INTEREP NATIONAL RADIO SALES INC - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

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FORM 10-K

(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT
OF 1934

For the fiscal year ended December 31, 1999

OR

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

For the transition period from to

Commission file number 333-60575

INTEREP NATIONAL RADIO SALES, INC.
(Exact name of registrant as specified in its charter)

New York 13-1865151
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Park Avenue, New York, New York 10017
(Address of principal executive offices) (Zip Code)

(212) 916-0700
(Registrant's telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act: None.

Securities registered under Section 12(g) of the Exchange Act:

Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------

Class A Common Stock, par value $.01 per share Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.Yes [X] No [_]

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

As of March 24, 2000, the aggregate market value of the Class A Common
Stock, par value $.01 per share, and Class B Common Stock, par value $.01 per
share, held by non-affiliates of the registrant, based upon the last reported
sale price for the registrant's Class A Common Stock on the Nasdaq stock
market, as reported in the Wall Street Journal, was $45,686,648 (this excludes
shares owned beneficially by directors, executive officers, the registrant's
Employee Stock Ownership Plan or the registrant's Stock Growth Plan).

The number of shares of the registrant's Common Stock outstanding as of the
close of business on March 24, 2000 was 6,241,890 shares of Class A Common
Stock, par value $.01 per share, and 4,098,739 shares of Class B Common Stock,
par value $.01 per share.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant's proxy statement to be used in
connection with its 2000 Annual Meeting of Shareholders (the "Proxy Statement")
are incorporated by reference into Part III of this Annual Report on Form 10-K.

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PART I

Item 1. BUSINESS

Some of the statements made in this Annual Report are "forward-looking
statements" that are not based on historical facts and that reflect
management's current views and estimates about future economic circumstances,
industry conditions and our performance and financial results. Because these
forward-looking statements are based on many assumptions and involve risks and
uncertainties, there are important factors that could cause actual results to
differ materially from those expressed or implied by these forward-looking
statements. Although we believe that the expectations in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements.

General

Interep (also referred to as "we," "us" or the "Company") is the largest
independent national spot radio representation or "rep" firm in the United
States. We are the exclusive rep firm for over 2,000 radio stations nationwide,
including radio stations of ABC Radio, Citadel, Cumulus, Entercom, Infinity and
Radio One. Our market share was an estimated 54.2% for 1998 and 55.6% for 1999
in the ten largest U.S. radio markets, as measured by gross billings. We have
grown to be a leader in our industry by increasing our clients' advertising
revenues, acquiring station representation contracts and creating and acquiring
other rep firms. Recently, our revenues have grown dramatically due in part to
the significant consolidation that has occurred in the radio industry since the
passage of the Telecommunications Act of 1996. We have sought to align
ourselves with innovative radio station groups that are well-positioned to
capitalize on this consolidation, while still meeting the needs of hundreds of
independent stations nationwide.

We have 15 full-service offices and six satellite offices across the country
serving independent radio stations, regional radio station groups and national
station groups in all 50 states and in 99 of the top 100 radio markets. Our
clients include country, rock, sports, Hispanic, classical, urban, news and
talk radio stations. We have built strong relationships with our clients and
advertising agencies, some of which date back over 40 years.

Industry Background

Popularity of Radio. Radio has been and continues to be a highly popular
medium in the United States. According to radio industry sources, nearly 96% of
all persons over age 12 listened to the radio every week. In 1998, Arbitron
estimated that the average person over age 12 listened to almost 21 hours of
radio programming each week. Of particular significance to advertisers is the
fact that radio is often the medium that reaches consumers as they are making
purchasing decisions. In any 24-hour period, 68% of adults ages 18 to 34 and
60% of adults ages 35 to 64 listen to radio within one hour of making their
largest purchase of the day.

Growth of Radio Advertising. Advertisers' awareness of the effectiveness of
radio is reflected in the significant growth of the U.S. radio advertising
industry during this decade. Total U.S. radio advertising revenues were an
estimated $17.68 billion in 1999, up from an estimated $10.65 billion in 1994,
for a compound annual growth rate of 10.7% during that five-year period. While
radio advertising increased at a compound annual growth rate of 10.7% during
the five years ended December 31, 1999, national spot radio advertising grew at
a greater compound annual growth rate of 12.4% during the same period.

Role of Representation Firms. Radio stations generally retain national rep
firms on an exclusive basis to sell national spot commercial air time on their
stations to advertisers outside of their local markets. The station's own sales
force handles sales of air time to local advertisers. National spot radio
advertising is placed or "spotted" in one or more broadcast markets, in
contrast to network advertising, which is broadcast simultaneously on network-
affiliated stations. National spot radio advertising typically accounts for
approximately 20% of a radio station's revenues. Generally, national spot radio
advertising time is purchased by advertising agencies or media buying services
retained by advertisers to place advertising.

A rep firm promotes the benefits of buying advertising time on its client
radio stations and arranges for the placement of specific advertisements. Rep
firms generate revenues by earning commissions on the sale of advertising time
on client stations.

Radio stations outsource their national spot advertising sales to rep firms
to gain the following advantages:

. eliminate the cost of developing and maintaining a dispersed, national
sales staff, multiple sales offices and related infrastructure;

. avoid the distraction of managing a group of national sales
representatives;

. benefit from the rep film's relationships with advertising agencies and
national advertisers; and

. obtain the rep firm's specialized research that enables it to sell its
advertising time more effectively.

Rep firms seek to increase national spot sales for their clients by making
it easier for advertising buyers to purchase spot air time. They do so by
providing easier access to a large number of radio stations which meet the
advertisers' needs for target audiences as well as access to the rep firms'
proprietary research and databases.

Our Services

We have become a leader in our industry in part by representing large radio
station groups which have been consolidators in the radio industry, while
still meeting the needs of independent stations across the country. We now
represent over 2,000 radio stations nationwide. We believe that our market
leadership enhances our value to advertisers, increases our ability to sell
air time for clients and allows us to package radio stations creatively to
meet advertisers' special needs.

We believe the following factors have contributed to our position as an
industry leader and provide a strong foundation for further growth:

Strong Relationships with Advertisers; National Presence. Our strong
relationships with advertisers, advertising agencies and media buying services
nationwide enable us to promote our client stations effectively. We work
closely with advertisers to help them develop and refine radio advertising
strategies and to support their purchases of advertising time on our client
stations. Our sales force across the country is strategically located to
provide effective coverage of all major media buying centers.

Innovative Solutions. We have pioneered a variety of innovative solutions
for the industry. For example, we were the first to package and market
unaffiliated portfolios of client stations by grouping them together as
"unwired networks" to meet advertisers' particular needs. Unwired networks
enable radio advertisers and advertising agencies to target specific groups or
markets by placing advertisements on as few as two stations or as many as all
of the over 2,000 stations represented by us. We use promotions and
specialized agency sales targeted at boutique agencies. We also developed the
use of dedicated rep firms, such as American Radio Sales and Infinity Radio
Sales, for the representation of individual radio station groups. A dedicated
rep firm allows a client to benefit from our comprehensive services while
still projecting its corporate identity to advertisers.

Highly Skilled Sales Force and Sophisticated Sales Support. We have
developed a highly skilled, professional sales force. We instill in our sales
force a team-oriented approach to sales, marketing and client relationships
through incentive programs and the continuous, in-house training programs of
the Interep Radio University. We support our sales efforts with sophisticated
media research, including a proprietary nationwide database. This research
enables us to profile for advertisers the relevant characteristics of the
audiences of our client stations, to assist them in reaching their target
audiences. We have also enhanced our services to clients and advertisers alike
through the growing use of technology, such as networked and mobile computing
and computerized databases with remote client access.

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Experienced Senior Management Team. We have an experienced and
entrepreneurial management team, headed by our Chief Executive Officer, Ralph
C. Guild, a recognized leader and innovator in the radio industry. Our senior
sales managers have an average of over 25 years of industry experience and
significant equity ownership in Interep. Our executive officers include Marc G.
Guild, President, Marketing Division, William J. McEntee, Jr., Chief Financial
Officer, Stewart Yaguda, President of Interep Marketing Group, and Charles
Parra, Chief Technology Officer.

Independence. We are not owned by a radio station group. We believe that our
independence reduces perceived conflicts of interest in representing radio
stations.

Radio Industry Focus. Because we focus on representing U.S. radio stations,
as opposed to unrelated businesses such as television stations and cable
television systems, we believe we are better positioned to serve the needs of
our clients.

Strategy

Our objective is to enhance our position as the leading independent national
spot radio advertising rep firm in the United States and to increase revenues
and earnings. Our strategy to achieve these goals includes the following:

Align with Leading Radio Groups. We intend to continue to expand our market
share by developing new clients and seeking strategic alliances with innovative
and leading station groups. The relaxed restrictions on ownership of multiple
radio stations resulting from the Telecommunications Act of 1996 have led to
significant concentration of ownership of radio stations. We intend to benefit
from consolidation in the radio industry by actively pursuing and representing
radio station groups that we believe will acquire additional radio stations,
such as ABC Radio, Citadel, Cumulus, Entercom, Infinity and Radio One. To the
extent that new government regulations or economic conditions create an
environment for further industry consolidation, we will further seek to
accelerate the growth of our client base through new alliances with radio
broadcast industry innovators and consolidators.

Develop Innovative Sales Programs. We will continue to develop innovative
strategies and solutions for our clients, such as "e-radio," an electronic
sales and communications tool. We will also strive to anticipate and meet
trends in radio and advertising as our clients evolve. For example, we created
Interep Interactive in 1999 to focus on the Internet. Interep Interactive sells
Internet advertising by serving as an intermediary between website operators
and advertisers in need of suitable websites to communicate their message.
Interep Interactive also provides online marketing research on a secure basis
to clients and advertisers. Our Interep Marketing Group works closely with
Interep Interactive to cross-market Internet advertising with radio to
advertisers and to reach potential radio advertisers that currently advertise
over other media.

Promote Radio Advertising. We will continue to use our proprietary databases
of demographic and socioeconomic profiles of radio audiences in promoting the
use of radio for advertising. In 1991, we established our Interep Marketing
Group to advance the ongoing growth of radio advertising by focusing on
advertisers that do not use or underutilize radio advertising. The Interep
Marketing Group sales force works with these advertisers to demonstrate how
radio can help them achieve their goals and create marketing opportunities. We
believe that the Interep Marketing Group has contributed to the growth of radio
advertising revenues in the aggregate and, by extension, our own growth.

Make Strategic Investments. During 1999 we completed strategic investments
in three Internet advertising representation companies. We will continue to
consider strategic investments or acquisitions in our industry and in new media
to improve our market share and to better leverage our marketing capabilities.

Organization

We are organized into seven rep firms and five geographic regions. The rep
firms focus on servicing client stations while the regional offices coordinate
selling efforts to advertisers. Some of the rep firms, such as McGavren Guild,
Allied Radio Partners and D&R Radio, have long histories and are the product of

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consolidations of smaller rep firms. Others, such as Infinity Radio Sales and
American Radio Sales, were established more recently for the purpose of
representing a single station group as a dedicated unit. Our rep firms are:

Year Acquired
Representation Firm or Formed
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McGavren Guild............................................. 1953
Allied Radio Partners...................................... 1977
D&R Radio.................................................. 1981
Caballero Spanish Media.................................... 1995
Infinity Radio Sales....................................... 1997
American Radio Sales....................................... 1998
Public Radio Network....................................... 1999

The rep firms operate through our 15 strategically located full-service
offices in Atlanta, Boston, Chicago, Dallas, Detroit, Los Angeles, Miami,
Minneapolis, New York, Philadelphia, Portland, San Antonio, San Francisco,
Seattle and St. Louis, plus six satellite offices.

Clients

We represent over 2,000 radio stations. We represent many of the largest and
most successful radio station groups in the United States. In the ten largest
U.S. radio markets, as measured by gross billings, our market share was an
estimated 54.2% for 1998 and 55.6% for 1999. For the year ended December 31,
1999, other than Infinity, no station or station group accounted for more than
10% of our commission revenues. We will attempt to expand our market share by
increasing our representation of stations in the top 100 radio markets, where
we already have a significant presence, and by selectively expanding into
smaller markets where appropriate.

