives.

In accordance with SFAS 141 and SFAS 142, goodwill and intangible assets
deemed to have indefinite lives will no longer be amortized, but instead will
be subject to annual impairment tests. Radio One will apply the new rules on
accounting for goodwill and other intangible assets beginning in the first
quarter of 2002. During 2002, Radio One will perform the first of the required
impairment tests of goodwill and indefinite-lived intangible assets as of
January 1, 2002, and has not yet determined what effect, if any, applying those
tests will have on Radio One's financial position and results of operations.
The annual impairment testing required by SFAS 142 will also require us to use
our judgment and could require us to write down the carrying value of our
goodwill and other intangible assets in future periods. As of December 31,
2001, Radio One had $1,934.8 million in goodwill and intangible assets with
indefinite lives. We expect amortization expense to decrease by approximately
$114.1 million as a result of this pronouncement.

Allowance for Doubtful Accounts

We must make estimates of the uncollectibility of our accounts receivable.
We specifically review historical write-off activity by market, large customer
concentrations, customer credit worthiness and changes in our customer payment
terms when evaluating the adequacy of the allowance for doubtful accounts. If
circumstances change, such as higher than expected defaults or an unexpected
material adverse change in an agency's ability to meet its financial obligation
to Radio One, Radio One's estimates of the recoverability of amounts due Radio
One could be reduced by a material amount.

Purchase Price Allocation for Acquisitions

Purchase accounting requires extensive use of accounting estimates and
judgments to allocate the purchase price to the fair market value of the assets
received and liabilities assumed. In August 2001, Radio One completed the
acquisition of Blue Chip Broadcasting, Inc. for total consideration of
approximately $188.0 million. Radio One has made estimates and assumptions
about the allocation of the purchase price to certain of its intangible assets.
As a result of the ongoing application of SFAS 141 and SFAS 142, adjustments
may be made in 2002 to the purchase price allocation for the Blue Chip
acquisition.

Impact of Inflation

We believe that inflation has not had a material impact on our results of
operations for each of our fiscal years in the three-year period ended December
31, 2001. However, there can be no assurance that future inflation would not
have an adverse impact on our operating results and financial condition.

Seasonality

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

Capital and Commercial Commitments

The following table and discussion reflect Radio One's significant
contractual obligations and other commercial commitments as of December 31,
2001:

Payments Due by Period
- - -----------------------------------------------------------------
Less Than 1
Capital Commitments Total Year 1-3 Years 4-5 Years After 5 Years
- ------------------- ------------ ----------- ------------ ------------ --------------

Long-term debt........... $780,000,000 $ -- $175,000,000 $305,000,000 $ 300,000,000
Operating leases......... 30,569,000 4,996,000 10,158,000 4,918,000 10,497,000
Capital lease obligations 22,000 22,000 -- -- --

In addition to the obligations above, Radio One also has the following
contractual obligations and other commercial commitments:

. severance obligations;

. employment contracts;

. programming contracts;

. dividends on our HIGH TIDES;

. interest swap agreements; and

. other operating contracts.

We anticipate that we will fund such obligations and commitments with cash
flow from operations. If we would terminate our interest swap agreements before
they expire, we would be required to pay early termination fees.
Overview of Risks

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

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

. We may not successfully identify and consummate future acquisitions.

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

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

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

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

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

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

. We are subject to certain covenants contained in our bank credit
facility. A breach of any of these covenants could allow our lenders to
declare all amounts outstanding under our bank credit facility to be
immediately due and payable. In addition, our banks could proceed
against the collateral granted to them to secure that indebtedness. If
the amounts outstanding under our bank credit facility are accelerated,
we cannot assure you that our assets will be sufficient to repay in full
the money owed to the banks or to our other debt holders.

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

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

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

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

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We do not have significant interest rate risk related to our Senior
Subordinated Notes due 2011, which have a fixed interest rate of 8 7/8%.
Further, we have no foreign currency risk, as we have no foreign operations. We
also do not have any derivative commodity instruments or other financial
instruments such as foreign currency forwards, futures and options, and foreign
currency denominated debt. We have entered into swap agreements to reduce
exposure to interest rate fluctuations in connection with our bank credit
facility. We do not enter into derivative transactions for speculative purposes.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of Radio One required by this item are
filed with this report on Pages F-1 to F-32.

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

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table provides information concerning our directors and
executive officers as of March 13, 2002.

Name Age Position
----------------------- --- -------------------------------------------------

Catherine L. Hughes.... 54 Chairperson of the Board of Directors and
Secretary
Alfred C. Liggins, III. 37 Chief Executive Officer, President, Treasurer and
Director
Scott R. Royster....... 37 Executive Vice President and Chief Financial
Officer
Mary Catherine Sneed... 50 Chief Operating Officer
Linda J. Eckard Vilardo 44 Vice President, Assistant Secretary and General
Counsel
Terry L. Jones......... 55 Director
Brian W. McNeill....... 46 Director
Larry D. Marcus........ 53 Director
D. Geoffrey Armstrong.. 44 Director
L. Ross Love........... 55 Director

Ms. Hughes has been Chairperson of the Board of Directors and Secretary of
Radio One since 1980, and was Chief Executive Officer of Radio One from 1980 to
1997. She was one of the founders of Radio One's predecessor company in 1980.
Since 1980, Ms. Hughes has worked in various capacities for Radio One including
President, General Manager, General Sales Manager and talk show host. She began
her career in radio as General Sales Manager of WHUR-FM, the Howard
University-owned, urban-contemporary radio station. Ms. Hughes is also the
mother of Mr. Liggins, Radio One's Chief Executive Officer, President,
Treasurer and director.

Mr. Liggins has been Chief Executive Officer since 1997, and President,
Treasurer and a director of Radio One since 1989. Mr. Liggins joined Radio One
in 1985 as an Account Manager at WOL-AM. In 1987, he was promoted to General
Sales Manager and promoted again in 1988 to General Manager overseeing Radio
One's Washington, D.C. operations. After becoming President, Mr. Liggins
engineered Radio One's expansion into other markets. Mr. Liggins is a graduate
of the Wharton School of Business/Executive M.B.A. Program. Mr. Liggins is the
son of Ms. Hughes, Radio One's Chairperson and Secretary.

Mr. Royster has been Executive Vice President of Radio One since 1997 and
Chief Financial Officer of Radio One since 1996. Prior to joining Radio One, he
served as an independent consultant to Radio One. From 1995 to 1996, Mr.
Royster was a principal at TSG Capital Group, LLC, a private equity investment
firm located in Stamford, Connecticut, which became an investor in Radio One in
1987. Mr. Royster has also served as an associate and later a principal at
Capital Resource Partners from 1992 to 1995, a private capital investment firm
in Boston, Massachusetts. Mr. Royster is a graduate of Duke University and
Harvard Business School.

Ms. Sneed has been Radio One's Chief Operating Officer since January 1998.
Prior to joining Radio One, she held various positions with Summit Broadcasting
including Executive Vice President of the Radio Division, and Vice President of
Operations from 1992 to 1995. Ms. Sneed is a graduate of Auburn University.

Ms. Eckard Vilardo has been General Counsel of Radio One since January 1998,
Assistant Secretary of Radio One since April 1999, and Vice President of Radio
One since February 2001. Prior to joining Radio One as General Counsel, Ms.
Eckard Vilardo represented Radio One as outside counsel from July 1995 until

assuming her current position. Ms. Eckard Vilardo was a partner in the
Washington, D.C. office of Davis Wright Tremaine LLP from August 1997 to
December 1997. Her practice focused on transactions and FCC regulatory matters.
Prior to joining Davis Wright Tremaine LLP, Ms. Eckard Vilardo was a
shareholder of Roberts & Eckard, P.C., a firm that she co-founded in April
1992. Ms. Eckard Vilardo is a graduate of Gettysburg College, the National Law
Center at George Washington University and the University of Glasgow. Ms.
Eckard Vilardo is admitted to the District of Columbia Bar and the Bar of the
United States Supreme Court.

Mr. Jones has been a director of Radio One since 1995. Since 1990, Mr. Jones
has been President of Syndicated Communications, Inc., a communications venture
capital investment company, and its wholly owned subsidiary, Syncom Capital
Corporation. He joined Syndicated Communications, Inc. in 1978 as a Vice
President. Mr. Jones serves in various capacities, including director,
president, general partner and vice president, for various other entities
affiliated with Syndicated Communications, Inc. He also serves on the board of
directors of Delta Capital Corporation, Sun Delta Capital Access Center, Cyber
Digital Inc. and the Southern African Enterprise Development Fund. Mr. Jones
earned his B.S. degree from Trinity College, his M.S. from George Washington
University and his M.B.A. from Harvard Business School.

Mr. McNeill has been a director of Radio One since 1995. Mr. McNeill is the
Managing General Partner of Alta Communications, which was founded in 1996 as
the successor firm to Burr, Egan, Deleage & Co., a major private equity firm
specializing in the telecommunications industry. Mr. McNeill began at Burr,
Egan in 1986. He has served as a director in many private radio and television
broadcasting companies such as NextMedia, Marathon Media, Telemundo Holdings
and Shockley Communications. From 1979 to 1986, he worked at the Bank of Boston
where he started and managed that institution's broadcast lending group. Mr.
McNeill is a graduate of Holy Cross College and earned an M.B.A. from the Amos
Tuck School at Dartmouth College. He currently serves as a director of Acme
Communications, Inc., a public company with ownership interests in nine
television stations.

Mr. Marcus became a director of Radio One in April 1999. Mr. Marcus is
currently President of Peak Media L.L.C., which is the sole management member
of Peak Media Holdings L.L.C., the owner of a television station in Johnstown,
Pennsylvania, and the operator under a time brokerage agreement of a television
station in Altoona, Pennsylvania. In 1989, Mr. Marcus became the Chief
Financial Officer of River City Broadcasting, L.P., licensee of ten television
stations and thirty-four radio stations located in medium to large markets.
River City Broadcasting was sold to Sinclair Broadcasting in 1996. Mr. Marcus
is a graduate of City College of New York.

Mr. Armstrong became a director of Radio One in June 2001. Mr. Armstrong is
currently Chief Executive Officer of 310 Partners, a private investment firm.
From March 1999 through September 2000, Mr. Armstrong was the Chief Financial
Officer of AMFM, Inc., which was publicly traded on the New York Stock exchange
until it was purchased by Clear Channel Communications in September 2000.
Between June 1998 and March 1999, Mr. Armstrong was Chief Operating Officer and
a director of Capstar Broadcasting Corporation, which merged with AMFM, Inc. in
July 1999. Mr. Armstrong was a founder of SFX Broadcasting, which was taken
public in 1993, and subsequently served as Chief Financial Officer, Chief
Operating Officer, and a director until the company was sold in 1998.

Mr. Love became a director of Radio One in June 2001. Mr. Love is currently
the President and Chief Executive Officer of Blue Chip Enterprises, LLC, which
owns and operates J&M Precision Machining, a manufacturer of power train
components for the automotive industry in Blanchester, Ohio. Mr. Love is also
the President and Chief Executive Officer of Blue Chip Communications, Inc.,
which owns radio station WDBZ-AM in Cincinnati, Ohio. Previously, Mr. Love was
the President and Chief Executive Officer of Blue Chip Broadcasting, Inc.,
which was acquired by Radio One in August 2001. Mr. Love founded Blue Chip in
1995, growing the company to 19 stations in six markets. He was Blue Chip's
largest shareholder. Prior to starting Blue Chip, Mr. Love had a 28-year career
at Procter & Gamble, serving the last 10 years as Vice-President, Advertising
for P&G worldwide.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires Radio One's
directors and executive officers and persons who beneficially own more than ten
percent of our common stock to file with the Securities and Exchange Commission
reports showing ownership of and changes in ownership of our Common Stock and
other equity securities. On the basis of reports and representations submitted
by Radio One's directors, executive officers, and greater than ten percent
owners, we believe that all required Section 16(a) filings for fiscal 2001 were
timely made, except one Form 4 was filed late for Ms. Sneed and two Form 4's
were filed late for Mr. Love.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

Long-Term Compensation Awards
---------------------------------------
Restricted Securities
Stock Underlying All Other
Name and Principal Positions Year Salary Bonus Awards Options Compensation(2)
---------------------------- ---- -------- -------- ---------- ---------- ---------------

Catherine L. Hughes, Chairperson of the Board
of Directors and Secretary..................... 2001 $325,000 $125,000 -- 500,000 $--
2000 250,000 200,000 -- -- --
1999 250,000 150,000 -- -- --

Alfred C. Liggins, III, Chief Executive Officer,
President, Treasurer and Director.............. 2001 $500,000 $475,000 -- 250,000 --
2000 300,000 300,000 -- -- --
1999 300,000 250,000 -- -- --

Scott R. Royster, Executive Vice President and
Chief Financial Officer........................ 2001 $325,000 $100,000 -- -- --
2000 300,000 125,000 -- 37,292 --
1999 200,000 175,000 $225,000(1) 18,646 --

Mary Catherine Sneed, Chief Operating
Officer........................................ 2001 $300,000 $100,000 -- 500,000 --
2000 220,000 175,000 -- -- --
1999 220,000 50,000 -- -- --

Linda J. Eckard Vilardo, Vice President,
Assistant Secretary and General Counsel........ 2001 $220,000 $ 90,000 -- -- --
2000 200,000 95,000 -- 62,154 --
1999 175,000 90,000 -- 31,077 --

- --------
(1) Represents 51,194 shares of class A common stock. In May 2000, Mr. Royster
received 102,388 shares of class D common stock as a result of a 2-for-1
stock dividend. As of December 31, 2001, Mr. Royster held 8,694 shares of
class A common stock with a value (based on the last reported sale price
for class A common stock on The Nasdaq National Market on such date of
$18.47) of $160,578 and 77,388 shares of class D common stock with a value
as of December 31, 2001 (based on the last reported sale price for class D
common stock on The Nasdaq National Market on such date of $18.01) of
$1,393,757. Twenty-five percent of the stock vested on the date of grant;
the remaining stock vested in equal increments every month beginning
February 28, 1999 and ending December 31, 2001. The stock is now fully
vested.
(2) Value of perquisites and other personal benefits paid does not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported for
the named executive officer and, therefore, is not required to be disclosed
pursuant to the rules of the Commission.

Option Grants in Last Fiscal Year

Potential Realization
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Option Term
----------------------
% of Total
Number of Options Granted
Securities Underlying to Employees in Exercise Expiration
Name Options Granted Fiscal Year(1) Price Date 5% 10%
---- --------------------- --------------- -------- ------------- ---------- -----------

Catherine L. Hughes... 500,000 21.8% $13.56 April 3, 2011 $4,264,692 $10,807,566
Alfred C. Liggins, III 250,000 11.0% $13.56 April 3, 2011 $2,132,346 $ 5,403,783
Mary Catherine Sneed.. 500,000 21.8% $13.56 April 3, 2011 $4,264,692 $10,807,566

Fiscal Year-End Option Values

Number of Securities Underlying Value of Unexercised In-the-Money Options
Unexercised Options at Fiscal Year-End at Fiscal Year-End
-------------------------------------- -----------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ------------------- ------------------ -------------------- --------------------
Class A Class D Class A Class D Class A Class D Class A Class D

Catherine L. Hughes.... -- -- -- 500,000 -- -- -- $2,223,750
Alfred C. Liggins, III. -- -- -- 250,000 -- -- -- $1,111,875
Scott R. Royster....... 18,646 37,292 -- -- $199,326 $369,191 -- --
Mary Catherine Sneed... -- -- -- 500,000 -- -- -- $2,223,750
Linda J. Eckard Vilardo 31,077 62,154 -- -- $332,213 $615,325 -- --

Employment Agreements

Scott R. Royster Employment Agreement. Effective as of October 18, 2000,
we entered into an amended and restated employment agreement with Mr. Royster
pursuant to which his employment term was extended through October 17, 2005,
with an optional five-year extension upon mutual agreement of the parties.
Under the terms of the employment agreement, Mr. Royster serves as our Chief
Financial Officer and Executive Vice President and receives an annual base
salary of $300,000, subject, under the terms of the employment agreement, to an
annual increase of not less than 5% and an annual cash bonus at the discretion
of the Board of Directors. If Mr. Royster remains employed by the company
through and including December 31, 2004, he will receive a retention bonus of
$750,000, and if he is employed on October 18, 2010, he will receive an
additional retention bonus in the amount of $7.0 million. In connection with
the employment agreement, Mr. Royster agreed to purchase from us and we agreed
to sell to him 333,334 unregistered shares of class A common stock and 666,666
unregistered shares of class D common stock, each for a purchase price of $7.00
per share. The purchase price for such shares was funded by a loan from us
evidenced by a full recourse promissory note from Mr. Royster. Under the terms
of the employment agreement, Mr. Royster also received from us an interest free
loan in the amount of $750,000 due on the earlier of January 1, 2005 or the
sixtieth day following the termination of Mr. Royster's employment. We could
incur severance obligations under the terms of the employment agreement in the
event that Mr. Royster's employment is terminated.

