10-K 1 0001.txt FORM 10-K -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 10-K (Mark One) [X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 or [_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-29253 ---------------- BEASLEY BROADCAST GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 65-0960915 (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.) 3033 Riviera Drive, Suite 200 Naples, Florida 34103 (Address of principal executive offices and Zip Code) (941) 263-5000 (Registrant's telephone number, including area code) Securities Registered pursuant to Section 12(b) of the Act: None Securities Registered pursuant to Section 12(g) of the Act: Class A Common Stock, $.001 par value ---------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. [_] As of February 9, 2001, the aggregate market value of the Class A common stock held by non-affiliates of the registrant was $90,650,850 based on the closing price on The Nasdaq Stock Market's National Market on such date. Class A Common Stock, $.001 par value 7,252,068 Shares Outstanding as of February 9, 2001 Class B Common Stock, $.001 par value 17,021,373 Shares Outstanding as of February 9, 2001 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- BEASLEY BROADCAST GROUP, INC. FORM 10-K ANNUAL REPORT FOR THE PERIOD ENDED DECEMBER 31, 2000 TABLE OF CONTENTS

Page ---- Part I--Financial Information Item 1. Business............................................................................... 1 Item 2. Properties............................................................................. 18 Item 3. Legal Proceedings...................................................................... 18 Item 4. Submission of Matters to a Vote of Security Holders.................................... 18 Part II--Other Information Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.................. 19 Item 6. Selected Financial Data................................................................ 20 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk............................. 30 Item 8. Financial Statements and Supplementary Data............................................ 31 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure... 54 Part III Item 10. Directors and Executive Officers of the Registrant..................................... 54 Item 11. Executive Compensation................................................................. 56 Item 12. Security Ownership of Certain Beneficial Owners and Management......................... 58 Item 13. Certain Relationships and Related Transactions......................................... 59 Part IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K....................... 61 Signatures...................................................................................... 64

i PART I ITEM 1. BUSINESS Overview We were founded in 1961 and are the 16th largest radio broadcasting company in the United States based on 1999 gross revenues. After giving effect to our pending acquisitions in Augusta, we will own and operate 44 stations, 28 FM and 16 AM. Our stations are located in eleven large and midsized markets primarily located in the eastern United States. Nineteen of these stations are located in seven of the nation's top fifty radio markets: Atlanta, Philadelphia, Boston, Miami-Ft. Lauderdale, Las Vegas, New Orleans and West Palm Beach. Our station groups rank among the three largest clusters, based on gross revenues, in seven of our eleven markets and, collectively, our radio stations reach approximately 3.6 million people on a weekly basis. For the year ended December 31, 2000, giving effect to acquisitions and dispositions completed during the period, as well as the pending acquisitions mentioned above and our recent acquisitions in Las Vegas and New Orleans, as if these acquisitions had been completed at the beginning of the period, we had net revenues of $127.2 million, broadcast cash flow of $40.7 million and a net loss of $38.8 million. We seek to maximize revenues and broadcast cash flow by acquiring and operating clusters of stations in high-growth large and midsized markets located primarily in the eastern United States. Our radio stations program a variety of formats, including urban, contemporary hit radio and country, which target the demographic groups in each market that we consider the most attractive to our advertisers. The combination of our market clusters and our advertising, sales and programming expertise has enabled us to achieve strong same station revenue and broadcast cash flow growth demonstrated as follows: . same station net revenues increased 10.8% for the year ended December 31, 2000 compared to the same period in 1999; and . same station broadcast cash flow increased 17.8% for the year ended December 31, 2000 compared to the same period in 1999. For the periods presented above, we calculate same station results by comparing the performance of radio stations operated by us at December 31, 2000 to the performance of those same stations, whether or not operated by us, in the corresponding period of the prior year. These results include the effect of barter revenues and expenses. Same station results exclude the Las Vegas and New Orleans stations we recently acquired as well as the Augusta stations we have agreed to acquire. They also exclude WPTP-FM in the Philadelphia market, which changed formats during the fourth quarter of 2000. We are led by our Chairman and Chief Executive Officer, George G. Beasley, who has 40 years of experience in the radio broadcasting industry. Under Mr. Beasley's guidance, excluding the stations that we currently own, we have acquired and disposed of a total of 52 radio stations, including stations in Los Angeles, Chicago, New Orleans, Orlando and Cleveland. We acquired these 52 stations for an aggregate acquisition price of approximately $168.0 million and the total consideration that we received upon disposition was valued at approximately $346.1 million. Mr. Beasley is supported by a management team with an average of 17 years of experience in the radio broadcasting industry. Mr. Beasley and our management team have established a track record of acquiring and operating a substantial portfolio of well run radio stations and, in several instances, have demonstrated the ability to reposition and turn around under-performing stations. We believe that we are well positioned to continue to realize cash flow growth from our existing stations and to acquire and operate new radio stations in both existing and new markets with positive demographic trends and growth characteristics. Recent Events On November 6, 2000, we changed the format at WPTP-FM in the Philadelphia market. In connection with this format change, we incurred certain one-time expenses, which were recorded in the statement of operations during the fourth quarter of 2000. We expect revenues, station operating expenses, and broadcast cash flow at WPTP-FM to decrease during the early stages of this transition. On November 13, 2000, we entered into an agreement to purchase two FM radio stations in the Augusta market for an aggregate purchase price of approximately $12.0 million. We intend to finance this acquisition through our credit facility. The consummation of the pending transaction is subject to certain conditions, including the approval of the FCC. Although we believe these closing conditions are customary for transactions of this type, these conditions may not be satisfied. We expect to close on this transaction during the second quarter of 2001. On December 28, 2000, we sold all of the radio towers and related real estate assets owned by Beasley Broadcast Group to Beasley Family Towers, Inc., which is owned by George G. Beasley, B. Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, Bradley C. Beasley and Robert E. Beasley for approximately $5.1 million. The purchase price was paid with an unsecured note payable to us from Beasley Family Towers bearing interest at the applicable federal rate. In connection with this transaction, we entered into twenty-year lease agreements to lease the radio towers from Beasley Family Towers. Annual rent under these leases is expected to be approximately $467,000. On January 14, 2000, we purchased 600,000 shares of common stock of FindWhat.com in exchange for a $3.0 million promissory note. On December 31, 2000, we considered a decline in market value to be other than temporary and recorded an unrealized loss on this investment of approximately $2.4 million. On December 29, 1998, we filed a lawsuit in the Circuit Court of the Eleventh Judicial Circuit, Miami-Dade County, against the Florida Marlins Inc., Florida Marlins Baseball Team, Ltd., and Front Row Communications for breach of contract and other related claims. The lawsuit is based on actions taken by the Florida Marlins major league baseball team to trade or release key players of the Marlins after the 1997 season, thereby transforming the Marlins into a non- competitive team. On January 14, 2000, the court dismissed the Marlins' motion for summary judgment. On May 22, 1999, the Marlins countersued for breach of contract. On January 10, 2001, we settled both lawsuits with the other parties with no material impact on the financial statements. On January 31, 2001, we purchased the equity interest in three FM radio stations in the Las Vegas market and two FM and one AM radio stations in the New Orleans market for an aggregate purchase price of approximately $113.5 million. The acquisition was financed through our credit facility. Initial Public Offering and Corporate Reorganization On February 11, 2000, we offered and sold 6,850,000 shares of Class A common stock. In connection with our initial public offering, we effected a corporate reorganization. Before our reorganization, we were comprised of a series of subchapter S corporations, a general partnership and a series of limited partnerships and limited liability companies. The subchapter S corporations and the general partnership held the operating assets of our radio stations and the limited partnerships held the FCC licenses for our radio stations. Subchapter S Corporations and partnerships are flow-through entities for federal and some state and local income tax purposes. As a result, our combined net income for federal and some state and local income tax purposes has been reported by and taxed directly to the equity holders of these entities, rather than to us. In connection with our initial public offering, our subchapter S corporation status of these entities terminated, and we became subject to federal and applicable state and local corporate income tax as a subchapter C corporation. After our reorganization, the various entities comprising our business became indirect, wholly-owned subsidiaries of Beasley Broadcast Group. To effect this corporate reorganization: . George G. Beasley and members of his immediate family contributed their equity interests in those entities to Beasley Broadcast Group in exchange for a total of 17,021,373 shares of Class B common stock of Beasley Broadcast Group; and . two of our general managers contributed their equity interests in two of the entities to Beasley Broadcast Group in exchange for a total of 402,068 shares of Class A common stock of Beasley Broadcast Group. 2 Immediately after these contribution transactions, Beasley Broadcast Group contributed the capital stock and partnership interests it acquired to Beasley Mezzanine Holdings, LLC, in exchange for all the membership interests in Beasley Mezzanine Holdings. As a result, Beasley Mezzanine Holdings became a wholly-owned subsidiary of Beasley Broadcast Group and our radio station assets are owned by a series of wholly-owned subsidiaries of Beasley Mezzanine Holdings. Operating Strategy The principal components of our operating strategy are to: . Develop Market-Leading Clusters. We seek to secure and maintain a leadership position in the markets we serve by creating clusters of multiple stations in each of our markets. Our station groups rank among the three largest clusters, based on gross revenues, in seven of our eleven markets. We operate our stations in clusters to capture a variety of demographic listener groups, which enhances our stations' appeal to a wide range of advertisers. In addition, we have been able to achieve operating efficiencies by strategically aligning our sales and promotional efforts and consolidating broadcast facilities where possible to minimize duplicative management positions and reduce overhead expenses. Finally, we believe that strategic acquisitions of additional stations in existing clusters positions us to capitalize on our market expertise and existing relationships with local advertisers to increase revenues of the acquired stations. . Conduct Extensive Market Research. We conduct extensive market research to enhance our ratings and in certain circumstances to identify opportunities to reformat a station to reach an underserved demographic group. Our research, programming and marketing strategy combines thorough research with an assessment of our competitors' vulnerabilities and overall market dynamics in order to identify specific audience and formatting opportunities within each market. Using this research, we tailor our programming, marketing and promotions on each station to maximize its appeal to its target audience and to respond to the changing preferences of our listeners. . Establish Strong Local Brand Identity. Our stations pursue a variety of programming and marketing initiatives designed to develop a distinctive identity and to strengthen the stations' local brand or franchise. In addition, through our research, programming and promotional initiatives, we create a marketable identity for our stations to enhance audience share and listener loyalty. As part of this objective, we promote nationally recognized on-air personalities and local sports programming at a number of our stations. For example, we broadcast nationally- syndicated shows such as "Howard Stern" and we are the flagship station for the Miami Dolphins, Florida Marlins, Florida Panthers and Miami Hurricanes on our sports station in the Miami-Ft. Lauderdale market. . Build Relationship-Oriented Sales Staff and Emphasize Focused Marketing and Promotional Initiatives. We seek to gain advertising revenue share in each of our markets by utilizing our relationship-oriented sales staff to lead local and national marketing and promotional initiatives. We design our sales efforts based on advertiser demand and market conditions. Our stations have an experienced and stable sales force with an average of three years experience with Beasley Broadcast Group. In addition, we provide our sales force with extensive training, competitive compensation and performance based incentives. Our stations also engage in special local promotional activities such as concerts featuring nationally recognized performers, contests, charitable events and special community events. Our experienced sales staff and these promotional initiatives help strengthen our relationship with our advertisers and listening community. . Hire, Develop and Motivate Strong Local Management Teams. Our station general managers have been with Beasley Broadcast Group for an average of approximately nine years, and a substantial majority operate under employment contracts. We believe that broadcasting is primarily a locally-based business and much of its success is based on the efforts of local management teams. We believe that our station managers have been able to recruit, develop, motivate and train superior management teams. We 3 offer competitive compensation packages with performance-based incentives for our key employees. In addition, we provided employees with opportunities for personal growth and advancement through extensive training, seminars and other educational initiatives. . Enhance Broadcast Cash Flow of Underutilized AM Stations. We seek to selectively acquire and enhance the performance of major-market AM stations serving niche markets. To enhance broadcast cash flows at these radio stations, we sell blocks of time to providers of health, ethnic, religious and other specialty formats. Acquisition Strategy Since June 1996, we have acquired or agreed to acquire 33 radio stations. Our future acquisition strategy, which will focus on stations located in the 100 largest radio markets, is to: . acquire additional radio stations in our current markets to further enhance our market position; . acquire existing clusters in new markets or establish a presence in new markets where we believe we can build successful clusters over time; . pursue swap opportunities with other radio station owners to build or enhance our market clusters; and . selectively acquire large-market AM stations serving attractive demographic groups with specialty programming. Internet Strategy We have formed a division, Beasley Interactive, to create an Internet presence for Beasley Broadcast Group that will complement our existing radio business. We have also hired a team of creative directors to develop web page content for our radio stations' web sites that reflects each station's programming and brand. Our strategy is to create additional revenue streams from advertising, e-commerce and web page development and support for advertisers by capitalizing on the loyalty of our radio station listeners by persuading them to use our stations' web sites. From time to time, we expect to make strategic investments in Internet companies that we believe are complementary to our radio broadcasting business and that are available on commercially attractive terms. On January 14, 2000, we purchased 600,000 shares of common stock of FindWhat.com, representing approximately 4.8% of the outstanding capital stock, in exchange for $3.0 million, reflected by a promissory note. The outstanding amount due under the promissory note may be offset by the purchase price of advertisements placed by FindWhat.com with our radio stations. We have recorded an unrealized loss on this investment. See "Management's Discussion and Analysis" for more information. Also, in December 1999, we entered into an agreement to purchase 750,000 shares of preferred stock of eTour, Inc., representing approximately 2.8% of the outstanding capital stock, in exchange for $3.0 million of advertising time from our radio stations. 4 Station Portfolio Our stations are clustered in demographically attractive and growing markets located mostly in the eastern United States, including major markets such as Atlanta, Philadelphia, Boston, Miami-Ft. Lauderdale, Las Vegas, New Orleans, and West Palm Beach. The following table sets forth information about our portfolio and the markets where we operate. The column entitled Beasley Stations in the table includes radio stations in Augusta that we have agreed to acquire.

2000 Beasley 1995-1999 Beasley Market 2000 Radio Market 2000 Stations Revenue Radio Market Average Annual Radio Market --------- ----------- Market Revenue Rank Revenue Growth Revenue Growth FM AM Share Rank ------ ------------ -------------- -------------- ---- ---- ----- ---- Atlanta, GA............. 7 16.7% 10.1% -- 2 -- -- Philadelphia, PA........ 9 10.5 6.6 2 2 6.1% 5 Boston, MA.............. 10 14.8 12.0 -- 1 -- -- Miami-Ft. Lauderdale, FL..................... 12 11.1 8.6 2 3 18.1 2 Las Vegas, NV........... 39 17.3 13.2 3 -- 13.8 3 New Orleans, LA......... 40 9.4 9.1 2 1 12.5 3 West Palm Beach, FL..... 44 10.5 11.0 -- 1 -- -- Ft. Myers-Naples, FL.... 74 10.3 8.3 4 1 35.7 1 Greenville-New Bern- Jacksonville, NC....... 86 11.5 11.9 5 1 58.4 1 Fayetteville, NC........ 91 13.8 4.0 4 2 61.7 1 Augusta, GA............. 112 4.9 1.5 6 2 42.1 1 ---- ---- Total................. 28 16

For this report, we derived: . the 2000 radio market revenue rank from BIA Research, Inc. . the 1995-1999 radio market average annual revenue growth from Duncan's Radio Market Guide (2000 ed.). . the 2000 radio market revenue growth from Miller, Kaplan, Arase & Co. (December 2000 ed.). Because information was not available from Miller, Kaplan, Arase & Co. for the Atlanta, Boston, and West Palm Beach markets, for these markets we used Duncan's Radio Market Guide (2000 ed.). . our audience share and audience rank in target demographic data from surveys of persons, listening Monday through Sunday, 6 a.m. to 12 midnight, in the indicated demographic, as set forth in the Fall 2000 radio market reports published by The Arbitron Ratings Company. . our 2000 cluster market revenue rank and 2000 cluster market revenue share data from Miller, Kaplan, Arase & Co. (December 2000 ed.). . the viable station data for each market from Duncan's Radio Market Guide (2000 ed.). Duncan's defines viable stations as stations that are active and viable competitors for advertising dollars in a market. We present radio station and market data assuming the completion of our pending acquisitions. Further information about our radio stations on a market- by-market basis follows. ATLANTA, GA 2000 Radio Market Revenue Rank: 7

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- --------- ----------- ------------------ ------------------ WAEC- AM 2000 religious 35-64 -- -- WWWE- AM 2000 Hispanic 35-64 -- --

5 Market Overview Atlanta is the seventh largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Atlanta market have grown from approximately $170.0 million in 1995 to approximately $315.2 million in 1999 at an average annual rate of 16.7%. Radio market revenue grew 10.1% in 2000, as compared to 1999. In 1999, there were 17 viable stations in the Atlanta market. PHILADELPHIA, PA 2000 Radio Market Revenue Rank: 9 2000 Cluster Market Revenue Share: 6.1% 2000 Cluster Market Revenue Rank: 5

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- --------- ----------- ------------------ ------------------ WXTU-FM 1983 country 25-54 4.1% 10t WPTP-FM 1997 80's 25-49 1.7 17 WWDB-AM 1986 financial 35-64 men * -- WTMR-AM 1998 religious 35-64 * --

-------- t Tied for audience rank. * Less than 1%. Market Overview Philadelphia is the ninth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Philadelphia market have grown from approximately $192.2 million in 1995 to approximately $286.4 million in 1999 at an average annual rate of 10.5%. Radio market revenue grew 6.6% in 2000, as compared to 1999. In 1999, there were 19 viable stations in the Philadelphia market. BOSTON, MA 2000 Radio Market Revenue Rank: 10

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- -------- ----------- ------------------ ------------------ WRCA-AM 2000 Hispanic 25-54 -- --

Market Overview Boston is the tenth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Boston market have grown from approximately $171.0 million in 1995 to approximately $296.7 million in 1999 at an average annual rate of 14.8%. Radio market revenue grew 12.0% in 2000, as compared to 1999. In 1999, there were 18.5 viable stations in the Boston market. MIAMI-FT. LAUDERDALE, FL 2000 Radio Market Revenue Rank: 12 2000 Cluster Market Share: 18.1% 2000 Cluster Market Revenue Rank: 2

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- ----------- ----------- ------------------ ------------------ WPOW-FM 1986 dance CHR 18-34 10.9% 2 WQAM-AM 1996 sports/talk 25-54 men 4.4 5t WKIS-FM 1996 country 25-54 2.9 15 WWNN-AM 2000 health 35+ -- -- WHSR-AM 2000 foreign 25-54 -- -- language

-------- t Tied for audience rank. 6 Market Overview Miami-Ft. Lauderdale is the twelfth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Miami- Ft. Lauderdale market have grown from approximately $154.5 million in 1995 to approximately $235.1 million in 1999 at an average annual rate of 11.1%. Radio market revenue grew 8.6% in 2000, as compared to 1999. In 1999, there were 24.5 viable stations in the Miami-Ft. Lauderdale market. LAS VEGAS, NV 2000 Radio Market Revenue Rank: 39 2000 Cluster Market Share: 13.8% 2000 Cluster Market Revenue Rank: 3

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- ------------ ----------- ------------------ ------------------ KJUL-FM 2001 nostalgia 35-64 6.5% 4 KKLZ-FM 2001 classic rock 25-54 men 4.4 9 KSTJ-FM 2001 80's 25-54 4.9 9t

-------- t Tied for audience rank. Market Overview Las Vegas is the thirty-ninth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Las Vegas market have grown from approximately $38.0 million in 1995 to approximately $71.9 million in 1999 at an average annual rate of 17.3%. Radio market revenue grew 13.2% in 2000, as compared to 1999. In 1999, there were 19 viable stations in the Las Vegas market. NEW ORLEANS, LA 2000 Radio Market Revenue Rank: 40 2000 Cluster Market Share: 12.5% 2000 Cluster Market Revenue Rank: 3

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- ------------- ----------- ------------------ ------------------ WRNO-FM 2001 classic rock 25-54 men 7.7% 3t KMEZ-FM 2001 urban/ oldies 25-54 6.3 5t WBYU-AM 2001 nostalgia 25-54 * 25

-------- t Tied for audience rank. * Less than 1%. Market Overview New Orleans is the fortieth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the New Orleans market have grown from approximately $41.6 million in 1995 to approximately $59.5 million in 1999 at an average annual rate of 9.4%. Radio market revenue grew 9.1% in 2000, as compared to 1999. In 1999, there were 14 viable stations in the New Orleans market. WEST PALM BEACH, FL 2000 Radio Market Revenue Rank: 44

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- --------- ----------- ------------------ ------------------ WSBR-AM 2000 financial 35-64 men * 36t

-------- t Tied for audience rank. * Less than 1%. 7 Market Overview West Palm Beach is the forty-fourth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the West Palm Beach market have grown from approximately $33.7 million in 1995 to approximately $50.1 million in 1999 at an average annual rate of 10.5%. Radio market revenue grew 11.0% in 2000, as compared to 1999. In 1999, there were 13.5 viable stations in the West Palm Beach market. FT. MYERS-NAPLES, FL 2000 Radio Market Revenue Rank: 74 2000 Cluster Market Revenue Share: 35.7% 2000 Cluster Market Revenue Rank: 1

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- ---------------- ----------- ------------------ ------------------ WJBX-FM 1998 alternative rock 18-34 men 14.8% 1 WXKB-FM 1995 adult CHR 18-49 women 11.6 1 WRXK-FM 1986 classic rock 25-54 men 9.4 1 WJPT-FM 1998 nostalgia 55+ 8.1 2t WWCN-AM 1987 sports/talk 25-54 men 1.4 21t