Clients generally retain us on an exclusive basis through written
agreements. These rep contracts generally provide for an initial term followed
by an "evergreen" period, meaning that the contract term continues until
canceled following 12 months' prior notice. If the client terminates the
contract without cause, the rep contracts generally provide for termination
payments equal to the estimated commissions that would have been payable to the
rep firm during the remaining portion of the term and the evergreen period,
plus two months. For example, if a contract with an initial term of five years
and a one-year evergreen period is canceled after three years, we would be
compensated in an amount equal to 38 months of commissions: 24 months for the
remaining term, 12 months for the evergreen notice period, plus two "spill-
over" months. It is customary in the industry for the successor rep firm to
make this payment. However, certain contracts representing material revenues
permit clients in certain circumstances to terminate their agreements with less
than 12 months' notice and pay termination and evergreen payments over shorter
periods of time.

Sales Support

In order to sell air time for our clients, we have established strong
relationships with advertisers, advertising agencies and media buying services.
Our Interep Marketing Group helps advertisers develop effective radio
advertising strategies with the objective of influencing and facilitating their
purchases of radio advertising air time. We support our sales efforts with
sophisticated media research, using a proprietary database of demographic and
socioeconomic profiles of every major U.S. radio market to help advertisers
refine their radio advertising strategies. By showing correlations between
buying patterns for various products and services and specific demographic and
socioeconomic characteristics, we help advertisers reach their target
audiences. In this way, our sales force helps advertisers plan radio
advertising schedules using selected stations that we represent. We also
provide concept development and sales promotion services, such as advertising
support, merchandising and sales incentive programs, that enable us to suggest
promotional campaigns, including partnerships with other advertising media.

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We believe that the overall demand for national spot radio advertising is
enhanced by our packaging and selling of advertising time on unwired networks.
By placing advertising with these networks, an advertiser can reach a large,
targeted audience more efficiently than if it were to place advertising with
many stations one at a time. An advertising agency or media buying service
derives additional benefits from our unwired networks as we often perform
research, scheduling, billing, payment and pre-analysis and post-analysis
functions relating to the advertising time purchase.

We use an extensive in-house training program for our work force called the
Interep Radio University. We require that most of our professional employees
spend approximately two weeks each year in our in-house training programs,
which use our own personnel as well as instructors from leading marketing and
management education programs.

Competition

Our success depends on our ability to acquire and retain representation
contracts with radio stations. The media representation business is highly
competitive, both in the competition for clients and in the sale of air time to
advertisers. Our only significant competitor in the national spot radio
representation industry is Katz Media Group, Inc., a subsidiary of AM/FM, Inc.,
a major radio station group owner, which was acquired by Clear Channel
Communications Inc. in 1999. In December 1999, Clear Channel, which had been
our client, terminated its contract with us and engaged Katz Media Group as the
exclusive representative for its 225 stations. To comply with FCC requirements,
Clear Channel has announced that it will sell at least 200 of its radio
stations. Some of the potential purchasers are our clients. After those
dispositions, Katz Media Group would represent approximately 850 radio stations
that are owned, directly or indirectly, by its parent corporation, many of
which compete with other radio stations represented by Katz Media Group. We are
not owned by a radio station group. We believe that our independence reduces
perceived conflicts of interest in representing radio stations.

We also compete with other independent and network media representatives,
direct national advertisers, national radio networks, syndicators and other
brokers of radio advertising. Moreover, on behalf of our clients, we compete
for advertising dollars with other media such as broadcast and cable
television, newspapers, magazines, outdoor and transit advertising. Internet
advertising, point-of-sale advertising and yellow pages directories. Certain of
our competitors have greater financial and other resources than we do, and such
resources may provide them with a competitive advantage in competing for client
stations or advertising expenditures.

The change of ownership of a client station frequently results in a change
of representation firm. The pace of consolidation in the radio industry has
increased as a result of the Telecommunications Act of 1996, resulting in
larger station groups. The recent increase in the number of ownership changes
of radio stations has increased the frequency of the termination or buyout of
representation contracts. Further, as station groups have become larger, they
have gained bargaining power with representation firms over rates and terms. As
a result, we continually compete for both the acquisition of new client
stations as well as the maintenance of existing relationships.

We believe that our ability to compete successfully is based on:

. the number of stations and the inventory of air time represented;

. strong relationships with advertisers;

. the experience of management and the training and motivation of sales
personnel;

. past performance;

. ability to offer unwired networks;

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. use of technology; and

. research and marketing services for clients and advertisers.

We believe that we compete effectively, in part, through our employees'
knowledge of, and experience in, our business and industry and their long
standing relationships with clients.

Employees

As of December 31, 1999, we employed approximately 653 employees, of which
approximately 614 were sales-related personnel. None of our employees are
represented by a union. We believe that our relations with our employees are
excellent.

Executive Officers

The following table sets forth certain information regarding our executive
officers:

Name Age Positions

Ralph C. Guild.......... 71 Chairman of the Board and Chief Executive Officer;
Director
Marc G. Guild........... 48 President, Marketing Division; Director
William J. McEntee, 56 Vice President and Chief Financial Officer
Jr.....................
Stewart Yaguda.......... 43 President, Interep Marketing Group
Charles Parra........... 35 Chief Technology Officer

All executive officers are appointed for terms of one year.

Ralph C. Guild has been Chairman of the Board and Chief Executive Officer of
the Company since 1986, and has served as a director of the Company since 1967.
He has been employed by the Company or its predecessors since 1957 in various
capacities. In November 1991, Mr. Guild became one of the first inductees into
the Broadcasting Hall of Fame. Mr. Guild serves on the Boards of Trustees of
the Museum of Television & Radio, the Center for Communications and the
University of the Pacific. In April 1998, Mr. Guild received the Golden Mike
Award from the Broadcasters Foundation for outstanding contributions to the
radio industry.

Marc G. Guild has been President, Marketing Division, of the Company since
November 1989, and has served as a director of the Company since 1989. He was
Executive Vice President of Network Sales/Operations of the Company from 1986
to 1989. Mr. Guild has been employed by the Company or its predecessors since
1975 in various capacities. As President, Marketing Division of the Company,
Mr. Guild plays a key role in the Company's sales and marketing programs, the
Interep Radio University and the Company's research and technology divisions
and also oversees the Company's regional executives. Mr. Guild serves on the
Board of Directors of the International Radio and Television Foundation. Marc
Guild is the son of Ralph Guild.

William J. McEntee, Jr. has been Vice President and Chief Financial Officer
of the Company since March 1997. Mr. McEntee serves in such positions pursuant
to a Services Agreement between the Company and Media Financial Services, Inc.
See "Certain Transactions and Relationships." Mr. McEntee was Chief Financial
Officer at Sudbrink Broadcasting in West Palm Beach, Florida, from 1971 through
1994. Mr. McEntee owned and managed WCEE-TV in Mt. Vernon, Illinois from 1994
until selling the station in 1996. Mr. McEntee currently owns WIOJ-AM in
Jacksonville, Florida. He is a certified public accountant and formerly served
as an audit manager for Arthur Andersen & Co.

Stewart Yaguda has been President, Interep Marketing Group since April 1992.
Mr. Yaguda was a director of marketing for Ciba-Geigy Corp., an international
pharmaceuticals company, from 1985 to 1992, where he was responsible for a
marketing budget of over $30 million for certain over-the-counter drugs. From
1981 to 1985, he was a product manager at Nabisco Brands. As President of the
Company's Radio 2000 Program,

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Mr. Yaguda is responsible for attracting new advertisers to radio and expanding
the advertising budgets of existing radio advertisers.

Charles Parra has been Chief Technology Officer of the Company since
September 1997. From July 1995 to August 1997, he was the Company's Director of
Information Technology. Mr. Parra was a project manager for the information
systems group at Russell Reynolds Associates, a New York-based executive search
firm, from 1993 through 1995. From 1990 to 1993, Mr. Parra was a technical
specialist for Sharp Electronics.

Item 2. PROPERTIES

We lease approximately 128,000 square feet of office space in 15 cities
throughout the United States. Our principal executive offices are located at
100 Park Avenue, New York, New York, where we occupy 38,400 square feet under a
lease which expires in March 2005. We believe that our office premises are
adequate for our foreseeable needs.

Item 3. LITIGATION

From time to time we are involved in litigation incidental to the conduct of
our business. 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 our
business.

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

On November 24, 1999, we held our Annual Meeting of Shareholders. The number
of shares of Common Stock of the Company outstanding at the close of business
on the record date for the meeting, September 29, 1999, and entitled to vote at
the meeting was 282,062. There were represented at the meeting, in person or by
duly given proxy, an aggregate of 268,290.42 shares of Common Stock,
representing 95% of the total number of shares of Common Stock outstanding on
the record date and entitled to vote at the meeting. At this meeting, the
shareholders voted on the following matters:

. The election of Ralph C. Guild, Marc G. Guild, Leslie D. Goldberg and
Jerome S. Traum as directors of Interep. Each of these nominees was
elected by a vote of 251,886.18 votes in favor of their election, 1,370
votes against and 15,034.24 votes withheld.

. The amendment and restatement of Interep's Articles of Incorporation in
connection with the contemplated initial public offering of Interep's
Class A Common Stock, which, among other things, effected a 20.896-for-
one split of the outstanding shares of our Common Stock. This proposal
was approved by a vote of 268,290.42 votes in favor of the proposal, no
votes against and no votes withheld.

. The amendment and restatement of Interep's By-laws, also in connection
with the contemplated initial public offering of Interep's Class A
Common Stock. This proposal was approved by a vote of 266,509.97 votes
in favor of the proposal, no votes against and 1,825.12 votes withheld.

. The adoption of Interep's 1999 Stock Incentive Plan. This proposal was
approved by a vote of 255,883.23 votes in favor of the proposal,
10,624.56 votes against and 1,782.63 votes withheld.

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PART II

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

Our Class A Common Stock has been quoted on the Nasdaq stock market since
December 9, 1999. On March 24, 2000, the last sale price of the Class A Common
Stock was $8.00 per share. The following table sets forth the range of high and
low bid prices for the common stock for the periods indicated. Such over-the-
counter market quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not necessarily represent actual transactions.

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

1999
Fourth Quarter (December 9, 1999 to December 31, 1999)..... $13.50 $12.625
2000
First Quarter (January 1, 2000 to March 24, 2000).......... $14.50 $7.00

As of March 24, 2000, there were four holders of record of our Class A
Common Stock. We believe that a substantially larger number of beneficial
owners hold shares of our Class A Common Stock in depository or nominee form.

Dividend Policy

We have not paid any dividends on our common stock in the past two years,
and we do not intend to pay any cash dividends on our common stock in the
foreseeable future. Moreover, the terms of the documents governing our
indebtedness prohibit the payment of cash dividends on our common stock. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."

Recent Sales of Unregistered Securities

On January 2, 1997, Patrick Healy acquired 229,856 shares of common stock on
exercise of options for an aggregate purchase price of $636,990. On August 15,
1997 we purchased these shares from Patrick Healy for an aggregate purchase
price of $894,520.

On June 27, 1998, Interep granted options to acquire an aggregate 835,840
shares of common stock at a per share exercise price of $3.80. Messrs. Ralph
Guild, Marc Guild and McEntee received options to acquire 626,880, 104,480 and
104,480 shares, respectively. These options are fully vested and expire in June
2008.

On July 10, 1998, Interep granted options to acquire an aggregate 1,985,119
shares of common stock at a per share exercise price of $4.02. Messrs. Ralph
Guild, Marc Guild, McEntee and Yaguda received options to acquire 1,253,759,
208,960, 313,440 and 208,960 shares, respectively. These options are fully
vested and expire in July 2008.

On December 16, 1998, Interep granted options to acquire an aggregate
470,160 shares of common stock at a per share exercise price of $4.20. Mr.
Ralph Guild received options to acquire 52,240 shares. These options are fully
vested and expire in December 2008.

The issuances of the above securities were intended to be exempt from
registration under the Securities Act in reliance on Section 4(2) thereof as
transactions by an issuer not involving any public offering. The recipients of
securities in each of these transactions represented their intentions to
acquire the securities for investment only and not with a view to, or for sale
in connection with, any distribution thereof and appropriate legends were
affixed to the share certificates, warrants and options issued in such
transactions. We believe that all recipients had adequate access, through their
relationships with the registrant, to information about the registrant.