Linda J. Eckard Vilardo Employment Agreement. Effective as of October 31,
2000, we entered into an amended and restated employment agreement with Ms.
Eckard Vilardo pursuant to which her employment term was extended through
October 31, 2004, with an optional four-year extension upon mutual agreement of
the parties. Under the terms of the employment agreement, Ms. Eckard Vilardo
serves as our General Counsel, Assistant Secretary and Vice President and
receives an annual base salary of $220,000, subject, under the terms of the
employment agreement, to an annual increase of not less than 5% and an annual
cash bonus at the discretion of the Board of Directors. If Ms. Eckard Vilardo
remains employed by the company through and including October 31, 2008, she
will receive a retention bonus of approximately $2.0 million. In connection
with the employment agreement, Ms. Eckard Vilardo agreed to purchase from us
and we agreed to sell to her 250,000

unregistered shares of class D common stock for a purchase price of $8.02 per
share. The purchase price for such shares was funded by a loan from us
evidenced by a full recourse promissory note from Ms. Eckard Vilardo. We could
incur severance obligations under the terms of the employment agreement in the
event that Ms. Eckard Vilardo's employment is terminated.

Alfred C. Liggins, III Employment Agreement. Effective as of April 9, 2001,
we entered into an employment agreement with Mr. Liggins pursuant to which Mr.
Liggins' employment term will continue through April 8, 2005. Under the terms
of the employment agreement, Mr. Liggins serves as our Chief Executive Officer
and President, and receives an annual base salary of $500,000, subject, under
the terms of the employment agreement, to an annual increase of not less than
5% and an annual cash bonus at the discretion of the Board of Directors. In
connection with the employment agreement, Mr. Liggins agreed to purchase from
us and we agreed to sell to him 1,500,000 unregistered shares of class D common
stock for a purchase price of $14.07 per share. The purchase price for such
shares was funded by a loan from us evidenced by a full recourse promissory
note from Mr. Liggins. We could incur severance obligations under the terms of
the employment agreement in the event that Mr. Liggin's employment is
terminated.

401(k) Plan

We adopted a defined contribution 401(k) savings and retirement plan
effective August 1, 1994. Employees are eligible to participate after
completing 90 days of service and attaining age 21. Participants may contribute
up to 15% of their gross compensation subject to certain limitations.

Stock Option Plan

On March 10, 1999 we adopted a stock plan which was also ratified by our
stockholders on March 10, 1999. The plan is designed to provide incentives
relating to equity ownership to present and future executive, managerial and
other key employees, directors and individuals who perform substantial work for
Radio One and our subsidiaries as may be selected in the sole discretion of the
committee that administers the plan. The plan was amended by the Board of
Directors as of March 10, 1999, June 14, 2000, September 27, 2000, May 30, 2001
and December 17, 2001. The plan, as amended, provides for the granting to
participants of stock options and restricted stock grants as the Compensation
Committee of the Board of Directors, or such other committee of the Board of
Directors as the Board of Directors may designate deems to be consistent with
the purpose of the plan. An aggregate of 1,408,099 shares of class A common
stock (voting) and 3,816,198 shares of class D common stock (non-voting) have
been reserved for issuance under the plan. The plan affords Radio One latitude
in tailoring incentive compensation for the retention of key personnel, to
support corporate and business objectives, and to anticipate and respond to a
changing business environment and competitive compensation practices. As of
December 31, 2001, we have granted options to purchase 151,783 shares of class
A common stock having a weighted average exercise price of $10.356 per share
and 3,037,294 shares of class D common stock, having a weighted average
exercise price of $13.755 per share.

Compensation of Directors

Our non-officer directors are reimbursed for all out-of-pocket expenses
related to meetings attended. In addition, Mr. Marcus receives an annual
stipend of $24,000. During 2001, Brian W. McNeill, D. Geoffrey Armstrong, L.
Ross Love and Terry L. Jones received options to purchase common stock under
our stock option plan. Our officers who serve as directors do not receive
compensation for their services as directors other than the compensation they
receive as officers of Radio One.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of March 13, 2002
regarding the beneficial ownership of our common stock by:

. each person known by us to be the beneficial owner of more than five
percent of any class of our common stock;

. each of our top five most highly compensated executive officers and
directors;

. all of our directors and executive officers as a group.

Each shareholder possesses sole voting and investment power with respect to
the shares listed, unless otherwise noted.

Common Stock
-----------------------------------------------------------------------------
Class A Class B Class C Class D
--------------- ----------------- ------------------- -------------------- Percent of
Number Total
of Percent Number Percent Number Percent of Number of Percent of Economic
Shares of Class of Shares of Class of Shares Class Shares Class Interest
------- -------- --------- -------- --------- ---------- ---------- ---------- --------

Catherine L. Hughes (1)(2)(3)(4)..... 1,000 * 851,536 29.7% 3,121,048 99.6% 7,897,168 12.0% 12.6%
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706

Alfred C. Liggins, III(1)(2)(5)(6)... 38,036 0.17% 2,010,307 70.1 3,121,048 99.6 11,726,282 17.8 17.9
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706

Scott R. Royster(7).................. 391,364 1.7 -- -- -- -- 767,726 1.2 1.2
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706......................

Linda J.Eckard Vilardo(8)............ 32,077 0.14 -- -- -- -- 314,154 0.5 0.4
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706

Mary Catherine Sneed................. 230,922 1.0 -- -- -- -- 136,844 0.2 0.4
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706

Terry L. Jones(9).................... 577,318 2.6 -- -- -- -- 1,168,886 1.8 1.9
c/o Syncom Capital
Corporation 8401 Colesville
Road, Suite 300 Silver Spring, MD
20910

Brian W. McNeill(10)................. 30,554 0.14 -- -- -- -- 62,320 0.1 0.1
c/o Burr, Egan, Deleage & Co. One
Post Office Square Boston, MA 02109

Larry D. Marcus...................... 2,500 0.01 -- -- -- -- 17,000 * *
248 Gay Avenue Clayton, MO 63105

Percent of
Total
Voting
Power
----------

Catherine L. Hughes (1)(2)(3)(4)..... 16.7%
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706

Alfred C. Liggins, III(1)(2)(5)(6)... 39.4
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706

Scott R. Royster(7).................. 0.8
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706......................

Linda J.Eckard Vilardo(8)............ 0.1
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706

Mary Catherine Sneed................. 0.5
c/o Radio One 5900 Princess Garden
Parkway, 8 th Floor Lanham,
Maryland 20706

Terry L. Jones(9).................... 1.1
c/o Syncom Capital
Corporation 8401 Colesville
Road, Suite 300 Silver Spring, MD
20910

Brian W. McNeill(10)................. 0.1
c/o Burr, Egan, Deleage & Co. One
Post Office Square Boston, MA 02109

Larry D. Marcus...................... *
248 Gay Avenue Clayton, MO 63105

Common Stock
--------------------------------------------------------------------------------
Class A Class B Class C Class D Percent of
------------------ ------------------ -------------------- --------------------- Total
Number Percent Number Percent Number Percent of Number of Percent of Economic
of Shares of Class of Shares of Class of Shares Class Shares Class Interest
--------- -------- --------- -------- --------- ---------- ---------- ---------- --------

L. Ross Love (11)................... 250 * -- -- -- -- 1,802,602 2.7 1.9
c/o Blue Chip Broadcasting,
Inc. 1821 Summit Road, Suite
401 Cincinnati, OH 45237

D. Geoffrey Armstrong (12).......... 10,000 0.05 -- -- -- -- 1,250 * *
c/o 310 Partners

FMR Corp............................ 2,601,535 11.6 -- -- -- -- -- -- 2.8
82 Devonshire Street Boston, MA
02109

Putnam Investments, Inc............. 1,162,271 5.2 -- -- -- -- 4,206,394 6.4 5.7
One Post Office Square Boston, MA
02109............................

The TCW Group, Inc.................. 1,922,406 8.6 -- -- -- -- 3,569,328 5.4 5.8
865 South Figueroa St. Los
Angeles, CA 90017

T. Rowe Price Associates, Inc....... -- -- -- -- -- -- 3,109,900 4.7 3.3
100 E. Pratt Street Baltimore, MD
21202

Delaware Business Management Trust.. 2,020,400 9.0 -- -- -- -- -- -- 2.1
2005 Market Street Philadelphia,
PA 19103

Salomon Brothers Holding Company 1,397,112 6.2 -- -- -- -- -- -- 1.5
Inc................................
388 Greenwich Street New York, NY
10013

All Directors and Named Executives
as a group (10 persons)............ 1,314,021 5.9 2,861,843 99.8 3,121,048 99.6 17,652,136 26.8 26.5

Percent of
Total
Voting
Power
----------

L. Ross Love (11)................... *
c/o Blue Chip Broadcasting,
Inc. 1821 Summit Road, Suite
401 Cincinnati, OH 45237

D. Geoffrey Armstrong (12).......... *
c/o 310 Partners

FMR Corp............................ 5.1
82 Devonshire Street Boston, MA
02109

Putnam Investments, Inc............. 2.3
One Post Office Square Boston, MA
02109............................

The TCW Group, Inc.................. 3.8
865 South Figueroa St. Los
Angeles, CA 90017

T. Rowe Price Associates, Inc....... *
100 E. Pratt Street Baltimore, MD
21202

Delaware Business Management Trust.. 4.0
2005 Market Street Philadelphia,
PA 19103

Salomon Brothers Holding Company 2.7
Inc................................
388 Greenwich Street New York, NY
10013

All Directors and Named Executives
as a group (10 persons)............ 58.6

- --------
* Less than .01%
(1) The shares of class C common stock and 6,242,096 shares of class D common
stock are held by Hughes-Liggins Family Partners, L.P., the limited
partners of which are the Catherine L. Hughes Revocable Trust, dated March
2, 1999 (of which Ms. Hughes is the trustee and sole beneficiary), and the
Alfred C. Liggins, III Revocable Trust, dated March 2, 1999 (of which Mr.
Liggins is the trustee and sole beneficiary), and the general partner of
which is Hughes-Liggins & Company, L.L.C., the members of which are the
Catherine L. Hughes Revocable Trust, dated March 2, 1999, and the Alfred C.
Liggins, III Revocable trust, dated March 2, 1999.
(2) The shares of class A common stock and class B common stock are subject to
a voting agreement between Ms. Hughes and Mr. Liggins with respect to the
election of Radio One's directors.
(3) The shares of class B common stock and 1,528,072 shares of class D common
stock are held by the Catherine L. Hughes Revocable Trust, dated March 2,
1999.
(4) Includes 125,000 shares of class D common stock obtainable upon the
exercise of stock options exercisable within 60 days of March 13, 2002.
(5) The shares B common stock and 3,921,686 shares of class D common stock are
held by the Alfred C. Liggins, III Revocable Trust, dated March 2, 1999.
(6) Includes 62,500 shares of class D common stock obtainable upon the exercise
of stock options exercisable within 60 days of March 13, 2002.
(7) Includes 18,646 shares of class A common stock and 37,292 shares of class D
common stock obtainable upon the exercise of stock options exercisable
within 60 days of March 13, 2002.
(8) Includes 31,077 shares of class A common stock and 62,154 shares of class D
common stock obtainable upon the exercise of stock options exercisable
within 60 days of March 13, 2002.

(9) Includes 49,557 shares of class A common stock and 6,714 shares of class D
common stock held by Mr. Jones, 300 shares of class A common stock and 600
shares of class D common stock held by each of Mr. Jones' three daughters,
and 526,861 shares of class A common stock and 1,134,122 shares of class D
common stock held by Syncom Capital Corporation. Mr. Jones is the President
of Syncom Capital Corporation and may be deemed to share beneficial
ownership of shares of class A and class D common stock held by Syncom
Capital Corporation by virtue of his affiliation with Syncom Capital
Corporation. Mr. Jones disclaims beneficial ownership in such shares. Also
includes 26,250 shares of class D common stock obtainable upon the exercise
of stock options exercisable within 60 days of March 13, 2002.
(10) Includes 1,250 shares of class D common stock obtainable upon the exercise
of stock options exercisable within 60 days of March 13, 2002.
(11) Includes 500 shares of class D common stock held by Mr. Love, 1,657,368
shares held by LRL Trading, L.L.C., 115,439 shares held by LRC Love
Limited Partnership and 28,045 shares held by the Love Family Limited
Partnership. Mr. Love has a controlling interest in LRL Trading, L.L.C.,
LRC Love Limited Partnership and Love Family Limited Partnership and may
be deemed to be the beneficial owner of the shares held by those entities
by virtue of his affiliation. Also includes 1,250 shares of class D common
stock obtainable upon the exercise of stock options exercisable within 60
days of March 13, 2002.
(12) Includes 1,250 shares of class D common stock obtainable upon the exercise
of stock options exercisable within 60 days of March 13, 2002.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mableton

Radio One has entered into a local management agreement with Mableton
Investment Group, LLC ("MIG") to provide programming and other managerial
services through MIG to WAMJ-FM (formerly known WAWE-FM), licensed to Mableton,
Georgia, which is in the Atlanta, Georgia market. MIG in turn has a right to
program the station through a time brokerage agreement with New Mableton
Broadcasting Corporation ("NMBC"), licensee of the station. MIG also has a
minority interest in NMBC and options to acquire all of the outstanding stock
of NMBC. Radio One is paying a fee for the right to program the station, along
with expenses incurred in operating the station, and will in turn share in the
operating profit, if any, from operating the station with MIG. Alfred C.
Liggins, III, the Chief Executive Officer of Radio One, is a member of MIG and
serves as its Manager. Syncom II Mableton Investment, Inc. is the other member
of MIG. Syndicated Communications Venture Partners II, LP is the shareholder of
Syncom II Mableton Investment, Inc. Terry L. Jones, a general partner of
Syndicated Communications Venture Partners II, LP is also a member of Radio
One's Board of Directors. In addition, Radio One of Atlanta, LLC, the sole
member of which is Radio One, leases space in its studio facilities in Atlanta
to NMBC for the operation of the station. Radio One commenced the operation of
WAMJ-FM under the local marketing agreement during August 2001. We believe that
the terms of this agreement are not materially different than if the agreement
were with an unaffiliated third party.

Office Lease

We lease office space located at 100 St. Paul Street, Baltimore, Maryland
from Chalrep Limited Partnership, a limited partnership controlled by Catherine
L. Hughes and Alfred C. Liggins, III. The annual rent incurred for the office
space during 2000 and 2001 was approximately $216,000, and is expected to
increase.

Music One, Inc.

Ms. Hughes and Mr. Liggins own a music company called Music One, Inc. We
sometimes engage in promoting the recorded music product of Music One, Inc.
Based on the cross-promotional value received by Radio One, we believe that the
provision of such promotion is fair to Radio One.

Allur-Detroit

Bell Broadcasting Company leases the transmitter site for WDMK-FM from
American Signalling Corporation for approximately $72,000 per year. American
Signalling Corporation is a wholly-owned subsidiary of Syndicated
Communications Venture Partners II, L.P. Terry L. Jones, a general partner of
Syndicated Communications Venture Partners II, L.P., is also a member of Radio
One's board of directors. We believe that the terms of this lease are not
materially different than if the agreement were with an unaffiliated third
party.