-------- t Tied for audience rank. Market Overview Ft. Myers-Naples is the seventy-fourth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Ft. Myers-Naples market have grown from approximately $18.7 million in 1995 to approximately $27.6 million in 1999 at an average annual rate of 10.3%. Radio market revenue grew 8.3% in 2000, as compared to 1999. In 1999, there were 16.5 viable stations in the Ft. Myers-Naples market. GREENVILLE-NEW BERN-JACKSONVILLE, NC 2000 Radio Market Revenue Rank: 86 2000 Cluster Market Revenue Share: 58.4% 2000 Cluster Market Revenue Rank: 1

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- ------------------ ----------- ------------------ ------------------ WIKS-FM 1996 urban 25-54 11.8% 2 WSFL-FM 1991 classic rock 25-54 men 10.9 2t WXNR-FM 1996 alternative rock 18-34 men 10.5 3t WMGV-FM 1996 adult contemporary 25-54 women 10.0 3 WNCT-FM 1996 oldies 35-64 5.3 5 WNCT-AM 1996 Hispanic brokered 25-54 -- --

-------- t Tied for audience rank. Market Overview Greenville-New Bern-Jacksonville is the eighty-sixth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Greenville-New Bern-Jacksonville market have grown from approximately $14.6 million in 1995 to approximately $22.5 million in 1999 at an average annual rate of 11.5%. Radio market revenue grew 11.9% in 2000, as compared to 1999. In 1999, there were 11 viable stations in the Greenville-New Bern-Jacksonville market. 8 FAYETTEVILLE, NC 2000 Radio Market Revenue Rank: 91 2000 Cluster Market Revenue Share: 61.7% 2000 Cluster Market Revenue Rank: 1

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- ------------ ----------- ------------------ ------------------ WZFX-FM 1997 urban 18-49 16.2% 1 WKML-FM 1983 country 25-54 14.5 1 WFLB-FM 1996 oldies 35-64 8.4 4 urban/adult WUKS-FM 1997 contemporary 25-54 7.2 5 WYRU-AM 1997 religious 35-64 1.2 18t WAZZ-AM 1997 nostalgia 55+ * 35t

-------- t Tied for audience rank. * Less than 1%. Market Overview Fayetteville is the ninety-first largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Fayetteville market have grown from approximately $11.3 million in 1995 to approximately $18.9 million in 1999 at an average annual rate of 13.8%. Radio market revenue grew 4.0% in 2000, as compared to 1999. In 1999, there were 10 viable stations in the Fayetteville market. AUGUSTA, GA 2000 Radio Market Revenue Rank: 112 2000 Cluster Market Revenue Share: 42.1% 2000 Cluster Market Revenue Rank: 1

Target Audience Share in Audience Rank in Station Call Letters Year Acquired Format Demographic Target Demographic Target Demographic -------------------- ------------- ------------------ ----------- ------------------ ------------------ WGAC-AM 1993 news/talk/sports 35-64 13.0% 1 WKXC-FM pending country 25-54 11.1 1 WAJY-FM 1994 nostalgia 55+ 9.6 3 WCHZ-FM 1997 alternative rock 18-34 men 9.1 4t WGOR-FM 1992 oldies 35-64 6.1 4 WSLT-FM pending adult contemporary 25-54 4.8 9t WRDW-AM 2000 sports/talk 25-54 men 1.8 14t WRFN-FM 2000 sports/talk 25-54 men -- --

-------- t Tied for audience rank. Market Overview Augusta is the one hundred twelfth largest radio market in the United States based on 2000 radio market revenue. Radio market revenues in the Augusta market have grown from approximately $13.9 million in 1995 to approximately $16.8 million in 1999 at an average annual rate of 4.9%. Radio market revenue grew 1.5% in 2000, as compared to 1999. In 1999, there were 14.5 viable stations in the Augusta market. Competition; Changes in Broadcasting Industry The radio broadcasting industry is highly competitive. The success of each of our stations depends largely upon its audience ratings and its share of the overall advertising revenue within its market. Our stations compete for listeners and advertising revenue directly with other radio stations within their respective markets. Radio stations compete for listeners primarily on the basis of program content that appeals to a particular demographic group. By building a strong listener base consisting of a specific demographic group in each of our markets, we are able to attract advertisers seeking to reach those listeners. 9 The following are some of the factors that are important to a radio station's competitive position: . management experience; . the station's local audience rank in its market; . transmitter power; . assigned frequency; . audience characteristics; . local program acceptance; and . the number and characteristics of other radio stations and other advertising media in the market area. In addition, we attempt to improve our competitive position with promotional campaigns aimed at the demographic groups targeted by our stations and by sales efforts designed to attract advertisers. Despite the competitiveness within the radio broadcasting industry, some barriers to entry exist. The operation of a radio broadcast station requires a license from the FCC. The number of radio stations that can operate in a given market is limited by strict AM interference criteria and availability of FM radio frequencies allotted by the FCC to communities in that market. The number of stations that a single entity may operate in a market is further limited by the FCC's multiple ownership rules that regulate the number of stations serving the same area that may be owned or controlled by a single entity. Our stations also compete for audiences and advertising revenues within their respective markets directly with other radio stations, as well as with other media such as newspapers, magazines, network and cable television, outdoor advertising and direct mail. In addition, the radio broadcasting industry is subject to competition from new media technologies that are being developed or introduced such as: . satellite delivered digital audio radio service, which could result in the near term introduction of new subscriber-based satellite radio services with numerous channels and sound quality equivalent to that of compact discs; . audio programming by cable systems, direct broadcast satellite systems, internet content providers, personal communications services and other digital audio broadcast formats; . in-band on-channel digital radio, which could provide multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services; and . low power FM radio, which could result in additional FM radio broadcast outlets that are designed to serve localized areas. The radio broadcasting industry historically has grown despite the introduction of new technologies for the delivery of entertainment and information, such as television broadcasting, cable television, audio tapes and compact discs. A growing population and greater availability of radios, particularly car and portable radios, have contributed to this growth. We cannot assure you, however, that this historical growth will continue or that the development or introduction in the future of any new media technology will not have an adverse effect on the radio broadcasting industry. The FCC has adopted licensing and operating rules for satellite delivered audio and in April 1997 awarded two licenses for this service. Satellite delivered audio may provide a medium for the delivery by satellite or terrestrial means of multiple new audio programming formats to local and/ or national audiences. Digital technology also may be used in the future by terrestrial radio broadcast stations either on existing or alternate broadcasting frequencies, and the FCC has stated that it will consider making changes to its rules to permit AM and FM radio stations to offer digital sound following industry analysis of technical standards. In addition, the FCC has authorized an additional 100 kHz of bandwidth for the AM band and has allotted frequencies in this new band to certain existing AM station licensees that applied for migration to the expanded AM band, subject to the requirement that at the end of a transition period, those licensees return to the FCC either the license for their existing AM band station or the license for the expanded AM band station. 10 We cannot predict what other matters might be considered in the future by the FCC, nor can we assess in advance what impact, if any, the implementation of any of these proposals or changes might have on our business. We employ a number of on-air personalities and generally enter into employment agreements with these personalities to protect our interests in those relationships that we believe to be valuable. The loss of some of these personalities could result in a short-term loss of audience share, but we do not believe that the loss would have a material adverse effect on our business. Federal Regulation Of Radio Broadcasting The radio broadcasting industry is subject to extensive and changing regulation of, among other things, program content, advertising content, technical operations and business and employment practices. The ownership, operation and sale of radio stations are subject to the jurisdiction of the FCC. Among other things, the FCC: . assigns frequency bands for broadcasting; . determines the particular frequencies, locations, operating powers and other technical parameters of stations; . issues, renews, revokes, conditions and modifies station licenses; . determines whether to approve changes in ownership or control of station licenses; . regulates equipment used by stations; and . adopts and implements regulations and policies that directly affect the ownership, operation and employment practices of stations. The FCC has the power to impose penalties for violations of its rules or the Communications Act, including the imposition of monetary forfeitures, the issuance of short-term licenses, the imposition of a condition on the renewal of a license, non-renewal of licenses and the revocation of operating authority. The following is a brief summary of some provisions of the Communications Act and of specific FCC regulations and policies. The summary is not a comprehensive listing of all of the regulations and policies affecting radio stations. For further information concerning the nature and extent of federal regulation of radio stations, you should refer to the Communications Act, FCC rules and FCC public notices and rulings. FCC Licenses. Radio stations operate pursuant to renewable broadcasting licenses that are ordinarily granted by the FCC for maximum terms of eight years. A station may continue to operate beyond the expiration date of its license if a timely filed license renewal application is pending. During the periods when renewal applications are pending, petitions to deny license renewals can be filed by interested parties, including members of the public. The FCC is required to hold hearings on a station's renewal application if a substantial or material question of fact exists as to whether the station has served the public interest, convenience and necessity. If, as a result of an evidentiary hearing, the FCC determines that the licensee has failed to meet certain requirements and that no mitigating factors justify the imposition of a lesser sanction, then the FCC may deny a license renewal application. Historically, FCC licenses have generally been renewed. We have no reason to believe that our licenses will not be renewed in the ordinary course, although there can be no assurance to that effect. The non-renewal of one or more of our licenses could have a material adverse effect on our business. The FCC classifies each AM and FM station. An AM station operates on either a clear channel, regional channel or local channel. A clear channel is one on which AM stations are assigned to serve wide areas. Clear channel AM stations are classified as either: Class A stations, which operate on an unlimited time basis and are designated to render primary and secondary service over an extended area; Class B stations, which operate on an unlimited time basis and are designed to render service only over a primary service area; or Class D AM 11 stations, which operate either during daytime hours only, during limited times only or on an unlimited time basis with low nighttime power. A regional channel is one on which Class B and Class D AM stations may operate and serve primarily a principal center of population and the rural areas contiguous to it. A local channel is one on which AM stations operate on an unlimited time basis and serve primarily a community and the immediately contiguous suburban and rural areas. Class C AM stations operate on a local channel and are designed to render service only over a primary service area that may be reduced as a consequence of interference. The minimum and maximum facilities requirements for an FM station are determined by its class. FM class designations depend upon the geographic zone in which the transmitter of the FM station is located. In general, commercial FM stations are classified as follows, in order of increasing power and antenna height: Class A, B1, C3, B, C2, C1, C0 and C. The FCC recently adopted a new rule that subjects Class C FM stations that do not satisfy a certain antenna height requirement to an involuntary downgrade in class to Class C0 under certain circumstances. The following table sets forth the metropolitan market served, call letters, FCC license classification, frequency, power and FCC license expiration date of each of the stations that we will own or operate upon the purchase of radio stations in Augusta. In many cases, our licenses are held by wholly-owned subsidiaries. Pursuant to FCC rules and regulations, many AM radio stations are licensed to operate at a reduced power during the nighttime broadcasting hours, which results in reducing the radio station's coverage during the nighttime hours of operation. Both power ratings are shown, where applicable. For FM stations, the maximum effective radiated power in the main lobe is given.

Expiration Date of FCC Power in FCC Market Station Class Frequency Kilowatts License ------ ------- ----- --------- --------- ---------- Atlanta, GA............. WAEC-AM B 860 kHz 5 kW day/.5 kW night 04/01/2004 WWWE-AM D 1100 kHz 5 kW day 04/01/2004 Philadelphia, PA........ WXTU-FM B 92.5 MHz 15.5 kW 08/01/2006 WPTP-FM B 96.5 MHz 17.0 kW 08/01/2006 WTMR-AM B 800 kHz 5 kW day/.5 kW night 06/01/2006 WWDB-AM D 860 kHz 10 kW day 08/01/2006 Boston, MA.............. WRCA-AM B 1330 kHz 5 kW 04/01/2006 Miami-Ft. Lauderdale, FL..................... WQAM-AM B 560 kHz 5 kW day/1 kW night 02/01/2004 WPOW-FM C 96.5 MHz 100 kW 02/01/2004 WKIS-FM C 99.9 MHz 100 kW 02/01/2004 WWNN-AM B 1470 kHz 50 kW day/2.5 kW 02/01/2004 WHSR-AM B 980 kHz 5 kW day/1 kW night 02/01/2004 Las Vegas, NV........... KKLZ-FM C 96.3 MHz 100 kW 10/01/2005 KJUL-FM C 104.3 MHz 24.5 kW 10/01/2005 KSTJ-FM C2 105.5 MHz 3.7 kW 10/01/2005 New Orleans, LA......... WRNO-FM C 99.5 MHz 100 kW 06/01/2004 KMEZ-FM C3 102.9 MHz 4.7 kW 06/01/2004 WBYU-AM C 1450 kHz 1 kW 06/01/2004 West Palm Beach, FL..... WSBR-AM B 740 kHz 2.5 kW day/.94 kW night 02/01/2004 Ft. Myers-Naples, FL.... WXKB-FM C1 103.9 MHz 100 kW 02/01/2004 WRXK-FM C 96.1 MHz 100 kW 02/01/2004 WJBX-FM C2 99.3 MHz 50 kW 02/01/2004 WJST-FM A 106.3 MHz 6 kW 02/01/2004 WWCN-AM B 770 kHz 10 kW day/1 kW night 02/01/2004 Greenville-New Bern- Jacksonsville, NC...... WSFL-FM C1 106.5 MHz 100 kW 12/01/2003 WIKS-FM C1 101.9 MHz 100 kW 12/01/2003 WNCT-AM B 1070 kHz 10 kW day/night 12/01/2003

12

Expiration Date of FCC Power in FCC Market Station Class Frequency Kilowatts License ------ ------- ----- --------- --------- ---------- WNCT-FM C 107.9 MHz 100 kW 12/01/2003 WXNR-FM C2 99.5 MHz 16.5 kW 12/01/2003 WMGV-FM C1 103.3 MHz 100 kW 12/01/2003 Fayetteville, NC...... WZFX-FM C1 99.1 MHz 100 kW 12/01/2003 WKML-FM C 95.7 MHz 100 kW 12/01/2003 WFLB-FM C 96.5 MHz 100 kW 12/01/2003 WUKS-FM C3 107.7 MHz 5.2 kW 12/01/2003 WAZZ-AM C 1490 kHz 1 kW day/night 12/01/2003 WYRU-AM B 1160 kHz 5 kW day/.25 kW night 12/01/2003 Augusta, GA........... WGAC-AM B 580 kHz 5 kW day/1 kW night 04/01/2004 WGOR-FM C3 93.9 MHz 13 kW 04/01/2004 WCHZ-FM C3 95.1 MHz 5.7 kW 04/01/2004 WAJY-FM A 102.7 MHz 3 kW 12/01/2003 WRFN-FM A 93.1 MHz 4.1 kW 04/01/2004 WRDW-AM B 1480 kHz 5 kW day/night 04/01/2004 WKXC-FM C2 99.5 MHz 24 kW 12/01/2003 WSLT-FM A 98.3 MHz 2.8 kW 12/01/2003