On December 9, 1999, Interep's Articles of Incorporation were amended and
restated so that (i) the number of authorized shares of common stock was
increased from 1,000,000 to 30,000,000 (20,000,000 shares

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of Class A Common Stock and 10,000,000 shares of Class B Common Stock) and (ii)
each outstanding share of common stock was converted into 20.896 shares of
Class B Common Stock. This transaction was conducted in reliance on the
exemption from registration under the Securities Act of 1933 provided by
Section 3(a)(9) thereof.

Uses of Proceeds from Sales of Registered Securities

On December 8, 1999, the Commission declared effective our Registration
Statement on Form S-1 (File No. 333-88265). The Registration Statement covered
the sale of 5,416,667 shares of our Class A Common Stock, of which 4,429,167
shares were sold by us, and 987,500 shares were sold by our Employee Stock
Ownership Plan (the "ESOP"), at an offering price of $12 per share. The
managing underwriters in the offering were Robertson Stephens, Bear Stearns &
Co., Inc., HCFP/Brenner Securities, Inc., and SPP Capital Partners, LLC (the
"Underwriters"). On December 14, 1999 we sold to the Underwriters 4,429,167
shares of Class A Common Stock for an aggregate consideration of $53,150,000,
less underwriting discounts and commissions of $3,720,500, and other expenses
of $2,655,500, for net proceeds to us of $46,774,000. The other expenses of
$2,655,500 were paid to third parties not affiliated with us. We did not
receive any proceeds from the sale of shares by the selling stockholder.
Substantially all of the net proceeds received by us have been invested in
interest-bearing investment grade securities. As disclosed in our Registration
Statement on Form S-1, we have no specific plans for the net proceeds other
than general corporate purposes and working capital. In addition to the
5,416,667 shares of common stock offered, the Underwriters were given an option
to purchase up to an additional 812,500 shares of Class A Common Stock from the
ESOP at an offering price of $12 per share. That option was exercised on
January 11, 2000.

Item 6. SELECTED FINANCIAL DATA

Year Ended December 31,
--------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
(in thousands, except share data)

Statement of Operations
Data:
Commission revenue...... $ 96,540 $ 87,735 $ 87,096 $ 72,858 $ 70,306
Contract termination
revenue................ 6,838 37,221 26,586 18,876 12,194
---------- ---------- ---------- ---------- ----------
Total revenues........ 103,378 124,956 113,682 91,734 82,500
Operating expense:
Selling, general and
administrative
expenses............... 78,774 73,482 75,676 62,877 62,245
Depreciation and
amortization........... 32,717 36,436 28,954 20,988 13,073
---------- ---------- ---------- ---------- ----------
Total operating
expenses............. 111,491 109,918 104,630 83,865 75,318
---------- ---------- ---------- ---------- ----------
Operating income
(loss)................. (8,113) 15,038 9,052 7,869 7,182
Interest expense, net... 10,213 6,744 3,779 3,911 3,385
Income (loss) before
provision (benefit)
for income taxes....... (18,326) 8,294 5,273 3,958 3,797
Provision (benefit) for
income taxes........... (6,148) 3,446 2,359 1,885 1,843
---------- ---------- ---------- ---------- ----------
Net income (loss)....... (12,178) 4,848 2,914 2,073 1,954
Preferred stock dividend
requirements and
redemption premium..... -- 5,031 1,590 1,364 1,159
---------- ---------- ---------- ---------- ----------
Net income (loss)
applicable to common
stockholders........... $ (12,178) $ (183) $ 1,324 $ 709 $ 795
========== ========== ========== ========== ==========
Basic earnings (loss)
per common share....... $ (1.97) $ (0.03) $ 0.18 $ 0.09 $ 0.10
Basic weighted average
common shares
outstanding............ 6,182,191 6,743,803 7,476,228 7,684,060 7,811,316
Diluted earnings (loss)
per common share....... $ (1.97) $ (0.03) $ 0.17 $ 0.09 $ 0.10
Diluted weighted average
common shares
outstanding............ 6,182,191 6,743,803 7,663,874 7,961,057 7,995,932

9

December 31,
---------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- ------- -------
(in thousands)

Balance Sheet Data:
Cash and cash equivalents...... $ 66,725 $ 32,962 $ 1,419 $ 2,653 $ 1,752
Working capital................ 87,134 66,111 31,516 19,964 22,398
Total assets................... 226,320 184,508 141,030 93,930 76,881
Long-term debt (including
current portion).............. 100,00 100,103 44,425 34,235 35,221
Redeemable preferred stock..... -- -- 6,924 5,334 3,970
Redeemable common stock........ -- -- 4,522 4,662 4,132
Stockholders' equity
(deficit)..................... 33,486 (1,222) (1,609) (2,684) (1,452)

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

The following discussion is based upon and should be read in conjunction
with "Selected Consolidated Financial Data" and the Consolidated Financial
Statements, including the notes thereto, included elsewhere in this Report.

Overview

We derive a substantial majority of our revenues from commissions on sales
by us of national spot radio advertising air time for the radio stations we
represent. Generally, national spot advertising time is purchased by
advertising agencies or media buying services retained by advertisers. We
receive commissions from our client radio stations based on the national spot
radio advertising billings of the station, net of standard advertising agency
and media buying services commissions. We enter into written representation
contracts with our clients which include negotiated commission rates. Because
commissions are based on the prices paid to radio stations for spots, our
revenue base is regularly and automatically adjusted for inflation.

Our operating results generally depend on:

. increases and decreases in the size of the total national spot radio
advertising market;

. changes in our share of this market;

. acquisitions and terminations of representation contracts; and

. operating expense levels.

The effect of these factors on our financial condition and results of
operations has varied from period to period.

Total U.S. national spot radio advertising annual revenues have grown from
an estimated $1.29 billion to an estimated $2.31 billion during the five years
ended December 31, 1999. The performance of the national spot radio advertising
market is influenced by a number of factors, including, but not limited to,
general economic conditions, consumer attitudes and spending patterns, the
share of total advertising spent on radio and the share of total radio
advertising represented by national spot radio.

Our share of the national spot advertising market changes as a result of
increases and decreases in the amount of national spot advertising broadcast by
our clients. Moreover, our market share increases as we acquire representation
contracts with new client stations and decreases if current client
representation contracts are terminated. Thus, our ability to attract new
clients and to retain existing clients significantly affects our market share.

10

The value of representation contracts which have been acquired or terminated
during the last few years has tended to increase due to a number of factors,
including the consolidation of ownership in the radio broadcast industry
following the passage of the Telecommunications Act of 1996. In recent years,
we have increased our representation contract acquisition activity, and we have
devoted a significant amount of our resources to these acquisitions. At the
same time, we have received an increased amount of contract termination
revenue. We base our decisions to acquire a representation contract on the
market share opportunity presented and an analysis of the costs and net
benefits to be derived. We continuously seek opportunities to acquire
additional representation contracts on attractive terms, while maintaining our
current clients. Our ability to acquire and maintain representation contracts
has had, and will continue to have, a significant impact on our revenues and
cash flows.

Following industry practice, we generally act as the exclusive national rep
firm for each of our client radio stations under a written contract. If a
station terminates its contract prior to the scheduled termination date, the
station is typically obligated to make a payment to us, as required by the
contract or in accordance with industry practice. This amount is approximately
equal to the commissions we would have earned during the unexpired term of the
canceled contract, plus an additional two months of "spill-over" commissions.
"Spill-over" commissions are those earned on advertising placed or committed to
prior to the contract termination but broadcast later. In practice, a successor
rep firm enters a new contract with the station and assumes the obligation to
make the termination payments. These payments are usually made in equal monthly
installments over a period of one-half the number of months remaining under the
terminated contract. To illustrate, assume a station terminates a
representation contract with a competing rep firm and that contract has a
remaining unexpired term of 12 months. If we acquire the representation
contract, our payment obligation to the competing rep firm would be 14 months
of commissions payable in seven equal monthly installments. However, certain
contracts representing material revenues permit clients in certain
circumstances to terminate their agreements with less than 12 months' notice
and pay termination and evergreen payments over shorter periods of time.

We recognize revenues on a contract termination as of the effective date of
the termination. When a contract is terminated, we write off in full the
unamortized portion, if any, of the expense we originally incurred on our
acquisition of the contract. When we enter into a representation contract with
a new client, we amortize the contract acquisition cost in equal monthly
installments over the life of the new contract. As a result, our operating
income is affected, negatively or positively, by the acquisition or loss of
client stations.

We are unable to forecast any trends in contract buyout activity, or in the
amount of revenues or expenses that will likely be associated with buyouts
during a particular period. Generally, the amount of revenue resulting from the
buyout of a representation contract depends on the length of the remaining term
of the contract and the revenue generated under the contract during the 12-
month "trailing period" preceding the date of termination. The amount
recognized by us as contract termination revenue in any period is not, however,
indicative of contract termination revenue that may be realized in any future
period. Historically, the level of buyout activity has varied from period to
period. Additionally, the length of the remaining terms, and the commission
revenue generation, of the contracts which are terminated in any period vary to
a considerable extent. Accordingly, while buyout activity and the size of
buyout payments has increased since 1996, their impact on our revenues and
income is expected to be uncertain, due to the variables of contract length and
commission generation.

While the commission revenues generated under a representation contract
during a trailing period is used in calculating the buyout amount we pay to
acquire that contract, it should not be relied on as an indicator of the future
commission revenues we will generate under that contract. Our revenues will
depend on a number of factors, including the amount of national spot
advertising broadcast by the station involved. This, in turn, will be affected
by factors such as general and local economic conditions, consumer attitudes
and spending patterns, the share of total advertising spent on radio and the
share of total radio advertising represented by national spot radio.

11

During 1999, we entered the Internet advertising business. Revenues and
expenses from this business will be affected by the level of advertising on the
Internet generally, the prices obtained for advertising on the Internet and our
ability to obtain contracts from high-traffic Internet websites and from
Internet advertisers.

Our selling and corporate expense levels are dependent on management
decisions regarding operating and staffing levels and on inflation. Selling
expenses represent all costs associated with our marketing, sales and sales
support functions. Corporate expenses include items such as corporate
management, corporate communications, financial services, advertising and
promotion expenses, Internet advertising development expenses and employee
benefit plan contributions.

Our business normally follows the pattern of advertising expenditures in
general. It is seasonal to the extent that radio advertising spending increases
during the fourth calendar quarter in connection with the Christmas season and
tends to be weaker during the first calendar quarter. Radio advertising also
generally increases during the second and third quarters due to holiday-related
advertising, school vacations and back-to-school sales. Additionally, radio
tends to experience increases in the amount of advertising revenues as a result
of special events such as presidential election campaigns. Furthermore, the
level of advertising revenues of radio stations, and therefore our level of
revenues, is susceptible to prevailing general and local economic conditions
and the corresponding increases or decreases in the budgets of advertisers, as
well as market conditions and trends affecting advertising expenditures in
specific industries.

Results of Operations

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

Commission revenue. Commission revenue for the year ended December 31, 1999
increased to $96.5 million, or 10.0%, from $87.7 million in 1998. This $8.8
million increase was primarily attributable to the fact that commissions from
new representation contracts exceeded the loss of commission revenues from
terminated contracts, as well as a general increase in national spot
advertising on client stations. Our new Internet advertising business earned
commissions of $210,000 in 1999.

Contract termination revenue. Contract termination revenue in 1999 decreased
to $6.8 million, or 81.7%, from $37.2 million in 1998, a decrease of $30.4
million. This decrease was primarily attributable to the fact that a
substantial amount of contract termination revenue was generated in the first
quarter of 1998 as a result of the termination of our representation contracts
with stations owned by SFX Broadcasting, when it was acquired by an affiliate
of our principal competitor. Our representation contracts with Clear Channel
were terminated in December 1999, but the related amount of contract
termination revenue has not been determined. The value of representation
contracts acquired or terminated during the last few years has generally tended
to increase due to the factors discussed above. During 1999, approximately 450
client stations terminated rep contracts with us, which generated an aggregate
of approximately $10.0 million of commission revenue during their 12-month
trailing periods.