NetNoir, Inc.

In 1999, we made a $750,000 loan to NetNoir, Inc., an internet portal
service provider. We provided $250,000 in cash and $500,000 of advertising in
connection with the loan. The loan was subsequently converted into preferred
stock. In March 2000, we made a commitment to invest an additional $2.5 million
in advertising on our radio stations in exchange for an equity investment in
NetNoir, Inc. As of December 31, 2001, $960,100 of the $2.5 million in
advertising had aired. Several entities in which Mr. Jones had an interest as
an officer or director owned approximately 32% of the equity of NetNoir. Mr.
Jones is a director of Radio One.

In July 2001, the assets of NetNoir, Inc., including the name "NetNoir" and
the remainder of the trade balance, were sold to eChapman.com, Inc. for the sum
of $150,000 cash and 250,000 shares of restricted stock of eChapman.com, Inc.
Radio One did not receive any of the sale proceeds. In connection with the sale
to eChapman.com, the shareholders of NetNoir, Inc. agreed to: (i) change the
name of the corporation to eNoir, Inc., (ii) dissolve that company and (iii)
cancel the shares of stock outstanding.

Executive Officers' Loans

In 1998, we extended an unsecured loan to Mr. Liggins in the amount of
$380,000, which bears interest at an annual rate of 5.56% and is evidenced by a
demand promissory note. As of December 31, 2001, the aggregate outstanding
principal and interest amount on this loan was approximately $460,000. The
purpose of the loan was to repay a loan that Mr. Liggins obtained from
NationsBank, Texas, N.A. in 1997 to purchase an additional interest in Radio
One.

In 1999, Radio One of Atlanta, Inc. extended an unsecured loan to Mary
Catherine Sneed, Chief Operating Officer of Radio One, in the original amount
of $262,539, which bears interest at an annual rate of 5.56% and is evidenced
by two demand promissory notes. As of December 31, 2001, the aggregate
outstanding principal and interest amount on this loan was approximately
$306,000. The purpose of this loan was to pay Ms. Sneed's tax liability with
respect to incentive stock grants of Radio One of Atlanta, Inc. stock received
by Ms. Sneed.

In 1999, we extended an unsecured loan to Scott R. Royster in the amount of
$87,564, which bears interest at an annual rate of 5.56% and is evidenced by a
demand promissory note. As of December 31, 2001, the aggregate outstanding
principal and interest amount on this loan was approximately $101,000. The
purpose of this loan was to pay Mr. Royster's tax liability with respect to a
restricted stock grant.

In 2000, we extended to Mr. Royster a secured loan in the amount of $7.0
million, which bears interest at the applicable federal rate (published monthly
by the Internal Revenue Service) as defined in Section 1274 of the Internal
Revenue Code of 1986, as amended, and is evidenced by a full recourse
promissory note due on the earlier of October 18, 2010 or the sixtieth day
following the termination of Mr. Royster's employment. As of December 31, 2001,
the aggregate outstanding principal and interest amount on this loan was
approximately $7,505,000. The purpose of the loan was to allow Mr. Royster to
purchase from us 333,334 unregistered shares of class A common stock and
666,666 unregistered shares of class D common stock, each for a purchase price
of $7.00 per share, as provided for in his employment agreement. Also, in 2000,
we agreed to extend to Mr. Royster an unsecured, interest free loan in the
amount of $750,000 to be evidenced by a non-recourse promissory note due on the
earlier of January 1, 2005 or the sixtieth day following the termination of Mr.
Royster's employment. In February 2002, Mr. Royster exercised his right to
receive this loan.

In 2000, we extended an unsecured loan to Ms. Hughes in the amount of
$100,000, which bears interest at an annual rate of 5.73% and is evidenced by a
demand promissory note. As of December 31, 2001, the aggregate outstanding
principal and interest amount on this loan was approximately $112,000.

In 2000, we extended to Ms. Eckard Vilardo a secured loan in the amount of
$2,005,000, which bears interest at the applicable federal rate (published
monthly by the Internal Revenue Service) as defined in Section 1274 of the
Internal Revenue Code of 1986, as amended, and is evidenced by a full recourse
promissory note due on the earlier of October 31, 2008 or the sixtieth day
following the termination of Ms. Eckard Vilardo's employment. As of December
31, 2001, the aggregate outstanding principal and interest amount on this loan
was approximately $2,148,000. The purpose of the loan was to allow Ms. Eckard
Vilardo to purchase from us 250,000 unregistered shares of class D common stock
for a purchase price of $8.02 per share, as provided for in her employment
agreement.

In 2001, we extended to Mr. Liggins a secured loan in the amount of
$21,105,000, which bears interest at an annual rate of 5.80% (adjustable based
on the applicable federal rate) and is evidenced by a promissory note. As of
December 31, 2001, the aggregate outstanding principal and interest on this
loan was $22,113,497. The purpose of this loan was to provide Mr. Liggins with
the necessary capital to purchase 1,500,000 unregistered shares of our Class D
common stock at a purchase price of $14.07 per share.

PART IV

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

(a)(1) Financial Statements

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

Report of Independent Public Accountants
Consolidated Balance Sheets as of December 31, 2000 and 2001
Consolidated Statements of Operations for the years ended December 31,
1999, 2000 and 2001
Consolidated Statements of Changes in Stockholders' Equity for the years
ended December 31, 1999, 2000 and 2001
Consolidated Statements of Cash Flows for the years ended December 31,
1999, 2000 and 2001
Notes to Consolidated Financial Statements
Consolidating Financial Statements

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

Exhibit
Number Description
- ------- ---------------------------

3.1 Amended and Restated Certificate of Incorporation of Radio One, Inc. (dated as of May 4, 2000), as
filed with the State of Delaware on May 9, 2000 (incorporated by reference to Radio One's Quarterly
Report on Form 10-Q for the period ended March 31, 2000 (File No. 000-25969; Film No. 631638)).
3.1.1 Certificate of Amendment (dated as of September 21, 2000) of the Amended and Restated Certificate
of Incorporation of Radio One, Inc. (dated as of May 4, 2000), as filed with the State of Delaware on
September 21, 2000 (incorporated by reference to Radio One's Current Report on Form 8-K filed
October 6, 2000 (File No. 000-25969; Film No. 736375)).
3.2 Amended and Restated By-laws of Radio One, Inc., amended as of June 5, 2001 (incorporated by
reference to Radio One's Quarterly Report on Form 10-Q filed August 14, 2001 (File No. 000-
25969; Film No. 1714323)).
3.3 Certificate Of Designations, Rights and Preferences of the 6 1/2% Convertible Preferred Securities
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES) of Radio One, Inc., as filed
with the State of Delaware on July 13, 2000 (incorporated by reference to Radio One's Quarterly
Report on Form 10-Q for the period ended June 30, 2000 (File No. 000-25969; Film No. 698190)).
4.1 Indenture dated May 18, 2001 among Radio One, Inc., the Guarantors listed therein, and United
States Trust Company of New York (incorporated by reference to Radio One's Registration
Statement on Form S-4, filed July 17, 2001 (File No. 333-65278; Film No. 1683373)).
4.2 First Supplemental Indenture, dated August 10, 2001, among Radio One, Inc., the Guaranteeing
Subsidiaries and other Guarantors listed therein, and the Bank of New York (formerly the United
States Trust Company of New York), as Trustee (incorporated by reference to the Radio One's
Registration Statement on Form S-4, filed October 4, 2001 (File No. 333-65278; Film No.
1752425)).
4.3 Second Supplemental Indenture dated as of December 31, 2001, among Radio One, Inc., the
Guaranteeing Subsidiaries and other Guarantors listed therein, and the Bank of New York (formerly
the United States Trust Company of New York), as Trustee.
4.7 Standstill Agreement dated as of June 30, 1998 among Radio One, Inc., the subsidiaries of Radio
One, Inc., United States Trust Company of New York and the other parties thereto (incorporated by
reference to Radio One's Quarterly Report on Form 10-Q for the period ended June 30, 1998 (File
No. 333-30795; Film No. 98688998)).

Exhibit
Number Description
- ------- -----------

4.9 Stockholders Agreement dated as of March 2, 1999 among Catherine L. Hughes and Alfred C.
Liggins, III (incorporated by reference to Radio One's Quarterly Report on Form 10-Q for the period
ended June 30, 1999 (File No. 000-25969; Film No. 99686684)).
4.10 Registration Rights Agreement, dated as of July 14, 2000, by and among Radio One, Inc., and Credit
Suisse First Boston Corporation, Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated,
Bank of America Securities LLC, and First Union Securities, Inc., as the Initial Purchases of Radio
One, Inc.'s 6 1/2% Convertible Preferred Securities Remarketable Term Income Deferrable Equity
Securities (HIGH TIDES) (incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 2000 (File No. 000-25969; Film No. 698190)).
4.11 Remarketing Agreement, dated as of July 14, 2000, by and among Radio One, Inc., American Stock
Transfer & Trust Co., as Tender Agent and Credit Suisse First Boston Corporation, as Remarketing
Agent, for Radio One, Inc.'s 6 1/2% Convertible Preferred Securities Remarketable Term Income
Deferrable Equity Securities (HIGH TIDES) (incorporated by reference to Radio One's Quarterly
Report on Form 10-Q for the period ended June 30, 2000 (File No. 000-25969; Film No. 698190)).
4.12 Global Security Certificate for Radio One, Inc.'s 6 1/2% Convertible Preferred Securities
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES) (incorporated by reference
to Radio One's Quarterly Report on Form 10-Q for the period ended June 30, 2000 (File No. 000-
25969; Film No. 698190)).
4.13 Registration Rights Agreement, dated February 7, 2001, by and between Radio One, Inc. and certain
stockholders of Blue Chip Broadcasting, Inc. listed therein (incorporated by reference to Exhibit 4.1
of Radio One's Current Report on Form 8-K filed February 8, 2001 (File No. 000-25969; Film No.
1528282)).
4.14 Registration Rights Agreement, dated May 18, 2001 among Radio One, Inc., the Guarantors, Banc of
America Securities LLC, Credit Suisse First Boston Corporation, Deutsche Banc. Alex. Brown Inc.,
Blaylock & Partners, L.P., First Union Securities, Inc., Morgan Stanley & Co. Incorporated and TD
Securities (USA) Inc. (incorporated by reference to Radio One's Registration Statement on Form S-
4, filed July 17, 2001 (File No. 333-65278; Film No. 1683373)).
10.1 Office Lease dated February 3, 1997 between National Life Insurance Company and Radio One, Inc.
for premises located at 5900 Princess Garden Parkway, Lanham, Maryland, as amended on the
period ended December 31, 1997 (File No. 333-30795; Film No. 98581327)).
10.1(a) Amendment to Office Lease dated January 22, 1999 between National Life Insurance Company and
Radio One, Inc. for premises located at 5900 Princess Garden Parkway, Lanham, Maryland
(incorporated by reference to Radio One's Quarterly Report on Form 10-Q for the period ended June
30, 1999 (File No. 000-25969; Film No. 99686684)).
10.3 Office Lease commencing November 1, 1993 between Chalrep Limited Partnership and Radio One,
Inc., with respect to the property located at 100 St. Paul Street, Baltimore, Maryland (incorporated by
reference to Radio One's Annual Report on Form 10-K for the period ended December 31, 1997
(File No. 333-30795; Film No. 98581327)).
10.6 Warrantholders' Agreement dated as of June 6, 1995, as amended by the First Amendment to
Warrantholders' Agreement dated as of May 19, 1997, among Radio One, Inc., Radio One Licenses,
Inc. and the other parties thereto (incorporated by reference to Radio One's Annual Report on Form
10-K for the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327)).
10.7(a) Second Amendment to the Warrantholders' Agreement dated as of May 3, 1999, among Radio One,
Inc., Radio One Licenses, Inc. and the other parties thereto (incorporated by reference to Radio
One's Quarterly Report on Form 10-Q for the period ended June 30, 1999 (File No. 000-25969; Film
No. 99686684)).

Exhibit
Number Description
- -------- -----------

10.45 Asset Purchase Agreement dated as of May 6, 1999 relating to the acquisition of WCDX-FM,
licensed to Mechanicsville, Virginia, WPLZ-FM, licensed to Petersburg, Virginia, WJRV-FM
licensed to Richmond, Virginia, and WGCV-AM licensed to Petersburg, Virginia (incorporated by
reference to Radio One's Registration Statement on Form S-1 filed on October 25, 1999 (File No.
333-89607; Film No. 99732728)).
10.45(a) Time Brokerage Agreement dated May 5, 1999 among Radio One, Inc. and Sinclair Telecable, Inc.
Commonwealth Broadcasting, L.L.C. and Radio One, Inc. (incorporated by reference to Radio
One's Quarterly Report on Form 10-Q for the period ended June 30, 1999 (File No. 000-25969;
Film No. 99686684)).
10.52 Asset Purchase Agreement dated as of May 24, 1999 relating to the acquisition of WBOT-FM,
licensed to Brockton, Massachusetts (incorporated by reference to Radio One's Quarterly Report on
Form 10-Q for the period ended June 30, 1999 (File No. 000-25969; Film No. 99686684)).
10.53 Time Brokerage Agreement dated May 24, 1999 among Radio One, Inc. and Radio Station WBOT-
FM, Brockton, Massachusetts (incorporated by reference to Radio One's Quarterly Report on Form
10-Q for the period ended June 30, 1999 (File No. 000-25969; Film No. 99686684)).
10.55 Amended and Restated Employment Agreement between Radio One, Inc. and Scott R. Royster
dated effective as of October 18, 2000 (previously filed).
10.56 Amended and Restated Employment Agreement between Radio One, Inc. and Linda J. Eckard
Vilardo dated effective as of October 31, 2000 (previously filed).
10.57 Asset Purchase Agreement dated as of December 1, 1999 relating to the acquisition of WPLY-FM,
licensed to Philadelphia, Pennsylvania (incorporated by reference to Radio One's Registration
Statement on Form S-1 on February 14, 2000(File No. 333-30285; Film No. 537846)).
10.58 Asset Purchase Agreement dated as of March 11, 2000 relating to the acquisition of KMJQ-FM and
KBXX-FM, licensed to Houston, Texas, WVCG-AM, licensed to Coral Gables, Florida, WZAK-
FM, licensed to Cleveland, Ohio, WJMO-AM, licensed to Cleveland Heights, Ohio, KKBT-FM,
licensed to Los Angeles, California, KBFB-FM, licensed to Dallas, Texas, WJMZ-FM, licensed to
Anderson, South Carolina, WFXC-FM, licensed to Durham, North Carolina, WFXK-FM, licensed
to Tarboro, North Carolina, WNNL-FM, licensed to Fuquay-Varina, North Carolina and WQOK-
FM, licensed to South Boston, Virginia (incorporated by reference to Radio One's Quarterly Report
on Form 10-Q for the period ended March 31, 2000 (File No. 000-25969; Film No. 631638)).
10.59 Agreement and Plan of Merger dated as of March 11, 2000 relating to the acquisition of WCCJ-FM,
licensed to Harrisburg, North Carolina, WFXA-FM and WTHB-AM, licensed to Augusta, Georgia,
WAKB-FM, licensed to Wrens, Georgia, WAEG-FM, licensed to Evans, Georgia and WAEJ-FM,
licensed to Waynesboro, Georgia (incorporated by reference to Radio One's Quarterly Report on
Form 10-Q for the period ended March 31, 2000 (File No. 000-25969; Film No. 631638)).
10.60 Asset Purchase Agreement dated as of March 11, 2000 relating to the acquisition of WHHH-FM,
licensed to Indianapolis, Indiana, WBKS-FM, licensed to Greenwood, Indiana, WYJZ-FM, licensed
to Lebanon, Indiana and W53AV, licensed to Indianapolis, Indiana (incorporated by reference to
Radio One's Quarterly Report on Form 10-Q for the period ended March 31, 2000 (File No. 000-
25969; Film No. 631638)).
10.61 Purchase Agreement, dated as of July 10, 2000, by and among Radio One, Inc., and Credit Suisse
First Boston Corporation, Deutsche Bank Securities Inc., Morgan Stanley & Co. Incorporated, Bank
of America Securities LLC, and First Union Securities, Inc., as the Initial Purchases of Radio One,
Inc.'s 6 1/2% Convertible Preferred Securities Remarketable Term Income Deferrable Equity
Securities (HIGH TIDES) (incorporated by reference to Radio One's Quarterly Report on Form 10-
Q for the period ended June 30, 2000 (File No. 000-25969; Film No. 698190)).