Transfers or Assignment of License. The Communications Act prohibits the assignment of broadcast licenses or the transfer of control of a broadcast licensee without the prior approval of the FCC. In determining whether to grant such approval, the FCC considers a number of factors pertaining to the licensee and proposed licensee, including: . compliance with the various rules limiting common ownership of media properties in a given market; . the character of the licensee and those persons holding attributable interests in the licensee; and . compliance with the Communications Act's limitations on alien ownership as well as compliance with other FCC regulations and policies. To obtain FCC consent to assign or transfer control of a broadcast license, appropriate applications must be filed with the FCC. If the application involves a substantial change in ownership or control, the application must be placed on public notice for not less than 30 days during which time petitions to deny or other objections against the application may be filed by interested parties, including members of the public. These types of petitions are filed from time to time with respect to proposed acquisitions. Informal objections to assignment and transfer of control applications may be filed at any time up until the FCC acts on the application. If the application does not involve a substantial change in ownership or control, it is a pro forma application. The pro forma application is nevertheless subject to having informal objections filed against it. When passing on an assignment or transfer application, the FCC is prohibited from considering whether the public interest might be served by an assignment or transfer of the broadcast license to any party other than the assignee or transferee specified in the application. If the FCC grants an assignment or transfer application, interested parties have 30 days from public notice of the grant to seek reconsideration of that grant. The FCC usually has an additional ten days to set aside the grant on its own motion. Multiple Ownership Rules. The Communications Act and FCC rules impose specific limits on the number of commercial radio stations an entity can own in a single market. These rules may preclude us from acquiring certain stations we might otherwise seek to acquire. The rules also effectively prevent us from selling stations in a market to a buyer that has reached its ownership limit in the market unless that buyer divests other stations. The local radio ownership rules are as follows: . in markets with 45 or more commercial radio stations, ownership is limited to eight commercial stations, no more than five of which can be either AM or FM; . in markets with 30 to 44 commercial radio stations, ownership is limited to seven commercial stations, no more than four of which can be either AM or FM; 13 . in markets with 15 to 29 commercial radio stations, ownership is limited to six commercial stations, no more than four of which can be either AM or FM; and . in markets with 14 or fewer commercial radio stations, ownership is limited to five commercial stations or no more than 50% of the market's total, whichever is lower, and no more than three of which can be either AM or FM. The FCC is also reportedly considering proposing a policy that would give special review to a proposed transaction if it would enable a single owner to attain a high degree of revenue concentration in a market. In connection with this, the FCC has invited comment on the impact of concentration in public notices concerning proposed transactions, and has delayed or refused its consent in some cases because of revenue concentration. The FCC has revised its radio/television cross-ownership rule to allow for greater common ownership of television and radio stations. The revised radio/television cross-ownership rule permits a single owner to own up to two television stations, consistent with the FCC's rules on common ownership of television stations, together with one radio station in all markets. In addition, an owner will be permitted to own additional radio stations, not to exceed the local ownership limits for the market, as follows: . in markets where 20 media voices will remain after the consummation of the proposed transaction, an owner may own an additional 5 radio stations, or, if the owner only has one television station, an additional 6 radio stations; and . in markets where 10 media voices will remain after the consummation of the proposed transaction, an owner may own an additional 3 radio stations. A media voice includes each independently-owned, full power television and radio station and each daily newspaper, plus one voice for all cable television systems operating in the market. In addition to the limits on the number of radio stations and radio/television combinations that a single owner may own, the FCC's broadcast/newspaper cross-ownership rule prohibits the same owner from owning a broadcast station and a daily newspaper in the same geographic market. The FCC generally applies its ownership limits to attributable interests held by an individual, corporation, partnership or other association. In the case of corporations controlling broadcast licenses, the interests of officers, directors and those who, directly or indirectly, have the right to vote 5% or more of the corporation's voting stock are generally attributable. In addition, certain passive investors are attributable if they hold 20% or more of the corporation's voting stock. The FCC recently revoked a rule that formerly provided that interests of minority shareholders in a corporation were not attributable if a single entity or individual held 50% or more of that corporation's voting stock. In revoking the rule, the FCC has, however, grandfathered as non-attributable those minority stock interests that were held as of the date of the FCC's order. The FCC has adopted a rule, known as the equity-debt-plus rule, that causes certain creditors or investors to be attributable owners of a station, regardless of whether there is a single majority stockholder. Under this new rule, a major programming supplier or a same-market owner will be an attributable owner of a station if the supplier or owner 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. A major programming supplier includes any programming supplier that provides more than 15% of the station's weekly programming hours. A same-market owner includes any attributable owner of a media company, including broadcast stations, cable television and newspapers, located in the same market as the station, but only if the owner is attributable under an FCC attribution rule other than the equity-debt-plus rule. The attribution rules limit the number of radio stations we may acquire or own in any market. Alien Ownership Rules. The Communications Act prohibits the issuance or holding of broadcast licenses by persons who are not U.S. citizens, whom the FCC rules refer to as "aliens," including any corporation if more than 20% of its capital stock is owned or voted by aliens. In addition, the FCC may prohibit any corporation from holding a broadcast license if the corporation is controlled by any other 14 corporation of which more than 25% of the capital stock is owned of record or voted by aliens, if the FCC finds that the prohibition is in the public interest. Our certificate of incorporation prohibits the ownership, voting and transfer of our capital stock in violation of the FCC restrictions, and prohibits the issuance of capital stock or the voting rights such capital stock represents to or for the account of aliens or corporations otherwise subject to domination or control by aliens in excess of the FCC limits. The certificate of incorporation authorizes our board of directors to enforce these prohibitions. For example, the certificate of incorporation provides for the redemption of shares of our capital stock by action of the board of directors to the extent necessary to comply with these alien ownership restrictions. Time Brokerage Agreements. Over the past few years, a number of radio stations have entered into what have commonly been referred to as time brokerage agreements. While these agreements may take varying forms, under a typical time brokerage agreement, separately owned and licensed radio stations agree to enter into cooperative arrangements of varying sorts, subject to compliance with the requirements of antitrust laws and with FCC's rules and policies. Under these arrangements, separately-owned stations could agree to function cooperatively in programming, advertising sales and similar matters, subject to the requirement that the licensee of each station maintain independent control over the programming and operations of its own station. One typical type of time brokerage agreement is a programming agreement between two separately-owned radio stations serving a common service area, whereby the licensee of one station provides substantial portions of the broadcast programming for airing on the other licensee's station, subject to ultimate editorial and other controls being exercised by the latter licensee, and sells advertising time during those program segments. The FCC's rules provide that a radio station that brokers more than 15% of the weekly broadcast time on another station serving the same market will be considered to have an attributable ownership interest in the brokered station for purposes of FCC's local radio ownership limits. As a result, in a market where we own a radio station, we would not be permitted to enter into a time brokerage agreement with another radio station in the same market if we could not own the brokered station under the multiple ownership rules, unless our programming on the brokered station constituted 15% or less of the brokered station's programming time on a weekly basis. FCC rules also prohibit a broadcast station from duplicating more than 25% of its programming on another station in the same broadcast service, that is AM-AM or FM-FM through a time brokerage agreement where the brokered and brokering stations which it owns or programs serve substantially the same area. 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 had developed in the past to promote the broadcast of certain types of programming responsive to the needs of a station's community of license. A licensee continues to be required, however, to present programming that is responsive to issues of the station's community of license and to maintain records demonstrating this responsiveness. Complaints from listeners concerning a station's programming often will be considered by the FCC when it evaluates renewal applications of a licensee, although listener complaints may be filed at any time, are required to be maintained in the station's public file and generally may be considered by the FCC at any time. Stations also must pay regulatory and application fees and follow various rules promulgated under the Communications Act. Those rules regulate, among other things, political advertising, sponsorship identifications, the advertisement of contests and lotteries, obscene and indecent broadcasts and technical operations, including limits on human exposure to radio frequency radiation. On January 20, 2000, the FCC adopted new rules prohibiting employment discrimination by broadcast stations on the basis of race, religion, color, national origin, and gender; and requiring broadcasters to implement programs to promote equal employment opportunities at their stations. The rules generally require broadcast stations to disseminate information about job openings widely so that all qualified applicants, including minorities and women, have an adequate opportunity to compete for the job. Broadcasters may fulfill this requirement by sending the station's job vacancy information to organizations that request it, participating in community outreach programs, or designing an alternative recruitment program. Broadcasters with five or 15 more full-time employees must place in their public files annually a report detailing their recruitment efforts and must file a statement with the FCC certifying compliance with the rules every two years. Broadcasters with ten or more full-time employees must file their annual reports with the FCC midway through their license term. Broadcasters also must file employment information with the FCC annually for statistical purposes. The FCC recently suspended the effectiveness of its EEO rules in response to a January 16, 2001 decision of the Court of Appeals for the District of Columbia Circuit, which vacated the FCC's rules. The FCC recently issued a decision holding that a broadcast station may not deny a candidate for federal political office a request for broadcast advertising time solely on the grounds that the amount of time requested is not the standard length of time which the station offers to its commercial advertisers. This decision is currently being reconsidered by the FCC. The effect that this FCC decision will have on our programming and commercial advertising operations is uncertain. Proposed and Recent Changes. Congress and the FCC may in the future consider and adopt new laws, regulations and policies regarding a wide variety of matters that could affect, directly or indirectly, the operation, ownership and profitability of our radio stations, including the loss of audience share and advertising revenues for our radio stations, and an inability to acquire additional radio stations or to finance those acquisitions. Such matters may include: . changes in the FCC's cross-interest, multiple ownership and attribution policies including the definition of the local market for multiple ownership purposes; . regulatory fees, spectrum use fees or other fees on FCC licenses; . streaming fees for radio; . foreign ownership of broadcast licenses; . restatement in revised form of FCC's equal employment opportunity rules and revisions to the FCC's rules relating to political broadcasting, including free air time to candidates; . technical and frequency allocation matters; and . proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages on radio. The FCC currently is considering standards for evaluating, authorizing, and implementing terrestrial digital audio broadcasting technology, including In- Band On-Channel(TM) technology for FM radio stations. Digital audio broadcasting's advantages over traditional analog broadcasting technology include improved sound quality and the ability to offer a greater variety of auxiliary services. In-Band On-Channel technology would permit an FM station to transmit radio programming in both analog and digital formats, or in digital only formats, using the bandwidth that the radio station is currently licensed to use. It is unclear what regulations the FCC will adopt regarding Digital Audio Broadcasting or In-Band On-Channel technology and what effect such regulations would have on our business or the operations of its radio stations. On January 20, 2000, the FCC voted to adopt rules creating a new low power FM radio service. The new low power stations will operate at a maximum power of between 10 and 100 watts in the existing FM commercial and non-commercial band. Low power stations may be used by governmental and non-profit organizations to provide noncommercial educational programming or public safety and transportation radio services. No existing broadcaster or other media entity, including us, will be permitted to have an ownership interest or enter into any program or operating agreement with any low power FM station. During the first two years of the new service, applicants must be based in the area that they propose to serve. Applicants will not be permitted to own more than one station nationwide during the initial two year period. After the initial two year period, entities will be allowed to own up to five stations nationwide, and after three years, the limit will be raised to ten stations nationwide. A single person or entity may not own two low power stations whose transmitters are less than seven miles from each other. The authorizations for the new stations will not be transferable. The FCC has begun to accept applications for new low power FM stations. 16 At this time, it is difficult to assess the competitive impact of these new stations. The new low power stations must comply with certain technical requirements aimed at protecting existing FM radio stations from interference, although we cannot be certain of the level of interference that low power stations will cause after they begin operating. Moreover, if low power FM stations are licensed in the markets in which we operate our stations, the low power stations may compete for listeners and advertisers. The low power stations may also limit our ability to obtain new license or to modify our existing facilities. Any of these events may materially and adversely impact our operating performance. Finally, the FCC has adopted procedures for the auction of broadcast spectrum in circumstances where two or more parties have filed for new or major change applications which are mutually exclusive. Such procedures may limit our efforts to modify or expand the broadcast signals of our stations. We cannot predict what other matters might be considered in the future by the FCC or Congress, nor can we judge in advance what impact, if any, the implementation of any of these proposals or changes might have on our business. Federal Antitrust Laws. The agencies responsible for enforcing the federal antitrust laws, the Federal Trade Commission or the Department of Justice, may investigate certain acquisitions. We cannot predict the outcome of any specific FTC or Department of Justice investigation. Any decision by the FTC or the Department of Justice to challenge a proposed acquisition could affect our ability to consummate the 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 FTC and the Department of Justice 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 FTC or the Department of Justice 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. 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. Employees On December 31, 2000, we had a staff of 459 full-time employees and 163 part-time employees. We are a party to a collective bargaining agreement with the American Federation of Television and Radio Artists. This agreement applies only to some employees at WXTU-FM in Philadelphia. The collective bargaining agreement expired on March 31, 2000; however we continue to operate under the same provisions as we renegotiate the agreement. We believe that our relations with our employees are good. 17 Environmental As the owner, lessee or operator of various real properties and facilities, we are subject to various federal, state and local environmental laws and regulations. Historically, compliance with these laws and regulations has not had a material adverse effect on our business. There can be no assurance, however, that compliance with existing or new environmental laws and regulations will not require us to make significant expenditures of funds. ITEM 2. PROPERTIES The types of facilities required to support each of our radio stations include offices, studios and transmitter and antenna sites. We typically lease our studio and office space with lease terms that expire in six months to ten years, although we do own some of our facilities. Our principal executive offices are located at 3033 Riviera Drive, Suite 200, Naples, Florida 34103. We lease that building from an affiliated company. We currently have a month to month lease and we pay approximately $7,400 per month. We lease a majority of our main transmitter and antenna sites from related parties. The transmitter and antenna site for each station is generally located so as to provide maximum market coverage, consistent with the station's FCC license. No one facility is material to us. We believe that our facilities are generally in good condition and suitable for our operations. However, we continually look for opportunities to upgrade our facilities and may do so in the future. Substantially all of our properties and equipment serve as collateral for our obligations under our credit facility. ITEM 3. LEGAL PROCEEDINGS We currently and from time to time are involved in litigation incidental to the conduct of our business, but we are not a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us. On December 29, 1998, we filed a lawsuit in the Circuit Court of the Eleventh Judicial Circuit, Miami-Dade County, against the Florida Marlins Inc., Florida Marlins Baseball Team, Ltd., and Front Row Communications for breach of contract and other related claims. The lawsuit is based on actions taken by the Florida Marlins major league baseball team to trade or release key players of the Marlins after the 1997 season, thereby transforming the Marlins into a non- competitive team. On January 14, 2000, the court dismissed the Marlins' motion for summary judgment. On May 22, 1999, the Marlins countersued for breach of contract. On January 10, 2001, we settled both lawsuits with the other parties with no material impact on the financial statements. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. 18 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Beasley Broadcast Group has two authorized and outstanding classes of equity securities: Class A common stock, $.001 par value, and Class B commons stock, $.001 par value. Class A common stock began trading on Nasdaq's National Market System on February 11, 2000. There is no established public trading market for our Class B common stock. Beasley Broadcast Group did not pay any dividends in the year 2000. Quarterly high and low stock prices are shown below:

High Low ------ ----- February 11--March 31, 2000..................................... 14.125 9.250 Second Quarter.................................................. 14.750 7.750 Third Quarter................................................... 15.813 9.688 Fourth Quarter.................................................. 9.953 7.563

Before our reorganization, the various subchapter S corporations and partnerships comprising Beasley Broadcast Group have occasionally made cash distributions to their equity holders. As a public company, we expect to retain earnings, if any, for use in the operation and expansion of our business. We do not anticipate paying any cash dividends in the foreseeable future. Additionally, our credit facility prohibits us from paying cash dividends and restricts our ability to make other distributions with respect to our capital stock. To effect our reorganization and pursuant to the Beasley Broadcast Group, Inc. Contribution Agreement dated as of November 23, 1999, we agreed to issue shares of our Class A common stock to Reed Miami Holdings, Inc. and J. Daniel Highsmith in exchange for all of their interests held in Beasley-Reed Acquisition Partnership and Beasley Broadcasting of Eastern North Carolina, Incorporated. Under this agreement, Reed Miami Holdings, Inc. and Mr. Highsmith received, on February 11, 2000, a total of 402,068 shares of Class A common stock, which is the number of shares having the value of their pre-offering interest in the entities that will become Beasley Broadcast Group, Inc. Therefore, based on the initial public offering price of $15.50, Beasley Broadcast Group received approximately $6.2 million of value for the interests in Beasley-Reed Acquisition Partnership and Beasley Broadcasting of Eastern North Carolina, Incorporated in exchange for approximately $6.2 million of shares of its Class A common stock. These transactions were effected without registration under the Securities Act in reliance upon the exemptions from registration contained in Section 4(2) of the Securities Act. Section 4(2) exempts transactions by an issuer not involving a public offering from the provisions of Securities Act Section 5. We offered Class A common stock to these stockholders, each of whom is an accredited investor under Rule 501 under the Securities Act and each of whom is actively involved in the management of radio stations owned by the registrant, on a private basis not involving a public offering. Additionally, pursuant to the Beasley Broadcast Group, Inc. Contribution Agreement dated as of November 23, 1999, we also agreed to issue shares of our Class B common stock to George G. Beasley, members of his immediate family and affiliated trusts in exchange for all the interests held by these persons in the companies we now hold. Under this agreement, the Beasley family members and affiliated trusts received on February 11, 2000 a total of 17,021,373 shares of Class B common stock, which is the number of shares having the value of their pre-offering interest in the entities that will become Beasley Broadcast Group, Inc. Therefore, based on the initial public offering price of $15.50 for Class A common stock, Beasley Broadcast Group received approximately $263.8 million of value for the interests in the entities that became Beasley Broadcast Group in exchange for approximately $263.8 million of shares of Class B common stock. These transactions were effected without registration under the Securities Act in reliance upon the exemptions from registration contained in Section 4(2) of the Securities Act. Section 4(2) exempts transactions by an issuer not involving a public offering from the provisions of Securities Act Section 5. We offered shares of its Class B common stock to George G. Beasley, members of his immediate family and affiliated entities, on a private basis not involving a public offering. 19 ITEM 6. SELECTED FINANCIAL DATA We have derived the selected financial data shown below for the years ended December 31, 1996 and 1997 from our audited combined financial statements, which are not included in this report. We have derived the selected financial data shown below for the years ended December 31, 1998 and 1999 from our audited combined financial statements included elsewhere in this report. We have derived the selected financial data shown below for the year ended December 31, 2000 from our audited consolidated financial statements included elsewhere in this report. As you review the information contained in the following table and throughout this report, you should note the following: . During the periods presented we operated as a series of partnerships and subchapter S corporations under the Internal Revenue Code. Accordingly, we were not liable for federal and some state and local corporate income taxes, as we would have been if we had been treated as a subchapter C corporation. During these periods, our stockholders included our taxable income or loss in their federal and applicable state and local income tax returns. The pro forma amounts shown in the table reflect provisions for federal, state and local income taxes, applied to income (loss) before pro forma income taxes, as if we had been taxed as a subchapter C corporation. On February 11, 2000, our subchapter S status terminated. For a more detailed description of our corporate reorganization, see "Business--Initial Public Offering and Corporate Reorganization." . For purposes of our historical financial statements, the term pro forma refers to the adjustments necessary to reflect our status as a subchapter C corporation for income tax purposes rather than a series of subchapter S corporations and partnerships, distributions to equity holders for income taxes on income of entities comprising Beasley Broadcast Group prior to the reorganization, the distribution of untaxed retained income and subsequent re-contribution of the same amounts as additional paid-in capital and the fair value adjustment necessary to record the acquisition of minority shareholder interest using the purchase method of accounting. . Broadcast cash flow consists of operating income (loss) before corporate general and administrative expenses, equity appreciation rights, format change expenses, depreciation and amortization, and impairment loss on long-lived assets. For the periods shown in the following table, broadcast cash flow is unaffected by local management and time brokerage agreements of $1,075,000 for the fiscal year ended December 31, 1996 and zero for other periods. The fees are included in other non-operating income (expense). . Broadcast cash flow margin represents broadcast cash flow as a percentage of net revenues. . EBITDA consists of broadcast cash flow minus corporate general and administrative expenses. . After-tax cash flow consists of net income (loss) minus gains on sale of radio stations plus the following: equity appreciation rights, format change expenses, depreciation and amortization, impairment loss on long- lived assets, deferred income tax expense (or minus deferred income tax benefit), nonrecurring items and other non-cash charges. . No expense for equity appreciation rights has been recorded for the periods presented other than the years ended December 31, 1999 and 2000. Although broadcast cash flow, EBITDA and after-tax cash flow are not measures of performance or liquidity calculated in accordance with generally accepted accounting principles, we believe that these measures are useful to an investor in evaluating our performance. These measures are widely used in the broadcast industry to evaluate a radio company's operating performance. However, you should not consider these measures in isolation or as substitutes for operating income, cash flows from operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. In addition, because broadcast cash flow, EBITDA and after-tax cash flow are not calculated in accordance with generally accepted accounting principles, they are not necessarily comparable to similarly titled measures employed by other companies. 20 The comparability of the historical financial information reflected below has been significantly affected by acquisitions and dispositions. You should read the selected financial data together with "Management Discussion and Analysis of Financial Condition and Results of Operations" and our combined financial statements and the related notes included elsewhere in this report.

Year ended December 31, ------------------------------------------------------------------- 1996 1997 1998 1999 2000 ----------- ----------- ----------- ----------- ----------- (in thousands except per share data, shares outstanding and margin data) Operating Data: Net revenues............ $ 62,413 $ 73,704 $ 81,433 $ 93,621 $ 106,154 Operating expenses: Radio station operating expenses.... 42,163 55,247 61,692 66,661 71,725 Corporate general and administrative........ 2,233 2,055 2,498 2,764 3,992 Equity appreciation rights................ -- -- -- 606 1,174 Format change expenses.............. -- -- -- -- 1,545 Depreciation and amortization.......... 8,317 14,174 16,096 16,410 17,409 Impairment loss on long-lived assets..... -- 4,124 -- -- -- ----------- ----------- ----------- ----------- ----------- Total operating expenses............ 52,713 75,600 80,286 86,441 95,845 Operating income (loss)............ 9,700 (1,896) 1,147 7,180 10,309 Other income (expense): Interest expense....... (9,340) (13,606) (13,602) (14,008) (8,813) Unrealized loss on investment............ -- -- -- -- (2,400) Other non-operating income (expense)...... (2,025) 54 (160) 776 304 Gain on sale of radio stations.............. 16,773 82,067 4,028 -- -- ----------- ----------- ----------- ----------- ----------- Total other income (expense)........... 5,408 68,515 (9,734) (13,232) (10,909) Income (loss) before income taxes............. 15,108 66,619 (8,587) (6,052) (600) Current income tax expense................ -- -- -- -- 3,598 Deferred income tax expense................ -- -- -- -- 25,400 ----------- ----------- ----------- ----------- ----------- Net income (loss)....... $ 15,108 $ 66,619 $ (8,587) $ (6,052) $ (29,598) =========== =========== =========== =========== =========== Pro-forma current income tax expense (benefit).. 567 7,054 (5,010) 692 N/A Pro-forma deferred income tax expense (benefit).............. 5,318 18,741 1,760 (2,896) N/A ----------- ----------- ----------- ----------- ----------- Pro-forma net income (loss)................. $ 9,223 $ 40,824 $ (5,337) $ (3,848) N/A =========== =========== =========== =========== =========== Basic and diluted net loss per share......... -- -- -- -- (1.26) Pro forma basic and diluted net income (loss) per share....... 0.53 2.34 (0.31) (0.22) -- Weighted average common shares outstanding-- basic and diluted...... 17,423,441 17,423,441 17,423,441 17,423,441 23,506,091 Other Data: Broadcast cash flow..... $ 20,250 $ 18,457 $ 19,741 $ 26,960 $ 34,429 Broadcast cash flow margin................. 32 % 25 % 24 % 29 % 32 % EBITDA before net income or loss from local management and time brokerage Agreements... $ 18,017 $ 16,402 $ 17,243 $ 24,196 $ 30,438 After tax cash flow..... -- -- -- -- 18,473 Pro-forma after tax cash flow................... 6,085 (4,204) 8,491 10,379 -- Cash provided by (used in): Operating activities... $ 5,303 $ 1,586 $ 4,921 $ 7,195 $ 7,705 Investing activities... (66,300) 18,871 (12,527) (2,760) (29,057) Financing activities... 63,152 (17,052) 4,689 (2,192) 20,092

As of December 31, ------------------------------------------------------------------- 1996 1997 1998 1999 2000 ----------- ----------- ----------- ----------- ----------- (in thousands) Balance Sheet: Cash and cash equivalents............ $ 4,273 $ 7,678 $ 4,760 $ 7,003 $ 5,743 Intangibles, net........ 100,442 145,487 151,048 137,287 164,894 Total assets............ 145,707 193,440 194,773 185,861 218,159 Long-term debt.......... 155,149 152,644 163,285 163,123 103,487 Total stockholders' equity (deficit)....... (25,703) 19,579 6,041 (2,919) 78,958