Selling expenses. Selling expenses for the year ended December 31, 1999
increased to $68.0 million from $61.6 million during 1998. This increase of
$6.4 million, or approximately 10.4%, was primarily due to employee
compensation increases associated with the growth in our commission revenues.
Costs relating to our entry into the Internet advertising business were $1.8
million during 1999.

General and administrative expenses. General and administrative expenses
declined $1.1 million to $10.8 million for 1999, from $11.9 million in 1998.
This reduction was primarily the result of cost reduction plans implemented by
us.

Depreciation and amortization. Depreciation and amortization decreased to
$32.7 million, or 10.2%, for 1999, from $36.4 million in 1998. The amortization
of costs associated with acquiring representation contracts is included in
depreciation and amortization. This decrease of $3.7 million was primarily due
to the completion

12

of the amortization of certain representation contracts. We acquired
representation contracts with approximately 400 new radio stations in 1999. We
believe these contracts generated an aggregate of approximately $8.0 million of
commission revenues during the 12-month trailing periods prior to their
acquisition.

Operating income (loss). Operating income decreased by $23.1 million, or
154.0%, to a loss of $8.1 million for 1999 compared with operating income of
$15.0 million in 1998. This decline was primarily due to the decrease in
contract termination revenues discussed above.

Interest expense, net. Interest expense, net increased 51.4% to $10.2
million for 1999, from $6.7 million for 1998. This increase of approximately
$3.5 million primarily resulted from interest charges associated with the
issuance of our Senior Subordinated Notes in July 1998.

Provision (benefit) for income taxes. The provision for income taxes
decreased by $9.5 million to $(6.1) million for 1999 compared to $3.4 million
for 1998, primarily as a result of the decrease in contract termination
revenues in 1999 discussed above.

Net Income (loss). Our net loss of approximately $12.2 million for 1999, a
$17.0 million decrease from the $4.8 million net income for 1998, was primarily
due to the reduction in contract termination revenues discussed above.

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997

Commission revenue. Commission revenues in 1998 were $87.7 million, as
compared to $87.1 million in 1997. Revenues from new client station
representation contracts were offset in large part by the loss of
representation contracts, primarily with SFX, which was acquired by an
affiliate of a competitor, and Nationwide Communications, which was acquired by
Jacor Communications.

Contract termination revenue. Contract termination revenue increased to
$37.2 million, or 39.8%, in 1998 from $26.6 million in 1997, primarily as a
result of the termination of the SFX and Nationwide Communication
representation contracts. This $10.6 million increase reflected that the value
of representation contracts acquired or terminated during the last few years
has tended to increase due to the factors discussed above. During 1998,
approximately 220 client stations terminated rep contracts with us, which
generated an aggregate of approximately $9.6 million of commission revenue
during their 12-month trailing periods.

Selling expenses. Selling expenses for 1998 decreased to $61.6 million, or
approximately 2.4%, from $63.1 million in 1997. The $1.5 million improvement
was primarily due to the effect of cost reduction programs initiated by us in
1997.

General and administrative expenses. General and administrative expenses
decreased to $11.9 million, or approximately 5.4%, in 1998, from $12.5 million
in 1997. The primary cause of this improvement was the lower cost levels
achieved through the relocation of our accounting and finance functions to
Florida in 1997.

Depreciation and amortization. Depreciation and amortization increased by
$7.5 million in 1998, to $36.4 million, from $29.0 million in 1997. This 25.8%
increase was due to the amortization of new representation contracts. We
acquired representation contracts with approximately 300 new radio stations in
1998. We believe these contracts generated an aggregate of approximately $10.7
million of commission revenues during their 12-month trailing periods prior to
their acquisition.

Operating income. Operating income increased by $6.0 million, or 66.1%, to
$15.0 million in 1998, compared with $9.0 million in 1997, primarily for the
reasons discussed above.

Interest expense, net. Interest expense, net increased to $6.7 million, or
78.4% in 1998, compared to $3.8 million in 1997. This $3.0 million increase was
primarily due to the interest on the $100.0 million of Senior

13

Subordinated Notes issued in July 1998, offset by an $800,000 increase in
interest earned on temporary investments.

Provision for income taxes. Provision for income taxes for 1998 increased to
$3.4 million, or 46.1%, from $2.4 million for 1997. This $1.0 million increase
was the result of an increase in our pretax income.

Net Income. Our net income increased by $1.9 million to $4.8 million, or
66.4% in 1998, from $2.9 million in 1997, for the reasons discussed above.

Liquidity and Capital Resources

Our cash requirements have been primarily funded by cash provided from
operations and financing transactions. On December 9, 1999 we closed our
initial public offering, which resulted in net proceeds of $46.8 million. As of
December 31, 1999, we had cash and cash equivalents of $66.7 million and
working capital of $87.1 million.

Cash provided by operations during 1999 amounted to $27.4 million, as
compared to $29.4 million and $23.8 million for the years ended 1998 and 1997,
respectively. These fluctuations were primarily attributable to changes in
receivables pertaining to representation contract buyouts and, in 1999, a
reduction in deferred income taxes.

Net cash used in investing activities is primarily attributable to capital
expenditures and investments in private companies. Capital expenditures of $2.9
million, $1.3 million and $0.8 million for the years ended December 31, 1999,
1998 and 1997, respectively, were primarily for computer equipment and software
upgrades. Investments in private companies amounted to $4.7 million for the
year ended December 31, 1999, and consisted of minority equity positions in
three Internet advertising firms. In December 1999, Ralph Guild acquired shares
in one of such firms from its founders at a price higher than we paid. In
February 2000, we invested an additional $1.14 million in the same firm, on the
same terms as our initial investment. Additionally, in 1999 we acquired a radio
promotion and marketing consulting business for an initial payment of $1.0
million plus an earn-out payment of up to $3.0 million over the next five
years.

Overall cash provided by financing activities of $15.0 million during 1999
resulted from Interep's initial public offering in December 1999, offset by
cash used for acquisitions of representation contracts. Cash provided by (used
in) financing activities during the years ended December 31, 1998 and 1997 was
$3.4 million and $(24.3) million, respectively. The cash provided by financing
activities in 1998 resulted from the issuance of the Senior Subordinated Notes
described below, offset by acquisitions of station representation contracts.
Cash used in financing activities in 1997 was primarily used for acquisitions
of representation contracts and debt repayments, offset by increased
borrowings.

In general, as we acquire new representation contracts, we use more cash
and, as our contracts are terminated, we receive additional cash. For the
reasons noted above in "Overview", we are not able to predict the amount of
cash we will require for contract acquisitions, or the cash we will receive on
contract terminations, from period to period.

In July 1998 we issued 10% Senior Subordinated Notes in the aggregate
principal amount of $100.0 million due July 1, 2008. Interest on the Senior
Subordinated Notes is payable in semi-annual payments of $5.0 million. The
Senior Subordinated Notes, while guaranteed by our subsidiaries, are unsecured
and are junior in right of payment to certain other indebtedness. We used a
portion of the net proceeds from the issuance of the Senior Subordinated Notes
to repay the then outstanding balance of our bank debt. Additionally, we
redeemed all of the outstanding shares of our Series A preferred stock and
Series B preferred stock, together with all of the associated shares of common
stock then subject to redemption. As of December 31, 1999 we terminated a $10.0
million revolving credit facility that we obtained in July 1998. We had made no
borrowings under that facility.

14

We issued the Senior Subordinated Notes under an indenture that limits our
ability to engage in various activities. Among other things: we are generally
not able to pay any dividends to our stockholders, other than dividends payable
in shares of common stock; we can only incur additional indebtedness under
limited circumstances; and certain types of mergers, asset sales and changes of
control either are not permitted or permit the note holders to demand immediate
redemption of their Senior Subordinated Notes.

The Senior Subordinated Notes may not be redeemed by us prior to July 1,
2003, except that we may redeem up to 30% of the Senior Subordinated Notes with
the proceeds of equity offerings. If certain events occurred which would be
deemed to involve a change of control under the indenture, we would be required
to offer to repurchase all of the Senior Subordinated Notes at a price equal to
101% of their aggregate principal, plus unpaid interest. Copies of the form of
Senior Subordinated Notes and the indenture, including further details
regarding the restrictions on our activities, are exhibits to our publicly
available registration statement filed with the Securities and Exchange
Commission, of which this prospectus is a part.

We believe that the liquidity resulting from our initial public offering and
the offering of our Senior Subordinated Notes, together with anticipated cash
from continuing operations, should be sufficient to fund our operations and
anticipated needs for required representation contract acquisition payments,
and to make the required 10% annual interest payments on the Senior
Subordinated Notes, for at least the next 12 months. We may not, however,
generate sufficient cash flow for these purposes or to repay the notes at
maturity. Our ability to fund our operations and required contract acquisition
payments and to make scheduled principal and interest payments will depend on
our future performance, which, to a certain extent, is subject to general
economic, financial, competitive, legislative, regulatory and other factors
that are beyond our control. We may also need to refinance all or a portion of
the notes on or prior to maturity. There can be no assurance that we will be
able to effect any such refinancing on commercially reasonable terms, if at
all.

Year 2000 Assessment

We have dedicated resources over the past two years to address the potential
hardware, software and other computer and technology issues and related
concerns associated with the transition to the Year 2000 and to confirm that
our service providers took similar measurers. As a result of those efforts, we
have not experienced any material disruptions in our operations in connection
with the transition to the Year 2000.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates that may
adversely affect our results of operations and financial condition. We seek to
minimize the risks from these interest rate fluctuations through our regular
operating and financing activities. Our policy is not to use financial
instruments for trading or other speculative purposes. We are not currently a
party to any financial instruments.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial information required by this item appears in the pages marked F-1
through F-21 at the end of this Report and is incorporated herein by reference
as if fully set forth herein.

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

None.

15

PART III

Item 10. through 13 inclusive

The information required by Item 10 (Directors and Executive Officers of the
Registrant)(other than information as to executive officers of the Company,
which is set forth in Part I under the caption "Executive Officers"), Item 11
(Executive Compensation), Item 12 (Security Ownership of Certain Beneficial
Owners and Management) and Item 13 (Certain Relationships and Related
Transactions) is incorporated by reference to the Company's definitive proxy
statement for the 2000 Annual Meeting of Shareholders, to be filed with the
Securities and Exchange Commission on or about April 25, 2000.

16

PART IV

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

(A) Documents Filed as Part of this Report

Financial Statements and Supplementary Data. The following Financial
Statements of the Company are filed with this Form 10-K:

Report of Independent Accountants...................................... F-2
Consolidated Balance Sheets as of December 31, 1999 and 1998........... F-3
Consolidated Statements of Operations for each of the three years in
the period ended December 31, 1999.................................... F-4
Consolidated Statements of Stockholders' Equity for each of the three
years in the period ended December 31, 1999........................... F-5
Consolidated Statements of Cash Flows for each of the three years in
the period ended December 31, 1999.................................... F-6
Notes to Consolidated Financial Statements............................. F-7

Financial Statement Schedules. The following financial statement schedule is
filed as part of this Annual Report on Form 10-K:

Schedule II--Valuation and Qualifying Accounts.......................... F-21

Exhibits. The following Exhibits are filed as part of this Report:

Exhibit No. Description
----------- -----------

3.1(5) Restated Certificate of Incorporation of Interep.

3.2(5) By-Laws of Interep.

4.1(1) Indenture, dated July 2,1998, between Interep, the Guarantors and
Summit Bank.

4.2(1) Form of 10% Senior Subordinated Note (Included in Exhibit 4.2).

4.3(2) Supplemental Indenture, dated as of March 22, 1999, among American
Radio Sales, Inc., Interep, the Guarantors and Summit Bank as
Trustee.

10.1(1) Agreement of Lease, dated June 15, 1998, between the Prudential
Insurance Company of America and Interep.

10.2(1) Amended Lease, dated June 15, 1998, between the Tuxedo Park
Executive Conference Center Proprietorship and Interep.

10.3(1)* Agreement, dated June 29, 1998, between Interep and Ralph C.
Guild.

10.4(1) Promissory Note, dated June 29, 1998, by Ralph C. Guild in favor
of Interep.

