<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission File Number 1-12187
[COX LOGO]
(Exact name of registrant as specified in its charter)
DELAWARE 58-1620022
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1400 LAKE HEARN DRIVE, ATLANTA, GEORGIA 30319
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (404) 843-5000
---------------
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 the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
There were 8,900,199 shares of Class A Common Stock outstanding as of
October 31, 1998.
There were 19,577,672 shares of Class B Common Stock outstanding as of
October 31, 1998.
<PAGE> 2
COX RADIO, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
Part I - Financial Information
<S> <C> <C>
Item 1. Financial Statements ........................................... 3
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations....................................... 11
Item 3. Quantitative and Qualitative Disclosures about Market Risk...... 18
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K ................................ 19
Signatures. ................................................................. 20
</TABLE>
2
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COX RADIO, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- -------------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ..................................... $ 7,453 $ 6,218
Accounts receivable, less allowance for doubtful accounts
of $2,315 and $1,875, respectively ......................... 56,675 50,680
Prepaid expenses and other current assets ..................... 4,703 3,795
-------- --------
Total current assets ....................................... 68,831 60,693
Plant and equipment, net ........................................ 50,216 46,071
Intangible assets, net .......................................... 570,010 518,926
Amounts due from Cox Enterprises, Inc. .......................... 21,157 3,113
Station investment notes receivable ............................. 25,412 18,220
Other assets .................................................... 8,661 7,617
-------- --------
Total assets ............................................... $744,287 $654,640
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses ......................... $ 23,328 $ 20,395
Income taxes payable .......................................... 4,863 3,487
Accrued interest .............................................. 4,427 1,372
Other current liabilities ..................................... 1,888 1,964
-------- --------
Total current liabilities .................................. 34,506 27,218
Notes payable ................................................... 300,410 235,740
Deferred income taxes ........................................... 104,705 104,401
-------- --------
Total liabilities .......................................... 439,621 367,359
-------- --------
Commitments and contingencies (Note 3) .......................... -- --
Shareholders' equity:
Class A common stock, $1.00 par value; 70,000,000 shares
authorized and 8,895,261 shares outstanding ................ 8,895 8,831
Class B common stock, $1.00 par value; 45,000,000 shares
authorized and 19,577,672 shares outstanding ............... 19,578 19,578
Additional paid-in capital .................................... 251,818 250,637
Retained earnings ............................................. 24,375 8,235
-------- --------
Total shareholders' equity ................................. 304,666 287,281
-------- --------
Total liabilities and shareholders' equity ................. $744,287 $654,640
======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
COX RADIO, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------------ ------------------------------------
1998 1997 1998 1997
---------------- --------------- ---------------- ----------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
NET REVENUES:
Local ................................. $ 50,233 $ 40,326 $ 139,837 $ 101,168
National .............................. 17,541 13,988 47,441 35,289
Other ................................. 1,381 874 3,098 2,235
-------- -------- --------- ---------
Total revenues ...................... 69,155 55,188 190,376 138,692
COSTS AND EXPENSES:
Operating ............................. 17,367 14,918 46,906 36,760
Selling, general and administrative ... 25,068 19,657 75,952 53,458
Corporate general and administrative .. 1,992 1,709 5,924 5,159
Depreciation and amortization ......... 6,144 4,834 17,098 12,019
-------- -------- --------- ---------
Operating income ......................... 18,584 14,070 44,496 31,296
OTHER INCOME (EXPENSE):
Interest income ........................ 164 106 375 1,578
Interest expense ....................... (4,726) (3,501) (12,604) (7,072)
Gain on sale of radio stations ......... -- -- -- 49,072
Other - net ............................ (153) (425) (303) (538)
-------- -------- --------- ---------
INCOME BEFORE INCOME TAXES ............... 13,869 10,250 31,964 74,336
Income taxes ........................... 6,849 4,255 15,824 30,201
--------- ---------
NET INCOME ............................... $ 7,020 $ 5,995 $ 16,140 $ 44,135
======== ======== ========= =========
Basic net income per common share ........ $ .25 $ .21 $ .57 $ 1.56
======== ======== ========= =========
Diluted net income per common share ...... $ .24 $ .21 $ .56 $ 1.56
======== ======== ========= =========
Weighted average basic common shares
outstanding .............................. 28,462 28,337 28,446 28,329
======== ======== ========= =========
Weighted average diluted common shares
outstanding .............................. 28,890 28,571 28,882 28,371
======== ======== ========= =========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
COX RADIO, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK ADDITIONAL
-------------------- ------------------ PAID-IN RETAINED
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS TOTAL