Exhibit
Number Description
- ------- -----------

10.62 Second Amended and Restated Credit Agreement, dated as of July 17, 2000, by and among Radio
One, Inc., Bank of America, N.A., Credit Suisse First Boston, First Union National Bank, Toronto
Dominion (Texas), Inc., Bankers Trust Company, and the Several Lenders From Time to Time
Parties thereto (incorporated by reference to Radio One's Quarterly Report on Form 10-Q for the
period ended September 30, 2000 (File No. 000-25969; Film No. 764960)).
10.63 First Amendment to Second Amended and Restated Credit Agreement, dated as of March 18, 2002,
by and among Radio One, Inc. and Bank of America, N.A., and the other Lenders party thereto
(incorporated by reference to Radio One's Current Report on Form 8-K filed March 19, 2002 (File
No. 000-25969; Film No. 2578491)).
10.64 Merger Agreement, dated February 7, 2001, by and among Radio One, Inc., Blue Chip Merger
Subsidiary, Inc., Blue Chip Broadcasting, Inc., and certain stockholders of Blue Chip Broadcasting,
Inc. listed therein (incorporated by reference to Exhibit 2.1 of Radio One's Current Report on
Form 8-K filed February 8, 2001 (File No. 000-25969; Film No. 1528282)).
10.65 Asset Purchase Agreement dated June 21, 2001 between Radio One, Inc. and U.S. Broadcasting
Limited Partnership (incorporated by reference to Radio One's Quarterly Report on Form 10-Q for
the period ended June 30, 2001 (File No. 000-25969; Film No. 1714323)).
10.66 Employment Agreement dated April 9, 2001 between Radio One, Inc. and Alfred C. Liggins, III
(incorporated by reference to Radio One's Quarterly Report on Form 10-Q for the period ended
June 30, 2001 (File No. 000-25969; Film No. 1714323).
21.1 Subsidiaries of Radio One, Inc.
23.1 Consent of Arthur Andersen LLP.
99.1 Letter of Acknowledgement with respect to Arthur Andersen's Audit.

(b) Reports on Form 8-K

The Company filed an Item 5 Form 8-K dated November 7, 2001, for the purpose
of releasing its results of operations for the third quarter of 2001 and
disclosing updated earnings guidance.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on March 22, 2002.

RADIO ONE, INC.

By: /S/ SCOTT R. ROYSTER
-----------------------------------
Name: Scott R. Royster
Title: Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer

Pursuant to the requirements of the Securities Act of 1934, this report has
been signed below by the following persons on behalf of the registrant in the
capacities indicated on March 22, 2002.

By: /S/ CATHERINE L. HUGHES
-----------------------------------
Name: Catherine L. Hughes
Title: Chairperson, Director and
Secretary

By: /S/ ALFRED C. LIGGINS, III
-----------------------------------
Name: Alfred C. Liggins, III
Title: Chief Executive Officer,
President and Director

By: /S/ TERRY L. JONES
-----------------------------------
Name: Terry L. Jones
Title: Director

By: /S/ BRIAN W. MCNEILL
-----------------------------------
Name: Brian W. McNeill
Title: Director

By: /S/ LARRY D. MARCUS
-----------------------------------
Name: Larry D. Marcus
Title: Director

By: /S/ L. ROSS LOVE
-----------------------------------
Name: L. Ross Love
Title: Director

By: /S/ D. GEOFFREY ARMSTRONG
-----------------------------------
Name: D. Geoffrey Armstrong
Title: Director

Report of Independent Public Accountants

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

We have audited the accompanying consolidated balance sheets of Radio One,
Inc. (a Delaware corporation) and subsidiaries (the Company) as of December 31,
2000 and 2001, and the related consolidated statements of operations, changes
in stockholders' equity and cash flows for each of the years in the three years
ended December 31, 2001. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Radio One,
Inc. and subsidiaries as of December 31, 2000 and 2001, and the results of
their operations and their cash flows for each of the years in the three years
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States.

As described in Note 1 to the financial statements, the Company changed its
method of accounting for derivative transactions effective January 1, 2001, and
its method of identifying and amortizing intangible assets acquired in a
purchase business combination after July 1, 2001.

Baltimore, Maryland
March 18, 2002

F-1

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31,
------------------------------
2000 2001
-------------- --------------

ASSETS

CURRENT ASSETS:
Cash and cash equivalents............................................... $ 20,879,000 $ 32,115,000
Trade accounts receivable, net of allowance for doubtful accounts of
$5,506,000 and $6,668,000, respectively............................... 46,883,000 56,682,000
Prepaid expenses and other.............................................. 6,557,000 2,441,000
Income tax receivable................................................... 2,476,000 3,200,000
Deferred tax asset...................................................... 2,187,000 3,465,000
Total current assets................................................ 78,982,000 97,903,000
PROPERTY AND EQUIPMENT, net................................................ 33,376,000 39,446,000
INTANGIBLE ASSETS, net..................................................... 1,637,180,000 1,776,201,000
OTHER ASSETS............................................................... 15,680,000 10,365,000
-------------- --------------
Total assets........................................................ $1,765,218,000 $1,923,915,000
============== ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable........................................................ $ 17,683,000 $ 7,782,000
Accrued expenses........................................................ 14,127,000 38,370,000
Fair value of derivative instruments.................................... -- 13,439,000
Other current liabilities............................................... 4,696,000 2,491,000
-------------- --------------
Total current liabilities........................................... 36,506,000 62,082,000
LONG-TERM DEBT AND DEFERRED INTEREST....................................... 646,956,000 780,022,000
DEFERRED TAX LIABILITY..................................................... 24,687,000 28,864,000
-------------- --------------
Total liabilities................................................... 708,149,000 870,968,000
-------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares
authorized and 310,000 shares issued and outstanding; liquidation
preference of $1,000 per share, plus cumulative dividends at 6.5% per
year. Unpaid dividends were $4,198,000 as of December 31, 2000
and 2001.............................................................. -- --
Common stock--Class A, $.001 par value, 30,000,000 shares
authorized, 22,789,000 and 22,389,000 shares issued and outstanding... 23,000 23,000
Common stock--Class B, $.001 par value, 150,000,000 shares
authorized, 2,867,000 shares issued and outstanding................... 3,000 3,000
Common stock--Class C, $.001 par value, 150,000,000 shares
authorized, 3,132,000 shares issued and outstanding................... 3,000 3,000
Common stock--Class D, $.001 par value, 150,000,000 shares
authorized, 58,246,000 and 65,826,000 shares issued and outstanding... 58,000 66,000
Accumulated other comprehensive income.................................. -- (9,053,000)
Stock subscriptions receivable.......................................... (9,005,000) (31,666,000)
Additional paid-in capital.............................................. 1,105,681,000 1,208,652,000
Accumulated deficit..................................................... (39,694,000) (115,081,000)
-------------- --------------
Total stockholders' equity.......................................... 1,057,069,000 1,052,947,000
-------------- --------------
Total liabilities and stockholders' equity.......................... $1,765,218,000 $1,923,915,000
============== ==============

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

F-2

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended December 31,
---------------------------------------
1999 2000 2001
----------- ------------ ------------

REVENUE:
Broadcast revenue, including barter revenue of $1,821,000,
$2,690,000 and $3,034,000, respectively................... $93,260,000 $177,219,000 $276,919,000
Less: Agency commissions.................................... 11,557,000 21,553,000 33,115,000
----------- ------------ ------------
Net broadcast revenue................................... 81,703,000 155,666,000 243,804,000
----------- ------------ ------------
OPERATING EXPENSES:
Program and technical, exclusive of depreciation and
amortization shown separately below....................... 13,576,000 23,971,000 40,791,000
Selling, general and administrative......................... 30,683,000 53,309,000 79,672,000
Corporate expenses.......................................... 4,155,000 6,115,000 9,114,000
Non-cash compensation....................................... 225,000 188,000 951,000
Depreciation and amortization............................... 17,073,000 63,207,000 129,723,000
----------- ------------ ------------
Total operating expenses................................ 65,712,000 146,790,000 260,251,000
----------- ------------ ------------
Operating income (loss)................................. 15,991,000 8,876,000 (16,447,000)
INTEREST EXPENSE, including amortization of deferred
financing costs.............................................. 15,279,000 32,407,000 63,358,000
GAIN ON SALE OF ASSETS, net.................................... -- -- 4,224,000
OTHER INCOME, net.............................................. 2,149,000 20,084,000 991,000
----------- ------------ ------------
Income (loss) before (provision) benefit for income
taxes and extraordinary item.......................... 2,861,000 (3,447,000) (74,590,000)
(PROVISION) BENEFIT FOR INCOME TAXES........................... (2,728,000) (804,000) 24,550,000
EXTRAORDINARY LOSS ON DEBT RETIREMENT, net of
taxes of $2,564,000.......................................... -- -- (5,207,000)
----------- ------------ ------------
Net income (loss)....................................... $ 133,000 $ (4,251,000) $(55,247,000)
=========== ============ ============
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS..................... $(1,343,000) $(13,487,000) $(75,387,000)
=========== ============ ============
BASIC AND DILUTED LOSS PER COMMON SHARE:
Net loss before extraordinary loss.......................... $ (.03) $ (.16) $ (.78)
Extraordinary loss.......................................... -- -- (.05)
----------- ------------ ------------
Net loss.................................................... $ (.03) $ (.16) $ (.83)
----------- ------------ ------------
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic and diluted........................................... 48,411,000 84,540,000 90,295,000
=========== ============ ============

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

F-3

RADIO ONE INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For The Years Ended December 31, 1999, 2000 and 2001

Accumulated
Convertible Common Common Common Common Other Stock
Preferred Stock Stock Stock Stock Comprehensive Comprehensive Subscriptions
Stock Class A Class B Class C Class D Income Income Receivable
----------- ------- ------- ------- ------- ------------- ------------- -------------

BALANCE, as of December 31, 1998...... $-- $ -- $2,000 $3,000 $10,000 $ -- $ --
Comprehensive income:
Net income......................... -- -- -- -- -- $ 133,000 -- --
Unrealized gain on securities...... -- -- -- -- -- 40,000 40,000 --
Comprehensive income................ $ 173,000
============
Preferred stock dividends.......... -- -- -- -- -- -- --
Issuance of stock for acquisition.. -- 2,000 1,000 -- 6,000 -- --
Stock issued to an officer......... -- -- -- -- -- -- --
Conversion of warrants............. -- 5,000 -- -- 10,000 -- --
Issuance of common stock........... -- 10,000 -- -- 20,000 -- --
--- ------- ------ ------ ------- ----------- ------------
BALANCE, as of December 31, 1999...... -- 17,000 3,000 3,000 46,000 40,000 --
Comprehensive income:...............
Net loss........................... -- -- -- -- -- $ (4,251,000) -- --
Unrealized loss on securities...... (40,000)
-- -- -- -- -- ------------ (40,000) --
Comprehensive income................ $ (4,291,000)
--- ------- ------ ------ ------- ============ ----------- ------------
Preferred stock dividends.......... -- -- -- -- -- -- --
Issuance of stock for acquisition.. -- 1,000 -- -- 1,000 -- --
Stock sold to officers............. -- -- -- -- 1,000 -- (9,005,000)
Issuance of common stock........... -- 5,000 -- -- 10,000 -- --
Employee exercise of options....... -- -- -- -- -- -- --
Issuance of preferred stock........ -- -- -- -- -- -- --
--- ------- ------ ------ ------- ----------- ------------
BALANCE, as of December 31, 2000...... -- 23,000 3,000 3,000 58,000 -- (9,005,000)
Comprehensive income:
Net loss........................... -- -- -- -- -- (55,247,000) -- --
Unrealized loss on derivative and
hedging activities from
cumulative effect of accounting
change, net of taxes.............. -- -- -- -- -- (2,630,000) (2,630,000) --
Unrealized net loss on derivative
and hedging activities, net of (6,423,000)
taxes............................. -- -- -- -- -- ------------ (6,423,000) --
Comprehensive income................ $(64,300,000)
============
Preferred stock dividends.......... -- -- -- -- -- -- --
Issuance of stock for acquisition.. -- -- -- -- 6,000 -- --
Stock sold to officers............. -- -- -- -- 2,000 -- (22,661,000)
Employee exercise of options....... -- -- -- -- -- -- --
Preferred stock issuance costs..... -- -- -- -- -- -- --
--- ------- ------ ------ ------- ----------- ------------
BALANCE, as of December 31, 2001...... $-- $23,000 $3,000 $3,000 $66,000 $(9,053,000) $(31,666,000)
=== ======= ====== ====== ======= =========== ============

Total
Additional Paid- Accumulated Stockholders
In Capital Deficit Equity
---------------- ------------- --------------

BALANCE, as of December 31, 1998...... $ (10,000) $ (24,864,000) $ (24,859,000)
Comprehensive income:
Net income......................... -- 133,000 133,000
Unrealized gain on securities...... -- -- 40,000
Comprehensive income................

Preferred stock dividends.......... -- (1,476,000) (1,476,000)
Issuance of stock for acquisition.. 34,185,000 -- 34,194,000
Stock issued to an officer......... 225,000 -- 225,000
Conversion of warrants............. (15,000) -- --
Issuance of common stock........... 411,969,000 -- 411,999,000
-------------- ------------- --------------
BALANCE, as of December 31, 1999...... 446,354,000 (26,207,000) 420,256,000
Comprehensive income:...............
Net loss........................... -- (4,251,000) (4,251,000)
Unrealized loss on securities......
-- -- (40,000)
Comprehensive income................
-------------- ------------- --------------
Preferred stock dividends.......... -- (9,236,000) (9,236,000)
Issuance of stock for acquisition.. 13,543,000 -- 13,545,000
Stock sold to officers............. 9,004,000 -- --
Issuance of common stock........... 335,967,000 -- 335,982,000
Employee exercise of options....... 878,000 -- 878,000
Issuance of preferred stock........ 299,935,000 -- 299,935,000
-------------- ------------- --------------
BALANCE, as of December 31, 2000...... 1,105,681,000 (39,694,000) 1,057,069,000
Comprehensive income:
Net loss........................... -- (55,247,000) (55,247,000)
Unrealized loss on derivative and
hedging activities from
cumulative effect of accounting
change, net of taxes.............. -- -- (2,630,000)
Unrealized net loss on derivative
and hedging activities, net of
taxes............................. -- -- (6,423,000)
Comprehensive income................