10.5(1)* Services Agreement, dated June 1, 1997, between Interep and Media
Financial Services, Inc.

10.6(1)* Amendment to Services Agreement, dated July 1, 1997, between
Interep and Media Financial Services, Inc.

10.7(2)* Amendment No. 2 to Services Agreement, dated as of March 25, 1999,
between Interep and Media Financial Services, Inc.

10.8(2)* Fifth Amended and Restated Employment Agreement, dated as of March
1, 1999, between Interep and Ralph C. Guild.

10.9(1)* Employment Agreement, dated January 1, 1991, between Interep and
Marc G. Guild.

17

Exhibit No. Description
----------- -----------

10.10(1)* Amendment, dated June 29, 1998, to Employment Agreement, dated
January 1, 1991, between Interep and Marc G. Guild.

10.11(1)* Non-Qualified Stock Option granted to Ralph C. Guild on December
31, 1988.

10.12(1)* Amendment and Extension of Option, dated January 1, 1991, between
Interep and Ralph C. Guild.

10.13(1)* Non-Qualified Stock Option granted to Ralph C. Guild on January 1,
1991.

10.14(1)* Non-Qualified Stock Option granted to Ralph C. Guild on December
31, 1995

10.15(1)* Non-Qualified Stock Option granted to Marc G. Guild on January 1,
1991

10.16(1)* Non-Qualified Stock Option granted to Ralph C. Guild on June 29,
1997

10.17(1)* Non-Qualified Stock Option granted to Marc G. Guild on June 29,
1997.

10.18(1)* Non-Qualified Stock Option granted to William J. McEntee, Jr. on
June 29, 1997.

10.19(1)* Deferred Compensation Agreement, dated September 30, 1997, between
Interep and Stewart Yaguda.

10.20(1)* Supplemental Income Agreement, dated December 31, 1986, between
Interep and Ralph C. Guild.

10.21(1)* Agreement, dated June 18, 1993, between Interep and Ralph C.
Guild.

10.22(1)* Non-Qualified Stock Option Granted to Ralph C. Guild on July 10,
1998.

10.23(1)* Non-Qualified Stock Option Granted to Marc G. Guild July 10, 1998.

10.24(1)* Non-Qualified Stock Option Granted to Stewart Yaguda July 10,
1998.

10.25(1)* Non-Qualified Stock Option Granted to William J. McEntee, Jr. July
10, 1998.

10.26(5)* Non-Qualified Stock Option Granted to Ralph C. Guild, December 16,
1998.

10.27(2)* Non-Qualified Stock Option Granted to Leslie D. Goldberg, December
16, 1998.

10.28(5)* Form of Indemnification Agreement for directors and officers.

10.29(5)* 1999 Stock Incentive Plan.

10.30(5)* Form of Stock Option Agreement.

10.31(5) Lease Agreement, dated as of June 30, 1999 between Bronxville
Family Partnership, L.P. and Interep.

10.32(5)* Agreement, dated as of November 30, 1999 between Interep and Ralph
C. Guild.

10.33(5)* Agreement, dated as of November 30, 1999 between Interep and Ralph
C. Guild.

10.34(5)* Agreement, dated as of November 30, 1999 between Interep and Marc
G. Guild.

10.35(5) Form of Registration Rights Agreement among the Interep Employee
Stock Ownership Plan, the Interep Stock Growth Plan and Interep.

21.1 Subsidiaries of Interep.

23.1 Consent of Arthur Andersen LLP (accountants).

27.1 Financial Data Schedule

- --------
* Management or compensatory contract required to be filed pursuant to Item
14(c) of the requirements for Form 10-K reports.
(1) Incorporated by reference to Interep's registration statement on Form S-4/A
(Registration No. 333-60575), filed with the Commission on February 17,
1999.

18

(2) Incorporated by reference to Interep's Annual Report on Form 10-K, filed
with the Commission on March 31, 1999.
(3) Incorporated by reference to Interep's Quarterly Report on Form 10-Q/A,
filed with the Commission on May 19, 1999.
(4) Incorporated by reference to Interep's Quarterly Report on Form 10-Q, filed
with the Commission on August 16, 1999.
(5) Incorporated by reference to Interep's registration statement on Form S-1/A
(Registration No. 333-88265), filed with the Commission on December 8,
1999.

(B) Reports on Form 8-K

None.

19

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 in the City of New
York, State of New York.

INTEREP NATIONAL RADIO SALES, INC.

March 29, 2000 /s/ Ralph C. Guild
By: _________________________________
Ralph C. Guild
President and Chief Executive
Officer and
Chairman of the Board (principal
executive officer)

Each person whose signature appears below hereby appoints Ralph C. Guild and
William J. McEntee, Jr., and both of them, either of whom may act without the
joinder of the other, as his true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments to this
Annual Report on Form 10-K, and to file the same, with all exhibits thereto and
all other documents in connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents full power and authority to perform each and
every act and thing appropriate or necessary to be done, as fully and for all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.

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/ Ralph C. Guild President, Chief Executive March 29, 2000
______________________________________ Officer, Chairman of the
Ralph C. Guild Board and Director

/s/ Marc G. Guild President, Marketing March 29, 2000
______________________________________ Division; Director
Marc G. Guild

/s/ William J. McEntee, Jr. Vice President and Chief March 29, 2000
______________________________________ Financial Officer
William J. McEntee, Jr. (Principal Financial and
Accounting Officer)

/s/ Leslie D. Goldberg Director March 29, 2000
______________________________________
Leslie D. Goldberg

/s/ Jerome S. Traum Director March 29, 2000
______________________________________
Jerome S. Traum

/s/ Howard J. Brenner Director March 29, 2000
______________________________________
Howard J. Brenner

20

INTEREP NATIONAL RADIO SALES, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Page
----

Report of Independent Public Accountants................................. F-2
Consolidated Balance Sheets as of December 31, 1999 and 1998............. F-3
Consolidated Statements of Operations for the Years Ended December 31,
1999, 1998 and 1997..................................................... F-4
Consolidated Statements of Shareholders' Equity for the Years Ended
December 31, 1999, 1998 and 1997........................................ F-5
Consolidated Statements of Cash Flows for the Years Ended December 31,
1999, 1998 and 1997..................................................... F-6
Notes to Consolidated Financial Statements............................... F-7
Financial Statement Schedule for the Years Ended December 31, 1999, 1998
and 1997
Schedule II--Valuation and Qualifying Accounts........................... F-21

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of Interep National Radio Sales, Inc.:

We have audited the accompanying consolidated balance sheets of Interep
National Radio Sales, Inc. (a New York corporation) and subsidiaries as of
December 31, 1999 and 1998, and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the three years in
the period ended December 31, 1999. These financial statements and the schedule
referred to below are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Interep National Radio
Sales, Inc. and subsidiaries as of December 31, 1999 and 1998, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1999, in conformity with accounting principles
generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index of
financial statements is presented for purposes of complying with the Securities
and Exchange Commission's rules and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.

Arthur Andersen LLP

New York, New York
March 8, 2000

F-2

INTEREP NATIONAL RADIO SALES, INC.

CONSOLIDATED BALANCE SHEETS
(in thousands except share information)

December 31,
------------------
1999 1998
-------- --------

ASSETS
Current assets:
Cash and cash equivalents................................ $ 66,725 $ 32,962
Receivables, less allowance for doubtful accounts of
$2,158 and $1,626 in 1999 and 1998, respectively........ 32,082 35,104
Representation contract buyouts receivable............... 7,529 11,447
Current portion of deferred representation contract
costs................................................... 37,228 33,742
Prepaid expenses and other current assets................ 1,028 1,207
-------- --------
Total current assets................................... 144,592 114,462
-------- --------
Fixed assets, net........................................ 5,727 4,311
Deferred representation contract costs................... 55,103 45,702
Station contract rights, net............................. 670 1,681
Representation contract buyouts receivable............... 3,569 6,920
Investments and other assets............................. 16,659 11,432
-------- --------
Total assets........................................... $226,320 $184,508
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Capitalized lease obligations............................ $ -- $ 103
Accounts payable and accrued expenses.................... 18,534 16,537
Accrued interest......................................... 5,000 4,972
Representation contract buyouts payable.................. 26,301 20,219
Accrued employee-related liabilities..................... 7,623 6,520
-------- --------
Total current liabilities.............................. 57,458 48,351
-------- --------
Long-term debt........................................... 100,000 100,000
-------- --------
Representation contract buyouts payable.................. 29,876 26,706
-------- --------
Other noncurrent liabilities............................. 5,500 10,673
-------- --------
Commitments and contingencies
Shareholders' equity:
Class A common stock, $.01 par value--20,000,000 shares
authorized, 5,416,667 shares issued at December 31,
1999.................................................... 54 --
Class B common stock, $.01 par value--10,000,000 shares
authorized, 4,923,962 and 6,991,350 shares issued at
December 31, 1999 and 1998, respectively................ 49 70
Additional paid-in-capital............................... 45,881 1,107
Accumulated deficit...................................... (12,498) (320)
Receivable from Employee Stock Ownership Plan............ -- (82)
Treasury stock, at cost--1,079,716 shares at December 31,
1998.................................................... -- (1,997)
-------- --------
Total shareholders' equity (deficit)................... 33,486 (1,222)
-------- --------
Total liabilities and shareholders' equity............. $226,320 $184,508
======== ========

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

F-3

INTEREP NATIONAL RADIO SALES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except per share data)

For the Year Ended
December 31,
----------------------------
1999 1998 1997
-------- -------- --------

Commission revenues.............................. $ 96,540 $ 87,735 $ 87,096
Contract termination revenue..................... 6,838 37,221 26,586
-------- -------- --------
Total revenues................................. 103,378 124,956 113,682
-------- -------- --------
Operating expenses:
Selling expenses............................... 67,995 61,618 63,135
General and administrative expenses............ 10,779 11,864 12,541
Depreciation and amortization expense.......... 32,717 36,436 28,954
-------- -------- --------
Total operating expenses..................... 111,491 109,918 104,630
-------- -------- --------
Operating (loss) income.......................... (8,113) 15,038 9,052
Interest expense, net............................ 10,213 6,744 3,779
-------- -------- --------
(Loss) income before (benefit) provision for
income taxes.................................... (18,326) 8,294 5,273
(Benefit) provision for income taxes............. (6,148) 3,446 2,359
-------- -------- --------
Net (loss) income................................ (12,178) 4,848 2,914
Preferred stock dividend requirements and
redemption premium.............................. -- 5,031 1,590
-------- -------- --------
Net (loss) income applicable to common
shareholders.................................... $(12,178) $ (183) $ 1,324
-------- -------- --------
Basic (loss) earnings per share.................. $ (1.97) $ (0.03) $ 0.18
-------- -------- --------
Diluted (loss) earnings per share................ $ (1.97) $ (0.03) $ 0.17
======== ======== ========

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

F-4

INTEREP NATIONAL RADIO SALES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands except share information)

Class A Class B
Common Stock Common Stock Additional Treasury Stock
---------------- ------------------ Paid-in Accumulated Receivable -------------------
Shares Amount Shares Amount Capital Deficit from ESOP Shares Amount
--------- ------ ---------- ------ ---------- ----------- ---------- ---------- -------