21 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion together with the financial statements and related notes included elsewhere in this report. The results discussed below are not necessarily indicative of the results to be expected in any future periods. General A radio broadcasting company derives its revenues primarily from the sale of broadcasting time to local and national advertisers. The advertising rates that a radio station is able to charge and the number of advertisements that can be broadcast without jeopardizing listener levels largely determine those revenues. Advertising rates are primarily based on three factors: . a radio station's audience share in the demographic groups targeted by advertisers, as measured principally by quarterly reports issued by The Arbitron Ratings Company; . the number of radio stations in the market competing for the same demographic groups; and . the supply of and demand for radio advertising time. In 2000, we generated 72.2% of our revenues from local advertising, which is sold primarily by each individual local radio station's sales staff. We generated 19.7% of our revenues from national spot advertising in 2000, which is purchased through independent, national advertising sales representatives by customers that want to advertise nationwide. We generated the balance of our revenues principally from promotional events and sales to broadcasting networks that purchase commercial airtime. We include revenues recognized under a time brokerage agreement or similar sales agreement for radio stations operated by us before acquiring the radio stations in net revenues, while we reflect operating expenses associated with these radio stations in station operating expenses. Consequently, there is no difference in the method of revenue and operating expense recognition between a radio station operated by us under a time brokerage agreement or similar sales agreement and a radio station owned and operated by us. For the periods discussed below, revenues and operating expenses under time brokerage agreements or similar sales agreements were not material for years subsequent to 1996. Since 1997, we have not operated any stations under time brokerage agreements or other similar sales agreements. Several factors may adversely affect a radio broadcasting company's performance in any given period. In the radio broadcasting industry, seasonal revenue fluctuations are common and are due primarily to variations in advertising expenditures by local and national advertisers. Typically, revenues are lowest in the first calendar quarter of the year. We generally incur advertising and promotional expenses to increase listenership and Arbitron ratings. However, because Arbitron reports ratings quarterly in most of our markets, any increased ratings, and therefore increased advertising revenues, tend to lag behind the incurrence of advertising and promotional spending. 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 our use of trade agreements and during the past five years have held barter revenues under 5% of our gross revenues and barter related broadcast cash flow under 3% of our broadcast cash flow. However, barter revenues increased as a percentage of our gross revenues and barter related broadcast cash flow increased as a percentage of our broadcast cash flow in fiscal 2000 due to our investments in eTour, Inc. and FindWhat.com. We calculate same station results by comparing the performance of radio stations operated by us at the end of a relevant period to the performance of those same stations, whether or not operated by us, in the prior 22 year's corresponding period, including the effect of barter revenues and expenses. Same station results exclude WPTP-FM in the Philadelphia market which changed formats during the fourth quarter of 2000. Broadcast cash flow consists of operating income before corporate general and administrative expenses, equity appreciation rights, format change expenses, and depreciation and amortization, and may not be comparable to similarly titled measures employed by other companies. Same station broadcast cash flow is the broadcast cash flow of the radio stations included in our same station calculations. For purposes of the following discussion, pro forma net income represents historical income before income taxes adjusted as if we were treated as a subchapter C corporation during all relevant periods at an effective tax rate of 38.62%, applied to income before income taxes. Results of Operations Several factors have affected our results of operations in the year ended December 31, 2000 that did not affect our historical results of operations. First, we redeemed, for cash, equity appreciation rights previously granted to some of our station managers, as we do not believe this form of compensation is well-suited to public companies. In connection with this redemption, we recorded an expense of approximately $606,000 and $1,174,000 in the fourth quarter of 1999 and first quarter of 2000, respectively. Second, in connection with our reorganization on February 11, 2000, our net stockholders' equity was reduced by approximately $27.6 million to establish the net deferred tax liability resulting from the termination of our subchapter S status. Third, in connection with the format change at WPTP-FM in the Philadelphia market on November 6, 2000, we recorded one-time expenses of approximately $1.5 million during the fourth quarter of 2000. Finally, corporate general and administrative expenses have increased as we incur the additional reporting and compliance costs of operating as a public company. Additionally, we have one contract that will continue to negatively affect our operating results going forward. In 1997, we entered into contracts for the radio broadcast rights relating to the Miami Dolphins, Florida Marlins and Florida Panthers sports franchises. These contracts grant WQAM-AM the exclusive, English language rights for live radio broadcasts of the sporting events of these franchises for a five year term which began in 1997. The contracts require us to pay fees and to provide commercial advertising and other considerations. As of December 31, 2000, remaining payments of fees are as follows: $8.8 million in 2001 and $359,000 in 2002. For the years ended December 31, 1998, 1999 and 2000, the contract expense calculated on a straight-line basis and other direct expenses exceeded related revenues by $3,617,000, $2,770,000 and $4,034,000, respectively. Unless we are able to generate significantly more revenues under these contracts in the future, they are likely to have a material adverse effect on our results of operations on a going-forward basis. However, in light of the uncertainty regarding future revenues, the amount of any future loss cannot be determined at this time. Year Ended December 31, 2000 Compared to Year Ended December 31, 1999 Net Revenue. Net revenue increased 13.4% to $106.2 million for 2000 from $93.6 million for 1999. The increase was primarily due to revenue growth at most of our existing radio stations, particularly in the Miami-Ft. Lauderdale and Greenville-New Bern-Jacksonville markets. In addition, net revenues increased due to our radio station acquisitions in the Atlanta, Boston, Miami- Ft. Lauderdale and West Palm Beach markets. Net revenues decreased in the Philadelphia market due to programming changes. On a same station basis, net revenues increased 10.8% to $99.7 million for 2000 from $90.0 million for 1999. Station Operating Expenses. Station operating expenses increased 7.6% to $71.7 million for 2000 from $66.7 million for 1999. The increase was primarily due to increased station operating expenses at most of our existing radio stations associated with generating the growth in net revenues. In addition, station operating expenses increased due to our radio station acquisitions in the Atlanta, Boston, Miami-Ft. Lauderdale and West Palm Beach markets. Station operating expenses decreased in the Philadelphia market due to programming changes. On a same station basis, station operating expenses increased 7.4% to $65.2 million for 2000 from $60.7 million for 1999. 23 Corporate General and Administrative Expenses. Corporate general and administrative expenses increased 44.4% to $4.0 million for 2000 from $2.8 million for 1999. The increase was primarily due to higher general and administrative expenses associated with our revenue growth over the same period and from operating as a public company. Depreciation and Amortization. Depreciation and amortization increased 7.9% to $17.7 million for 2000 from $16.4 million for 1999. The increase was primarily due to additional amortization and depreciation associated with the acquisitions of radio stations in Atlanta, Boston, Miami-Ft. Lauderdale and West Palm Beach markets. Interest Expense. Interest expense decreased 37.1% to $8.8 million in 2000 from $14.0 million for 1999. The decrease was primarily due to the repayment of $58.5 million of the credit facility as well as the repayment of all outstanding notes payable to related parties with proceeds from the initial public offering. This decrease was partially offset by an increase in interest expense due to financing the radio station acquisitions in the Atlanta, Boston, Miami-Ft. Lauderdale and West Palm Beach markets with borrowings from our credit facility. Broadcast Cash Flow. Broadcast cash flow increased 27.7% to $34.4 million for 2000 from $27.0 million for 1999. The increase was primarily due to the additional broadcast cash flow generated through revenue growth and increased operating efficiencies at most of our existing radio stations, particularly in the Greenville-New Bern-Jacksonville and Philadelphia markets. In addition, broadcast cash flow increased due to our radio station acquisitions in the Atlanta, Boston, Miami-Ft. Lauderdale and West Palm Beach markets. On a same station basis, broadcast cash flow increased 17.8% to $34.5 million for 2000 from $29.3 million for 1999. Income (Loss) Before Income Taxes. We experienced a loss before income taxes of $600,000 for 2000 versus a loss before pro forma income taxes of $6.1 million for 1999. The decrease in the loss was primarily due to the additional income before income taxes generated through the revenue growth, increased operating efficiencies at most of our existing radio stations, and a decrease in interest expense due to reduced borrowings from our credit facility. The revenue growth and increased operating efficiencies were partially offset by the redemption of equity appreciation rights for $1.2 million and the increase in amortization and depreciation associated with the acquisition of radio stations in Atlanta, Boston, Miami-Ft. Lauderdale and West Palm Beach markets. Net Income (Loss). Net loss for 2000 was $29.6 million compared to pro forma net loss of $3.8 million for 1999. The increase in the loss was primarily due to the establishment of a $27.6 million net deferred tax liability upon conversion from a series of subchapter S corporations to a series of subchapter C corporations, the $1.2 million redemption of equity appreciation rights as a result of the initial public offering and corporate reorganization, the one- time expenses of approximately $1.5 million associated with the format change at WPTP-FM in the Philadelphia market, the increase in amortization and depreciation associated with the acquisition of radio stations in Atlanta, Boston, Miami-Ft. Lauderdale and West Palm Beach markets, and the $2.4 million unrealized loss on our investment in FindWhat.com. The net loss for the year ended December 31, 2000 was partially offset by the additional net income generated through the revenue growth, increased operating efficiencies at most of our existing radio stations and the decrease in interest expense due to reduced borrowings from our credit facility. Year Ended December 31, 1999 Compared to Year Ended December 31, 1998 Net Revenue. Net revenue increased 15.0% to $93.6 million for 1999 from $81.4 million for 1998. The increase was primarily due to revenue growth at some of our radio stations, particularly in the Miami-Ft. Lauderdale market. On a same station basis, net revenues increased 14.4% to $93.6 million for 1999 from $81.8 million for 1998. Station Operating Expenses. Station operating expenses increased 8.1% to $66.7 million for 1999 from $61.7 million for 1998. The increase was primarily due to increased program and production, sales and 24 advertising, and general and administrative expenses associated with generating our revenue growth. On a same station basis, station operating expenses increased 8.5% to $66.6 million for 1999 from $61.4 million for 1998. Corporate General and Administrative Expenses. Corporate general and administrative expenses increased 12.0% to $2.8 million for 1999 from $2.5 million for 1998. The increase was primarily due to higher general and administrative expenses associated with our revenue growth over the same period. Depreciation and Amortization. Depreciation and amortization increased 1.9% to $16.4 million for 1999 from $16.1 million for 1998. The increase was primarily due to radio station acquisitions in 1998. Interest Expense. Interest expense increased 2.9% to $14.0 million in 1999 from $13.6 million for 1998. The increase was primarily due to radio station acquisitions in 1998 and increasing interest rates in 1999. Broadcast Cash Flow. Broadcast cash flow increased 37.1% to $27.0 million for 1999 from $19.7 million for 1998. The increase was primarily due to revenue growth at some of our stations, particularly in the Miami-Ft. Lauderdale market. On a same station basis, broadcast cash flow increased 32.3% to $27.0 million for 1999 from $20.4 million for 1998. Gain (Loss) on Sale of Radio Stations. We did not dispose of any radio stations in 1999. In 1998, we recognized a gain of $4.0 million primarily as a result of the sale of two radio stations, KAAY-AM in Little Rock, Arkansas and WEWO-AM in Fayetteville, North Carolina, for a total of approximately $5.2 million. Income (Loss) Before Pro Forma Income Taxes. We experienced a loss before pro forma income taxes of $6.1 million for 1999 versus a loss before pro forma income taxes of $8.6 million for 1998. The difference between 1999 and 1998 is mainly attributable to revenue growth at some of our radio stations, particularly in the Miami-Ft. Lauderdale market. Excluding gains on sales of radio stations, loss before pro forma income taxes would have been $12.6 million for 1998. Pro Forma Net Income (Loss). Pro forma net loss for 1999 was $3.8 million compared to pro forma net loss of $5.3 million for 1998. The change was mainly attributable to revenue growth at some of our radio stations, particularly in the Miami-Ft. Lauderdale market. Year Ended December 31, 1998 Compared to Year Ended December 31, 1997 Net Revenue. Net revenue increased 10.5% to $81.4 million for 1998 from $73.7 million for 1997. Approximately $6.8 million of the increase was attributable to the inclusion, during the entire period, of operating results from the stations acquired in 1998. The increase was also attributable to revenue growth at some of our radio stations, especially in the Miami-Ft. Lauderdale market. On a same station basis, net revenues increased 10.7% to $81.8 million for 1998 from $73.9 million for 1997. Station Operating Expenses. Station operating expenses increased 11.8% to $61.7 million for 1998 from $55.2 million for 1997. Approximately $5.9 million of the increase was attributable to the inclusion during the entire period of operating results from the radio stations acquired in 1997. The increase was also attributable to the introduction of additional news programming at WWDB- FM, the increased rights fees associated with our contracts to broadcast Miami sports teams and the addition of Neil Rogers, a top ranked personality in the Miami-Ft. Lauderdale market to our programming line-up at WQAM-AM. On a same station basis, station operating expenses increased 13.7% to $61.4 million for 1998 from $54.0 million for 1997. Corporate General and Administrative Expenses. Corporate general and administrative expenses increased 21.6% to $2.5 million for 1998 from $2.1 million for 1997. The increase was mainly attributable to higher administrative expenses associated with supporting our growth. Depreciation and Amortization. Depreciation and amortization increased 13.6% to $16.1 million for 1998 from $14.2 million for 1997. The increase was mainly attributable to radio station acquisitions in 1998. 25 Interest Expense. Interest expense remained constant at $13.6 million for 1998 and 1997. This was attributable to a reduction in the interest rate charged on our credit facility as a result of more favorable terms, offset by a higher debt balance due to borrowings to fund acquisitions. Broadcast Cash Flow. Broadcast cash flow increased 7.1% to $19.7 million for 1998 from $18.4 million for 1997. Approximately $900,000 of the increase was attributable to the inclusion, during the entire period, of operating results from the stations acquired in 1997. The increase was also attributable to revenue growth at most of our radio stations, in particular WQAM-AM and WKIS-FM in the Miami-Ft. Lauderdale market. On a same station basis, broadcast cash flow increased 3.0% to $20.4 million for 1998 from $19.8 million for 1997. Gain (Loss) on Sale of Radio Stations. We recognized a gain on sale of radio stations of $4.0 million for 1998 primarily as a result of the sale of two radio stations, KAAY-AM in Little Rock, Arkansas and WEWO-AM in Fayetteville, North Carolina, for a total of approximately $5.2 million. In 1997, we sold WDAS-AM/FM in Philadelphia for approximately $100 million, for which we recognized a gain of $79.8 million. Income (Loss) Before Pro Forma Income Taxes. We experienced a loss before pro forma income taxes of $8.6 million for 1998 versus income of $66.6 million for 1997. The difference between 1998 and 1997 is mainly attributable to the recognition of an $82.1 million gain on sale of radio stations in 1997. Excluding gains on sales of radio stations, loss before pro forma income taxes would have been $12.6 million for 1998 and $15.4 million for 1997. Pro Forma Net Income (Loss). Pro forma net loss for 1998 was $5.3 million compared to pro forma net income of $40.8 million for 1997. The change was mainly attributable to the reduction of the gain on the sale of radio stations and taking into account pro forma income taxes or tax benefits. Liquidity and Capital Resources Overview. Historically, we have used a significant portion of our liquidity to consummate acquisitions. These acquisitions have been funded from one or a combination of the following sources: . our credit facility; . disposing of radio stations in transactions which are intended to qualify as like-kind exchanges under Section 1031 of the Internal Revenue Code; . internally-generated cash flow; and . advances to us from George G. Beasley, members of his family and affiliated entities. Other liquidity needs have been for debt service, working capital, distributions to equity holders and general corporate purposes, including capital expenditures. In the future, we expect that our principal liquidity requirements will be for working capital and general corporate purposes, including acquisitions of additional radio stations. We expect to finance future acquisitions through a combination of bank borrowings, internally generated funds and our stock. We used approximately $58.5 million of the net proceeds from our initial public offering to pay down debt on our credit facility, which increased the availability of cash to fund future acquisitions, including the recently completed and pending acquisitions, and other general corporate purposes. We also used approximately $40.5 million of the proceeds of our initial public offering to repay the indebtedness owed to our Chairman and Chief Executive Officer, George G. Beasley, and affiliated companies. That approximately $40.5 million payment is net of the repayment at the closing of the initial public offering of approximately $10.3 million owed to us by members of the Beasley family. As of December 31, 2000, we held $5.7 million in cash and cash equivalents and had $197.8 million in availability under our credit facility we obtained on August 31, 2000, as described below. We completed one 26 acquisition on January 31, 2001 with an aggregate purchase price of $113.5 million and we have one pending acquisition with an aggregate purchase price of $12.0 million. We believe that the cash available from operations as well as the availability from our credit facility should be sufficient to permit us to meet our financial obligations for at least the next twelve months. Under our credit facility, we can currently borrow up to $300.0 million, subject to compliance with financial ratios and other restrictive covenants. Net Cash Provided by (Used in) Operating Activities. Net cash provided by operating activities was $7.7 million and $7.2 million for 2000 and 1999, respectively. Equity appreciation rights totaling $1.2 million were redeemed during the year ended December 31, 2000; however this redemption was offset by the additional net income generated through the revenue growth, increased operating efficiencies at most of our existing radio stations, and the decrease in interest expense due to reduced borrowings from our credit facility. Net cash provided by operating activities was $7.2 million and $4.9 million for 1999 and 1998, respectively. The increase of approximately $2.3 million was primarily due to the increase in revenue growth, from $81.4 million to $93.6 million. Net cash provided by operating activities was $4.9 million and $1.6 million for 1998 and 1997, respectively. The increase of approximately $3.3 million from 1997 to 1998 was primarily a result of an increase in revenues, from $73.7 million to $81.4 million. Net Cash Provided by (Used in) Investing Activities. Net cash used in investing activities was $29.1 million and $2.8 million for 2000 and 1999, respectively. The change was partially due to loans to the former S corporation stockholders and the subsequent repayment of these loans and all other outstanding notes receivable from related parties and stockholders as a result of our initial public offering. The change was also partially due to the radio station acquisitions in the Atlanta, Boston, Miami-Ft. Lauderdale and West Palm Beach markets and expenditures for property and equipment. Net cash used in investing activities was $2.8 million and $12.5 million for 1999 and 1998, respectively. The decrease of $9.7 million was primarily due to the acquisitions and dispositions in 1998, the proceeds from the sale of property in 1998 and the release of restricted cash in 1998. In 1999, cash used in investing activities primarily consisted of expenditures for property and equipment; however, there were no acquisitions or dispositions in 1999. Net cash used in investing activities was $12.5 million for 1998 compared with net cash provided by investing activities of $18.9 million for 1997. The increase of $31.4 million of net cash used was primarily a result of the use of approximately $19 million for the acquisitions of WJBX-FM, WJST-FM and WTMR-AM in 1998, partially offset by the net proceeds of $5.2 million from the sale of KAAY-AM and WEWO-AM in 1998. In 1997, we used $77.7 million of cash to acquire six stations, which was offset by the proceeds of $103.5 million from the sale of WDAS-AM/FM, WEGX-FM, WDSC-AM and WTSB-AM. Net Cash Provided by (Used in) Financing Activities. Net cash provided by financing activities was $20.1 million for 2000 and net cash used in financing activities was $2.2 million for 1999. The change was partially due to distributions made to the former S corporation stockholders prior to our initial public offering. The change was also partially due to the proceeds from our initial public offering, less related costs, which were used for repayment of approximately $58.5 million of the credit facility and all outstanding notes payable to related parties. The change was also partially due to additional borrowings from our credit facility to complete the radio station acquisitions in the Atlanta, Boston, Miami-Ft. Lauderdale and West Palm Beach markets. The change was also partially due to payments of loan fees related to the refinancing of our credit facility. Net cash used in financing activities was $2.2 million for 1999 and net cash provided by financing activities was $4.7 million for 1998. This increase of net cash used in financing activities of $6.9 million was primarily due to the refinancing of the revolving credit loan in 1998 which was offset by loan fees associated with the refinancing in 1998 and higher capital contributions and decreased stockholder distributions in 1999. 27 Net cash provided by financing activities was $4.7 million for the year ended 1998 compared to net cash used in financing activities of $17.1 million for 1997. The increase of net cash provided of $21.8 million from 1997 to 1998 was primarily a result of lower stockholder distributions of $6.0 million, offset by cash from additional borrowings during 1998. In 1997, we had stockholder distributions of $20.7 million that were not offset by additional borrowings. Credit Facility. On August 31, 2000, we refinanced our $150.0 million credit facility. Under terms of the new credit agreement, we were provided a credit facility with a maximum commitment of $300.0 million. The credit facility includes a $150.0 million revolving credit loan and a $150.0 million term loan. The revolving credit loan includes a $50.0 million sub-limit for letters of credit. The loans bear interest at either the base rate or LIBOR plus a margin that is determined by the Company's debt to cash flow ratio. The base rate is equal to the higher of the prime rate or the overnight federal funds effective rate plus 0.5%. Interest is generally payable monthly through maturity on June 30, 2008. The scheduled reductions in the amount available under the credit facility may require principal repayments if the outstanding balance at that time exceeds the new maximum available amount under the credit facility. The credit agreement requires the Company to maintain certain financial ratios and includes restrictive covenants. The loans are secured by substantially all assets of the Company and its subsidiaries. As of December 31, 2000, the scheduled reductions of the maximum commitment of the credit facility for the next five fiscal years and thereafter are as follows:

Revolving Total Credit Term Credit Loan Loan Facility ------------ ------------ ------------ 2002.................................. $ -- $ 15,000,000 $ 15,000,000 2003.................................. -- 22,500,000 22,500,000 2004.................................. 15,000,000 22,500,000 37,500,000 2005.................................. 22,500,000 30,000,000 52,500,000 Thereafter............................ 112,500,000 60,000,000 172,500,000 ------------ ------------ ------------ Total............................... $150,000,000 $150,000,000 $300,000,000 ============ ============ ============

As of December 31, 2000, we had an outstanding balance under our credit facility of approximately $227.7 million and availability under our credit facility of $72.3 million for future acquisitions and other corporate purposes. These amounts are after giving effect to: . the Las Vegas and New Orleans acquisitions; and . the pending acquisitions in Augusta; As of December 31, 2000, the weighted average annual interest rate applicable to our credit facility was approximately 7.9375%. The credit facility expires on June 30, 2008. We must pay a quarterly unused commitment fee, which is based upon our total leverage to operating cash flow ratio and ranges from 0.25% to 0.375% of the unused portion of the maximum commitment. Beginning on December 31, 2000, if the unused portion exceeds 50% of the maximum commitment the fee is increased by 0.375%. For the year ended December 31, 2000, our unused commitment fee was approximately $284,000. We are required to satisfy financial covenants, which require us to maintain specified financial ratios and to comply with financial tests, such as ratios for maximum total leverage, minimum interest coverage and minimum fixed charges. These financial covenants include: . Maximum Total Leverage Test. From August 31, 2000 through March 31, 2001, our total debt as of the last day of each fiscal quarter must not exceed 6.75 times our operating cash flow for the four quarters ending on that day. For the period from April 1, 2001 through September 30, 2001, the required maximum ratio is 6.5 times. For the period from October 1, 2001 through March 31, 2002, the 28 required maximum ratio is 6.25 times. For the period from April 1, 2002 through December 31, 2002, the required maximum ratio is 6.0 times. For each twelve-month period after December 31, 2002, the maximum ratio will decrease by 0.5 times. For all periods after January 1, 2006, the maximum ratio is 4.0 times. . Minimum Interest Coverage Test. From August 31, 2000 through June 30, 2001, our operating cash flow for the four quarters ending on the last day of each fiscal quarter must not be less than 1.75 times the amount of our interest expense. For all periods after July 1, 2001, the minimum ratio is 2.0 times. . Minimum Fixed Charges Test. Our operating cash flow for any four consecutive quarters must not be less than 1.10 times the amount of our fixed charges. The new credit facility also prohibits us from paying cash dividends and restricts our ability to make other distributions with respect to our capital stock. The credit facility also contains other customary restrictive covenants. These covenants limit our ability to: . incur additional indebtedness and liens; . enter into certain investments or joint ventures; . consolidate, merge or effect asset sales; . make overhead expenditures; . enter sale and lease-back transactions; . sell or discount accounts receivable; . enter into transactions with affiliates or stockholders; . sell, assign, pledge, encumber or dispose of capital stock; or . change the nature of our business. Pending Acquisitions. The total cash required to fund our pending acquisitions in Augusta is expected to be approximately $12.0 million. The consummation of the pending transactions is subject to certain conditions, including the approval of the FCC. Although we believe these closing conditions are customary for transactions of this type, these conditions may not be satisfied. Recent Pronouncements In June 1998 the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Certain Hedging Activities." In June 2000 the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activity, an Amendment of SFAS 133." SFAS No. 133 and SFAS No. 138 require that all derivative instruments be recorded on the balance sheet at their respective fair values. SFAS No. 133 and SFAS No. 138 are effective for all fiscal quarters of all fiscal years beginning after June 30, 2000; we adopted SFAS No. 133 and SFAS No. 138 on January 1, 2001. In accordance with the transition provisions of SFAS 133, we recorded an asset of $66,000 to recognize our derivatives at fair value. In September 2000, the FASB issued SFAS No. 140 entitled "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." SFAS 140 provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. SFAS 140 replaces SFAS No. 125 and is effective for transfers and servicing of financial assets and extinguishments occurring after March 31, 2001. SFAS 140 is effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. The Company has not completed its evaluation of SFAS 140; however, management does not anticipate that the adoption of SFAS 140 will have a material impact on the Company's earnings or financial position upon adoption. 29 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS Market risk is the risk of loss arising from adverse changes in market rates and prices such as interest rates, foreign currency exchange rate and commodity prices. Our primary exposure to market risk is interest rate risk associated with our credit facility. Amounts borrowed under the credit facility incur interest at the London Interbank Offered Rate, or LIBOR, plus additional basis points depending on the outstanding principal balance under the credit facility. As of December 31, 2000, $102.2 million was outstanding under our credit facility. We evaluate our exposure to interest rate risk by monitoring changes in interest rates in the market place. To manage interest rate risk associated with our credit agreement, we have entered into interest rate collar and swap agreements. An interest rate collar is the combined purchase and sale of an interest rate cap and an interest rate floor so as to keep interest rate exposure within a defined range. We have purchased four interest rate collars. Under these agreements, our base LIBOR cannot exceed the cap interest rate and our base LIBOR cannot fall below our floor interest rate. In February 2001, one interest rate collar was canceled and we purchased another interest rate collar. An interest rate swap is a combined series of forward rate agreements calling for exchange of interest payments on a number of specified future dates. We have purchased one interest rate swap. Under this agreement, we pay a fixed rate of 6.48%, on the notional amount, and the other party pays to us a variable amount rate equal to the three-month LIBOR on a quarterly basis. In February 2001, our swap agreement was canceled. Notional amounts are used to calculate the contractual payments to be exchanged under the contract. As of December 31, 2000 and February 13, 2001, the notional amount upon maturity of these collar and swap agreements, is approximately $100.0 million and $115.0 million, respectively. As of December 31, 2000, our collar and swap agreements are summarized as follows:

Estimated Notional Expiration Fair Agreement Amount Floor Cap Swap Date Value --------- ----------- ----- ---- ---- ------------- --------- Interest rate collar.. $20,000,000 6.69% 8% -- May 2002 $(1,000) Interest rate collar.. $20,000,000 5.85% 7.5% -- October 2002 -- Interest rate swap.... $20,000,000 -- -- 6.48% October 2002 67,000 Interest rate collar.. $20,000,000 5.45% 7.5% -- November 2002 -- Interest rate collar.. $20,000,000 5.75% 7.35% -- November 2002 -- As of February 13, 2001, our collar agreements are summarized as follows:

Notional Expiration Agreement Amount Floor Cap Swap Date --------- ----------- ----- ---- ---- ------------- Interest rate collar.. $20,000,000 6.69% 8% -- May 2002 Interest rate collar.. $20,000,000 5.45% 7.5% -- November 2002 Interest rate collar.. $20,000,000 5.75% 7.35% -- November 2002 Interest rate collar.. $55,000,000 4.99% 7% -- October 2003

30 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA BEASLEY BROADCAST GROUP, INC. INDEX TO FINANCIAL STATEMENTS

Page ---- Financial Statements Independent Auditor's Report............................................. 32 Balance Sheets as of December 31, 1999 and 2000.......................... 33 Statements of Operations for the Years Ended December 31, 1998, 1999 and 2000.................................................................... 34 Statements of Stockholders' Equity for the Years Ended December 31, 1998, 1999 and 2000........................................................... 35 Statements of Cash Flows for the Years Ended December 31, 1998, 1999 and 2000.................................................................... 36 Notes to Financial Statements............................................ 37 Financial Statement Schedule--Valuation and Qualifying Accounts.......... 53

31 INDEPENDENT AUDITORS' REPORT The Board of Directors Beasley Broadcast Group, Inc.: We have audited the accompanying combined balance sheet of Beasley Broadcast Group, Inc. as of December 31, 1999 and the accompanying consolidated balance sheet of Beasley Broadcast Group, Inc. as of December 31, 2000, and the related combined statements of operations, stockholders' equity and cash flows for each of the years in the two-year period ended December 31, 1999 and the related consolidated statement of operations, stockholders' equity and cash flows for the year ended December 31, 2000. In connection with our audits of the combined and consolidated financial statements, we have also audited the accompanying financial statement schedule as listed in the accompanying index. These financial statements and the accompanying financial statement schedule are the responsibility of the management of Beasley Broadcast Group, Inc. Our responsibility is to express an opinion on these financial statements and the accompanying financial statement schedule based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Beasley Broadcast Group, Inc. as of December 31, 1999 and 2000, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. /s/ KPMG LLP Tampa, Florida February 9, 2001 32 BEASLEY BROADCAST GROUP, INC. BALANCE SHEETS

Combined Consolidated December 31, December 31, 1999 2000 ------------ ------------ ASSETS Current assets: Cash and cash equivalents........................ $ 7,002,669 $ 5,742,628 Accounts receivable, less allowance for doubtful accounts of $560,282 in 1999 and $607,147 in 2000............................................ 19,915,098 18,712,862 Trade sales receivable........................... 735,607 843,843 Other receivables................................ 676,478 980,504 Prepaid expenses and other....................... 1,918,223 2,249,615 Deferred tax asset............................... -- 176,000 ------------ ------------ Total current assets........................... 30,248,075 28,705,452 Property and equipment, net........................ 15,773,175 15,619,688 Notes receivable from related parties.............. 556,796 4,990,480 Intangibles, net................................... 137,287,291 164,893,584 Other investments.................................. -- 1,523,729 Other assets....................................... 1,995,819 2,425,631 ------------ ------------ Total assets....................................... $185,861,156 $218,158,564 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Current installments of long-term debt........... $ 166,319 $ 8,352 Notes payable to related parties................. 10,447,454 -- Accounts payable................................. 5,027,145 2,355,006 Accrued expenses................................. 9,213,133 6,986,006 Trade sales payable.............................. 970,108 798,198 ------------ ------------ Total current liabilities...................... 25,824,159 10,147,562 Long-term debt, less current installments.......... 125,680,696 103,478,405 Long-term debt to related parties.................. 37,275,622 -- Deferred tax liability............................. -- 25,575,000 ------------ ------------ Total liabilities.............................. 188,780,477 139,200,967 ------------ ------------ Commitments and contingencies (note 9) Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued.................... -- -- Class A common stock, $0.001 par value, 150,000,000 shares authorized, 7,252,068 issued and outstanding....................................... -- 7,252 Class B common stock, $0.001 par value, 75,000,000 shares authorized, 17,021,373 issued and outstanding....................................... -- 17,021 Common stock....................................... 4,530,352 -- Additional paid-in capital......................... 34,774,928 106,633,932 Accumulated deficit................................ (32,818,024) (27,700,608) Treasury stock..................................... (548,600) -- ------------ ------------ Stockholders' equity............................... 5,938,656 78,957,597 Notes receivable from stockholders................. (8,857,977) -- ------------ ------------ Net stockholders' equity (deficit)................. (2,919,321) 78,957,597 ------------ ------------ Total liabilities and stockholders' equity (deficit)......................................... $185,861,156 $218,158,564 ============ ============

See accompanying notes to financial statements 33 BEASLEY BROADCAST GROUP, INC. STATEMENTS OF OPERATIONS

Combined Combined Consolidated Year Ended Year Ended Year Ended December December December 31, 31, 1998 31, 1999 2000 ----------- ----------- ------------ Net revenues.......................... $81,433,406 $93,621,404 $106,153,640 ----------- ----------- ------------ Costs and expenses: Program and production.............. 25,116,151 27,176,460 27,919,127 Sales and advertising............... 23,110,566 25,040,086 28,208,358 Station general and administrative.. 13,464,792 14,443,785 15,597,101 Corporate general and administrative..................... 2,498,411 2,764,216 3,991,535 Equity appreciation rights.......... -- 606,407 1,173,759 Format change expenses.............. -- -- 1,545,547 Depreciation and amortization....... 16,096,653 16,410,321 17,409,162 ----------- ----------- ------------ Total costs and expenses.......... 80,286,573 86,441,275 95,844,589 ----------- ----------- ------------ Operating income................ 1,146,833 7,180,129 10,309,051 Other income (expense): Interest expense.................... (13,601,867) (14,008,312) (8,812,564) Unrealized loss on investment....... -- -- (2,400,000) Other non-operating expenses........ (1,580,554) (107,154) (310,754) Interest income..................... 817,567 883,704 446,197 Other non-operating income.......... 348,890 -- 168,383 Gain on sale of radio stations...... 4,028,013 -- -- Minority interest................... 253,993 -- -- ----------- ----------- ------------ Loss before income taxes........ $(8,587,125) $(6,051,633) $ (599,687) Income tax expense.................... -- -- 28,998,000 ----------- ----------- ------------ Net loss........................ $(8,587,125) $(6,051,633) $(29,597,687) =========== =========== ============ Basic and diluted net loss per share.. $ -- $ -- $ (1.26) =========== =========== ============ Pro forma income tax benefit (unaudited).......................... $(3,250,000) $(2,204,000) N/A =========== =========== ============ Pro forma net loss (unaudited)........ $(5,337,125) $(3,847,633) N/A =========== =========== ============ Pro forma basic and diluted net loss per share (unaudited)................ $ (0.31) $ (0.22) N/A =========== =========== ============ Basic and diluted common shares outstanding.......................... 17,423,441 17,423,441 23,506,091 =========== =========== ============

See accompanying notes to financial statements 34 BEASLEY BROADCAST GROUP, INC. STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Class Notes A Class B Additional Receivable Net Common Common Common Paid-In Accumulated Treasury From Stockholders' Stock Stock Stock Capital Deficit Stock Stockholders Equity (Deficit) ------ ------- ----------- ------------ ------------ --------- ------------ ---------------- Balances as of December 31, 1997............... $ -- $ -- $ 4,530,352 $ 30,428,164 $ (7,280,337) $ -- $ (8,099,591) $ 19,578,588 Net loss................ -- -- -- -- (8,587,125) -- -- (8,587,125) Capital contributions... -- -- -- 1,582,211 -- -- -- 1,582,211 Stockholder distributions.......... -- -- -- -- (5,959,936) -- -- (5,959,936) Purchase of common stock.................. -- -- -- -- -- (548,600) -- (548,600) Loans to stockholders... -- -- -- -- -- -- (1,206,446) (1,206,446) Payments of notes receivable from stockholders........... -- -- -- -- -- -- 1,182,342 1,182,342 ------ ------- ----------- ------------ ------------ --------- ------------ ------------ Balances as of December 31, 1998............... $ -- $ -- $ 4,530,352 $ 32,010,375 $(21,827,398) $(548,600) $ (8,123,695) $ 6,041,034 Net loss................ -- -- -- -- (6,051,633) -- -- (6,051,633) Capital contributions... -- -- -- 2,764,553 -- -- -- 2,764,553 Stockholder distributions.......... -- -- -- -- (4,938,993) -- -- (4,938,993) Loans to stockholders... -- -- -- -- -- -- (734,282) (734,282) ------ ------- ----------- ------------ ------------ --------- ------------ ------------ Balances as of December 31, 1999............... $ -- $ -- $ 4,530,352 $ 34,774,928 $(32,818,024) $(548,600) $ (8,857,977) $ (2,919,321) Net loss................ -- -- -- -- (1,897,079) -- -- (1,897,079) Capital contributions... -- -- -- 100,000 -- -- -- 100,000 Stockholder distributions.......... -- -- -- -- (2,250,000) -- -- (2,250,000) Loans to stockholders... -- -- -- -- -- -- (910,263) (910,263) ------ ------- ----------- ------------ ------------ --------- ------------ ------------ Balances as of February 10, 2000............... $ -- $ -- $ 4,530,352 $ 34,874,928 $(36,965,103) $(548,600) $ (9,768,240) $ (7,876,663) Distributions to and contributions from subchapter S corporation stockholders in exchange for Class B common stock........... -- 17,021 (4,530,352) (33,000,372) 36,965,103 548,600 -- -- Issuance of Class A common stock........... 7,252 -- -- 99,002,648 -- -- -- 99,009,900 Initial public offering costs.................. -- -- -- (2,613,336) -- -- -- (2,613,336) Acquisitions of minority interests.............. -- -- -- 8,370,064 -- -- -- 8,370,064 Payments of notes receivable from stockholders .......... -- -- -- -- -- -- 9,768,240 9,768,240 Net loss................ -- -- -- -- (27,700,608) -- -- (27,700,608) ------ ------- ----------- ------------ ------------ --------- ------------ ------------ Balances as of December 31, 2000............... $7,252 $17,021 $ -- $106,633,932 $(27,700,608) $ -- $ -- $ 78,957,597 ====== ======= =========== ============ ============ ========= ============ ============

See accompanying notes to financial statements 35 BEASLEY BROADCAST GROUP, INC. STATEMENTS OF CASH FLOWS

Combined Year Combined Consolidated Ended Year Ended Year Ended December 31, December 31, December 31, 1998 1999 2000 ------------- ------------ ------------- Cash flows from operating activities: Net loss......................... $ (8,587,125) $(6,051,633) $ (29,597,687) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization.. 16,096,653 16,410,321 17,409,162 (Gain) loss on sale of property and equipment................. -- 107,154 -- Unrealized loss on investment.. -- -- 2,400,000 Gain on sale of radio stations...................... (4,028,013) -- -- Minority interest.............. (253,993) -- -- Change in assets and liabilities net of effects of acquisitions and dispositions of radio stations: Increase in receivables...... (782,146) (2,235,888) (1,728,793) Increase in prepaid expense and other................... (476,296) (625,890) (331,392) Increase in intangibles...... (267,331) -- -- Increase in other assets..... (506,431) (475,304) (774,349) Increase (decrease) in payables and accrued expenses.................... 3,725,220 66,425 (5,071,176) Increase in deferred tax liabilities................. -- -- 25,399,000 ------------- ----------- ------------- Net cash provided by operating activities....... 4,920,538 7,195,185 7,704,765 ------------- ----------- ------------- Cash flows from investing activities: Expenditures for property and equipment....................... (1,586,933) (2,025,425) (3,641,877) Proceeds from sale of property and equipment................... 1,700,000 -- -- Payments for acquisitions of radio stations.................. (19,000,000) -- (34,780,000) Proceeds from dispositions of radio stations.................. 5,150,000 -- -- Payment for purchase of equity investment...................... -- -- (50,002) Decrease in restricted cash...... 1,250,000 -- -- Loans to related parties......... (16,325) -- -- Payments from related parties.... -- -- 556,796 Loans to stockholders............ (1,206,446) (734,282) (910,263) Payments from stockholders....... 1,182,342 -- 9,768,240 ------------- ----------- ------------- Net cash used in investing activities................. (12,527,362) (2,759,707) (29,057,106) ------------- ----------- ------------- Cash flows from financing activities: Proceeds from issuance of indebtedness.................... 135,040,061 -- 138,300,523 Principal payments on indebtedness.................... (124,463,715) (161,994) (161,890,721) Proceeds from issuance of related party notes..................... 663,538 144,027 -- Principal payments on related party notes..................... -- -- (47,723,076) Payments for loan fees........... (1,625,000) -- (2,840,990) Capital contributions............ 1,582,211 2,764,553 100,000 Stockholders distributions....... (5,959,936) (4,938,993) (2,250,000) Issuance of common stock......... -- -- 99,009,900 Payments for initial public offering costs.................. -- -- (2,613,336) Purchase of common stock......... (548,600) -- -- ------------- ----------- ------------- Net cash provided by (used in) financing activities... 4,688,559 (2,192,407) 20,092,300 ------------- ----------- ------------- Net increase (decrease) in cash and cash equivalents............. (2,918,265) 2,243,071 (1,260,041) Cash and cash equivalents at beginning of year................ 7,677,863 4,759,598 7,002,669 ------------- ----------- ------------- Cash and cash equivalents at end of year.......................... $ 4,759,598 $ 7,002,669 5,742,628 ============= =========== ============= Cash paid for interest............ $ 13,017,000 $12,853,000 12,052,995 ============= =========== ============= Cash paid for taxes............... $ 22,000 $ 25,000 1,878,825 ============= =========== ============= Supplement disclosure of non-cash investing and financing activities: Financed purchases of equipment.. $ 35,649 $ -- $ -- ============= =========== ============= Financed purchase of equity investment...................... $ -- $ -- $ 3,000,000 ============= =========== ============= Equity investment acquired through placement of advertising airtime......................... $ -- $ -- $ 873,727 ============= =========== ============= Minority interests acquired through issuance of Class A common stock.................... $ -- $ -- $ 8,370,064 ============= =========== ============= Principal payments on indebtedness through placement of advertising airtime.......... $ -- $ -- $ 1,770,060 ============= =========== ============= Financed sale of property and equipment to a related party.... $ -- $ -- $ 5,115,500 ============= =========== =============

See accompanying notes to financial statements 36 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies (a) Basis of Presentation and Corporate Reorganization Beasley Broadcast Group, Inc. (the "Company") operates 36 radio stations with its primary source of revenue generated from the sale of advertising time to local and national spot advertisers and national network advertisers. All significant inter-company balances and transactions have been eliminated in presenting the Company's financial statements. The accompanying financial statements as of December 31, 1999 and for the years ended December 31, 1998 and 1999 are presented on a combined basis. The accompanying financial statements as of and for the year ended December 31, 2000 are presented on a consolidated basis. Prior to February 11, 2000, the Company's radio stations were operated through a series of subchapter S corporations, partnerships and limited liability companies related to one another through common ownership and control. These subchapter S corporations, partnerships and limited liability companies were collectively known as Beasley FM Acquisition Corp. and related companies ("BFMA") through February 10, 2000. The accompanying financial statements reflect the financial position of BFMA as of December 31, 1999 and include the results of operations of BFMA from January 1, 2000 to February 10, 2000. The number of shares authorized, issued and outstanding for Beasley FM Acquisition Corp. and related companies through February 10, 2000 is as follows:

Common Stock Outstanding ----------- Beasley FM Acquisition Corp. common stock, no par value; authorized 1,000 shares; issued and outstanding 1,000 shares..... $4,464,099 Beasley Broadcasting of Eastern North Carolina, Inc. common stock, $1 par value; authorized 100,000 shares; issued and outstanding 50,000 shares.................................................... 50,000 CSRA Broadcasters, Inc. common stock, $100 par value; authorized 600 shares; issued and outstanding 100 shares.................... 10,000 W&B Media, Inc. common stock, $1 par value; authorized 100,000 shares; issued and outstanding 2,223 shares...................... 2,223 Beasley Broadcasting of Arkansas, Inc. common stock, $1 par value; authorized 10,000 shares; issued and outstanding 1,000 shares.... 1,000 Beasley Broadcasting of Eastern Pennsylvania, Inc. common stock, $1 par value; authorized 10,000 shares; issued and outstanding 1,000 shares..................................................... 1,000 Beasley Broadcasting of Southwest Florida, Inc. common stock, $1 par value; authorized 10,000 shares; issued and outstanding 1,000 shares........................................................... 1,000 Beasley Radio, Inc. common stock, $1 par value; authorized 10,000 shares; issued and outstanding 1,000 shares...................... 1,000 Beasley Broadcasting of Coastal Carolina, Inc. common stock, $.01 par value; authorized 1,000 shares issued and outstanding 1,000 shares........................................................... 10 Beasley Broadcasting of Augusta, Inc. common stock, $.01 par value; authorized 1,000 shares; issued and outstanding 1,000 shares........................................................... 10 Beasley Communications, Inc. common stock, $.01 par value; authorized 1,000 shares; issued and outstanding 1,000 shares..... 10 ---------- $4,530,352 ==========