Preferred stock dividends.......... -- (20,140,000) (20,140,000)
Issuance of stock for acquisition.. 81,327,000 -- 81,333,000
Stock sold to officers............. 21,103,000 -- (1,556,000)
Employee exercise of options....... 550,000 -- 550,000
Preferred stock issuance costs..... (9,000) -- (9,000)
-------------- ------------- --------------
BALANCE, as of December 31, 2001...... $1,208,652,000 $(115,081,000) $1,052,947,000
============== ============= ==============

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

F-4

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31,
---------------------------------------------
1999 2000 2001
------------- --------------- -------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................................... $ 133,000 $ (4,251,000) $ (55,247,000)
Adjustments to reconcile net income (loss) to net cash from operating
activities:
Depreciation and amortization............................................. 17,073,000 63,207,000 129,723,000
Amortization of debt financing costs, unamortized discount and deferred
interest................................................................. 4,597,000 2,839,000 2,074,000
Deferred income taxes and reduction in valuation reserve on deferred
income taxes............................................................. (1,043,000) 8,966,000 (24,783,000)
Non-cash compensation to officers......................................... 225,000 188,000 951,000
Non-cash advertising revenue in exchange for equity investments........... (448,000) (683,000) --
Loss on investments....................................................... -- -- 1,623,000
Gain on sale of assets.................................................... -- -- (4,224,000)
Extraordinary item........................................................ -- -- 7,771,000
Effect of change in operating assets and liabilities-
Trade accounts receivable, net........................................... (5,419,000) (25,511,000) (2,712,000)
Income tax receivable.................................................... -- -- (724,000)
Prepaid expenses and other............................................... (593,000) 2,586,000 26,000
Other assets............................................................. (627,000) (281,000) 377,000
Accounts payable......................................................... 369,000 11,588,000 (10,631,000)
Accrued expenses and other............................................... 3,954,000 (2,962,000) 15,559,000
------------- --------------- -------------
Net cash flows from operating activities............................... 18,221,000 55,686,000 59,783,000
------------- --------------- -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment.......................................... (3,252,000) (3,665,000) (9,283,000)
Purchase of intangible asset................................................ -- (2,000,000) --
Proceeds from sale of assets................................................ -- -- 69,432,000
Equity investments.......................................................... (1,275,000) (1,185,000) (613,000)
(Purchase) proceeds from sale of available for sale investments............. (256,321,000) 256,430,000 --
Deposits and payments for station purchases................................. (85,723,000) (1,469,603,000) (206,464,000)
------------- --------------- -------------
Net cash flows from investing activities............................... (346,571,000) (1,220,023,000) (146,928,000)
------------- --------------- -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt........................................................... $(128,804,000) $ (7,599,000) $(308,746,000)
Proceeds from debt issuances................................................ 75,650,000 570,000,000 300,000,000
Proceeds from credit facility............................................... -- -- 135,000,000
Deferred financing costs.................................................... (569,000) (6,158,000) (8,274,000)
Repayment of senior cumulative redeemable preferred stock................... (28,160,000) -- --
Proceeds from issuance of common stock, net of issuance costs............... 411,999,000 335,982,000 --
Proceeds from issuance of preferred stock, net of issuance costs............ -- 299,935,000 --
Payment of preferred stock dividends........................................ -- (5,038,000) (20,140,000)
Payment of preferred stock issuance costs................................... -- -- (9,000)
Loans to officers........................................................... -- (9,005,000) --
Proceeds from exercise of stock options..................................... -- 878,000 550,000
------------- --------------- -------------
Net cash flows from financing activities............................... 330,116,000 1,178,995,000 98,381,000
------------- --------------- -------------
INCREASE IN CASH AND CASH EQUIVALENTS......................................... 1,766,000 14,658,000 11,236,000

CASH AND CASH EQUIVALENTS, beginning of year.................................. 4,455,000 6,221,000 20,879,000
------------- --------------- -------------

CASH AND CASH EQUIVALENTS, end of year........................................ $ 6,221,000 $ 20,879,000 $ 32,115,000
============= =============== =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for-
Interest.................................................................. $ 10,762,000 $ 28,581,000 $ 38,319,000
============= =============== =============
Income taxes.............................................................. $ 2,252,000 $ 5,938,000 $ --
============= =============== =============

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

F-5

RADIO ONE, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999, 2000 and 2001

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Organization and Business

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

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

In September 2001, the Company began providing programming services to XM
Satellite Radio, Inc. (XM). Under its agreement with XM, Radio One is providing
five channels of urban radio programming to XM for a five-year period. Revenues
derived from the Company's agreement with XM were insignificant in 2001.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of
Radio One, Inc. and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.

Issuance of Stock

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

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

Stock Split and Conversion

On May 22, 2000, the Company's Board of Directors declared a three-for-one
stock split of Class A common stock in the form of a stock dividend of Class D
common stock payable to shareholders of record as of

F-6

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

May 30, 2000. All per share data in the accompanying consolidated financial
statements and notes thereto have been restated to reflect this stock dividend.

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

Cash and Cash Equivalents

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

Other Assets

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

During 2001, the Company wrote off its investment in Net Noir. This
write-off was due to Net Noir discontinuing its operations. The Company
recognized a loss of $1,206,000, which is included in other income, net in the
accompanying consolidated financial statements.

During 2000, the Company invested approximately $500,000 in cash and $2.5
million in advertising on the Company's radio stations in exchange for an
equity investment in New Urban Entertainment Television, Inc. (NUE). The
advertising provided by the Company is valued based on the valuation of that
company, using what other investors have paid for equity in that company. This
basis for the value of advertising is not more than the Company's normal rates
for this advertising.

In September 2001, the Company entered into a non-interest bearing note
agreement with NUE, in which Radio One loaned NUE $520,000 (Note Agreement).
The principal is due upon the closing of NUE's next round of financing. In
connection with the Note Agreement, the Company received a warrant for the
purchase of 2,600 shares of NUE common stock at an exercise price of $0.01 per
share. The warrant expires 10 years from the date of issuance.

Radio One's ownership interest in NUE would be less than 20% on a fully
converted basis if Radio One exercised their warrants, thus, this investment
has been accounted for on the cost basis as of December 31, 2001. The Company
has deferred the recognition of certain advertising revenue, where the Company
received equity, to recognize the decline in market value of its equity
investment in NUE. The net equity investment as of December 31, 2001, in the
companies discussed above, are stated at the estimated fair market value.

F-7

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

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

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

During 1999, the Company made a $1.0 million investment in PNE Media
Holdings, LLC., a privately-held outdoor advertising company. During 2001, the
Company incurred an impairment charge of $250,000 related to this investment.

Financial Instruments

Financial instruments as of December 31, 2000 and 2001, consist of cash and
cash equivalents, investments, trade accounts receivable, notes receivable
(which are included in other current assets), accounts payable, accrued
expenses, long-term debt and subscriptions receivable, all of which the
carrying amounts approximate fair value except for the Senior Subordinated
Notes as of December 31, 2000 and 2001, which have a fair value of
approximately $84.0 million and $310.5 million, respectively, as compared to a
carrying value of $84.4 million and $300.0 million, respectively. The fair
value is determined based on the fair market value of similar instruments.

Derivative Financial Instruments

The Company adopted Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133),
as amended by SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities--Deferral of the Effective Date of FASB Statement No. 133" and SFAS
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities" on January 1, 2001. This standard requires the Company to recognize
all derivatives, as defined in the Statement, on the balance sheet at fair
value. Derivative value changes are recorded in income for any contracts not
classified as hedges. For derivatives in qualifying hedge relationships, any
change in value is recognized in earnings. The change in derivative fair value
depends on the classification of the derivative as a hedging instrument. For
derivatives in qualifying cash flow hedge relationships, the effective portion
of the derivative value change must be recorded through other comprehensive
income, a component of stockholders' equity, net of tax.

During 2000, the Company entered into swap agreements to reduce exposure to
interest rate fluctuations on certain floating rate debt commitments (See Note
5). The Company recorded an adjustment of approximately $2.6 million, net of an
income tax benefit of approximately $1.2 million on January 1, 2001, to record
the liability related to the fair value of these swap agreements. This amount
was recorded as a cumulative effect of change in accounting principle, which is
included as a component of accumulated comprehensive income adjustments in the
accompanying consolidated balance sheets. The Company then recorded a $6.4
million valuation adjustment, net of an income tax benefit of approximately
$3.2 million, to record the swaps at fair market value as of December 31, 2001.
This amount is also recorded as a component of accumulated comprehensive income
adjustments as the Company has designated the agreements as cash flow hedges.
Interest paid under the swap agreements was $0 and $5.2 million in 2000 and
2001, respectively. These interest rate agreements and the corresponding hedge
relationships expire in December 2002.

Costs incurred to execute the swap agreements are deferred and amortized
over the term of the swap agreements. The amounts incurred by the Company,
representing the effective difference between the fixed rate under the swap
agreements and the variable rate on the underlying term of the debt, are
included in interest

F-8

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

expense in the accompanying consolidated statements of operations. In the event
of early termination of these swap agreements, any gains or losses would be
amortized over the respective lives of the underlying debt or recognized
currently if the debt is terminated earlier than initially anticipated.

Revenue Recognition

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

Barter Arrangements

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

Advertising

The Company expenses advertising costs as incurred. Total advertising
expenses were $3,268,000, $3,743,000 and $4,897,000 in 1999, 2000 and 2001,
respectively.

Comprehensive Income

The Company's comprehensive income consists of net income and other items
recorded directly to the equity accounts. The objective is to report a measure
of all changes in equity of an enterprise that result from transactions and
other economic events of the period other than transactions with owners. The
Company's other comprehensive income consists principally of gains and losses
on derivative instruments that qualify for cash flow hedge treatment.

Segment Reporting

The Company believes it has only one segment, radio broadcasting. The
Company came to this conclusion because the Company has one product or service,
has the same type of customer and operating strategy in each market, operates
in one regulatory environment, has only one management group that manages the
entire Company and provides information on the Company's results as one segment
to the key decision-makers. All of the Company's revenue is derived from
stations located in the United States.

Earnings Available for Common Stockholders

In July 2000, the Company completed a private placement of $310.0 million of
6 1/2% Convertible Preferred Securities (the Securities), at $1,000 per
security. Dividends accrue on the Securities at 6 1/2% per annum from the date
of original issuance. Dividends are paid quarterly in arrears, commencing
October 15, 2000. The earnings available for common stockholders for the years
ended December 31, 2000 and 2001, is the net loss less the dividends of
$9,236,000 and $20,140,000 paid during 2000 and 2001, respectively, on the
Securities.

Additionally, the Company had certain senior cumulative redeemable preferred
stock outstanding during 1999 which paid dividends at 15% per annum and was
retired in 1999. The Company accreted dividends on this

F-9

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

preferred stock, which was paid when the preferred stock was redeemed. The
earnings available for common stockholders for the year ended December 31,
1999, is the net loss for the year, less the accreted dividend of $1,476,000,
on the preferred stock.

Earnings Per Share

Earnings per share are based on the weighted average number of common and
diluted common equivalent shares for stock options and warrants outstanding
during the period the calculation is made, divided into the earnings available
for common stockholders. Diluted common equivalent shares consist of shares
issuable upon the exercise of stock options and warrants, using the treasury
stock method. For the years ended December 31, 1999, 2000 and 2001,
approximately 621,000, 1,268,000 and 3,189,000 shares, respectively,
attributable to the exercise of outstanding options were excluded from the
calculation of diluted EPS because the effect was antidilutive.

Recent Accounting Pronouncements

Also, in June 2001, FASB issued Statement of Financial Accounting Standard
No. 142 (SFAS 142) "Goodwill and Other Intangible Assets." This pronouncement
requires a non-amortization approach to account for purchased goodwill and
certain other intangible assets. Under a non-amortization approach, goodwill
and certain intangibles will not be amortized into results of operations but,
instead, would be reviewed for impairment and written down and charged to
results of operations only in the periods in which the recorded value of
goodwill and certain intangibles is more than their fair value. The provisions
of this statement, which apply to goodwill and intangible assets acquired prior
to June 30, 2001, will be adopted by the Company on January 1, 2002. The
provisions of this statement that apply to goodwill and other indefinite life
intangible assets acquired after June 30, 2001, was adopted by the Company on
July 1, 2001. As a result of the adoption, Radio One did not record
amortization expense related to the Blue Chip Broadcasting, Inc. acquisition.
Amortization expense would have approximated $5.0 million related to the
goodwill and FCC licenses had the Company not adopted this non-amortization
approach. The adoption of these accounting standards will eliminate the
amortization of goodwill and FCC broadcast licenses commencing January 1, 2002.
SFAS 142 will have a material impact on the Company's financial statements as
the amounts previously recorded for the amortization of goodwill and FCC
broadcast licenses is significant. For the years ended December 31, 1999, 2000
and 2001, the Company recorded amortization expense for goodwill of $4.6
million, $6.1 million and $7.1 million, respectively. For the years ended
December 31, 1999, 2000 and 2001, the Company recorded amortization expense for
FCC broadcasting licenses of $8.4 million, $48.4 million and $107.0 million,
respectively. Impairment reviews may result in future periodic write-downs or
in write-down upon adoption. The Company expects amortization expense to
decrease by approximately $114.1 million as a result of this pronouncement.

In order to complete the transitional assessment of goodwill and
nonamortizing intangible assets impairment, the Company will need to: (1)
identify the reporting units; (2) determine the carrying value of each
reporting unit; and (3) determine the fair value of each reporting unit. The
Company will have up to six months from the date of adoption to determine the
fair value of each reporting unit and compare it to the reporting unit's

F-10

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

carrying amount. To the extent a reporting unit's carrying amount exceeds its
fair value, an indication exists that the reporting unit's goodwill and
non-amortizing intangible assets may be impaired, and the Company must perform
the second step of the transitional impairment test. In the second step, the
Company must compare the implied fair value of the reporting unit's goodwill,
determined by allocating the reporting unit's fair value to all of its assets
and liabilities in a manner similar to a purchase price allocation in
accordance with SFAS No. 141, to its carrying amount, both of which would be
measured as of the date of adoption. This second step is required to be
completed as soon as possible, but no later than the end of the year of
adoption. Any transitional impairment loss will be recognized as the cumulative
effect of a change in accounting principle in the Company's consolidated
statement of operations. As of the date of adoption, the Company has net
unamortized goodwill and unamortized broadcasting licenses in the amounts of
$218.8 million and $1,518.4 million, respectively. The Company has not yet
determined what the effect of the impairment tests will be on the Company's
financial position or results of operations.

This statement retains the fundamental provisions of Statement 121 that
require the Company to test long-lived assets for impairment using undiscounted
cash flows; however, the statement eliminates the requirement to allocate
goodwill to these long-lived assets. The statement also requires that
long-lived assets to be disposed of by a sale must be recorded at the lower of
the carrying amount or the fair value, less the cost to sell the asset and
depreciation should cease to be recorded on such assets. Any loss resulting
from the write-down of the assets shall be recognized in income from continuing
operations.

Additionally, long-lived assets to be disposed of other than by sale may no
longer be classified as discontinued until they are disposed of. The provisions
of this statement are effective for financial statements issued for fiscal
years beginning after December 15, 2001. The Company will apply this guidance
prospectively.

2. ACQUISITIONS AND DISPOSITIONS:

In August 2001, the Company completed the acquisition of the outstanding
stock of Blue Chip Broadcasting, Inc., owner and/or operator of sixteen radio
stations (WIZF-FM, licensed to Erlanger, Kentucky, WMJM-FM, licensed to
Jeffersontown, Kentucky, WDJX-FM and WULV-FM, licensed to Louisville, Kentucky,
WLRS-FM, licensed to Shepherdsville, Kentucky, WLXO-FM, licensed to Stamping
Ground, Kentucky, WGZB-FM, licensed to Corydon, Indiana, KTTB-FM, licensed to
Glencoe, Minnesota, WDHT-FM (formerly WING-FM), licensed to Dayton, Ohio,
WING-AM, licensed to Springfield, Ohio, WGTZ-FM, licensed to Eaton, Ohio,
WKSW-FM, licensed to Urbana, Ohio, WJYD-FM, licensed to London, Ohio, WCKX-FM,
licensed to Columbus, Ohio, WXMG-FM, licensed to Upper Arlington, Ohio and
WBLO-FM, licensed to Charlestown, Kentucky, which was operated under a local
marketing agreement (LMA)), for approximately $106.7 million in cash, 5,773,824
shares of class D common stock and the assumption of outstanding debt. The
Company financed the acquisition with common stock of the Company and cash
drawn from its bank credit facility. In connection with the transaction, the
Company also entered into an LMA with Blue Chip Communications, Inc. for
WDBZ-AM, licensed to Cincinnati, Ohio. This acquisition resulted in the
recording of approximately $7.5 million of fixed assets, $73.2 million of FCC
licenses and $135.4 million of other intangible assets, which includes the
recording of a deferred tax liability of $33.0 million for the difference in
book and tax basis in the assets acquired

F-11

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

from the purchase price being in excess of the net book value of the acquired
entity. This purchase price allocation is based upon preliminary estimates made
by management.