Balance, January 1,
1997................... -- $-- 6,761,494 $ 67 $ 841 $ (1,601) $(255) (466,168) $(1,736)
Net income.............. -- -- -- -- -- 2,914 -- -- --
Treasury stock
purchases.............. -- -- -- -- -- -- -- (264,251) (206)
Accretion of preferred
stock.................. -- -- -- -- -- (793) -- -- --
Accrued dividends in-
kind on preferred
stock.................. -- -- -- -- -- (797) -- -- --
Reduction of receivable
from ESOP.............. -- -- -- -- -- -- 73 -- --
Revaluation of common
stock subject to
redemption............. -- -- -- -- -- 140 -- -- --
Exercise of stock
options................ -- -- 229,856 3 (259) -- -- -- --
--------- ---- ---------- ---- ------- -------- ----- ---------- -------
Balance, December 31,
1997................... -- -- 6,991,350 70 582 (137) (182) (730,419) (1,942)
Net income.............. -- -- -- -- -- 4,848 -- -- --
Treasury stock
purchases.............. -- -- -- -- -- -- -- (150,347) (302)
Accretion of preferred
stock.................. -- -- -- -- -- (492) -- -- --
Accrued dividends in-
kind on preferred
stock.................. -- -- -- -- -- (442) -- -- --
Reduction of receivable
from ESOP.............. -- -- -- -- -- -- 100 -- --
Earned compensation,
executive stock
options................ -- -- -- -- 753 -- -- -- --
Redemption of preferred
stock and common stock
subject to redemption.. -- -- -- -- (228) (4,097) -- (198,950) 247
--------- ---- ---------- ---- ------- -------- ----- ---------- -------
Balance, December 31,
1998................... -- -- 6,991,350 70 1,107 (320) (82) (1,079,716) (1,997)
Net loss................ -- -- -- -- -- (12,178) -- -- --
Treasury stock
purchases.............. -- -- -- -- -- -- -- (172) (14)
Retirement of treasury
stock.................. -- -- (1,079,888) (11) (2,000) -- -- 1,079,888 2,011
Reduction of receivable
from ESOP.............. -- -- -- -- -- -- 82 -- --
Conversion of common
stock.................. 987,500 10 (987,500) (10) -- -- -- -- --
Sale of common stock
under public offering,
net of expenses........ 4,429,167 44 -- -- 46,774 -- -- -- --
--------- ---- ---------- ---- ------- -------- ----- ---------- -------
Balance, December 31,
1999................... 5,416,667 $ 54 4,923,962 $ 49 $45,881 $(12,498) $ -- -- $ --
========= ==== ========== ==== ======= ======== ===== ========== =======

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

F-5

INTEREP NATIONAL RADIO SALES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

For the Year Ended
December 31,
----------------------------
1999 1998 1997
-------- -------- --------

Cash flows from operating activities:
Net (loss) income.............................. $(12,178) $ 4,848 $ 2,914
Adjustments to reconcile income to net cash
provided by operating activities:
Depreciation and amortization................ 32,717 36,436 28,954
Stock option compensation expense............ -- 753 --
Changes in assets and liabilities--
Receivables.................................. 3,022 (3,908) (4,487)
Representation contract buyouts receivable... 7,269 (447) (5,966)
Prepaid expenses and other current assets.... 179 (529) 243
Other noncurrent assets...................... (1,480) (5,259) 954
Accounts payable and accrued expenses........ 1,894 (8,161) (809)
Accrued interest............................. 28 4,817 13
Accrued employee-related liabilities......... 1,103 1,934 2,457
Other noncurrent liabilities................. (5,173) (1,080) (452)
-------- -------- --------
Net cash provided by operating activities.. 27,381 29,404 23,821
-------- -------- --------
Cash flows from investing activities:
Additions to fixed assets...................... (2,900) (1,270) (792)
Increase in other investments.................. (5,678) -- --
-------- -------- --------
Net cash used in investing activities...... (8,578) (1,270) (792)
-------- -------- --------
Cash flows from financing activities:
Station representation contract payments....... (31,926) (35,609) (33,991)
Debt repayments................................ -- (61,572) (6,100)
Borrowings in accordance with credit
agreement..................................... -- 17,250 16,519
Issuance of senior subordinated notes.......... -- 100,000 --
Redemption of preferred stock and common stock
subject to redemption......................... -- (16,705) --
Sales and issuances of stock, net of issuance
costs......................................... 46,774 -- (256)
Purchases of treasury stock.................... (14) (55) (206)
Other, net..................................... 126 100 (229)
-------- -------- --------
Net cash provided by (used in) financing
activities................................ 14,960 3,409 (24,263)
-------- -------- --------
Net increase (decrease) in cash and cash
equivalents..................................... 33,763 31,543 (1,234)
Cash and cash equivalents, beginning of period... 32,962 1,419 2,653
-------- -------- --------
Cash and cash equivalents, end of period......... $ 66,725 $ 32,962 $ 1,419
======== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest paid.................................. $ 9,972 $ 2,387 $ 3,220
Income taxes paid, net......................... 906 341 235
Non-cash investing and financing activities:
Station representation contracts acquired...... $ 41,266 $ 36,958 $ 67,168
======== ======== ========

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

F-6

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share information)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Interep
National Radio Sales, Inc. ("Interep"), together with its subsidiaries
(collectively, the "Company"). All significant intercompany transactions and
balances have been eliminated.

Revenue Recognition

The Company is a national representation ("rep") firm serving radio
broadcast clients throughout the United States. Commission revenue is derived
from sales of advertising time for radio stations under representation
contracts. Commissions and fees are recognized in the month the advertisement
is broadcast. In connection with its unwired network business, the Company
collects fees for unwired network radio advertising and, after deducting its
commissions, remits the fees to the respective radio stations. In instances
when the Company is not legally obligated to pay a station until the
corresponding receivable is paid, fees payable to stations have been offset
against the related receivable from advertising agencies in the accompanying
consolidated balance sheets.

In 1999, commission revenue includes $210 of revenue derived from sales of
advertising on the internet. In accordance with generally accepted accounting
principles, the Company records this revenue on a net commission basis.

Representation Contract Termination Revenue and Contract Acquisition Costs

The Company's station representation contracts usually renew automatically
from year to year unless either party provides written notice of termination
at least twelve months prior to the next automatic renewal date. In accordance
with industry practice, in lieu of termination, an arrangement is normally
made for the purchase of such contracts by a successor representative firm.
The purchase price paid by the successor representation firm is generally
based upon the historic commission income projected over the remaining
contract period plus two months.

Costs of obtaining station representation contracts are deferred and
amortized over the life of the new contract. Such amortization is included in
the accompanying consolidated statements of operations as a component of
depreciation and amortization expense. Amounts which are to be amortized
during the next year are included as current assets in the accompanying
consolidated balance sheets. Income earned from the loss of station
representation contracts (contract termination revenue) is recognized on the
effective date of the buyout agreement. In 1999, contract termination revenue
was offset by $290 representing the amount of previously deferred cost that
will not be realized due to the loss of the station representation contract.

In addition, costs incurred as a result of commission rate reductions are
deferred and amortized over the remaining life of the existing representation
agreement. Such amortization is included in the accompanying consolidated
statements of operations as a component of depreciation and amortization
expense.

Cash and Cash Equivalents

Cash equivalents consist of cash in excess of daily requirements which are
invested in overnight deposits.

F-7

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

Fixed Assets, net

Furniture, fixtures and equipment are recorded at cost and are depreciated
over three to ten-year lives, and leasehold improvements are amortized over the
shorter of the lives of the leases or assets, all on a straight-line basis.

Depreciation and Amortization Expense

A summary of depreciation and amortization expense for the years ended
December 31, 1999, 1998 and 1997 is as follows:

1999 1998 1997
------- ------- -------

Depreciation and amortization of office
facilities....................................... $ 1,484 $ 1,294 $ 1,587
Amortization of contract acquisition costs........ 28,291 32,482 24,603
Amortization of intangible assets................. 2,942 2,660 2,764
------- ------- -------
$32,717 $36,436 $28,954
======= ======= =======

Station Contract Rights, Net

Station contract rights consist of costs of purchased businesses in excess
of net tangible assets acquired and are stated at cost less accumulated
amortization. These costs are being amortized using the straight-line method
over 5 years. Amortization expense for 1999, 1998 and 1997 was $1,011, $959 and
$978, respectively, and is included in the above table. Other intangible assets
include noncompete agreements which are being amortized over their contractual
lives of two to four years.

Recoverability of intangible assets is assessed regularly (at least
annually) and impairments, if any, are recognized in operating results if a
permanent diminution in value were to occur based upon an undiscounted cash
flow analysis. The Company has determined that no such impairment exists.

Employee Stock Ownership Plan

The Company has an Employee Stock Ownership Plan ("ESOP") for eligible
employees. Cash contributions made by the Company to the ESOP are recorded as
compensation expense and stock repurchases made by the Company from the ESOP
are recorded in treasury stock. Any outstanding receivable to the Company from
the ESOP is recorded as a reduction to shareholders' equity and shares of the
Company's stock owned by the ESOP are treated as outstanding common stock.

Earnings (Loss) per Share

Basic earnings (loss) per share (EPS) for each of the respective years have
been computed by dividing the net income (loss) applicable to common
shareholders by the weighted average number of common shares outstanding during
the year. Basic EPS has been computed using the weighted average shares of
common stock outstanding of 6,182,191, 6,743,803 and 7,476,228 for the years
ended December 31, 1999, 1998 and 1997, respectively. Diluted EPS reflects the
potential dilution that could occur if the outstanding options to purchase
common stock were exercised. Diluted EPS has been computed using the weighted
average shares of common stock outstanding of 6,182,191, 6,743,803 and
7,663,874 for the years ended December 31, 1999, 1998 and 1997, respectively.

F-8

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

Income Taxes

Income taxes are recognized during the year in which transactions enter into
the determination of financial statement income, with deferred taxes being
provided for temporary differences between amounts of assets and liabilities
recorded for tax and financial reporting purposes.

Segment Reporting

In 1998, the Company adopted Statement of Financial Accounting Standards No.
131, "Disclosure about Segments of an Enterprise and Related Information". The
Statement requires the Company to report segment financial information
consistent with the presentation made to the Company's management for decision
making purposes. The Company is managed as one segment and all revenues are
derived solely from radio representation operations and related activities. The
Company's management decisions are based on operating cash flow, (defined as
operating income before depreciation, amortization, and management fees),
general and administrative expenses of $10,779, $11,864 and $12,541 in 1999,
1998, and 1997, respectively, and adjusted EBITDA (income excluding contract
termination revenue before interest, taxes, depreciation and amortization) of
$17,766, $14,253, and $11,420 in 1999, 1998, and 1997, respectively.

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 amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

2. ACQUISITIONS AND INVESTMENTS

In September 1999, the Company acquired substantially all of the assets of
Morrison and Abraham, Inc., a promotion and marketing consulting service to the
radio broadcasting industry, for approximately $1 million paid upon closing and
a maximum of $3 million to be paid contingent upon certain future performance
measures over the next five years. The performance measures were met for the
year ended December 31, 1999 and therefore, the Company accrued an additional
$1 million to be paid in September, 2000. The acquisition has been accounted
for by the purchase method; accordingly, operating results are included in the
accompanying statement of operations from the date of purchase. The acquired
assets include fixed assets, current assets and rights to certain service
agreements. The excess of cost over the fair market value of the assets
acquired is being amortized over a five year period.

The Company has investments in affiliates, which are accounted for on the
cost method as the Company does not have the ability to exercise significant
influence over operating and financial policies of these affiliates. Total
investments in 1999 amounted to $4,678, representing a range of ownership from
8% to 16% of the affiliated companies.

F-9

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

3. FIXED ASSETS

Fixed assets are comprised of the following:

December 31,
------------------
1999 1998
-------- --------

Furniture and equipment.................................. $ 14,133 $ 11,318
Leasehold improvements................................... 5,975 5,889
Equipment held under lease............................... 3,461 3,461
-------- --------
23,569 20,668
Less--Accumulated depreciation and amortization.......... (17,842) (16,357)
-------- --------
Fixed assets, net........................................ $ 5,727 $ 4,311
======== ========

4. ACCOUNTS PAYABLE

The Company utilizes a cash management system whereby overnight investments
are determined daily. Included in accounts payable are $8,863 and $7,218 of
book overdrafts as of December 31, 1999 and 1998, respectively, which result
from this cash management program.

5. EMPLOYEE STOCK PLANS

Employee Stock Ownership Plan

Under the terms of the Company's nonleveraged Employee Stock Ownership Plan
("ESOP") and Trust ("ESOT"), the Company may make annual contributions to the
ESOT in the form of either cash or Class B common stock of the Company for the
benefit of eligible employees. In lieu of contributions, the Company may
repurchase shares of Class B common stock from the ESOP or advance money to the
plan from time to time. The amount of annual funding is at the discretion of
the Board of Directors of the Company except that the minimum amount must be
sufficient to enable the ESOT to meet its current obligations. No cash
contributions were made by the Company in 1999, 1998 and 1997 and consequently
no compensation cost was incurred during 1999, 1998 or 1997. In lieu of
contributions prior to 1998, the Company loaned money to the ESOP. At December
31, 1998, $82 of this advance remained outstanding and was recorded as a
reduction of shareholders' equity. There was no outstanding receivable from the
ESOP at December 31, 1999.