-------- -------- ------ -------- ----------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1997 ......... 8,831 $ 8,831 19,578 $19,578 $250,637 8,235 $287,281
Net income ......................... 16,140 16,140
Issuance of Class A common stock
related to incentive plans ...... 64 64 1,181 1,245
------ ------- ------ ------- -------- ------ --------
BALANCE AT SEPTEMBER 30, 1998 ........ 8,895 $ 8,895 19,578 $19,578 $251,818 24,375 $304,666
====== ======= ====== ======= ======== ====== ========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
COX RADIO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1998 1997
----------- ----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................................. $ 16,140 $ 44,135
Items not requiring cash:
Depreciation ............................................. 4,224 3,204
Amortization ............................................. 12,874 8,815
Deferred income taxes .................................... 3,378 25,394
Gain on sale of radio stations ........................... -- (49,072)
Increase in accounts receivable ............................ (5,995) (654)
Increase in accounts payable and accrued expenses .......... 2,606 237
Increase in accrued interest ............................... 3,055 1,128
Increase (decrease) in taxes payable ....................... 1,376 (3,805)
Other, net ................................................. (983) (267)
-------- ---------
Net cash provided by operating activities ........... 36,675 29,115
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures ....................................... (4,817) (7,835)
Acquisitions, net of cash acquired ......................... (69,182) (315,121)
Increase in other long-term assets ......................... (9,639) (19,822)
Net proceeds from sale of radio stations ................... -- 19,590
Other, net ................................................. 29 237
-------- ---------
Net cash used in investing activities ............... (83,609) (322,951)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in amounts due to (from) CEI ...................... (18,044) 64,549
Net borrowings of debt ..................................... 64,670 224,994
Proceeds from stock options exercised ...................... 1,216 1,054
Increase in book overdrafts ................................ 327 1,917
-------- ---------
Net cash provided by financing activities ........... 48,169 292,514
-------- ---------
Net increase (decrease) in cash and cash equivalents ....... 1,235 (1,322)
Cash and cash equivalents at beginning of period ........... 6,218 10,595
-------- ---------
Cash and cash equivalents at end of period ................. $ 7,453 $ 9,273
======== =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest ................................... $ 9,549 $ 5,463
Cash paid for income taxes ............................... $ 10,945 $ 10,091
</TABLE>
See notes to consolidated financial statements.
6
<PAGE> 7
COX RADIO, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1998
1. BASIS OF PRESENTATION AND OTHER INFORMATION
Cox Radio, Inc. ("Cox Radio" or the "Company") is a leading national
radio broadcast company whose business is devoted to acquiring, developing and
operating radio stations located throughout the United States. Cox Enterprises,
Inc. ("CEI") indirectly owns approximately 69% of the Common Stock of Cox Radio.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnote disclosures required by generally accepted accounting principles for
complete financial statements. In the opinion of management, the financial
statements reflect all adjustments considered necessary for a fair statement of
the results of operations and financial position for the interim periods
presented. All such adjustments are of a normal, recurring nature. These
unaudited interim financial statements should be read in conjunction with the
audited consolidated financial statements for the year ended December 31, 1997
and notes thereto contained in Cox Radio's Annual Report on Form 10-K filed with
the Securities and Exchange Commission (Commission File No. 1-12187).
The results of operations for the nine months ended September 30, 1998
are not necessarily indicative of the results to be expected for the year ending
December 31, 1998 or any interim period.
2. ACQUISITIONS AND DISPOSITIONS OF BUSINESSES
During the past several years, the Company has actively managed its
portfolio of radio stations through selected acquisitions, dispositions and
swaps, as well as the use of local marketing agreements ("LMA's"), joint sales
agreements ("JSA's") and time brokerage agreements ("TBAs"). Specific
transactions entered into or consummated by the Company during the nine months
ended September 30, 1998 are discussed below.
In January 1998, the Company entered into an agreement to assign its
option to purchase KRIO-FM serving the San Antonio, Texas market for an
aggregate consideration of $.3 million (the "San Antonio Disposition"). The
closing of the San Antonio Disposition occurred in May 1998.
In February 1998, the Company entered into an agreement to acquire the
assets of radio station WTLN-FM serving the Orlando, Florida market for
consideration of $14.5 million. In a related transaction, the Company entered
into an agreement to dispose of the assets of radio station WTLN-AM (formerly
known as WZKD-AM), also serving the Orlando, Florida market for $.5 million (the
"Orlando Exchange"). Pending certain regulatory approvals, the Company
anticipates closing the Orlando Exchange in the fourth quarter of 1998 or the
first half of 1999.
In March 1998, the Company acquired KONO-FM and KONO-AM in San Antonio
for $23 million (the "San Antonio Acquisition II").
In May 1998, the Company acquired the assets of radio stations WBLI-FM,
WBAB-FM, WHFM-FM and WGBB-AM, serving the Nassau-Suffolk, New York market for
consideration of $48 million (the "Long Island Acquisition").