In August 2001, the Company completed the acquisition of substantially all
of the assets of three radio stations (WCDX-FM, licensed to Mechanicsville,
Virginia, WRHH-FM (formerly WPLZ-FM) and WGCV-AM, licensed to Petersburg,
Virginia) from Sinclair Telecable, Inc. and one station WJMO-FM (formerly
WJRV-FM), licensed to Richmond, Virginia, from Commonwealth Broadcasting, LLC
for approximately $34.0 million in cash. On May 6, 1999, the Company entered
into an asset purchase agreement to acquire those four stations for
approximately $34.0 million. Radio One made a deposit of approximately
$1,250,000 towards the purchase price that is included in other assets in the
accompanying consolidated balance sheet as of December 31, 2000. The Company
operated the three FM stations under an LMA and paid approximately $1.6
million, $2.8 million and $1.6 million in TBA fees for the years ended December
31, 1999, 2000 and 2001, respectively, that are included in interest expense in
the accompanying consolidated statements of operations for the years ended
December 31, 1999, 2000 and 2001. This acquisition resulted in the recording of
approximately $1.6 million of fixed assets, $30.4 million of FCC licenses and
$2.0 million of other intangible assets.

In August 2001, the Company commenced the operation of WAMJ-FM (formerly
WAWE-FM), licensed to Mableton, Georgia, under a local marketing agreement
(LMA) with the Mableton Investment Group, LLC, an entity in which one of the
Company's executive officers and one of its directors have an ownership
interest.

In July 2001, the Company sold the assets of WJZZ-AM, licensed to Kingsley,
Michigan, for approximately $225,000 in cash.

In June 2001, the Company entered into an agreement to acquire WHTA-FM
(formerly WPEZ-FM), licensed to Macon, Georgia, which is now serving the
Atlanta, Georgia, market, for approximately $55.0 million in cash. The Company
began operating this station under an LMA in October 2001.

In April 2001, the Company acquired substantially all the assets of WTLC-AM,
licensed to Indianapolis, Indiana, for approximately $1.1 million in cash.

In March 2001, the Company completed the sale of KJOI-AM (formerly KLUV-AM),
licensed to Dallas, Texas, for approximately $16.0 million in cash.

In February 2001, the Company acquired the intellectual property of WTLC-FM,
licensed to Indianapolis, Indiana, for approximately $7.2 million in cash. The
acquisition resulted in the recording of approximately $7.2 million of
intangible assets.

In February 2001, the Company acquired substantially all of the assets of
KTXQ-FM (formerly KDGE-FM), licensed to Gainsville, Texas, for approximately
$52.6 million in cash. This acquisition resulted in the recording of
approximately $945,000 of fixed assets and $51.7 million of FCC licenses.

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

In February 2001, the Company acquired the outstanding stock of Nash
Communications Corporation, which owned WILD-AM, licensed to Boston,
Massachusetts, for approximately $4.5 million in cash and 63,492 shares of
class A common stock. The acquisition resulted in the recording of
approximately $5.1 million of FCC licenses and $1.8 million of intangible
assets.

F-12

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

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

On September 25, 2000, the Company acquired substantially all of the assets
of KJOI-AM (formerly KLUV-AM) licensed to Dallas, Texas, for approximately
$16.0 million. The acquisition resulted in recording approximately $744,000 of
fixed assets and $15.3 million of intangible assets.

On August 25, 2000, the Company completed the acquisition of the assets of
twelve radio stations (KMJQ-FM and KBXX-FM licensed to Houston, Texas, WVCG-AM,
licensed to Coral Gables, Florida, WZAK-FM, licensed to Cleveland, Ohio,
WJMO-AM, licensed to Cleveland Heights, Ohio, KKBT-FM, licensed to Los Angeles,
California, KBFB-FM, licensed to Dallas, Texas, WJMZ-FM, licensed to Anderson,
South Carolina, WFXK-FM, licensed to Tarboro, North Carolina, WFXC-FM, licensed
to Durham, North Carolina, WNNL-FM, licensed to Fuquay-Varina, North Carolina
and WQOK-FM, licensed to South Boston, Virginia) from Clear Channel
Communications, Inc. and AMFM, Inc. for approximately $1.3 billion in cash. The
acquisition resulted in the recording of approximately $15.0 million of fixed
assets and $1,280.7 million of intangible assets.

On June 8, 2000, the Company completed the acquisitions of WHHH-FM, licensed
to Indianapolis, Indiana; WTLC-FM (formerly WBKS-FM), licensed to Greenwood,
Indiana; WYJZ-FM, licensed to Lebanon, Indiana; and W53AV, a low-powered
television station licensed to Indianapolis, Indiana, for approximately $30.0
million in cash and 441,000 shares of Class A common stock valued at
approximately $10.0 million. The acquisitions resulted in the recording of
approximately $520,000 of fixed assets and $49.1 million of intangible assets,
which includes the recording of a deferred tax liability of $10.2 million for
the difference in book and tax basis in the assets acquired from the purchase
price being in excess of the net book value of the company.

On June 7, 2000, the Company completed the acquisition of the outstanding
stock of Davis Broadcasting, Inc., which owns and operates radio stations
WTHB-AM and WFXA-FM, licensed to Augusta, Georgia; WAEG-FM, licensed to Evans,
Georgia; WAKB-FM, licensed to Wrens, Georgia; WAEJ-FM, licensed to Waynesboro,
Georgia; and WCCJ-FM, licensed to Harrisburg, North Carolina, for approximately
$20.7 million in cash, 57,000 shares of Class A common stock and 115,000 shares
of Class D common stock valued at approximately $3.5 million. The acquisition
resulted in the recording of approximately $1.0 million of fixed assets and
$23.9 million of intangible assets.

On February 28, 2000, the Company acquired substantially all of the assets
of WPLY-FM, located in the Philadelphia, Pennsylvania, area, for approximately
$80.0 million. The acquisition resulted in the recording of approximately $1.3
million of fixed assets and $78.7 million of intangible assets.

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

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

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

F-13

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

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

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

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

The unaudited pro forma summary consolidated results of operations for the
years ended December 31, 2000 and 2001, assuming that all acquisitions
previously discussed which were completed during the years ended December 31,
2000 and 2001, had occurred as of January 1, 2000, are as follows:

2000 2001
------------ ------------

Net broadcast revenue........................................ $257,662,000 $261,663,000
Operating expenses, excluding depreciation and amortization.. 129,593,000 132,726,000
Corporate expenses........................................... 7,383,000 10,378,000
Depreciation and amortization................................ 123,451,000 131,812,000
------------ ------------
Operating loss............................................... (2,765,000) (13,253,000)
Interest expense............................................. 67,313,000 66,190,000
Gain on sale of assets....................................... -- 4,224,000
Other income, net............................................ 65,000 677,000
Benefit for income taxes..................................... -- 24,531,000
Extraordinary loss........................................... -- (5,207,000)
------------ ------------
Net loss................................................. $(70,013,000) $(55,218,000)
============ ============
Net loss applicable to common stockholders................... $(79,249,000) $(75,358,000)
============ ============
Basic and diluted loss per common share...................... $ (0.88) $ (0.83)
============ ============

Pro forma summary results are not presented for the year ended December 31,
1999, because some of the stations that were acquired in the Blue Chip
transaction in 2001 were previously acquired by Blue Chip in 2000, therefore it
is not practicable to prepare pro forma results for the year ended December 31,
1999.

The pro forma statements of operations for the fiscal years ended December
31, 2000 and 2001, were prepared to retroactively reflect the Financial
Accounting Standards Board (FASB) SFAS No. 142 "Goodwill and Other Intangible
Assets" for transactions that were completed subsequent to June 30, 2002. The
new pronouncements require the use of purchase accounting and the use of a
non-amortization approach to account for certain purchased intangible assets.
Under the non-amortization approach, certain intangible assets would be tested
for impairment, rather than being amortized to earnings. In accordance with
SFAS No. 142, for acquisitions completed after June 30, 2001, the Company has
not recorded amortization expense related to the values assigned to FCC
licenses and goodwill in the accompanying pro forma statements.

F-14

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

3. FIXED AND INTANGIBLE ASSETS:

Property and equipment are recorded at cost and are being depreciated on a
straight-line basis over various periods. The components of the Company's
property and equipment as of December 31, 2000 and 2001, are as follows:

Period of
2000 2001 Depreciation
----------- ----------- -------------

PROPERTY AND EQUIPMENT:
Land and improvements............. $ 3,745,000 $ 4,362,000 --
Building and improvements......... 1,089,000 1,820,000 31 years
Transmitter towers................ 12,141,000 15,791,000 7 or 15 years
Equipment......................... 22,891,000 26,941,000 5 to 7 years
Leasehold improvements............ 4,028,000 4,381,000 Life of Lease
Construction-in-progress.......... 1,385,000 4,508,000
----------- -----------
45,279,000 57,803,000
Less: Accumulated depreciation.... 11,903,000 18,357,000
----------- -----------
Property and equipment, net... $33,376,000 $39,446,000
=========== ===========

Depreciation expense for the years ended December 31, 1999, 2000 and 2001,
was $2,395,000, $4,919,000 and $6,701,000, respectively.

Repairs and maintenance costs are expensed as incurred.

Intangible assets are being amortized on a straight-line basis over various
periods. The intangible asset balances and periods of amortization as of
December 31, 2000 and 2001, are as follows:

Period of
2000 2001 Amortization
-------------- -------------- ------------

FCC broadcast licenses.......................... $1,612,920,000 $1,692,492,000 15 Years
Goodwill........................................ 97,300,000 242,277,000 15 Years
Trade names..................................... 2,334,000 28,523,000 2-5 Years
Debt financing costs............................ 9,913,000 16,022,000 Life of Debt
Favorable transmitter site and other intangibles 6,784,000 6,026,000 6-17 Years
Noncompete agreement............................ 4,005,000 223,000 3 Years
-------------- --------------
Total........................................ 1,733,256,000 1,985,563,000
Less: Accumulated amortization.............. 96,076,000 209,362,000
-------------- --------------
Net intangible assets........................ $1,637,180,000 $1,776,201,000
============== ==============

Amortization expense for the years ended December 31, 1999, 2000 and 2001,
was $14,678,000, $56,335,000 and $123,022,000, respectively. The amortization
of deferred financing costs was charged to interest expense for all periods
presented.

The Company continually monitors events and changes in circumstances which
could indicate that carrying amounts of intangible assets may not be
recoverable. When events or changes in circumstances are present that indicate
the carrying amount of intangible assets may not be recoverable, the Company
assesses the recoverability of intangible assets by determining whether the
carrying value of such intangible assets will be recovered through the future
cash flows expected from the use of the asset and its eventual disposition.
Management believes that no impairment exists as of December 31, 2001.

F-15

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

4. CURRENT LIABILITIES:

Accrued expenses as of December 31, 2000 and 2001, included the following:

2000 2001
----------- -----------

Accrued interest............... $ 1,692,000 $19,436,000
Accrued salaries and benefits.. 5,846,000 7,218,000
Accrued commissions............ 2,462,000 3,018,000
Income taxes payable........... -- 2,699,000
Other accrued expenses......... 4,127,000 5,999,000
----------- -----------
Total accrued expenses..... $14,127,000 $38,370,000
=========== ===========

5. LONG-TERM DEBT AND DEFERRED INTEREST:

As of December 31, 2000 and 2001, the Company's outstanding debt is as
follows:

2000 2001
------------ ------------

12% Senior subordinated notes (net of $1,110,000 unamortized
discounts as of December 31, 2000).......................... $ 84,368,000 $ --
8 7/8% Senior subordinated notes.............................. -- 300,000,000
Bank credit facility.......................................... 562,500,000 480,000,000
Other notes payable........................................... 1,000 --
Capital lease obligations..................................... 87,000 22,000
------------ ------------
Total long-term debt and deferred interest................ $646,956,000 $780,022,000
============ ============

Senior Subordinated Notes

In May 1997, Radio One issued approximately $85.5 million of 12% Senior
Subordinated Notes due 2004. The notes were sold at a discount, with the net
proceeds to Radio One of approximately $72.8 million. The notes paid cash
interest at 7% per annum through May 15, 2000, and at 12% thereafter, with the
difference between the 7% cash interest and the 12% interest being accrued
through May 15, 2000, and added to the principal balance. The principal balance
was not due until maturity. The balance of these notes was paid off in May 2001
with the proceeds of the 8 7/8% Senior Subordinated Notes.

In May 2001, the Company sold $300.0 million of 8 7/8% Senior Subordinated
Notes (Notes) due 2011, through a private offering, receiving net proceeds of
approximately $291.8 million. There were approximately $8.2 million in deferred
offering costs recorded in connection with the sale, which are being amortized
to interest expense over the life of the Notes using the effective interest
rate method.

The proceeds of the Notes were primarily used to repay amounts owed on the
Company's bank credit facility and the entire balance of the 12% Senior
Subordinated Notes (Former Notes) due 2004. The Company recognized an
extraordinary loss of $5.2 million, net of income tax benefit of approximately
$2.6 million, in the accompanying consolidated statement of operations related
to the early retirement of the Former Notes. This loss encompassed the
write-off of the remaining deferred offering costs, underwriter's discount and
prepayment penalties associated with the Former Notes.

F-16

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

Bank Credit Facility

The Amended and Restated Credit Agreement dated July 17, 2000, provides for
a new facility under which the Company can borrow up to $600.0 million as of
December 31, 2001 from a group of banking institutions. The new bank credit
facility contains covenants limiting the Company's ability to incur additional
debt and additional liens, make dividend and other payments with respect to the
Company's equity securities, make new investments and sell assets. This new
facility also requires compliance with financial tests based on financial
position and results of operations, including a leverage ratio, an interest
coverage ratio and a fixed charge coverage ratio, all of which could
effectively limit the Company's ability to borrow or otherwise raise funds in
the credit and capital markets. As of December 31, 2001, the Company was in
compliance with the covenants under its bank credit facility.

The bank credit facility consists of Term A Loans in an amount up to $350.0
million, Term B Loans in an amount up to $150.0 million and the revolving
credit loans in an amount up to $250.0 million, that may be borrowed on a
revolving basis. As of December 31, 2000, the Company had borrowed the full
amount of the Term A and B Loans and $62.5 million of the revolving credit
loan. In May 2001, the Company repaid the Term B loan in full. As of December
31, 2001, the Company has $350.0 million outstanding on its Term A loan and
$130.0 million on the revolving credit loan. The interest rate on the credit
facility is LIBOR plus a spread based on the Company's leverage ratio, as
defined in the credit agreement. The credit facility requires quarterly
interest payments. As of December 31, 2001, $120.0 million remained available
(subject to various covenant restrictions) to be drawn down from the Company's
$600.0 million bank credit facility. The loans mature in June 2007. The
weighted average interest rate for the bank credit facility was 7.56% in 2001.

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

Future minimum payments as of December 31, 2001, are as follows:

Senior
Subordinated Bank Credit
Notes Facility
------------ ------------

2002......................... $ -- $ --
2003......................... -- 52,500,000
2004......................... -- 52,500,000
2005......................... -- 70,000,000
2006......................... -- 87,500,000
2007 and thereafter.......... 300,000,000 217,500,000
------------ ------------
$300,000,000 $480,000,000
============ ============

Capital Lease Obligations

The Company has capital leases in excess of one year terms for office
equipment. The terms of these leases require maximum monthly principal and
interest payments of $6,500 through July 2002. The imputed interest on these
leases range from 7.9% to 16.0%.

F-17

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

6. COMMITMENTS AND CONTINGENCIES:

Operating Leases

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

The following is a schedule of the future minimum rental payments required
under the operating leases that have an initial or remaining noncancelable
lease term in excess of one year as of December 31, 2001.