Pursuant to the ESOP, as amended, employees of the Company and each of its
subsidiaries are eligible to participate, subject to certain uniform
requirements. Upon leaving the Company, employees may sell the shares back to
the ESOT at the then fair market value of the Company's Class B common stock.
Prior to the initial public offering (see Note 10), distributions were made in
quarterly installments over a period not to exceed five years, depending upon
the former employee's total account balance. Effective with the initial public
offering, the distribution rule was amended to lump sum distribution. The
portion of the vested liability relating to terminated employees as of December
31, 1998 was $4,381.

The Company has purchased life insurance policies on certain of its
executives for which Interep is the beneficiary. Proceeds from these policies
will be used to partially fund payments under the ESOP for these executives.
Such policies had a cash surrender value of $3,023 and $2,839 as of December
31, 1999 and 1998, respectively, with no offsetting loans.

F-10

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

As of December 31, 1999 and 1998, the Company's ESOP owned 2,419,528 and
3,697,774 Class B common shares, respectively, representing approximately 23.4%
and 62.6%, respectively, of the Company's total shares outstanding, before
consideration of common stock equivalents. All shares owned by the ESOP as of
December 31, 1999 and 1998 were allocated and earned.

Stock Growth Plan

On January 1, 1995, the Company established the Stock Growth Plan, a
qualified stock bonus plan through which a portion of qualified employee
compensation is allocated to the plan. Participation in the Stock Growth Plan
is mandatory and non-contributory for all eligible employees. Stock Growth Plan
participants are at all times fully vested in their accounts without regard to
age or years of service. The Company, through employee withholdings, makes
regular monthly cash contributions to the Stock Growth Plan. For the years
ended December 31, 1999, 1998 and 1997, the Company recorded compensation
expense of $2,672, $2,521 and $2,886, respectively, in relation to these
contributions. Contributions to the Stock Growth Plan are used to repurchase
shares of Interep Class B common stock from the ESOP and shares held by
terminated employees.

Shares owned by the Stock Growth Plan are recorded as outstanding stock of
the Company. Distributions to participants will be made in cash upon
termination of employment over a period not to exceed three years. The Stock
Growth Plan purchased 290,746, 494,796 and 508,713 shares from the ESOP in
1999, 1998 and 1997, respectively. The weighted average fair value of stock
purchased by the plan during 1999, 1998 and 1997 was $5.81, $4.01 and $3.94,
respectively.

Stock Options

In 1999, the Company adopted the 1999 Stock Incentive Plan. The plan
provides for the granting of options and appreciation rights of the Company's
Class A and Class B common stock. The option price per share may not be less
than the fair market value of the Class A and Class B common stock on the date
the option is granted. The aggregate number of shares may not exceed 666,667
for any participant during any three consecutive 12 month periods, and the
maximum term of an option may not exceed ten years. Options primarily vest in
three equal annual installments. Under the terms of the plan, the Company is
authorized to grant options to purchase up to a total of 2,000,000 shares of
Class A and Class B common stock.

A summary of the stock options outstanding during the years ended December
31, 1999, 1998 and 1997 is set forth below:

Number of Weighted
Shares Subject Average
to Option Exercise Price
-------------- --------------

Outstanding and exercisable at December 31,
1996........................................ 1,236,687 3.01
Exercised during 1997........................ (229,856) 2.77
--------- ----
Outstanding and exercisable at December 31,
1997........................................ 1,006,831 3.07
Granted during 1998, at prices less than fair
market value................................ 3,291,119 3.99
Redeemed during 1998......................... (66,511) 3.91
--------- ----
Outstanding at December 31, 1999 and 1998.... 4,231,439 3.77
--------- ----
Options exercisable at December 31, 1998..... 1,776,159 3.38
Options exercisable at December 31, 1999..... 4,231,439 3.77

No stock options were granted in 1999.

F-11

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

The following table summarizes information regarding the stock options
outstanding at December 31, 1999, pursuant to the terms of the Plan:

Options Outstanding
and Exercisable
At December 31, Remaining
1999 Exercise Price Contractual Life
------------------- -------------- ----------------
208,960 $ 1.56 6 Years
313,440 2.77 6 Years
417,920 3.91 6 Years
835,839 3.80 8.5 Years
1,985,119 4.02 8.5 Years
470,161 4.20 9 Years
-----------------
4,231,439
=================

Compensation expense of $753 was recognized in 1998, which represents the
difference between fair market value and the option exercise price on the date
of grant. Under generally accepted accounting principles this also resulted in
a credit to additional paid in capital.

The Company has adopted the disclosure provisions of FASB Statement No. 123,
but opted to remain under the expense recognition provisions of Accounting
Principles Board (APB) Opinion No. 25, in accounting for stock option plans.
Had compensation expense for stock options granted under the Plan been
determined based on fair value at the grant dates consistent with the
disclosure method required in accordance with FASB Statement No. 123, the
Company's net income and earnings per share would have been affected as shown
in the following pro forma presentation:

Year ended December 31,
-------------------------
1999 1998
------------ -----------

Net (loss) income
As reported...................................... $ (12,178) $ 4,848
Pro forma........................................ (16,756) 3,139
Basic and diluted (loss) earnings per share
As reported...................................... $ (1.97) $ 0.72
Pro forma........................................ (2.71) 0.47

There would have been no impact on 1997 reported results as all options
granted in previous years vested 100% on the grant dates, and no options were
granted in 1997.

The weighted average fair value of options granted in 1998 of $1.91 was
estimated as of the date of grant using the Black-Scholes stock option pricing
model, based on the following weighted average assumptions: weighted average
risk free interest rate of 5.55%, dividend yield of 0%, volatility of 0% and
expected term of 10 years.

F-12

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

6. EMPLOYEE BENEFIT PLANS

Managers' Incentive Compensation Plans

The Company maintains various managers' incentive compensation plans for
substantially all managerial employees. The plans provide for incentives to be
earned based on attainment of threshold operating profit and market share goals
established each year, as defined. The Company provided approximately $5,029,
$5,071 and $4,551 for such compensation during 1999, 1998 and 1997,
respectively.

401(k) Plan

The Company has a defined contribution plan, the 401(k) Plan, which covers
substantially all employees who have completed ninety days of service with the
Company. Under the terms of the 401(k) Plan, the Company may contribute a
matching contribution percentage determined by, and at the discretion of, the
Board of Directors but not in excess of the maximum amount deductible for
federal income tax purposes. Company contributions vest to the employees at 20%
per year over a five-year period. The Company provided $615, $892 and $728 in
the form of cash in 1999, 1998 and 1997, respectively.

Deferred Compensation Plans

Certain of Interep's subsidiaries maintain deferred compensation plans which
cover employees selected at the discretion of management. Participants are
entitled to deferred compensation and other benefits under these plans. In
1999, 1998, and 1997, the Company provided compensation expense of $101, $72
and $14, respectively related to these plans. All amounts due under these plans
were fully vested as of December 31, 1999 and are recorded as liabilities on
the Company's consolidated balance sheet; however, they remain subject to
further appreciation/depreciation upon changes in value (as defined).

The Company has agreements with several of its employees to provide
supplemental income benefits. The benefits under these plans were fully vested
as of December 31, 1999. The Company provided $189, $226 and $262 in 1999, 1998
and 1997, respectively, for these plans which principally represented interest
on the vested benefits.

In 1994, the Company established a compensation deferral plan for key
executives. Participants made a one-time election to defer certain of their
compensation and have such amounts contributed to a tax-deferred trust in the
form of Series B Cumulative Redeemable Preferred Stock (the "Series B Preferred
Stock") and Interep common stock. No contributions were made in 1999, 1998 or
1997. The Company redeemed all of the outstanding Series B Preferred Stock and
redeemable common stock during 1998. Distributions to participants out of the
trust are being made in cash. As of December 31, 1999, the Company has $613
classified as accrued employee-related liabilities on the accompanying
consolidated balance sheet relating to this plan.

Other

The Company has life insurance policies on certain of its executives for
which Interep is the beneficiary. Proceeds from these policies will be used to
partially fund certain of the retirement benefits under these supplemental
agreements. Such policies had cash surrender values of $1,344 and $1,229 as of
December 31, 1999 and 1998, respectively, and offsetting loans of $873 and
$793, respectively.

F-13

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

7. INCOME TAXES

Interep and its subsidiaries file a consolidated federal tax return.
However, for state tax purposes, separate tax returns are filed in various
jurisdictions where losses on certain subsidiaries are not available to offset
income on other subsidiaries, and tax benefits on such losses may not be
realized. As a result, the consolidated tax provisions are determined
considering this tax reporting structure and may not fluctuate directly with
consolidated pretax income.

Components of the provisions for income taxes are as follows:

Year Ended December
31,
----------------------
1999 1998 1997
------- ------ ------

Current:
Federal............................................ $ -- $ 240 $ --
State.............................................. -- 252 412
Deferred........................................... (6,148) 2,954 1,947
------- ------ ------
Total (benefit) provision........................ $(6,148) $3,446 $2,359
======= ====== ======

A reconciliation of the U.S. federal statutory tax rate to the effective tax
rate on the income (loss) before income taxes for the periods ended December
31, 1999, 1998 and 1997, is as follows:

1999 1998 1997
------- ------ ------

(Benefit) provision computed at the federal
statutory rate of 34%............................ $(6,231) $2,820 $1,793
State and local taxes, net of federal income tax
benefit.......................................... (946) 292 272
Nondeductible travel and entertainment expense.... 204 303 249
Nondeductible insurance premiums.................. 53 (102) 45
Other............................................. (280) 133 --
Valuation allowance............................... 1,052 -- --
------- ------ ------
Total......................................... $(6,148) $3,446 $2,359
======= ====== ======

Temporary differences and carryforwards which gave rise to deferred tax
assets and liabilities at December 31, 1999 and 1998, are as follows:

December 31,
----------------
1999 1998
------- -------

Deferred tax assets:
Depreciation and amortization........................... $ 1,966 $ 1,460
Accruals not currently deductible for tax purposes...... 3,202 3,190
Consolidated net operating loss carryforward............ 7,200 --
Other................................................... 676 884
------- -------
13,044 5,534
------- -------
Deferred tax liabilities:
Buyout receivable....................................... 4,439 7,347
Unamortized representation contracts.................... 7,450 6,167
Other................................................... 103 344
------- -------
Net deferred tax asset (liability)........................ 1,052 (8,324)
Valuation allowance....................................... (1,052) --
------- -------
Net deferred tax liability................................ $ -- $(8,324)
======= =======

F-14

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

As of December 31, 1999 and 1998, the Company had a refund receivable of
$189 and an accrued tax liability of $492, respectively, on its books. The
Company has a tax net operating loss of $7,200 as of December 31, 1999 that
expires in 2019.

8. LONG-TERM DEBT

Long-term debt at December 31, 1999 and 1998, includes the following:

1999 1998
-------- --------

Senior subordinated notes................................. $100,000 $100,000
Capitalized lease obligations............................. -- 103
-------- --------
100,000 100,103
Less--Current portion..................................... -- 103
-------- --------
$100,000 $100,000
======== ========

On July 2, 1998, the Company issued (the "Offering") $100,000,000 aggregate
principal amount of 10.0% Senior Subordinated Notes (the "Notes") due on July
1, 2008. The Notes are general unsecured obligations of the Company, and the
indenture agreement for the Notes stipulates, among other things, restrictions
on incurrence of additional indebtedness, payment of dividends, repurchase of
equity interests (as defined), creation of liens (as defined), transactions
with affiliates (as defined), sale of assets or certain mergers and
consolidations. The Notes bear interest at the rate of 10.0% per annum, payable
semiannually on January 1 and July 1. The Notes are subject to redemption at
the option of the Company, in whole or in part, at any time after July 1, 2003.
In addition, at any time and from time to time prior to July 1, 2001, the
Company may redeem up to an aggregate of 30% in principal amount of Notes
originally issued under the indenture agreement at a redemption price equal to
110.0% of the principal amount thereof, plus accrued and unpaid interest and
liquidated damages, if any, with the net cash proceeds of one or more equity
offerings (as defined). All of the Company's subsidiaries are guarantors of
these Notes and all guarantor subsidiaries are wholly owned by the Company. The
guarantee is full, unconditional, joint and several with other guarantor
subsidiaries. The Company has no other assets or operations separate from its
investment in the subsidiaries.