The Company completed an initial public offering of common stock and the corporate reorganization on February 11, 2000. Immediately prior to the initial public offering, pursuant to the reorganization, affiliates of BFMA contributed their equity interests in those entities to the Company, a newly formed holding company, in 37 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) exchange for common stock. Immediately after these transactions, the Company contributed the capital stock and partnership interests acquired to Beasley Mezzanine Holdings, LLC ("BMH") and BMH became a wholly-owned subsidiary of the Company. All S corporation elections were terminated and the resulting entities became C corporations. The reorganization and contribution of equity interests was accounted for in a manner similar to a pooling of interests as to the majority owners, and as an acquisition of minority interest using the purchase method of accounting. Proceeds from the initial public offering, net of underwriters discount of $7,165,100, were used as follows: Repayment of the revolving credit loan......................... $58,508,421 Repayment of long-term debt, including accrued interest, to related parties............................................... 38,228,843 Net repayment of payables and receivables, including accrued interest, to related parties.................................. 2,272,636 ----------- Net proceeds................................................... $99,009,900 =========== The Company has two classes of common stock and may issue one or more series of preferred stock. In addition, the Company adopted an equity plan providing various stock based compensation awards. Class B common shares are held by majority stockholders of the former S corporations. Class A common shares were issued in the initial public offering including shares to former minority-interest stockholders. No shares of preferred stock were issued in the offering. The only difference between the Class A and Class B common stock is that Class A is entitled to one vote per share and Class B is entitled to ten votes per share. Class B is convertible into Class A shares on a one for one share basis under certain circumstances. (b) Cash and Cash Equivalents Cash and cash equivalents include demand deposits and short-term investments with an original maturity of three months or less. (c) Program Rights The total fixed cost of the contracts for the radio broadcast rights relating to the Miami Dolphins, Florida Marlins and Florida Panthers sports contracts is expensed on a straight-line basis in the quarters in which the programs are broadcast. Other payments are expensed when additional contract elements, such as post-season games, are paid for and broadcast. (d) Property and Equipment Property and equipment are stated at cost. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets. (e) Intangibles Intangibles consist primarily of FCC broadcasting licenses, goodwill, advertising base, loan fees, noncompete agreements, and other intangibles which are amortized straight-line over their estimated useful lives. (f) Impairment The Company assesses the recoverability of intangibles and other long-lived assets on an ongoing basis based on estimates of related future undiscounted cash flows compared to net book value. If the future 38 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) undiscounted cash flow estimate is less than net book value, the net book value is reduced to the estimated fair value. The Company also evaluates the amortization and depreciation periods of intangibles and other long-lived assets to determine whether events or circumstances warrant revised estimates of useful lives. (g) Derivative Financial Instruments The Company has only limited involvement with derivative financial instruments and does not use them for trading purposes. The Company uses interest rate cap, collar and swap agreements to specifically hedge against the potential impact of increases in interest rates on the revolving credit loan. Interest differentials are recorded as adjustments to interest expense in the period they occur. (h) Revenue Recognition Revenue is recognized as advertising air time is broadcast and is net of advertising agency commissions. (i) Barter Transactions Trade sales are recorded at the fair value of the products or services received. For the years ended December 31, 1998, 1999 and 2000, trade sales were approximately $4,018,000, $4,449,000 and $8,147,000, respectively. For the years ended December 31, 1998, 1999 and 2000, trade expenses were approximately $3,481,000, $5,002,000 and $4,788,000, respectively. (j) Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. BFMA had elected to be treated as a subchapter S corporation under provisions of the Internal Revenue Code. Under this corporate status, the stockholders of BFMA were individually responsible for reporting their share of taxable income or loss. Accordingly, no deferred tax assets or liabilities have been reflected in the accompanying balance sheet as of December 31, 1999. Pro forma income tax benefit in the accompanying statements of operations for the years ended December 31, 1998 and 1999 includes pro forma income tax benefit computed in accordance with SFAS 109, Accounting for Income Taxes, as if BFMA had been subject to Federal and state income taxes for that period. (k) Earnings per Share Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if options or other contracts to issue common stock were exercised or converted into common stock and were not anti-dilutive. Earnings per share for the years ended December 31, 1998 and 1999 and from January 1, 2000 to February 10, 2000 is based on the number of common shares issued immediately prior to the initial public offering. 39 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) (l) Stock-Based Compensation Stock-based compensation is measured and recognized in accordance with APB Opinion 25, Accounting for Stock Issued to Employees and disclosed in accordance with SFAS 123, Accounting for Stock-Based Compensation. (m) Segment Reporting As of December 31, 2000 the Company operates two reportable segments comprised of 36 separate radio stations in the eastern United States. The reportable segments are in the radio broadcasting industry, providing a similar product to similar customers. Net revenues, consisting primarily of national and local advertising, are derived from external sources. The Company does not rely on any major customer as a source of net revenue. The Company identifies its reportable segments based on the operating management responsibility for the segment. The chief operating decision maker uses net revenues and broadcast cash flow as measures of profitability to assess segment profit or loss and to allocate resources between the two segments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. (n) Defined Contribution Plan The Company has a defined contribution plan that conforms with Section 401(k) of the Internal Revenue Code. Under this plan, employees may contribute a minimum of 1% of their compensation (no maximum) to the Plan. The Internal Revenue Code, however, limited contributions to $ 10,000 in 1998 and 1999 and $10,500 in 2000. There are no employer matching contributions. (o) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Actual results could differ from these estimates. To the extent management's estimates prove to be incorrect, financial results for future periods may be adversely affected. (p) Recent Accounting Pronouncements In June 1998 the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Certain Hedging Activities." In June 2000 the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activity, an Amendment of SFAS 133." SFAS No. 133 and SFAS No. 138 require that all derivative instruments be recorded on the balance sheet at their respective fair values. SFAS No. 133 and SFAS No. 138 are effective for all fiscal quarters of all fiscal years beginning after June 30, 2000; the Company adopted SFAS No. 133 and SFAS No. 138 on January 1, 2001. In accordance with the transition provisions of SFAS 133, the Company recorded an asset of $66,000 to recognize its derivatives at fair value. In September 2000, the FASB issued SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. SFAS 140 provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. SFAS 140 replaces SFAS No. 125 and is effective for transfers and servicing of financial assets and extinguishments occurring after March 31, 2001. SFAS 140 is effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. 40 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) (2) Property and Equipment Property and equipment, at cost, is comprised of the following:

December 31, Estimated -------------------------- useful lives 1999 2000 (years) ------------ ------------ ------------ Land, buildings and improvements........... $ 4,369,458 $ 5,466,559 31.5 Broadcast equipment..... 20,438,606 19,267,530 5 Transportation equipment.............. 876,987 1,241,467 5 Office equipment and other.................. 4,329,267 4,997,782 5-7 Construction in progress............... 800,778 1,323,081 -- ------------ ------------ ---- 30,815,096 32,296,419 Less accumulated Depreciation........... (15,041,921) (16,676,731) ------------ ------------ $ 15,773,175 $ 15,619,688 ============ ============

(3) Intangibles Intangibles, at cost, is comprised of the following:

December 31, Estimated -------------------------- useful lives 1999 2000 (years) ------------ ------------ ------------ FCC broadcasting licenses........... $157,700,379 $188,307,206 10-15 Goodwill............................ 16,763,990 25,219,054 15 Advertising base.................... 4,139,251 4,139,251 5 Loan fees........................... 2,975,681 5,816,671 7 Noncompete agreements............... 1,120,000 1,120,000 2-8 Other intangibles................... 5,666,932 6,011,469 5-15 ------------ ------------ ----- 188,366,233 230,613,651 Less accumulated amortization....... (51,078,942) (65,720,067) ------------ ------------ $137,287,291 $164,893,584 ============ ============

On February 11, 2000, the Company computed the fair value of minority stockholder interests based on the number of shares issued to the stockholders and the estimated net book values of the radio stations at the close of business on February 10, 2000. The computed amount of $8,370,064 was recorded using the purchase method of accounting and is included in goodwill and additional paid-in capital in the accompanying consolidated balance sheet as of December 31, 2000. (4) Other Investments In December 1999, the Company entered into an agreement to purchase 750,000 shares of preferred stock of eTour, Inc. in exchange for $3.0 million of advertising airtime. The Company will earn these shares as advertisements are placed over the term of the agreement. For the year ended December 31, 2000, eTour, Inc. placed advertising airtime totaling approximately $874,000 and for the year ended December 31, 2000, the Company earned approximately 218,000 shares. The shares contain restrictions that generally limit the Company's ability to sell or otherwise dispose of them. The investment was recorded using the cost method of accounting. 41 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) On January 14, 2000, the Company purchased 600,000 shares of common stock of FindWhat.com in exchange for a $3.0 million promissory note. The shares contained restrictions that generally limit the Company's ability to sell or otherwise dispose of them. In January 2001, FindWhat.com filed a registration statement under the Securities Act pursuant to which the Company may resell its shares at prevailing market prices. The investment was initially recorded using the cost method of accounting. On December 31, 2000, the Company considered a decline in market value to be other than temporary and recorded an unrealized loss on this investment of approximately $2.4 million. On April 4, 2000, the Company purchased 5,394 shares of preferred stock of iBiquity Digital for $50,002. The shares contain restrictions that generally limit the Company's ability to sell or otherwise dispose of them. The investment was recorded using the cost method of accounting. (5) Long-Term Debt Long-term debt consists of the following:

December 31, -------------------------- 1999 2000 ------------ ------------ Revolving credit loan, see below for terms of agreement..................................... $124,680,420 $102,236,261 Note payable to FindWhat.com, see below for terms of note agreement....................... -- 1,229,940 Note payable to Georgia Bank and Trust, payable in monthly payments of $3,500, including interest at 8.5% per annum, maturing on December 5, 2002.............................. 358,930 -- Note payable to Aiken Radio, Inc., payable in monthly payments ranging from $4,167 to $7,844, including interest at 10% per annum, maturing in June 2003......................... 262,627 -- Note payable to G.R.R. Marketing, Inc., payable in monthly payments of $5,592, including interest at prime plus 1% per annum (9.5% at December 31, 1999), maturing in February, 2005.......................................... 281,677 -- Note payable to Columbia County Broadcasters, Inc., payable in quarterly payments of $7,062, including interest at 8% per annum, maturing on December 15, 2002.......................... 73,665 -- Note payable to SunTrust Bank, payable in monthly payments of $893, including interest at 8.68% per annum, maturing on March 15, 2002.......................................... 79,853 -- Note payable to Georgia Bank and Trust, payable in monthly payments of $1,134, including interest at 9.25% per annum, maturing on December 22, 2001............................. 24,227 -- Note payable to Myer Feldman, payable in monthly payments of $527, including interest at 12% per annum, maturing on April 1, 2013... 42,155 -- Note payable to Georgia Bank and Trust, payable in monthly payments of $648, including interest at 8% per annum, maturing on January 25,2002....................................... 14,964 -- Capital lease obligations, payable in monthly payments ranging from $399 to $532, including interest ranging from 8% to 20% per annum, maturing on various dates through April 27, 2003. The leases are secured by the leased property...................................... 28,497 20,556 ------------ ------------ 125,847,015 103,486,757 Less current installments of long-term debt.... (166,319) (8,352) ------------ ------------ Long-term debt, less current installments...... $125,680,696 $103,478,405 ============ ============

42 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) On August 31, 2000, the Company refinanced its $150.0 million revolving credit loan. Under terms of the new credit agreement, the Company was provided a credit facility with a maximum commitment of $300.0 million. The credit facility includes a $150.0 million revolving credit loan and a $150.0 million term loan. The revolving credit loan includes a $50.0 million sub-limit for letters of credit. As of December 31, 2000, the maximum commitment under the credit facility is $300.0 million and the outstanding balance is $102.2 million. The loans bear interest at either the base rate or LIBOR plus a margin that is determined by the Company's debt to cash flow ratio. The base rate is equal to the higher of the prime rate or the overnight federal funds effective rate plus 0.5%. As of December 31, 1999, the old revolving credit loan carried interest at an average rate of 7.95%. As of December 31, 2000, the new credit facility carried interest at an average rate of 7.9375%. Interest is generally payable monthly through maturity on June 30, 2008. The scheduled reductions in the amount available under the credit facility may require principal repayments if the outstanding balance at that time exceeds the new maximum amount available under the credit facility. The Company must pay a quarterly unused commitment fee, which is based upon its total leverage to operating cash flow ratio and ranges from 0.25% to 0.375% of the unused portion of the maximum commitment. For the years ended December 31, 1999 and 2000, our unused commitment fee was approximately $96,000 and $284,000, respectively. The Company has entered into interest rate hedge agreements as discussed in note 10. The credit agreement requires the Company to maintain certain financial ratios and includes restrictive covenants. The restrictive covenants prohibit the payment of dividends. The loans are secured by substantially all assets of the Company. As of December 31, 2000, the scheduled reductions of the maximum commitment of the credit facility for the next five fiscal years and thereafter are as follows:

Revolving Total Credit Credit Loan Term Loan Facility ------------ ------------ ------------ 2002.................................. $ -- $ 15,000,000 $ 15,000,000 2003.................................. -- 22,500,000 22,500,000 2004.................................. 15,000,000 22,500,000 37,500,000 2005.................................. 22,500,000 30,000,000 52,500,000 Thereafter............................ 112,500,000 60,000,000 172,500,000 ------------ ------------ ------------ Total............................... $150,000,000 $150,000,000 $300,000,000 ============ ============ ============

On January 14, 2000, the Company executed a $3.0 million promissory note in favor of FindWhat.com as consideration for the purchase of 600,000 shares of common stock. The note bears interest at 5.73% per annum and matures on January 14, 2002. All outstanding principal and accrued interest is due at maturity, however the Company may repay the note in full with an equivalent amount of advertising airtime as specified in the loan agreement and a related advertising agreement with FindWhat.com. As of December 31, 2000, the outstanding principal amount has been reduced by approximately $1,770,000 through the placement of advertising airtime. The note is guaranteed by BFMA. On February 16, 2000, all long-term debt, except the revolving credit loan and capital lease obligations, was repaid in full. As of December 31, 2000, scheduled payments of the capital lease obligations are as follows: $8,352 in 2001, $9,045 in 2002 and $3,159 in 2003. 43 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) (6) Long-Term Debt to Related Parties Long-term debt to related parties consists of the following:

December 31, ------------------------- 1999 2000 ------------ ----------- 7.67% notes payable to affiliate Beasley Broadcasting of Philadelphia, Inc., interest- only payments are due annually, principal and any unpaid interest due August 11, 2004....... $25,699,530 $ -- 7.67% notes payable to affiliate Beasley-Reed Broadcasting of Miami, Inc., interest-only payments are due annually, principal and any unpaid interest due August 11, 2004........... 11,576,092 -- ------------ ----------- $ 37,275,622 $ -- ============ ===========

For each of the years ended December 31, 1998 and 1999, interest expense on long-term debt to related parties was approximately $2,859,000. On February 16, 2000, all long-term debt to related parties was repaid in full. (7) Acquisitions and Dispositions Station acquisitions, including tax-deferred exchanges were accounted for by the purchase method for financial statement purposes, and accordingly, the purchase price has been allocated to the assets acquired based on their estimated fair market values at the date of the acquisition. A substantial portion of each purchase price was allocated to intangible assets to reflect the FCC broadcasting licenses acquired. These FCC broadcasting licenses are being amortized over 15 years using the straight-line basis. The excess of the purchase price over the fair value of the net assets acquired has been recorded as goodwill and is being amortized over 15 years using the straight-line basis. No liabilities were assumed by the Company as a result of these acquisitions. Operations of acquired stations have been included in the combined results of the Company since the acquisition date of each such station. (a) 2000 Acquisitions and Dispositions . On January 6, 2000, the Company acquired the assets of WAEC-AM and WWWE- AM in the Atlanta market for approximately $10.0 million. This acquisition was financed through the Company's credit facility and accounted for by the purchase method of accounting. . On May 2, 2000, the Company acquired the assets of WRCA-AM in the Boston market for approximately $6.0 million. This acquisition was financed through the Company's credit facility and accounted for by the purchase method of accounting. . On May 3, 2000 the Company acquired the assets of WRFN-FM and WRDW-AM in the Augusta market for approximately $0.8 million. This acquisition was funded by surplus working capital and accounted for by the purchase method of accounting. . On June 2, 2000 the Company acquired the assets of WHSR-AM and WWNN-AM in the Miami-Ft. Lauderdale market and WSBR-AM in the West Palm Beach market for approximately $18.0 million. This acquisition was financed through the Company's credit facility and accounted for by the purchase method of accounting. . There were no dispositions during 2000. 44 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) (b) 1999 Acquisitions and Dispositions . There were no acquisitions or dispositions during 1999. (c) 1998 Acquisitions and Dispositions . On February 11, 1998, BFMA acquired the assets of WJBX-FM in the Ft. Myers-Naples market for approximately $6,000,000. This acquisition was finance through the Company's credit facility and accounted for by the purchase method. . On February 11, 1998, Beasley Radio, Inc. acquired the assets of WJST-FM in the Ft. Myers-Naples market for approximately $5,000,000. This acquisition was finance through the Company's credit facility and accounted for by the purchase method. . On December 1, 1998, Beasley Broadcasting of Arkansas, Inc. ("BBA") acquired the assets of WTMR-AM in the Philadelphia market for approximately $8,000,000. This acquisition was finance through the Company's credit facility and accounted for by the purchase method. . BBA sold substantially all of the assets of KAAY-AM to Citadel Broadcasting Company on November 17, 1998. Net proceeds from the sale were approximately $5,000,000, which resulted in a gain of approximately $4,356,000. . BFMA sold substantially all of the assets of WEWO-AM to Service Media, Inc. on August 1, 1998. Net proceeds from the sale were approximately $150,000, which resulted in a loss of approximately $328,000. For tax purposes, the sale of KAAY-AM and the acquisition of WTMR-AM were treated as a tax-deferred exchange under Section 1031 of the Internal Revenue Code to a substantial extent. For tax purposes, the sale of WEGX-FM and WDSC-AM and the acquisition of WJBX-FM were treated as a tax-deferred exchange under Section 1031 of the Internal Revenue Code. Acquisitions for the years ended December 31, 1998 and 2000 are summarized as follows:

Year ended December 31 ----------------------- 1998 2000 ----------- ----------- Property and equipment.............................. $ 1,499,641 $ 4,088,173 Other assets........................................ 2,142 -- FCC broadcasting licenses........................... 17,226,517 30,606,827 Goodwill............................................ 271,700 85,000 ----------- ----------- Payments for purchase of radio stations............. $19,000,000 $34,780,000 =========== ===========

Dispositions for the year ended December 31, 1998 are summarized as follows: Proceeds from sale of stations................................... $5,150,000 Accounts receivable, net......................................... (5,720) Prepaid expenses and other....................................... -- Property and equipment, net...................................... (797,915) Intangibles, net................................................. (193,755) Trade sales, net................................................. -- Selling expenses................................................. (124,597) ---------- Gain on sale of radio stations................................... $4,028,013 ========== 45 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) (d) Unaudited Pro Forma Results of Operations The following unaudited pro forma information presents the results of operations for the years ended December 31, 1999 and 2000, with pro forma adjustments as if the acquisitions of the stations had occurred on January 1, 1999. This unaudited pro forma information is not necessarily indicative of what would have occurred had the acquisitions occurred on January 1, 1999 or of results that may occur in the future.

Combined Consolidated Year Ended Year Ended December December 31, 31, 1999 2000 ----------- ------------ Net revenues..................................... $99,155,267 $107,839,154 ----------- ------------ Costs and expenses: Program and production......................... 27,653,609 28,052,654 Sales and advertising.......................... 25,437,289 28,322,798 Station general and administrative............. 15,604,600 15,885,704 Corporate general and administrative........... 2,764,216 3,991,535 Equity appreciation rights..................... 606,407 1,173,759 Format change expenses......................... -- 1,545,547 Depreciation and amortization.................. 18,846,988 18,101,744 ----------- ------------ Total costs and expenses..................... 90,913,109 97,073,741 ----------- ------------ Operating income............................... 8,242,158 10,765,413 Other income (expense): Interest expense............................... (16,711,312) (9,579,639) Unrealized loss on investment.................. -- (2,400,000) Other non-operating expenses................... (107,154) (310,754) Interest income................................ 883,704 446,197 Other non-operating income..................... -- 168,383 ----------- ------------ Loss before income taxes..................... $(7,692,604) $ (910,400) Income tax expense............................... -- 28,878,000 ----------- ------------ Net loss..................................... $(7,692,604) $(29,788,400) =========== ============ Basic and diluted net loss per share............. $ -- $ (1.27) =========== ============ Pro forma income tax benefit..................... $(2,838,000) $ -- =========== ============ Pro forma net loss............................... $(4,854,604) $ -- =========== ============ Pro forma basic and diluted net loss per share... $ (0.28) $ -- =========== ============ Basic and diluted common shares outstanding...... 17,423,441 23,506,091 =========== ============