For the Year Ending
December 31, Total
------------ -----------

2002............................... $ 4,996,000
2003............................... 4,064,000
2004............................... 3,206,000
2005............................... 2,888,000
2006............................... 2,388,000
2007 and thereafter................ 13,027,000

Total rent expense for the years ended December 31, 1999, 2000 and 2001, was
$1,492,000, $3,776,000 and $5,445,000, respectively.

FCC Broadcast Licenses

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

Contingencies

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

7. STOCKHOLDERS' EQUITY:

Stock Options Plans

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

F-18

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

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

Fiscal Year Ended December 31,
--------------------------------------------------------
1999 2000 2001
---------------- ------------------- -------------------
Weighted Weighted Weighted
Average Average Average
Exercise Exercise Exercise
Options Price Options Price Options Price
------- -------- --------- -------- --------- --------

Balance, beginning of period...... -- $ -- 621,000 $ 7.99 1,268,000 $10.56
Granted........................ 621,000 7.99 808,000 11.82 2,293,000 15.14
Canceled....................... -- -- (43,000) 10.51 (306,000) 15.75
Exercised...................... -- -- (118,000) 16.48 (66,000) 7.88
------- --------- ---------
Balance, end of period............ 621,000 $7.99 1,268,000 $10.56 3,189,000 13.65
------- ----- --------- ------ --------- ------
Exercisable, end of period........ 65,509 $7.99 169,013 $ 7.99 420,000 $ 9.82
======= ===== ========= ====== ========= ======

As of December 31, 2001, 545,502 shares were available for future grants
under the terms of these plans.

Stock Options Outstanding

Summarized information relative to the Company's stock options outstanding
as of December 31, 2001 is as follows:

Options Outstanding Options Exercisable
------------------------------------------------- -------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Range of Exercise Contractual Exercise Exercise
Price Options Life (Years) Price Options Price
----------------- --------- ------------ -------- ------- --------

$ 7.50--$ 7.78 563,000 8.51 $ 7.57 185,000 $ 7.64
$ 8.11--$12.19 246,000 7.48 8.46 169,000 8.23
$13.56--$17.90 2,267,000 9.53 15.16 28,000 13.82
$21.59--$26.53 113,000 8.37 24.82 38,000 24.82
--------- ------ ------- ------
3,189,000 $13.65 420,000 $ 9.82
========= ====== ======= ======

Stock-Based Compensation

The Company accounts for its stock-based compensation plans as permitted by
FASB Statement No. 123, "Accounting for Stock-Based Compensation," (SFAS No.
123) which allows the Company to follow Accounting Principles Board Opinion No.
25 (APB No. 25), "Accounting for Stock Issued to Employees" and recognize no
compensation cost for options granted at fair market prices. The Company has
computed, for pro forma disclosure purposes, the value of all compensatory
options granted during 1999, 2000 and 2001, using the Black-Scholes option
pricing model. The following assumptions were used for grants:

1999 2000 2001
------- ------- -------

Average risk-free interest rate........ 4.65% 5.85% 3.66%
Expected dividend yield................ 0.00% 0.00% 0.00%
Expected lives......................... 3 years 3 years 3 years
Expected volatility.................... 59% 42% 141%

F-19

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

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

For the Year Ended December 31,
------------------------------------
1999 2000 2001
--------- ----------- ------------

Net income (loss):
As reported.......................................... $ 133,000 $(4,251,000) $(55,247,000)
As adjusted.......................................... (153,000) (5,406,000) (60,159,000)
Basic earnings and diluted loss per share, applicable to
common stockholders:
As reported.......................................... $ (0.03) $ (0.16) $ (0.83)
As adjusted.......................................... (0.03) (0.17) (0.89)

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

Weighted average fair value of options granted for the years ended December
31, 1999, 2000 and 2001, was $3.46, $4.13 and $11.98, respectively. This fair
value was calculated using the Black-Scholes option pricing model.

8. INCOME TAXES:

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

During 1999, 2000 and 2001, the Company acquired the stock of two, one and
one companies, respectively. Associated with these stock purchases, the Company
allocated the purchase price to the related assets acquired, with the excess
purchase price allocated to goodwill. Usually, in a stock purchase, for income
tax purposes, the underlying assets of the acquired companies retain their
historical tax basis. Accordingly, the Company recorded a deferred tax
liability of approximately $16.9 million, $10.2 million and $34.8 million in
1999, 2000 and 2001, respectively, related to the difference between the book
and tax basis for all of the assets acquired (excluding nondeductible goodwill).

A reconciliation of the statutory federal income taxes to the recorded
income tax provision (benefit) for the years ended December 31, 1999, 2000 and
2001 is as follows:

1999 2000 2001
----------- ----------- -----------

Statutory tax (@ 35% rate).............. $(1,001,000) $ 1,206,000 $26,100,000
Effect of state taxes, net of federal... (114,000) 137,000 3,500,000
Nondeductible goodwill.................. (1,613,000) (2,147,000) (2,050,000)
Other................................... -- -- (3,000,000)
----------- ----------- -----------
(Provision) benefit for income taxes. $(2,728,000) $ (804,000) $24,550,000
=========== =========== ===========

F-20

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

The components of the provision (benefit) for income taxes for the years
ended December 31, 1999, 2000 and 2001, are as follows:

1999 2000 2001
----------- ----------- -----------

Federal:
Current................................... $(3,374,000) $(1,195,000) $24,734,000
Deferred.................................. 933,000 1,066,000 (1,455,000)
----------- ----------- -----------
(2,441,000) (129,000) 23,279,000
----------- ----------- -----------
State:
Current................................... (397,000) (825,000) 1,441,000
Deferred.................................. 110,000 150,000 (170,000)
----------- ----------- -----------
(287,000) (675,000) 1,271,000
----------- ----------- -----------
(Provision) benefit for income taxes...... $(2,728,000) $ (804,000) $24,550,000
=========== =========== ===========

Deferred income taxes reflect the net tax effect of temporary differences
between the financial statement and tax basis of assets and liabilities. The
significant components of the Company's deferred tax assets and liabilities as
of December 31, 2000 and 2001, are as follows:

2000 2001
------------ ------------

Deferred tax assets--
Reserve for bad debts..................................................... $ 1,725,000 $ 2,278,000
Accruals.................................................................. 213,000 817,000
Barter activity........................................................... 85,000 142,000
Deferred revenue.......................................................... 35,000 911,000
Other..................................................................... 129,000 (683,000)
------------ ------------
Total current tax assets................................................ 2,187,000 3,465,000
Interest expense........................................................... 963,000 4,474,000
FCC and other intangibles amortization.................................... 726,000 1,166,000
NOL carryforward.......................................................... 1,598,000 32,784,000
Debt costs................................................................ 307,000 --
Other..................................................................... 155,000 81,000
------------ ------------
Total deferred tax assets............................................... 5,936,000 41,970,000
------------ ------------
Deferred tax liabilities-
FCC license............................................................... (27,721,000) (65,390,000)
Depreciation.............................................................. (667,000) (1,674,000)
Loss on extinguishment of debt............................................ -- (163,000)
Other..................................................................... (48,000) (142,000)
------------ ------------
Total deferred tax liabilities.......................................... (28,436,000) (67,369,000)
------------ ------------
Net deferred taxes included in the accompanying consolidated balance sheets $(22,500,000) $(25,399,000)
============ ============

In 2000, the Company acquired an approximate $4,000,000 net operating loss
related to the purchase of Davis Broadcasting, Inc. In 2001, the Company
acquired an approximate $14,820,000 net operating loss related to the purchase
of Blue Chip (see Note 2). As of December 31, 2001, the Company had an NOL
carryforward of approximately $86,273,000, which is recorded as a deferred tax
asset. The net operating loss carryforwards expire beginning in 2019 through
2021.

F-21

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

9. RELATED PARTY TRANSACTIONS:

Radio One leased office space for $13,000, $18,000 and $18,000, per month in
1999, 2000 and 2001, respectively, from a partnership in which two of the
partners are officers of Radio One (see Note 5). The Company believes that
these amounts approximate fair market value. Total rent paid to the partnership
for fiscal years 1999, 2000 and 2001, was approximately $161,000, $216,000 and
$216,000, respectively.

The Company has a loan outstanding of $380,000, and accrued interest of
$56,000 and $80,000 as of December 31, 2000 and 2001, respectively, from an
officer. The loan is due in May 2003 and bears interest at 5.6%.

The Company has a loan outstanding of approximately $262,000, and accrued
interest of $27,000 and $44,000, as of December 31, 2000 and 2001,
respectively, from another officer. The loan is due in May 2004 and bears
interest at 5.6%.

The Company has a loan outstanding of approximately $88,000, and accrued
interest of $8,000 and $13,000, as of December 31, 2000 and 2001, respectively,
from another officer. The loan is due in May 2004 and bears interest at 5.6%.

The Company has a loan outstanding of approximately $100,000, and accrued
interest of $6,000 and $12,000, as of December 31, 2001 and 2000, from another
officer. The loan is due in May 2004 and bears interest at 5.7%.

Three officers of the Company purchased 1.5 million, 1.0 million and 250,000
shares, respectively, of the Company's common Stock. The stock was purchased
with the proceeds of a full recourse loan from the Company of $21,105,000,
$7,000,000 and $2,005,000, respectively, with accrued interest as of December
31, 2000, of $0, $83,000 and $25,000 and as of December 31, 2001, of $908,000,
$505,000 and $143,000, respectively. The loans are due in 2005, 2004 and 2005,
respectively, and bear interest at 5.8%, 5.8% and 5.9%, respectively. The
employees to which the latter two loans relate have the option to extend the
terms of the loans to 2010 and 2008, respectively. These loans are reported in
the accompanying consolidated balance sheets as stock subscriptions receivable.

As of December 31, 2000 and 2001, the Company has a receivable of
approximately $412,000 and $571,000, respectively, from a company in which one
of the shareholders is an officer of Radio One.

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

In August 2001, the Company entered in to a Programming Management Agreement
with a company in which an executive of the Company has an interest. Total fees
paid under this agreement were approximately $75,000 for the year ended
December 31, 2001.

10. PROFIT SHARING:

Radio One has a 401(k) profit sharing plan for its employees. Radio One can
contribute to the plan at the discretion of its Board of Directors. Radio One
made no contributions to the plan during 1999, 2000 or 2001.

F-22

RADIO ONE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999, 2000 and 2001

11. QUARTERLY FINANCIAL DATA (UNAUDITED):

Quarters Ended
------------------------------------------------------
March 31 June 30 September 30 December 31
------------ ------------ ------------ ------------
(Amounts in Thousands, Except Per Share Data)

2000:
Net revenues....................... $ 22,152,000 $ 32,643,000 $ 42,886,000 $ 57,985,000
Operating income................... 3,006,000 7,990,000 2,764,000 (4,884,000)
Net income (loss).................. 2,061,000 5,577,000 (4,021,000) (7,868,000)
------------ ------------ ------------ ------------
Net income (loss) per share........ $ 0.08 $ 0.07 $ (0.10) $ (0.11)
============ ============ ============ ============
Weighted average shares outstanding 24,536,000 84,994,000 85,494,000 86,525,000
============ ============ ============ ============
2001:
Net revenues....................... 47,925,000 62,285,000 66,206,000 67,388,000
Operating income................... (11,649,000) 1,273,000 184,000 (6,255,000)
Loss before extraordinary item..... (15,173,000) (9,407,000) (10,089,000) (15,371,000)
Net Loss........................... (15,173,000) (14,614,000) (10,089,000) (15,371,000)
Loss before extraordinary item..... $ (0.23) $ (0.16) $ (0.16) $ (0.22)
============ ============ ============ ============
Net income (loss) per share........ $ (0.23) $ (0.22) $ (0.16) $ (0.22)
============ ============ ============ ============
Weighted average shares outstanding 86,801,000 88,252,000 91,687,000 94,120,000
============ ============ ============ ============

12. SUBSEQUENT EVENT:

In February 2002, an officer of the Company exercised his right to receive a
non-interest-bearing loan in the amount of $750,000. The loan is due in January
2005 or 60 days after the employee terminates, whichever is earlier.

F-23

CONSOLIDATING FINANCIAL STATEMENTS

The Company conducts a portion of its business through its subsidiaries. All
of the Company's subsidiaries (Subsidiary Guarantors) have fully and
unconditionally guaranteed the Company's 8 7/8% Senior Subordinated Notes due
2011.

Set forth below are consolidating financial statements for the Company and
the Subsidiary Guarantors as of December 31, 2000 and 2001, and for the years
then ended. The equity method of accounting has been used by the Company to
report its investments in subsidiaries. Separate financial statements for the
Subsidiary Guarantors are not presented based on management's determination
that they do not provide additional information that is material to investors.

F-24

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING BALANCE SHEET
As of December 31, 2000

Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
-------------- -------------- --------------- --------------
(Unaudited) (Unaudited) (Unaudited)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ 105,000 $ 20,774,000 $ -- $ 20,879,000
Trade accounts receivable, net of allowance for doubtful
accounts................................................ 5,100,000 41,783,000 -- 46,883,000
Due from Combined Guarantor Subsidiaries................. -- 1,667,894,000 (1,667,894,000) --
Prepaid expenses and other............................... 234,000 6,323,000 -- 6,557,000
Income tax receivable.................................... -- 2,476,000 -- 2,476,000
Deferred tax asset....................................... 165,000 2,022,000 -- 2,187,000
-------------- -------------- --------------- --------------
Total current assets................................... 5,604,000 1,741,272,000 (1,667,894,000) 78,982,000
PROPERTY AND EQUIPMENT, net................................ 6,033,000 27,343,000 -- 33,376,000
INTANGIBLE ASSETS, net..................................... 1,613,123,000 24,057,000 -- 1,637,180,000
OTHER ASSETS............................................... 2,634,000 13,046,000 -- 15,680,000
-------------- -------------- --------------- --------------
Total assets........................................... $1,627,394,000 $1,805,718,000 $(1,667,894,000) $1,765,218,000
============== ============== =============== ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable......................................... $ 676,000 $ 17,007,000 $ -- $ 17,683,000
Accrued expenses......................................... 1,589,000 12,538,000 -- 14,127,000
Other current liabilities................................ 431,000 4,265,000 -- 4,696,000
Due to the Company....................................... 1,667,894,000 -- (1,667,894,000) --
-------------- -------------- --------------- --------------
Total current liabilities.............................. 1,670,590,000 33,810,000 (1,667,894,000) 36,506,000
INVESTMENT IN SUBSIDIARIES................................. -- 65,569,000 (65,569,000) --
LONG-TERM DEBT AND DEFERRED INTEREST, net of
current portion........................................... 28,000 646,928,000 -- 646,956,000
DEFERRED INCOME TAX LIABILITY.............................. 22,345,000 2,342,000 -- 24,687,000
-------------- -------------- --------------- --------------
Total liabilities...................................... 1,692,963,000 748,649,000 (1,733,463,000) 708,149,000
-------------- -------------- --------------- --------------

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock............................................. -- 87,000 -- 87,000
Stock subscriptions receivable........................... -- (9,005,000) -- (9,005,000)
Additional paid-in capital............................... -- 1,105,681,000 -- 1,105,681,000
Accumulated deficit...................................... (65,569,000) (39,694,000) 65,569,000 (39,694,000)
-------------- -------------- --------------- --------------
Total stockholders' equity............................. (65,569,000) 1,057,069,000 65,569,000 1,057,069,000
-------------- -------------- --------------- --------------
Total liabilities and stockholders' equity............. $1,627,394,000 $1,805,718,000 $(1,667,894,000) $1,765,218,000
============== ============== =============== ==============

The accompanying notes are an integral part of this consolidated balance sheet.