The Company capitalized $4,689 of the costs incurred in the Offering of
which, $468 and $205 has been expensed in 1999 and 1998, respectively.

In addition, on July 2, 1998, the Company entered into a $10.0 million
revolving credit facility with BankBoston, N.A. and Summit Bank. This Facility
was terminated by the Company in December 1999.

9. COMMON AND PREFERRED STOCK SUBJECT TO REDEMPTION

On June 29, 1998, the Company redeemed all of the outstanding shares of its
Series A Preferred Stock, at face value plus accrued dividends, and certain
associated shares of its common stock, for a total purchase price of $14.1
million. Also on that date, the Company redeemed all of the outstanding shares
of its Series B Preferred Stock, at face value plus accrued dividends, and
certain associated shares of Common Stock, from certain members of management,
for a total purchase price of $2.6 million. The excess of the purchase price
over the carrying amount of the redeemable stock at June 29, 1998 of $4,325 has
been charged to additional paid in capital to the extent applicable with the
remainder charged to retained earnings.

Accretion of the Series A Preferred Stock in 1998 and 1997 was $457 and
$735, respectively. Accretion of the Series B Preferred Stock in 1998 and 1997
was $35 and $58, respectively. Dividends-in-kind on the Series A Preferred
Stock in 1998 and 1997 were $372 and $676, respectively (consisting of 372 and
676 shares,

F-15

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

respectively). Dividends-in-kind on the Series B Preferred Stock for 1998 and
1997 were $70 and $121, respectively (consisting of 70 and 121 shares,
respectively).

The Company had traditionally repurchased the shares of its common stock
held by departing employees outside the ESOP at a price equal to the then
independently appraised value. The purchase price was payable in quarterly
installments, including interest at rates prevailing for U.S. Treasury
securities, over a one to five-year period depending upon the total value of
the shares. During 1999, 1998 and 1997, in connection with employee
terminations, the Company repurchased 172, 150,347 and 264,251 shares of common
stock, respectively, at a price equal to the then fair market value of the
shares.

10. SHAREHOLDERS' EQUITY

In December 1999, the Company completed an initial public offering of
5,416,667 shares of Class A common stock at an initial offering price of $12.00
per share. Of the 5,416,667 shares of Class A common stock offered, 4,429,167
shares were issued and sold by the Company and 987,500 were sold by the
Company's ESOP. The net proceeds to the Company from the initial public
offering, after deducting applicable underwriter discounts and offering
expenses, was $46.8 million. In January 2000, an additional 812,500 shares of
common stock were sold by the Company's ESOP pursuant to an underwriters' over-
allotment provision.

On November 5, 1999, the board of directors approved a stock split of
20.8959855 for every one share outstanding to the stockholders of record as of
December 8, 1999. The stock split was effected prior to the initial public
offering. The stockholders also approved an increase in the authorized Class B
common stock to 10,000,000 shares and a decrease in its par value to $0.01 as
well as the authorization of 20,000,000 shares of Class A common stock. All
share and per share data have been retroactively restated to reflect these
changes.

11. RELATED PARTY TRANSACTIONS

Since December 1979, the Company has leased from a trust, of which one of
its executives is an income beneficiary and one of its executives is the
trustee, a building which is used by the Company for training sessions and
management meetings. The current lease expires on December 31, 2009 and
provides for a base annual rental which is adjusted each year to reflect
inflation and actual usage. Total lease expense was $74 in 1999, 1998 and 1997.

In 1999, the Company acquired Interep Interactive, an internet
representation firm, from one of its executives for $50 and a warrant to
acquire 20% of this subsidiary for $30 expiring in 2025.

At December 31, 1998, an executive was indebted to Interep in the total
amount of $201 (including accrued interest), which was evidenced by a
promissory note payable to Interep. This note bore variable interest at the
lowest rate permitted for federal income tax purposes, which was 4.33% at
December 31, 1998 and was due in equal annual installments of principal and
interest through December 31, 1999. The note was paid in 1999.

As of December 31, 1999 and 1998, an executive was indebted to Interep in
the total of $300 and $489, respectively, by execution of promissory notes
payable to the Company in annual installments of $200 and bearing interest at a
fluctuating rate equal to the prime commercial lending rate plus 1%.

In 1997, the Company entered into an agreement with Media Financial
Services, Inc., an affiliate of one of the Company's executives, whereby Media
Financial Services provides financial and accounting services to the

F-16

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

Company. The fee for these services amounted to approximately $3,000 and $2,600
in 1999 and 1998, respectively.

The Company believes the terms of the arrangements relating to the building
rental, indebtedness and accounting services are at least comparable to, if not
more favorable for the Company, than the terms which would have been obtained
in transactions with unrelated parties.

12. COMMITMENTS AND CONTINGENCIES

At December 31, 1999, the Company was committed under operating leases,
principally for office space, which expire at various dates through 2009.
Certain leases are subject to rent reviews and require payment of expenses
under escalation clauses. Rent expense was $4,613, $4,292 and $4,266 in 1999,
1998 and 1997, respectively. The noncash portion of rent expense was $222, $114
and $85 for 1999, 1998 and 1997, respectively. Future minimum rental
commitments under noncancellable leases are as follows:

2000.............................. $4,245
2001.............................. 4,229
2002.............................. 4,328
2003.............................. 4,104
2004.............................. 4,056
Thereafter........................ 5,860

The Company has employment agreements with certain of its officers and
employees for terms ranging from three to six years with annual compensation
aggregating approximately $1,560. These agreements include escalation clauses
(as defined) and provide for certain additional bonus and incentive
compensation.

The Company may be involved in various legal actions from time to time
arising in the normal course of business. In the opinion of management, there
are no matters outstanding that would have a material adverse effect on the
consolidated financial position or results of operations of the Company.

In February 2000, a client of the Company was served a summons and complaint
in an action filed in New York State Supreme Court for alleged breach of
various national sales representation agreements. The plaintiffs seek damages
of approximately $8 million. The Company has agreed to indemnify the defendant
from and against any loss, liability, cost or expense incurred in the action.
Management believes the defendant has factual and legal defenses to the action
and intends to vigorously defend the claims.

The Company has long term representation contract buyouts payable due over
the next five years, as follows:

December 31,

2000............................. $26,301
2001............................. 12,833
2002............................. 5,879
2003............................. 3,733
2004............................. 3,429
Thereafter....................... 4,002

F-17

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

In December 1999, the Company's representation agreement with Clear Channel
Communications was terminated. The Company is currently in negotiations with
the successor representation firm regarding the terms of a Buyout Agreement and
therefore, did not recognize buyout termination revenue in 1999 pertaining to
this buyout. As of December 31, 1999, the Company had $8 million of current
deferred costs on representation contract purchases and $9.4 million of current
representation contract buyout payables resulting from the purchase of the
Clear Channel representation agreement in 1996. Management believes based on
current status of negotiations, that the deferred costs will be realized and
the buyout payables will be assumed as part of the terms of the Buyout
Agreement.

13. SUPPLEMENTAL INFORMATION

Interest expense is shown net of interest income of $693, $864 and $109 in
1999, 1998 and 1997, respectively.

One broadcast group contributed approximately 29.0%, 29.0%, and 28.7% of the
Company's total revenues in 1999, 1998 and 1997, respectively. No other client
group contributed revenues in excess of 10.0% in 1999, 1998 and 1997.

In 1999 and 1998, contract buyout receivables from one group of radio rep
firms represented $10,858 and $16,926, respectively, of the Company's total
contract buyout receivables.

14. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments." The estimated fair
value amounts have been determined by the Company using available market
information and appropriate valuation methodologies. However, considerable
judgment is necessarily required in interpreting market data to develop the
estimates of fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.

December 31,
---------------------------------------
1999 1998
------------------- -------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
-------- ---------- -------- ----------

Assets:
Cash and cash equivalents.......... $66,725 $66,725 $32,962 $32,962
Liabilities:
Long-term debt..................... 100,000 97,500 100,000 100,000

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:

Cash and Cash Equivalents

The fair value of cash and cash equivalents approximates the carrying amount
due to the short maturity of those instruments.

F-18

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

Long-Term Debt

The fair value of long-term debt is estimated based on financial instruments
with similar terms, credit characteristics and expected maturities.

The fair value estimates presented herein are based on pertinent information
available to the Company as of December 31, 1999. Although the Company is not
aware of any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively reevaluated for purposes of
these financial statements since that date, and current estimates of fair value
may differ significantly from the amounts presented herein.

15. SUMMARIZED CONSOLIDATING FINANCIAL STATEMENTS

The following summarized consolidating financial statements as of December
31, 1999 and 1998 present the financial position, the results of operations and
cash flows for the Company and the guarantor subsidiaries of the Company, and
the eliminations necessary to arrive at the information for the Company on a
consolidated basis.

The guarantor subsidiaries are wholly-owned subsidiaries of the Company and
have fully and unconditionally guaranteed the Company's 10.0% Senior
Subordinated Notes (the "Notes") due 2008 on a joint and several basis. The
Company has not presented separate financial statements and other disclosures
concerning the guarantor subsidiaries of the Company because management has
determined that such information is not material to investors.

At December 31, 1999
---------------------------------------------
Consolidated
Company Guarantors Eliminations Company
-------- ---------- ------------ ------------

Current assets................ $ 74,140 $70,452 $ -- $144,592
Noncurrent assets............. 41,071 46,013 (5,356) 81,728
Current liabilities........... 26,375 31,083 -- 57,458
Noncurrent liabilities........ 103,859 31,517 -- 135,376

At December 31, 1998
---------------------------------------------
Consolidated
Company Guarantors Eliminations Company
-------- ---------- ------------ ------------

Current assets................ $ 46,210 $68,252 $ -- $114,462
Noncurrent assets............. 15,266 60,136 (5,356) 70,046
Current liabilities........... 23,310 25,041 -- 48,351
Noncurrent liabilities........ 108,259 29,120 -- 137,379

F-19

INTEREP NATIONAL RADIO SALES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(in thousands except share information)

For the year ended December 31,
1999
---------------------------------
Consolidated
Company Guarantors Company
-------- ---------- ------------

Commission revenue......................... $ 1,061 $95,479 $ 96,540
Contract termination revenue............... -- 6,838 6,838
Operating (loss) income.................... (36,902) 28,789 (8,113)
Net (loss) income.......................... (40,519) 28,341 (12,178)

For the year ended December 31,
1998
---------------------------------
Consolidated
Company Guarantors Company
-------- ---------- ------------

Commission revenue......................... $ 964 $86,771 $ 87,735
Contract termination revenue............... -- 37,221 37,221
Operating (loss) income.................... (35,848) 50,886 15,038
Net (loss) income.......................... (45,647) 50,495 4,848

For the year ended December 31,
1997
---------------------------------
Consolidated
Company Guarantors Company
-------- ---------- ------------

Commission revenue......................... $ 693 $86,403 $ 87,096
Contract termination revenue............... -- 26,586 26,586
Operating (loss) income.................... (40,094) 49,146 9,052
Net (loss) income.......................... (45,680) 48,594 2,914

F-20

Schedule II

INTEREP NATIONAL RADIO SALES, INC.

VALUATION AND QUALIFYING ACCOUNTS
(in thousands)

Additions
Balance charged to Balance
at beginning costs and at end of
of period expenses Deductions period
------------ ---------- ---------- ---------

December 31, 1997
Allowance for Doubtful Accounts.. $ 983 $ 755 $ (518) $1,220

December 31, 1998
Allowance for Doubtful Accounts.. $1,220 $1,227 $ (821) $1,626

December 31, 1999
Allowance for Doubtful Accounts.. $1,626 $1,534 $(1,002) $2,158
Valuation Allowance on Deferred
Tax Assets...................... $ -- $1,052 $ -- $1,052

F-21