(e) Subsequent and Pending Acquisitions . On January 31, 2001, the Company acquired all of the outstanding common stock of Centennial Broadcasting Nevada, Inc. and all of the membership interests in Centennial Broadcasting, LLC for an aggregate purchase price, subject to certain adjustments, of approximately $113.5 million. Centennial Broadcasting Nevada, Inc. owns approximately 18.5% of the membership interests in Centennial Broadcasting, LLC. Centennial Broadcasting, LLC owns the radio stations KJUL-FM, KSTJ-FM and KKLZ-FM in Las Vegas, Nevada and WBYU-AM, WRNO-FM and KMEZ-FM in New Orleans, 46 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) Louisiana. This acquisition was financed through the Company's credit facility and accounted for by the purchase method of accounting. . On November 13, 2000, the Company entered into an agreement to acquire WKXC-FM and WSLT-FM in Augusta, Georgia for approximately $12.0 million. (8) Related Party Transactions The Company had a management agreement with Beasley Broadcasting Management Corp., an affiliate of the Company's principal stockholder, George G. Beasley. For the years ended December 31, 1998 and 1999, management fee expense under the agreement was approximately $2,498,000 and $2,764,000, respectively. From January 1, 2000 to February 10, 2000, management fee expense under the agreement was approximately $447,000. The Company leases certain office space from its principal stockholder, George G. Beasley. For the years ended December 31, 1998, 1999 and 2000, rental expense paid to Mr. Beasley was approximately $77,000, $96,000 and $96,000, respectively. Distributions to stockholders of the S corporations during the years ended December 31, 1998 and 1999 were $5,959,936 and $4,938,993, respectively. From January 1, 2000 to February 10, 2000, distributions to stockholders of BFMA were approximately $2,250,000. Notes receivable from related parties as of December 31, 1999 were repaid in full on February 16, 2000. On December 28, 2000, the Company sold all of its radio towers and related real estate assets to Beasley Family Towers, Inc. ("BFT") for approximately $5.1 million. The Company received unsecured notes payable from BFT, which are due in monthly payments including interest at the applicable federal rate. The notes mature on December 28, 2020. In connection with this transaction, the Company entered into agreements to lease the radio towers from BFT. The lease agreements expire on December 28, 2020. As of December 31, 2000, future minimum lease payments to related parties for the next five years and thereafter are summarized as follows: 2001............................................................ $ 467,000 2002............................................................ 467,000 2003............................................................ 467,000 2004............................................................ 467,000 2005............................................................ 467,000 Thereafter...................................................... 7,015,000 ---------- Total......................................................... $9,350,000 ========== Notes payable to related parties bore interest at 7.67% to 9.25% and were repaid in full on February 16, 2000. For the years ended December 31, 1998 and 1999, interest expense on notes payable to related parties was approximately $666,000 and $642,000, respectively. From January 1, 2000 to February 10, 2000, interest expense on notes payable to related parties was approximately $80,000. Notes receivable from stockholders bear interest at 9.25% and were repaid in full on February 16, 2000. For the years ended December 31, 1998 and 1999, interest income on notes receivable from related parties was approximately $618,000 and $707,000, respectively. From January 1, 2000 to February 16, 2000, interest income on notes receivable from related parties was approximately $135,000. 47 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) (9) Commitments and Contingencies In 1997, the Company entered into contracts for the radio broadcast rights relating to the Miami Dolphins, Florida Marlins and Florida Panthers sports franchises. These contracts grant WQAM-AM the exclusive, English language rights for live radio broadcasts of the sporting events of these franchises for a five-year term that began in 1997. The contracts require the Company to pay certain fees and to provide commercial advertising and other considerations. As of December 31, 2000, remaining payments of fees are as follows: $8,844,000 in 2001 and $359,000 in 2002. For the years ended December 31, 1998, 1999 and 2000, the contract expense calculated on a straight-line basis and other direct expenses exceeded related revenues by $3,617,000, $2,770,000 and $4,034,000, respectively. Unless the Company is able to generate significantly more revenues under these contracts in future periods, the contracts are likely to have a material adverse effect on the Company's results of operations on a going-forward basis. However, in light of the uncertainty regarding future revenues, the amount of any future loss cannot be determined at this time. The Company leases property and equipment from third parties under one- to ten-year operating leases. For the years ended December 31, 1998, 1999 and 2000, lease expense was approximately $1,503,000, $1,815,000 and $2,052,000, respectively. As of December 31, 2000, future minimum lease payments to third parties for the next five years and thereafter are summarized as follows: 2001............................................................ 1,673,000 2002............................................................ 1,211,000 2003............................................................ 1,171,000 2004............................................................ 1,141,000 2005............................................................ 988,000 Thereafter...................................................... 3,510,000 ---------- Total......................................................... $9,694,000 ========== The Company had employment agreements with two radio station managers that contained provisions allowing the station manager to participate in the gain on the sale of the station managed in the event it is sold, and while the station manager was still employed by the Company. In addition, these agreements provided that upon the occurrence of certain liquidity events the station manager would be paid a percentage of the increase in value of the station managed upon completion of the offering. On February 16, 2000, the Company paid approximately $1.2 million to the station managers as a result of the initial public offering. In the normal course of business, the Company is party to various legal matters. The ultimate disposition of these matters will not, in management's judgment, have a material adverse effect on the Company's financial position. (10) Derivative Financial Instruments The Company uses interest rate collar and swap agreements to hedge against the potential impact of increases in interest rates on the revolving credit loan. For the years ended December 31, 1998 and 2000, the Company received additional interest of approximately $11,000 and $113,000, respectively. For the year ended December 31, 1999, the Company paid additional interest of approximately $87,000. The amount received or paid is based on the differential between the specified rate of the swap agreements and the variable interest rate of the revolving credit loan. There was no additional interest paid or received under the collar agreements. 48 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) In February 2001, one interest rate swap and one interest rate collar were canceled and we purchased another interest rate collar. As of February 13, 2001, our collar agreements are summarized as follows:

Notional Expiration Agreement Amount Floor Cap Date --------- ----------- ----- ---- ------------- Interest rate collar..................... $20,000,000 6.69% 8% May 2002 Interest rate collar..................... $20,000,000 5.45% 7.5% November 2002 Interest rate collar..................... $20,000,000 5.75% 7.35% November 2002 Interest rate collar..................... $55,000,000 4.99% 7% October 2003

(11) Fair Value of Financial Instruments The Company's significant financial instruments and the methods used to estimate their fair values are as follows: . Notes receivable from related parties--It is not practicable to estimate the fair value of notes receivable from related parties due to their related party nature. . Other investments--The fair value is estimated using quoted market prices where available and using management's best estimate where quoted market prices are unavailable. . Revolving credit loan--The fair value approximates carrying value due to the interest rate being based on current market rates. . Notes payable to related parties--It is not practicable to estimate the fair value of notes payable to related parties due to their related party nature. . Hedge agreements--The Company has entered into various agreements to hedge against the potential impact of increases in interest rates on the revolving credit loan. These agreements as of December 31, 2000 are summarized as follows:

Estimated Notional Expiration Fair Agreement Amount Floor Cap Swap Date Value --------- ----------- ----- ---- ---- ------------- --------- Interest rate collar..... $20,000,000 6.69% 8% -- May 2002 $(1,000) Interest rate collar..... 20,000,000 5.85% 7.5% -- October 2002 -- Interest rate swap....... 20,000,000 -- -- 6.48% October 2002 67,000 Interest rate collar..... 20,000,000 5.45% 7.5% -- November 2002 -- Interest rate collar..... 20,000,000 5.75% 7.35% -- November 2002 --

The Company is exposed to credit loss in the event of nonperformance by the other parties to the agreements. The Company, however, does not anticipate nonperformance by the counterparties. The fair value of the interest rate swap agreements is estimated using the difference between the present value of discounted cash flows using the base rate stated in the swap agreement and the present value of discounted cash flows using the LIBOR rate at December 31, 2000. The fair values of the interest rate collar agreements are estimated based on the amounts the Company would expect to receive or pay to terminate the agreement. 49 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) (12) Income Taxes Pro forma income tax benefit from continuing operations for the years ended December 31, 1998 and 1999 and income tax expense for the year ended December 31, 2000 from continuing operations is as follows:

Year ended December 31, ------------------------------------- 1998 1999 (Unaudited) (Unaudited) 2000 ----------- ----------- ----------- Federal: Current.............................. $(4,102,000) $ 567,000 $ 2,489,000 Deferred............................. 1,441,000 (2,371,000) 20,796,000 ----------- ----------- ----------- (2,661,000) (1,804,000) 23,285,000 State: Current.............................. (908,000) 125,000 1,109,000 Deferred............................. 319,000 (525,000) 4,604,000 ----------- ----------- ----------- (589,000) (400,000) 5,713,000 ----------- ----------- ----------- $(3,250,000) $(2,204,000) $28,998,000 =========== =========== ===========

Pro forma income tax benefit for the years ended December 31, 1998 and 1999 and income tax expense for the year ended December 31, 2000 differ from the amounts that would result from applying the federal statutory rate of 34% to the Company's loss before income taxes, as follows:

Year ended December 31, ------------------------------------- 1998 1999 (Unaudited) (Unaudited) 2000 ----------- ----------- ----------- Expected tax benefit................. $(2,920,000) $(2,058,000) $ (204,000) State income taxes, net of federal benefit............................. (397,000) (280,000) 532,000 Establishment of deferred tax assets and liabilities upon conversion from a subchapter S corporation to a subchapter C corporation on February 11, 2000............................ -- -- 28,297,000 Non-deductible amortization of minority interest acquisitions...... -- -- 194,000 Other................................ 67,000 134,000 179,000 ----------- ----------- ----------- $(3,250,000) $(2,204,000) $28,998,000 =========== =========== ===========

Temporary differences that give rise to the components of pro forma deferred tax assets and liabilities, are as follows:

December 31, -------------------------- 1999 (Unaudited) 2000 ------------ ------------ Allowance for doubtful accounts................ $ 2,623,000 $ 176,000 Unrealized loss on investment.................. -- 927,000 Accrued interest on notes receivable from related parties............................... 1,457,000 -- Notes receivable from related parties.......... 478,000 -- ------------ ------------ Gross deferred tax assets.................... 4,558,000 1,103,000 Intangibles.................................... (27,929,000) (25,633,000) Property and equipment......................... (1,113,000) (869,000) ------------ ------------ Gross deferred tax liabilities............... (29,042,000) (26,502,000) ------------ ------------ Net deferred tax liabilities................. $(24,484,000) $(25,399,000) ============ ============

50 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) (13) Segment Information Segment information, in thousands of dollars for the years ended December 31, 1998, 1999 and 2000 are as follows:

December 31, ---------------------------- 1998 1999 2000 -------- -------- -------- Total assets: Radio Group One............................ $ 97,530 $ 97,802 $117,790 Radio Group Two............................ 97,243 88,059 100,369 -------- -------- -------- Total...................................... $194,773 $185,861 $218,159 ======== ======== ========

Year ended December 31, ---------------------------- 1998 1999 2000 -------- -------- -------- Net revenues: Radio Group One............................ $ 50,825 $ 59,798 $ 68,984 Radio Group Two............................ 30,608 33,823 37,170 -------- -------- -------- Total...................................... 81,433 93,621 106,154 -------- -------- -------- Broadcast cash flow: Radio Group One............................ $ 10,922 $ 18,116 $ 21,382 Radio Group Two............................ 8,820 8,845 13,047 -------- -------- -------- Total...................................... 19,742 26,961 34,429 -------- -------- -------- Reconciliation to net loss before income taxes: Corporate general and administrative expenses.................................. $ (2,498) $ (2,764) $ (3,992) Equity appreciation rights................. -- (606) (1,174) Format change expenses..................... -- -- (1,545) Depreciation and amortization.............. (16,097) (16,410) (17,409) Interest expense........................... (13,602) (14,008) (8,813) Unrealized loss on investment.............. -- -- (2,400) Other non-operating income (expense)....... (160) 775 304 Gain on sale of radio stations............. 4,028 -- -- -------- -------- -------- Net loss before income taxes............... $ (8,587) $ (6,052) $ (600) ======== ======== ========

Radio Group One includes radio stations located in Miami-Ft. Lauderdale, FL, Ft. Myers-Naples, FL, West Palm Beach, FL and Greenville-New Bern-Jacksonville, NC. Radio Group Two includes radio stations located in Atlanta, GA, Philadelphia, PA, Boston, MA, Fayetteville, NC and Augusta, GA. Broadcast cash flow consists of operating income before corporate general and administrative expenses, equity appreciation rights, and depreciation and amortization. (14) Equity Plan On February 11, 2000, the Company adopted The 2000 Equity Plan of Beasley Broadcast Group, Inc. (the "Plan"). A total of 3,000,000 shares of Class A common stock were reserved for issuance under the Plan, of which 2,500,000 stock options were granted on February 11, 2000 with an exercise price per share equal to the initial public offering price. All stock options have ten- year terms and generally vest and become fully exercisable after a period of three to four years from the date of grant, however some contain performance- related provisions that may delay vesting beyond four years. 51 BEASLEY BROADCAST GROUP, INC. NOTES TO FINANCIAL STATEMENTS--(Continued) As of December 31, 2000, there were 418,000 additional shares available for grant under the Plan. The per share weighted-average fair value of stock options granted during 2000 was $8.85 on the date of grant using the Black Scholes option-pricing model with the following weighted-average assumptions: expected life of 7 years, expected volatility of 50%, risk-free interest rate of 5.11% to 5.33%, and no expected dividend yield. The Company applies APB Opinion No. 25 in accounting for its Plan and, accordingly, no compensation cost has been recognized for its stock options in the financial statements. Had the Company determined compensation cost based on the fair value at the grant date for its stock options under SFAS No. 123, the Company's net loss for the year ended December 31, 2000 would have been increased to the pro forma amounts indicated below: Net loss: As reported................................................. $(29,597,687) Pro forma................................................... (33,071,326) Net loss per share: Basic and diluted........................................... (1.26) Pro forma basic and diluted................................. (1.41) Stock option activity during the periods indicated is as follows:

Weighted- Average Number of Exercise Shares Price --------- --------- Balance as of February 11, 2000......................... -- -- Granted............................................... 2,607,000 $15.26 Exercised............................................. -- -- Forfeited............................................. (25,000) 15.50 Expired............................................... -- -- --------- ------ Balance as of December 31, 2000......................... 2,582,000 $15.26 ========= ======

As of December 31, 2000, the range of exercise prices and weighted-average remaining contractual life of outstanding options was $7.87--$15.50 and 9.7 years, respectively. As of December 31, 2000, the number of options exercisable was 49,438 and the weighted-average exercise price of those options was $14.32. (15) Subsequent Event On December 29, 1998, the Company filed a lawsuit in the Circuit Court of the Eleventh Judicial Circuit, Miami-Dade County, against the Florida Marlins Inc., Florida Marlins Baseball Team, Ltd., and Front Row Communications for breach of contract and other related claims. The lawsuit is based on actions taken by the Florida Marlins major league baseball team to trade or release key players of the Marlins after the 1997 season, thereby transforming the Marlins into a non-competitive team. On January 14, 2000, the court dismissed the Marlins' motion for summary judgment. On May 22, 1999, the Marlins countersued for breach of contract. On January 10, 2001, the Company settled both lawsuits with the other parties with no material impact on the accompanying financial statements. 52 BEASLEY BROADCAST GROUP, INC. FINANCIAL STATEMENT SCHEDULE VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 1998, 1999 and 2000

Column B Column E Balance Column C Balance at Provision Column D at End Beginning for Bad Charge of Column A Description of Period Debts Offs Period -------------------- --------- --------- --------- -------- Year ended December 31, 1998: Allowance for doubtful accounts....... 1,092,000 1,129,211 1,631,859 589,352 Year ended December 31, 1999: Allowance for doubtful accounts....... 589,352 803,074 832,144 560,282 Year ended December 31, 2000: Allowance for doubtful accounts....... 560,282 1,673,939 1,627,074 607,147

53 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.

Name Age Position ---- --- -------- George G. Beasley....... 68 Chairman and Chief Executive Officer Bruce G. Beasley........ 43 President, Co-Chief Operating Officer and Director Allen B. Shaw........... 57 Vice Chairman and Co-Chief Operating Officer B. Caroline Beasley..... 38 Vice President, Chief Financial Officer, Secretary, Treasurer and Director Brian E. Beasley........ 41 Vice President of Operations and Director Joe B. Cox.............. 61 Director Mark S. Fowler.......... 59 Director Herbert W. McCord....... 58 Director

George G. Beasley founded Beasley Broadcast Group in 1961 and has served since inception as the Company's Chairman and Chief Executive Officer. Mr. Beasley served on the North Carolina Association of Broadcasters' Board of Directors for eight years and has served that Association as President and Vice President. Mr. Beasley was awarded the Distinguished Broadcaster of North Carolina Award in 1988. Mr. Beasley has a B.A. and M. A. from Appalachian State University. George G. Beasley is the father of Bruce G. Beasley, B. Caroline Beasley and Brian E. Beasley. Bruce G. Beasley has served as the Company's President and Chief Operating Officer since 1997 and as a director since 1980. He began his career in the broadcasting business with Beasley Broadcast Group in 1975 and since that time has served in various capacities including General Sales Manager of a radio station, General Manger of a radio station and Vice President of Operations of Beasley Broadcast Group. Currently, Mr. Beasley oversees the operation of all radio stations. Mr. Beasley serves on the Boards of Directors of the North Carolina Association of Broadcasters and the Radio Advertising Bureau. Mr. Beasley has a B.S. from East Carolina University. Mr. Beasley is the son of George G. Beasley and the brother of B. Caroline Beasley and Brian E. Beasley. Allen B. Shaw joined Beasley Broadcast Group as the Vice Chairman of the Board of Directors and Co-Chief Operating Officer in February 2001 as part of the Company's acquisition of Centennial Broadcasting. From 1990 to February 2001, Mr. Shaw was the President and Chief Executive Officer of Centennial Broadcasting. Mr. Shaw previously served as the Chief Operating Officer of Beasley from 1985 to 1990. Caroline Beasley has served as the Company's Vice President, Chief Financial Officer and Secretary since 1994 and as a director since 1983. She joined Beasley Broadcast Group in 1983 and since that time has served in various capacities including Business Manager, Assistant Controller and Corporate Controller. Ms. Beasley is a member of the Broadcast and Cable Financial Management Association. Ms. Beasley has a B.S. from the University of North Carolina at Chapel Hill. Ms. Beasley is the daughter of George G. Beasley and the sister of Bruce G. Beasley and Brian E. Beasley. Brian E. Beasley has served as the Company's Vice President of Operations since 1997 and as a director since 1982. He began his career in broadcasting during high school in 1977. He joined Beasley full-time in 1982 as General Manager of the previously-owned cable TV division. In 1985, he became Senior Account Executive to a radio station. Since that time, Mr. Beasley has served as General Manger to three different radio stations and most recently has been named Vice President of Operations. Mr. Beasley has a B.S. from East Carolina University. Mr. Beasley is the son of George G. Beasley and the brother of Bruce G. Beasley and B. Caroline Beasley. 54 Joe B. Cox has been a director of Beasley Broadcast Group since February 2000. Mr. Cox is a partner at the law firm of Cummings and Lockwood. Mr. Cox has practiced law for 34 years, primarily in the tax, corporate and estate law areas. Mr. Cox is a director of Citizens National Bank. Mark S. Fowler, age 59, has been a director of Beasley Broadcast Group since February 2000. Mr. Fowler was of counsel at the law firm of Latham & Watkins from 1987 to December 31, 2000. Mr. Fowler has served as Chairman of UniSite, Inc. since 1994 and Chairman of Assure Sat, Inc. since 1997. Mr. Fowler is also a director of Pac-West Telecom, Inc. and Talk.com, Inc. Mr. Fowler served as Chairman of the FCC from 1981 until 1987. Herbert W. McCord, age 58, has been a director of Beasley Broadcast Group since May 2000. Mr. McCord currently is President of Granum Communications Corporation, a management consulting firm specializing in the radio industry, which he founded in 1991. Prior to starting Granum, Mr. McCord worked in the radio industry at the station and management levels for over twenty years. Mr. McCord serves as a member of the Executive Committee for the Board of Directors of the Radio Advertising Bureau. Committees Of The Board Of Directors Our Board of Directors has established an Audit Committee and a Compensation Committee. Audit Committee. The Audit Committee consists of Messrs. Cox, Fowler and McCord. The responsibilities of the audit committee include: . recommending to the Board of Directors independent public accountants to conduct the annual audit of our financial statements; . reviewing the proposed scope of the audit and approving the audit fees to be paid; . reviewing the Company's accounting and financial controls with the independent public accountants and our financial and accounting staff; and . reviewing and approving transactions, other than compensation matters ,between us and our directors, officers and affiliates. Compensation Committee. The Compensation Committee consists of Messrs. Cox, Fowler, and McCord. This Committee provides a general review of the Company's compensation plans to ensure that they meet corporate objectives. The responsibilities of the compensation committee also include administering and interpreting The 2000 Equity Plan of Beasley Broadcast Group. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and persons who own more than ten percent of a registered class of the Company's stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its review of the copies of such reports and upon written representations from certain reporting persons, the Company believes that, for the year ended December 31, 2000, all Section 16(a) filing requirements applicable to the Company's officers, directors and greater than ten percent stockholders were complied with on a timely basis, except Mr. McCord's Form 3, Initial Statement of Beneficial Ownership of Securities, the George Beasley Grantor Retained Annuity Trust's Form 3, Initial Statement of Beneficial Ownership of Securities, the George Beasley Estate Reduction Trust's Form 3, Initial Statement of Beneficial Ownership of Securities, and Mr. Brian E. Beasley's Form 4, Statement of Changes of Beneficial Ownership of Securities, reporting one transaction. 55 ITEM 11. EXECUTIVE COMPENSATION The following table sets forth certain annual compensation information for Beasley's Chief Executive Officer and the other four most highly paid executive officers of Beasley whose annual salary exceeded $100,000 as of December 31, 2000 (collectively, the "Named Officers"). Summary Compensation Table

Annual compensation ----------------------------- Name and principal Other annual All other position Year Salary Bonus compensation compensation ------------------ ---- -------- ------- ------------ ------------ George G. Beasley.............. Chairman and Chief Executive 2000 $490,081 -- -- $306,212* Officer 1999 434,094 -- -- 285,549* Bruce G. Beasley............... President and Co-Chief 2000 $320,965 -- -- -- Operating Officer 1999 300,365 -- -- -- Caroline Beasley............... 2000 $266,985 $50,000 -- -- Chief Financial Officer 1999 222,599 -- -- -- Brian E. Beasley............... 2000 $295,622 -- -- -- Vice President of Operations 1999 266,259 -- -- --

-------- * Amounts attributable to the insurance portion of a split-dollar life insurance policy. The following table sets forth certain information with respect to stock option to purchase shares of the Company's common stock awarded during the fiscal year ended December 31, 2000 to the Named Officers. Option Grants In Fiscal Year 2000

Individual Grants ---------------------------------------------- Number of Percent of securities total options Total underlying granted to Exercise grant date options employees in price Expiration present Name granted fiscal year(1) ($/share) date value(2) ---- ---------- -------------- --------- ---------- -------------- George G. Beasley....... 487,500 18.7% $15.50 2/11/10 $4,382,625 Bruce G. Beasley........ 487,500 18.7 15.50 2/11/10 4,382,625 Caroline Beasley........ 487,500 18.7 15.50 2/11/10 4,382,625 Brian E. Beasley........ 487,500 18.7 15.50 2/11/10 4,382,625