7
<PAGE> 8
In September 1998, the Company entered into an agreement in principle
to acquire the assets of radio station WLVU-FM serving the Tampa, Florida
market. The Company has entered into a TBA for WLVU-FM commencing in September
1998. In a related transaction, the Company entered into an agreement to dispose
of the assets of radio station WSUN-AM, also serving the Tampa market (the
"Tampa Exchange"). Pending certain regulatory approvals, the Company anticipates
closing the Tampa Exchange in the first half of 1999.
In October 1998, the Company entered into an agreement with a third
party to dispose of the assets of radio station WGBB-AM (the "Long Island
Disposition") for consideration of $1.7 million. Pending certain regulatory
approvals, the Company anticipates closing the Long Island Disposition in the
first half of 1999.
In October 1998, the Company consummated the acquisition of radio
stations WCLR-FM, WZLR-FM and WPTW-AM serving the Dayton, Ohio market for
approximately $6 million (the "Dayton Acquisition"). The Company had been
operating these stations pursuant to an LMA since December 1997.
In November 1998, the Company consummated the acquisition of radio
stations WBHJ-FM and WBHK-FM in Birmingham, Alabama (the "Birmingham Acquisition
I") for an aggregate consideration of $17 million. Since August 1, 1997, the
Company has been operating WBHJ-FM AND WBHK-FM under an LMA.
In November 1998, the Company entered into an LMA for WEDA-FM in
Homewood, Alabama serving the Birmingham market. The Company also acquired an
option to purchase the station, in September 1997, for an aggregate
consideration of $5.5 million and the assumption of debt in an amount not to
exceed $200,000 (the "Birmingham Acquisition III"). The Company expects to
consummate the acquisition in the fourth quarter of 1998 or the first half of
1999.
The following unaudited pro forma summary of operations presents the
consolidated results of operations as if all consummated and pending
transactions had occurred at the beginning of the periods presented and does not
purport to be indicative of what would have occurred had these transactions been
made as of those dates or of results which may occur in the future.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- ------------------------
1998 1997 1998 1997
---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net revenues ..................................... $69,015 $60,817 $194,324 $171,725
Corporate general and administrative expenses .... 1,992 1,709 5,924 5,635
Depreciation and amortization .................... 6,144 5,528 17,674 16,776
Operating income ................................. 18,593 15,446 44,777 34,742
Net income ....................................... $ 7,025 $ 5,742 $ 15,768 $ 10,652
======= ======= ======== ========
Basic pro forma net income per common share ...... $ .25 $ .20 $ .55 $ .38
======= ======= ======== ========
Diluted pro forma net income per common share .... $ .24 $ .20 $ .55 $ .38
======= ======= ======== ========
Basic pro forma shares outstanding ............... 28,462 28,337 28,446 28,329
======= ======= ======== ========
Diluted pro forma shares outstanding ............. 28,890 28,571 28,882 28,371
======= ======= ======== ========
</TABLE>
8
<PAGE> 9
3. COMMITMENTS AND CONTINGENCIES
On March 7, 1997, Cox Radio entered into a $300 million, five-year,
senior, unsecured revolving credit facility (the "Credit Agreement"). The
interest rate is based on the London Interbank Offered Rate plus a spread
determined by certain leverage ratios. This facility also includes a commitment
fee on the unused portion of the total amount available of .1% to .25% based on
certain leverage ratios.
At September 30, 1998, the Company had $100 million of outstanding
indebtedness under the Credit Agreement and had $200 million available under the
Credit Agreement. The interest rate applied to amounts due under the Credit
Agreement was 6.0% at September 30, 1998.
On May 26, 1998, the Company issued and sold an aggregate of $200
million principal amount of notes (the "Original Notes") in an offering exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to Rule 144A thereunder. As provided in the Registration Rights
Agreement dated as of May 26, 1998 among the Company, its wholly owned
subsidiaries WSB, Inc. and WHIO, Inc. (each a guarantor of the Original Notes),
NationsBanc Montgomery Securities LLC, Chase Securities, Inc., and J.P. Morgan
Securities, Inc.. The Company, in November 1998, commenced an offer to exchange
the Original Notes for an aggregate of $200 million principal amount of notes
(the terms and form of which are the same in all material respects as the
Original Notes, except as to restrictions on transfer) which have been
registered under the Securities Act.