F-25

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING BALANCE SHEET
As of December 31, 2001

Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
-------------- -------------- --------------- --------------
(Unaudited) (Unaudited) (Unaudited)

ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................ $ (447,000) $ 32,562,000 $ -- $ 32,115,000
Trade accounts receivable, net of allowance for doubtful
accounts................................................ 11,552,000 45,130,000 -- 56,682,000
Due from Combined Guarantor Subsidiaries................. -- 1,699,420,000 (1,699,420,000) --
Prepaid expenses and other............................... 463,000 1,978,000 -- 2,441,000
Income tax receivable.................................... -- 3,200,000 -- 3,200,000
Deferred tax asset....................................... 1,882,000 1,583,000 -- 3,465,000
-------------- -------------- --------------- --------------
Total current assets................................... 13,450,000 1,783,873,000 (1,699,420,000) 97,903,000
PROPERTY AND EQUIPMENT, net................................ 12,715,000 26,731,000 -- 39,446,000
INTANGIBLE ASSETS, net..................................... 1,534,807,000 241,394,000 -- 1,776,201,000
OTHER ASSETS............................................... 1,276,000 9,089,000 -- 10,365,000
-------------- -------------- --------------- --------------
Total assets........................................... $1,562,248,000 $2,061,087,000 $(1,699,420,000) $1,923,915,000
============== ============== =============== ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............................... $ 794,000 $ 6,988,000 $ -- $ 7,782,000
Accrued expenses............................... 3,257,000 35,113,000 -- 38,370,000
Fair value of derivative instruments........... -- 13,439,000 -- 13,439,000
Other current liabilities...................... 316,000 2,175,000 -- 2,491,000
Due to the Company............................. 1,699,420,000 -- (1,699,420,000) --
-------------- -------------- --------------- --------------
Total current liabilities.................... 1,703,787,000 57,715,000 (1,699,420,000) 62,082,000
INVESTMENT IN SUBSIDIARIES....................... -- 163,951,000 (163,951,000) --
LONG-TERM DEBT AND DEFERRED INTEREST, net of
current portion................................. 2,000 780,020,000 -- 780,022,000
DEFERRED INCOME TAX LIABILITY.................... 22,410,000 6,454,000 -- 28,864,000
-------------- -------------- --------------- --------------
Total liabilities................................ 1,726,199,000 1,008,140,000 (1,863,371,000) 870,968,000
-------------- -------------- --------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock................................... -- 95,000 -- 95,000
Accumulated comprehensive income adjustments... -- (9,053,000) -- (9,053,000)
Stock subscriptions receivable................. -- (31,666,000) -- (31,666,000)
Additional paid-in capital..................... -- 1,208,652,000 -- 1,208,652,000
Accumulated deficit............................ (163,951,000) (115,081,000) 163,951,000 (115,081,000)
-------------- -------------- --------------- --------------
Total stockholders' equity................... (163,951,000) 1,052,947,000 163,951,000 1,052,947,000
-------------- -------------- --------------- --------------
Total liabilities and stockholders' equity... $1,562,248,000 $2,061,087,000 $(1,699,420,000) $1,923,915,000
============== ============== =============== ==============

The accompanying notes are an integral part of this consolidated balance sheet.

F-26

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS
For the Year Ended December 31, 2000

Combined
Guarantor
Subsidiaries Radio One, Inc Eliminations Consolidated
------------ -------------- ------------ ------------
(Unaudited) (Unaudited) (Unaudited)

REVENUE:
Broadcast revenue, including barter revenue..... $ 31,941,000 $145,278,000 $ -- $177,219,000
Less: Agency commissions........................ 3,749,000 17,804,000 -- 21,553,000
------------ ------------ ----------- ------------
Net broadcast revenue....................... 28,192,000 127,474,000 -- 155,666,000
------------ ------------ ----------- ------------
OPERATING EXPENSES:
Program and technical........................... 4,771,000 19,200,000 -- 23,971,000
Selling, general and administrative............. 11,959,000 41,350,000 -- 53,309,000
Corporate expenses.............................. -- 6,115,000 -- 6,115,000
Non-cash compensation........................... -- 188,000 -- 188,000
Depreciation and amortization................... 57,758,000 5,449,000 -- 63,207,000
------------ ------------ ----------- ------------
Total operating expenses.................... 74,488,000 72,302,000 -- 146,790,000
------------ ------------ ----------- ------------
Broadcast operating (loss) income........... (46,296,000) 55,172,000 -- 8,876,000
INTEREST EXPENSE, including amortization of
deferred financing costs....................... 151,000 32,256,000 -- 32,407,000
OTHER INCOME, net................................ 13,000 20,071,000 -- 20,084,000
------------ ------------ ----------- ------------
(Loss) income before provision for income
taxes..................................... (46,434,000) 42,987,000 -- (3,447,000)
PROVISION FOR INCOME TAXES....................... -- (804,000) -- (804,000)
EQUITY IN LOSSES OF SUBSIDIARIES................. -- (46,434,000) 46,434,000 --
------------ ------------ ----------- ------------
Net loss.................................... $(46,434,000) $ (4,251,000) $46,434,000 $ (4,251,000)
============ ============ =========== ============
NET LOSS APPLICABLE TO COMMON
STOCKHOLDERS................................... $(46,434,000) $(13,487,000) $(13,487,000)
============ ============ ============

The accompanying notes are an integral part of this consolidated statement.

F-27

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENT OF OPERATIONS
For the Year Ended December 31, 2001

Combined
Guarantor
Subsidiaries Radio One, Inc. Eliminations Consolidated
------------ --------------- ------------ ------------
(Unaudited) (Unaudited) (Unaudited)

REVENUE:
Broadcast revenue, including barter revenue... $ 48,338,000 $228,581,000 $ -- $276,919,000
Less: Agency commissions...................... 5,382,000 27,733,000 -- 33,115,000
------------ ------------ ----------- ------------
Net broadcast revenue..................... 42,956,000 200,848,000 -- 243,804,000
------------ ------------ ----------- ------------
OPERATING EXPENSES:
Program and technical......................... 8,579,000 32,212,000 -- 40,791,000
Selling, general and administrative........... 19,572,000 60,100,000 -- 79,672,000
Corporate expenses............................ -- 9,114,000 -- 9,114,000
Non-cash compensation......................... -- 951,000 -- 951,000
Depreciation and amortization................. 111,961,000 17,762,000 -- 129,723,000
------------ ------------ ----------- ------------
Total operating expenses.................. 140,112,000 120,139,000 -- 260,251,000
------------ ------------ ----------- ------------
Broadcast operating (loss) income......... (97,156,000) 80,709,000 -- (16,447,000)
INTEREST EXPENSE, including amortization of
deferred financing costs..................... 1,234,000 62,124,000 -- 63,358,000
GAIN ON SALE OF ASSETS, net.................... -- 4,224,000 -- 4,224,000
OTHER INCOME, net.............................. 13,000 978,000 -- 991,000
------------ ------------ ----------- ------------
(Loss) income before benefit for income
taxes and extraordinary loss............ (98,377,000) 23,787,000 -- (74,590,000)
BENEFIT FOR INCOME TAXES....................... -- 24,550,000 -- 24,550,000
------------ ------------ ----------- ------------
Loss before extraordinary loss............ (98,377,000) 48,337,000 -- (50,040,000)
EXTRAORDINARY LOSS ON DEBT
RETIREMENT, net of taxes..................... -- (5,207,000) -- (5,207,000)
EQUITY IN LOSSES OF SUBSIDIARIES............... -- (98,377,000) 98,377,000 --
------------ ------------ ----------- ------------
Net loss.................................. $(98,377,000) $(55,247,000) $98,377,000 $(55,247,000)
============ ============ =========== ============
NET LOSS APPLICABLE TO COMMON
STOCKHOLDERS................................. $(98,377,000) $(75,387,000) $(75,387,000)
============ ============ ============

The accompanying notes are an integral part of this consolidated statement.

F-28

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year Ended December 31, 2000

Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(46,434,000) $ (4,251,000) $46,434,000 $ (4,251,000)
Adjustments to reconcile net loss to net cash
from operating activities:..............................
Depreciation and amortization......................... 57,758,000 5,449,000 -- 63,207,000
Amortization of debt financing costs,
unamortized discount and deferred
interest............................................ -- 2,839,000 -- 2,839,000
Deferred income taxes and reduction in
valuation reserve on deferred income
taxes............................................... 500,000 8,466,000 -- 8,966,000
Non-cash compensation to officers..................... -- 188,000 -- 188,000
Non-cash advertising.................................. -- (683,000) -- (683,000)
Gain on sale of assets, net........................... -- -- -- --
Extraordinary loss on debt retirement................. -- -- -- --
Effect of change in operating assets and
liabilities--
Trade accounts receivable, net..................... (2,801,000) (22,710,000) -- (25,511,000)
Due to Corporate/from Subsidiaries................. (10,296,000) 10,296,000 -- --
Income tax receivable.............................. -- -- -- --
Prepaid expenses and other......................... 341,000 2,245,000 -- 2,586,000
Other assets....................................... 286,000 (567,000) -- (281,000)
Accounts payable................................... 927,000 10,661,000 -- 11,588,000
Accrued expenses and other......................... (207,000) (2,755,000) -- (2,962,000)
------------ ------------ ----------- ------------
Net cash flows from operating
activities................................... 74,000 9,178,000 46,434,000 55,686,000
------------ ------------ ----------- ------------

The accompanying notes are an integral part of this consolidated statement.

F-29

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year Ended December 31, 2000

Combined
Guarantor
Subsidiaries Radio One, Inc. Eliminations Consolidated
------------ --------------- ------------ ---------------
(Unaudited) (Unaudited) (Unaudited)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment............... $ -- $ (3,665,000) $ -- $ (3,665,000)
Investment in Subsidiaries....................... -- 46,434,000 (46,434,000) --
Purchase of intangible asset..................... -- (2,000,000) -- (2,000,000)
Equity investments............................... -- (1,185,000) -- (1,185,000)
Proceeds from sale of investments................ -- 256,430,000 -- 256,430,000
Deposits and payments for station purchases...... -- (1,469,603,000) -- (1,469,603,000)
-------- --------------- ------------ ---------------
Net cash flows from investing activities..... -- (1,173,589,000) (46,434,000) (1,220,023,000)
-------- --------------- ------------ ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt................................ -- (7,599,000) -- (7,599,000)
Proceeds from debt issuances..................... -- 570,000,000 -- 570,000,000
Proceeds from issuance of common stock, net of
issuance costs................................. -- 335,982,000 -- 335,982,000
Proceeds from preferred stock offering........... -- 299,935,000 -- 299,935,000
Payment of preferred stock dividends............. -- (5,038,000) -- (5,038,000)
Deferred financing costs......................... -- (6,158,000) -- (6,158,000)
Loans to officers................................ -- (9,005,000) -- (9,005,000)
Proceeds from exercise of stock options.......... -- 878,000 -- 878,000
-------- --------------- ------------ ---------------
Net cash flows from financing activities..... -- 1,178,995,000 -- 1,178,995,000
-------- --------------- ------------ ---------------
INCREASE IN CASH AND CASH EQUIVALENTS............ 74,000 14,584,000 -- 14,658,000
CASH AND CASH EQUIVALENTS, beginning of year........ 31,000 6,190,000 -- 6,221,000
-------- --------------- ------------ ---------------
CASH AND CASH EQUIVALENTS, end of year.............. $105,000 $ 20,774,000 $ -- $ 20,879,000
======== =============== ============ ===============

The accompanying notes are an integral part of this consolidated statement.

F-30

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year Ended December 31, 2001

Combined
Guarantor Radio One,
Subsidiaries Inc. Eliminations Consolidated
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(98,377,000) $(55,247,000) $98,377,000 $(55,247,000)
Adjustments to reconcile loss to net cash from
operating activities:...................................
Depreciation and amortization......................... 111,961,000 17,762,000 -- 129,723,000
Amortization of debt financing costs,
unamortized discount and deferred
interest............................................ -- 2,074,000 -- 2,074,000
Deferred income taxes and reduction in
valuation reserve on deferred income
taxes............................................... -- (24,783,000) -- (24,783,000)
Non-cash compensation to officers..................... -- 951,000 -- 951,000
Loss on write-off of investments...................... -- 1,623,000 -- 1,623,000
Gain on sale of assets, net........................... -- (4,224,000) -- (4,224,000)
Extraordinary loss on debt retirement................. -- 7,771,000 -- 7,771,000
Effect of change in operating assets and
liabilities--
Trade accounts receivable, net..................... 1,028,000 (3,740,000) -- (2,712,000)
Due to Corporate/from Subsidiaries................. (13,543,000) 13,543,000 -- --
Income tax receivable.............................. -- (724,000) -- (724,000)
Prepaid expenses and other......................... 282,000 (256,000) -- 26,000
Other assets....................................... (2,588,000) 2,965,000 -- 377,000
Accounts payable................................... 118,000 (10,749,000) -- (10,631,000)
Accrued expenses and other......................... 1,554,000 14,005,000 -- 15,559,000
------------ ------------ ----------- ------------
Net cash flows from operating
activities................................... 435,000 (39,029,000) 98,377,000 59,783,000
------------ ------------ ----------- ------------

The accompanying notes are an integral part of this consolidated statement.

F-31

RADIO ONE, INC. AND SUBSIDIARIES

CONSOLIDATING STATEMENTS OF CASH FLOWS
For the Year Ended December 31, 2001

Combined
Guarantor
Subsidiaries Radio One, Inc. Eliminations Consolidated
------------ --------------- ------------ -------------
(Unaudited) (Unaudited) (Unaudited)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment............... $(961,000) $ (8,322,000) $ -- $ (9,283,000)
Investment in Subsidiaries....................... -- 98,377,000 (98,377,000) --
Proceeds from sale of assets..................... -- 69,432,000 -- 69,432,000
Equity investments............................... -- (613,000) -- (613,000)
Deposits and payments for station purchases...... -- (206,464,000) -- (206,464,000)
--------- ------------- ------------ -------------
Net cash flows from investing activities..... (961,000) (47,590,000) (98,377,000) (146,928,000)
--------- ------------- ------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt................................ (26,000) (308,720,000) -- (308,746,000)
Proceeds from debt issuances..................... -- 300,000,000 -- 300,000,000
Proceeds from credit facility.................... -- 135,000,000 -- 135,000,000
Deferred financing costs......................... -- (8,274,000) -- (8,274,000)
Payment of preferred stock dividends............. -- (20,140,000) -- (20,140,000)
Payment of preferred stock issuance costs........ -- (9,000) -- (9,000)
Proceeds from exercise of stock options.......... -- 550,000 -- 550,000
--------- ------------- ------------ -------------
Net cash flows from financing activities..... (26,000) 98,407,000 -- 98,381,000
--------- ------------- ------------ -------------
(DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS.................................... (552,000) 11,788,000 -- 11,236,000
CASH AND CASH EQUIVALENTS, beginning of year........ 105,000 20,774,000 -- 20,879,000
--------- ------------- ------------ -------------
CASH AND CASH EQUIVALENTS, end of year.............. $(447,000) $ 32,562,000 $ -- $ 32,115,000
========= ============= ============ =============

The accompanying notes are an integral part of this consolidated statement.

F-32

RADIO ONE, INC AND SUBSIDIARIES

INDEX TO SCHEDULES

Report of Independent Public Accountants...... S-2
Schedule II--Valuation and Qualifying Accounts S-3

S-1

Report of Independent Public Accountants

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

We have audited in accordance with auditing standards generally accepted in
the United States, the consolidated balance sheets and statements of
operations, changes in stockholders' equity and cash flows of Radio One, Inc.
and subsidiaries (the Company) included in this Form 10-K and have issued our
report thereon dated March 18, 2002. Our audits were made for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
schedule listed in the accompanying index is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states, in all material respects, the financial data required
to be set forth therein in relation to the basic financial statements taken as
a whole.

/s/ ARTHUR ANDERSEN LLP

Baltimore, Maryland
March 18, 2002

S-2

RADIO ONE, INC. AND SUBSIDIARIES

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 1999, 2000, and 2001
(In Thousands)

Balance Additions
at Charged Acquired Balance
Beginning to from at End
Description of Year Expense Acquisitions Deductions of Year
----------- --------- --------- ------------ ---------- -------

Allowance for Doubtful Accounts:
1999............................ $1,243 $2,824 $ 481 $2,119 $2,429
2000............................ 2,429 3,392 1,539 1,854 5,506
2001............................ 5,506 4,403 613 3,854 6,668

S-3