-------- (1) Total options granted to all executive officers, other employees and non- employee directors of the Company in 2000 were for an aggregate of 2,607,000 shares of the Company's Class A Common Stock. (2) The hypothetical present values on the grant date were calculated under the Black Scholes option pricing model, which is a mathematical formula used to value options traded on stock exchanges. The formula considers a number of assumptions in hypothesizing an option's present value. Assumptions used to value the options include an expected life of seven years, expected volatility of 50%, risk-free interest rate of 5.18%, and no expected dividend rate. The ultimate realizable value of an option will depend on the actual market value of the common stock on the date of exercise as compared to the exercise price of the option. Consequently, there is no assurance that the hypothetical present value of the stock options reflected in this table will be realized. Employment Agreements George G. Beasley Employment Agreement. The Company entered into a three year employment agreement with George G. Beasley effective as of January 31, 2000 pursuant to which he serves as our Chief Executive Officer and Chairman of the board of directors. Mr. Beasley receives an annual base salary of $500,000 subject to an annual increase of not less than 5%, and an annual cash bonus at the discretion of the board of directors. Mr. Beasley also received an option to purchase 487,500 shares of our Class A common stock under the Company's 2000 equity plan at an exercise price equal to $15.50. This option vests over the term of the employment agreement. The Company could incur severance obligations under the terms of the employment agreement in the event that Mr. Beasley's employment is terminated without cause or if he resigns for good reason. 56 Bruce G. Beasley Employment Agreement. The Company entered into a three year employment agreement with Bruce G. Beasley effective as of January 31, 2000 pursuant to which he serves as the President and Chief Operating Officer. Mr. Beasley receives an annual base salary of $325,000 subject to an annual increase of not less than 5% and an annual cash bonus at the discretion of the board of directors. Mr. Beasley also received an option to purchase 487,500 shares of the Company's Class A common stock under the 2000 equity plan at an exercise price equal to $15.50. This option vests over the term of the employment agreement. The Company could incur severance obligations under the terms of the employment agreement in the event that Mr. Beasley's employment is terminated without cause or if he resigns for good reason. Allen B. Shaw Employment Agreement. The Company entered into a three year employment agreement with Allen Shaw pursuant to which he will serve as our Co- Chief Operating Officer and Vice Chairman of our board of directors. Mr. Shaw will receive an annual base salary of $322,350, subject to an annual increase of not less than 5%, and an annual cash bonus at the discretion of the board of directors. Mr. Shaw also received an option to purchase 50,000 shares of our Class A common stock on February 1, 2001 under our 2000 equity plan at an exercise price equal to the closing price of BBGI Class A common stock on the day before the grant. The option vests on February 1, 2011, but may become exercisable earlier, on the anniversary date of the date of grant, if certain material conditions are satisfied (33% each time a material condition is satisfied). We could incur severance obligations under the expected terms of the employment agreement in the event that Mr. Shaw's employment is terminated without cause or if he resigns for good reason.without cause or if he resigns for good reason. Caroline Beasley Employment Agreement. The Company entered into a three year employment agreement with Caroline Beasley pursuant to which she serves as the Chief Financial Officer. Ms. Beasley receives an annual base salary of $275,000 subject to an annual increase of not less than 5%, and an annual cash bonus at the discretion of the board of directors. Ms. Beasley also receive an option to purchase 487,500 shares of the Company's Class A common stock under the 2000 equity plan at an exercise price equal to $15.50. This option vests over the term of the employment agreement. The Company could incur severance obligations under the terms of the employment agreement in the event that Ms. Beasley's employment is terminated without cause or if she resigns for good reason. Ms. Beasley also received a $50,000 cash bonus upon completion of the initial public offering. Brian E. Beasley Employment Agreement. The Company entered into a three year employment agreement with Brian E. Beasley pursuant to which he serves as the Vice President of Operations. Mr. Beasley receives an annual base salary of $300,000 subject to an annual increase of not less than 5%, and an annual cash bonus at the discretion of the board of directors. Mr. Beasley also received an option to purchase 487,500 shares of the Company's Class A common stock under the 2000 equity plan at an exercise price equal to $15.50. This option vests over the term of the employment agreement. The Company could incur severance obligations under the terms of the employment agreement in he event that Mr. Beasley's employment is terminated without cause or if the resigns for good reason. 2000 Equity Plan On February 11, 2000, we adopted The 2000 Equity Plan of Beasley Broadcast Group. This equity plan is our first plan under which employee stock options have been granted. The principal purpose of the equity plan is to attract, retain and motivate selected officers, employees, consultants and directors through the granting of stock-based compensation awards. The equity plan provides for a variety of compensation awards, including non-qualified stock options, incentive stock options that are within the meaning of Section 422 of the Internal Revenue Code, stock appreciation rights, restricted stock, deferred stock, dividend equivalents, performance awards, stock payments and other stock-related benefits. A total of 3,000,000 shares of Class A common stock were reserved for issuance under the equity plan, of which 2,500,000 shares were granted on February 11, 2000. These options have an exercise price of $15.50 per share. As of December 31, 2000, the Company had granted 2,607,000 options under this plan. The equity plan provides that a committee of independent directors has the authority to select the employees and consultants to whom awards are to be made, to determine the number of shares to be subject to 57 those awards and their terms and conditions, and to make all other determinations and to take all other actions necessary or advisable for the administration of the equity plan with respect to employees or consultants. The equity plan also provides that, each of our independent director nominees will automatically be granted options to purchase 20,000 shares of our Class A common stock upon election to our board of directors. These options will have an exercise price per share equal to the fair market value per share of our Class A common stock as of the date of grant, and will be exercisable with respect to 10,000 shares as of the date of grant and will become exercisable with respect to an additional 5,000 shares on each of the first two anniversaries of the date of grant. The board may make additional option grants to our independent directors from time to time, in its discretion, on such terms as the board determines consistent with the equity plan. The committee and the board is authorized to adopt, amend and rescind rules relating to the administration of the equity plan, and to amend, suspend and terminate the equity plan. We have attempted to structure the equity plan in a manner such that remuneration attributable to stock options and other awards will not be subject to the deduction limitation contained in Section 162(m) of the Internal Revenue Code. Director Compensation In the past, directors did not receive any fees for service on the Board of Directors. The Board of Directors has considered and may implement paying its non-employee directors a fee for each Board meeting and Committee meeting attended. The Board of Directors may do this on a retroactive basis. Non- employee directors would continue to be reimbursed for their out-of-pocket travel expenses for each Board of Directors and Committee meeting attended. Compensation Committee Interlocks And Insider Participation During the fiscal year ended December 31, 2000, the Compensation Committee consisted of three members, Messrs. Cox, Fowler and McCord. None of the members was at any time during the fiscal year ended December 31, 2000, or at any other time, an officer or employee of the Company. No executive officer of the Company serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as members of the Company's Board of Directors or Compensation Committee. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information regarding beneficial ownership of the Class A Common Stock as of January 31, 2001, by: . each person who is known by us to own beneficially more than 5% of the Class A Common Stock; . each of our directors; . each of the Named Officers; and . all current officers and directors as a group. Each stockholder possess sole voting and investment power with respect to the shares listed, unless otherwise noted. Shares of Class B Common stock are convertible into shares of Class A common stock on a one-for-one basis. The number of Class A shares owned by George G. Beasley include options to purchase 162,500 shares of Class A Common Stock and 13,000 shares of Class A Common Stock held for the benefit of his grandchildren, which he disclaims beneficial ownership of. The number of Class B shares owned by George G. Beasley consists of 12,337,486 shares owned individually by him, 1,514,599 shares owned by the George Beasley Grantor Retained Annuity Trust and 39,835 shares owned by Shirley W. Beasley, Mr. Beasley's spouse. The number of Class A shares owned by Bruce G. Beasley, Caroline Beasley and Brian E. Beasley include options for each of them to purchase 162,500 shares of Class A Common Stock. The number of Class B shares owned by Bruce G. Beasley and Caroline Beasley each include 356,736 owned individually by each of them and 58 897,518 shares owned by the George Beasley Estate Reduction Trust as to which they share voting and dispositive power as trustees. Messrs. Cox and Fowler's ownership includes options to purchase 15,000 Class A shares at $15.50 per share and Mr. McCord's ownership includes options to purchase 10,000 Class A shares at the $10.38 per share. The number of Class A shares owned by Bradley C. Beasley includes options to purchase 33,334 shares of Class A Common Stock. Unless otherwise indicated, the address of each beneficial owner is c/o Beasley Broadcast Group, Inc., 3033 Riviera Drive, Suite 200, Naples, Florida 34103.

Common Stock ---------------------------------- Class A Class B Percent --------------- ------------------ Percent of Number Percent Percent of total total Name of Beneficial of of Number of economic voting Owner Shares class of Shares class interest power ------------------ ------ ------- ---------- ------- -------- ------- George G. Beasley......... 176,900 2.4% 13,891,920 81.6% 57.6% 78.3% George Beasley Grantor Retained Annuity Trust... -- -- 1,514,599 8.9 6.2 8.5 Bruce G. Beasley.......... 165,000 2.2 1,254,254 7.4 5.8 7.2 Caroline Beasley.......... 164,500 2.2 1,254,254 7.4 5.8 7.2 George Beasley Estate Reduction Trust.......... -- -- 897,518 5.3 3.7 5.1 Bradley C. Beasley........ 34,334 0.5 741,462 4.4 3.2 4.2 Brian E. Beasley.......... 162,500 2.2 420,265 2.5 2.4 2.5 Thomson, Horstmann & Bryant................... 501,900 6.9 -- -- 2.1 0.3 Park 80 West Plaza Two Saddle Brook, NJ 07663 Joe B. Cox................ 25,000 * -- -- * * Mark S. Fowler............ 16,000 * -- -- * * Herbert W. McCord......... 11,000 * -- -- * * All directors and executive officers as a group.................... 720,900 9.1% 15,923,175 93.5% 66.7% 89.8%

-------- * Less than one percent. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Indebtedness to Affiliates From time to time prior to the completion of the Company's initial public offering on February 11, 2000, Beasley had incurred indebtedness to related parties and affiliated entities. The Company used a portion of the net proceeds from the initial public offering to repay all indebtedness to related parties and affiliated entities outstanding at the completion of the offering. The repayments consisted of the following: . $25,976,006 owed to an affiliated entity owned by George G. Beasley, Shirley Beasley (the wife of George G. Beasley), Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, Bradley C. Beasley and Robert E. Beasley; . $11,611,038 owed to another affiliated entity, wholly-owned by George G. Beasley; and . $13,516,008 owed to George G. Beasley, an affiliated entity wholly-owned by George G. Beasley and Brian E. Beasley. Indebtedness from Affiliates From time to time prior to the completion of the Company's initial public offering, George G. Beasley, members of his immediate family and entities affiliated with them had borrowed funds from the Company. The aggregate indebtedness of $9,420,093 was repaid to Beasley at the completion of the offering. Distribution to Affiliates A distribution of approximately $1.0 million was made to George G. Beasley and his immediate family January 2000 to cover tax liabilities arising from the pass-through corporate structure of the entities that comprised Beasley Broadcast Group prior to the reorganization. 59 Corporate Reorganization Prior to the completion of the Company's initial public offering, Beasley Broadcast Group comprised of a series of subchapter S corporations, a general partnership and a series of limited partnerships and limited liability companies. In connection with the offering, the subchapter S corporation status was terminated and all former subchapter S corporations and partnerships became indirect, wholly-owned subsidiaries of Beasley Broadcast Group, Inc., through the exchange by the Company's equity holders of their interests in the subchapter S corporations and partnerships for interests in Beasley Broadcast Group. To effect this corporate reorganization: . George G. Beasley and members of his immediate family contributed their equity interest in the prior entities to Beasley Broadcast Group in exchange for a total of 17,021,373 shares of Class B common stock of Beasley Broadcast Group; and . two of our general managers contributed their equity interests in two of the prior entities to Beasley Broadcast Group in exchange for a total of 402,068 shares of Class A common stock of Beasley Broadcast Group. Radio Towers Sale and Leaseback On December 28, 2000, the Company sold its radio towers and related real estate assets to Beasley Family Towers, Inc. (BFT) for approximately $5.1 million. Beasley Family Towers is a corporation owned by George G. Beasley, Bruce G. Beasley, Caroline Beasley, Brian E. Beasley and other family members of George G. Beasley. The purchase price was paid by unsecured notes payable to the Company from BFT in monthly payments at an interest rate equal to the applicable federal rate. The notes mature on December 28, 2020. In conjunction with this sale, the Company entered into lease agreements that expire on December 28, 2020 to leaseback the towers or space on the towers and certain transmitter buildings from BFT. Office and Studio Leases The Company leases office and studio broadcasting space for radio station WRXK-FM and WXKB-FM in Ft. Myers, Florida from George G. Beasley. The current annual rent for this space is approximately $95,000. The Company believes that these lease agreements are on terms at least as favorable to it as could have been obtained from an unaffiliated party. The Company leases office space in Naples, Florida from Beasley Broadcasting Management Corp., which is wholly-owned by George G. Beasley. The current annual rent for the office space is approximately $90,000. The Company believes that the lease agreement is on terms at least as favorable to it as could have been obtained from an unaffiliated party. Augusta Radio Tower Lease The Company's Augusta radio station, WCHZ-FM, leases its radio tower from Wintersrun Communication, Inc., which is owned by George G. Beasley and Brian E. Beasley. The current annual rent for the tower is approximately $21,000. The Company believes that the lease agreement is on terms at least as favorable to it as could have been obtained from an unaffiliated party. Centennial Transaction As of February 1, 2001, we purchased all of the outstanding common stock of Centennial Broadcasting Nevada, Inc. and all of the membership interests in Centennial Broadcasting, LLC for approximately $113.5 million. Centennial Broadcasting Nevada, Inc. owned approximately 18.5% of the membership interests in Centennial Broadcasting, LLC, which owned the radio stations KJUL-FM, KSTJ- FM and KKLZ-FM in Las Vegas, Nevada and WBYU-AM, WRNO-FM and KMEZ-FM in New Orleans, Louisiana. Our Co-Chief Operating Officer and Vice Chairman of the Board of Directors, Allen B. Shaw, owned approximately 8.5% of Centennial Broadcasting, LLC and received a distribution of approximately $6.1 million, subject to certain conditions, as a result of this transaction. 60 PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) Financial Statements. A list of financial statements included herein is set forth in the Index to Financial Statements appearing in "ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA." (b) Reports on Form 8-K. The following reports on Form 8-K were filed by us during the fourth quarter of the fiscal year ended December 31, 2000: We filed a Current Report on Form 8-K on December 13, 2000 disclosing under Item 5 a second amendment to the Equity Interest Purchase Agreement for Centennial Broadcasting Nevada, Inc. and Centennial Broadcasting, LLC. (c) Exhibits.

Exhibit Number Description ------- ----------- 2.1 Asset purchase agreement of radio stations WAEC-AM and WWWE-AM in Atlanta and Hapeville, Georgia, dated August 13, 2000.(1) 2.2 Asset purchase agreement of radio station WRCA-AM in Waltham, Massachusetts, dated December 31, 1999.(1) 2.3 Asset purchase agreement of radio stations WWNN-AM and WHSR-AM in Pompano Beach, Florida and WSBR-AM in Boca Raton, Florida, dated December 30, 1999.(1) 2.4 Equity interest purchase agreement of Centennial Broadcasting Nevada, Inc. and Centennial Broadcasting, LLC, dated June 2, 2000.(2) 2.4 First amendment to equity interest purchase agreement of Centennial Broadcasting Nevada, Inc. and Centennial Broadcasting, LLC, dated December 13, 2000.(3) 2.5 Second amendment to equity interest purchase agreement of Centennial Broadcasting Nevada, Inc. and Centennial Broadcasting, LLC, dated December 13, 2000.(4) 2.6 Asset purchase agreement of radio stations WKXC-FM and WSLT-FM in Augusta, Georgia, dated November 13, 2000. 3.1 Third amended and restated bylaws of the Registrant. 10.1 George G. Beasley executive employment agreement with Beasley Mezzanine Holdings, LLC, dated January 31, 2000.(1) 10.2 Bruce G. Beasley executive employment agreement with Beasley Mezzanine Holdings, LLC, dated January 31, 2000.(1) 10.3 B. Caroline Beasley executive employment agreement with Beasley Mezzanine Holdings, LLC, dated January 31, 2000.(1) 10.4 Brian E. Beasley executive employment agreement with Beasley Mezzanine Holdings, LLC, dated January 31, 2000.(1) 10.5 Beasley Broadcast Group Contribution Agreement, dated as of November 23, 1999 between Beasley Broadcast Group, Inc., George G. Beasley, Bruce G. Beasley, Brian E. Beasley, B. Caroline Beasley, Bradley C. Beasley, Robert E. Beasley, Shirley W. Beasley, J. Daniel Highsmith, Reed Miami Holdings, Inc., Beasley FM Acquisition Corp. and affiliated entities.(1) 10.6 Note of indebtedness issued to Beasley Broadcasting of Philadelphia, Inc., in the principal amount of $24,545,566.53, dated August 11, 1994.(1)

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Exhibit Number Description ------- ----------- 10.7 Note of indebtedness issued to Beasley-Reed Broadcasting of Miami, Inc., in the principal amount of $11,498,147.97, dated August 11, 1994.(1) 10.8 Form of notes of indebtedness by and between Beasley Broadcast Group, Inc. and affiliates, dated January 31, 2000.(1) 10.9 The 2000 Equity Plan of Beasley Broadcast Group, Inc.(1) 10.10 Form of agreement of sale of four communications towers between Beasley FM Acquisition Corp. and Beasley Family Towers, Inc.(1) 10.11 Form of agreement of sale of a communications tower between Beasley Broadcasting of Eastern North Carolina, Inc. and Beasley Family Towers, Inc.(1) 10.12 Form of agreement of sale of a communications tower between Beasley Broadcasting of New Jersey, Inc. and Beasley Family Towers, Inc.(1) 10.13 Form of agreement of sale of a communications tower between Beasley Broadcasting of Eastern Pennsylvania, Inc. and Beasley Family Towers, Inc.(1) 10.14 Form of agreement of sale of a communications tower between Beasley Broadcasting of Coastal Carolina, Inc. and Beasley Family Towers, Inc.(1) 10.15 Form of agreement of sale of a communications tower between Beasley Reed Acquisition Partnership and Beasley Family Towers, Inc.(1) 10.16 Form of agreement of sale of three communications towers between Beasley FM Acquisition Corp. and Beasley Family Towers, Inc.(1) 10.17 Credit agreement between Beasley Mezzanine Holdings, LLC and Fleet National Bank, as syndication agent, Bank of America, as documentation agent, the Bank of New York, as co-documentation agent and managing agent, and the Bank of Montreal, Chicago Branch, as administrative agent, dated August 31, 2000.(5) 10.18 Amendment to Agreement of Sale of Four Communications Towers between Beasley FM Acquisition Corp. and Beasley Family Towers, Inc. 10.19 Amendment to Agreement of Sale of a Communications Tower between Beasley Broadcasting of Eastern North Carolina, Inc. and Beasley Family Towers, Inc. 10.20 Amendment to Agreement of Sale of a Communications Tower between Beasley Broadcasting New Jersey, Inc. and Beasley Family Towers, Inc. 10.21 Amendment to Agreement of Sale of Three Communications Towers between Beasley FM Acquisition Corp. and Beasley Family Towers, Inc. 10.22 Agreement of Sale of a Communications Tower between Beasley Radio and Beasley Family Towers 10.23 Amendment to Agreement of Sale of a Communications Tower between Beasley Radio and Beasley Family Towers 10.24 Agreement of Sale of a Communications Tower between Beasley Broadcasting of Augusta and Beasley Family Towers 10.25 Amendment to Agreement of Sale of a Communications Tower between Beasley Broadcasting of Augusta and Beasley Family Towers 10.26 Agreement of Sale of a Communications Tower between Beasley Broadcasting of Augusta and Beasley Family Towers

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Exhibit Number Description ------- ----------- 10.27 Amendment to Agreement of Sale of a Communications Tower between Beasley Broadcasting of Augusta and Beasley Family Towers 10.28 Agreement of Sale of Two Communications Towers between Beasley FM Acquisition and Beasley Family Towers 10.29 Amendment to Agreement of Sale of a Communications Tower between Beasley FM Acquisition and Beasley Family Towers 10.30 Allen B. Shaw executive employment agreement with Beasley Mezzanine Holdings, LLC, dated February 1, 2001. 10.31 Amendment to Agreement of Sale of a Communications Tower between Beasley Broadcasting of Eastern Pennsylvania, Inc. and Beasley Family Towers, Inc. 10.32 Amendment to Agreement of Sale of a Communications Tower between Beasley Broadcasting of Coastal Carolina, Inc. and Beasley Family Towers, Inc. 10.33 Amendment to Agreement of Sale of a Communications Tower between Beasley Reed Acquisition Partnership and Beasley Family Towers, Inc. 21.1 Subsidiaries of the Company. 23.1 Consent of KPMG, LLP.

-------- (1) Incorporated by reference to Beasley Broadcast Group's Registration Statement on Form S-1 (333-91683). (2) Incorporated by reference to Exhibit 2.1 to Beasley Broadcast Group's Current Report on Form 8-K dated June 2, 2000. (3) Incorporated by reference to Exhibit 2.2 to Beasley Broadcast Group's Current Report on Form 8-K dated December 13, 2000. (4) Incorporated by reference to Exhibit 2.3 to Beasley Broadcast Group's Current Report on Form 8-K dated January 31, 2001. (5) Incorporated by reference to Exhibit 10.8 to Beasley Broadcast Group's Quarterly Report on Form 10-Q dated November 7, 2000. 63 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. Beasley Broadcast Group, Inc. /s/ George G. Beasley By: _________________________________ George G. Beasley Chairman of the Board andChief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date --------- ----- ---- /s/ George G. Beasley Chairman of the Board and February 13, 2001 ______________________________________ Chief Executive Officer George G. Beasley /s/ Bruce G. Beasley President, Chief Operating February 13, 2001 ______________________________________ Officer and Director Bruce G. Beasley /s/ Caroline Beasley Vice President, Chief February 13, 2001 ______________________________________ Financial Officer, Caroline Beasley Secretary, Treasurer and Director /s/ Brian E. Beasley Vice President of February 13, 2001 ______________________________________ Operations and Director Brian E. Beasley /s/ Joe B. Cox Director February 13, 2001 ______________________________________ Joe B. Cox /s/ Mark S. Fowler Director February 13, 2001 ______________________________________ Mark S. Fowler /s/ Herbert W. McCord Director February 13, 2001 ______________________________________ Herbert W. McCord /s/ Allen B. Shaw Director February 13, 2001 ______________________________________ Allen B. Shaw

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