The Company has entered into interest rate swap agreements with certain
lenders providing bank financing. Pursuant to the interest rate swap agreements,
the Company has exchanged its floating rate interest obligations on an aggregate
of $100 million in principal at an average fixed rate of 6.23% per annum for an
average maturity of 6.25 years. The fixing of interest rates for this period
reduces in part the Company's exposure to the uncertainty of floating interest
rates. The differentials paid or received on the interest rate swap agreements
are recognized as adjustments to interest expense. The counterparties to these
interest rate swap agreements are a diverse group of major financial
institutions. The Company is exposed to credit loss in the event of
nonperformance by these counterparties. However, the Company does not anticipate
nonperformance by such counterparties, and no material loss from their
nonperformance is expected. The fair value of the interest rate swap agreements
was not recognized in the consolidated financial statements since they are
accounted for as hedges. Interest expense of $138,000 and $354,000 was recorded
on these interest rate swap agreements for the three and nine month periods
ending September 30, 1998, respectively. At September 30, 1998, the estimated
fair value of the interest rate swap agreements, based on current market rates,
approximated a net liability of $5.9 million.
4. SUBSEQUENT EVENTS
WSB, Inc., a Delaware corporation ("WSB"), and WHIO, Inc., a Delaware
corporation ("WHIO") were merged with and into the Company on November 10, 1998,
and November 1, 1998, respectively (collectively, the "Mergers"). As a result of
such Mergers, the Initial Note Guarantors are no longer Note Guarantors and, as
of the date hereof, the Notes do not have the benefit of any Note Guarantees.
The Company anticipates transferring the licenses, permits and
authorizations it holds from the Federal Communications Commission (the "FCC")
in respect of the radio stations it owns (other than in respect of the radio
stations it owns in the states of California and Florida) to CXR Holdings, Inc.,
a Nevada corporation and a wholly-owned subsidiary of the Company ("CXR
Holdings"), upon receipt of consent from the FCC and the satisfaction of certain
other conditions (the "License Drop-Down"). The Company has received the consent
of the FCC with respect to most of the stations that will be involved in the
License Drop-Down and expects to apply for and receive such FCC consents in
respect of the remaining stations. The Company currently anticipates that the
License Drop-Down will be consummated in the first quarter of 1999. If the
License Drop-Down is consummated, CXR Holdings will become a Note Guarantor.
There can be no assurance as to the timing of License Drop-Down or if the
License Drop-Down shall occur at all (in which case, CXR Holdings will not
become a Note Guarantor).
9
<PAGE> 10
5. EARNINGS PER COMMON SHARE AND CAPITAL STRUCTURE
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ---------------------
1998 1997 1998 1997
---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
NET INCOME $ 7,020 $ 5,995 $ 16,140 $ 44,135
======== ======== ======== ========
BASIC EPS
Weighted-average common shares outstanding 28,462 28,337 28,446 28,329
======== ======== ======== ========
Basic net income per common share $ .25 $ .21 $ .57 $ 1.56
======== ======== ======== ========
DILUTED EPS
Weighted-average common shares outstanding 28,462 28,337 28,446 28,329
Shares issuable on exercise of dilutive options 668 577 668 577
Shares assumed to be purchased with proceeds from options (395) (421) (388) (545)
Shares issuable pursuant to employee stock purchase plan 186 186 186 186
Shares assumed to be purchased with proceeds from
employee stock purchase plan (31) (108) (30) (176)
-------- -------- -------- --------
Shares applicable to diluted EPS 28,890 28,571 28,882 28,371
======== ======== ======== ========
Diluted net income per common share $ .24 $ .21 $ .56 $ 1.56
======== ======== ======== ========
</TABLE>
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying historical Consolidated Statements of Income for the three and nine
month periods ended September 30, 1998 and 1997.
This report contains forward-looking statements that are subject to
risks and uncertainties. Forward-looking statements include, but may not be
limited to, the information regarding future cash requirements of the Company
and statements regarding Year 2000 issues. For such statements, the Company
claims the protection of the safe harbor for forward-looking statements
contained in Section 21E of the Securities Exchange Act of 1934, as amended. The
Company's results could differ materially from those discussed in each
forward-looking statement due to various factors which are outside the Company's
control, including competition for audience share and advertising revenue from
other radio stations, electronic and print media and new media technologies and
governmental regulation of the radio broadcasting industry. For a more detailed
discussion of these factors and others, see the Risk Factors section of the
Company's prospectus filed as part of its Registration Statement on Form S-1
(File No. 333-08737).
GENERAL
Cox Radio is a leading national radio broadcast company whose business
is devoted to acquiring, developing and operating radio stations located
throughout the United States. CEI indirectly owns approximately 69% of the
Common Stock of Cox Radio.
The performance of a radio station group, such as the Company, is
customarily measured by its ability to generate Broadcast Cash Flow and EBITDA.
Broadcast Cash Flow is defined as operating income plus depreciation and
amortization and corporate general and administrative expenses. EBITDA is
defined as operating income plus depreciation and amortization. "After-tax" cash
flow is defined as net income (loss) before extraordinary items plus
depreciation, amortization and deferred tax expense/benefit. Although Broadcast
Cash Flow, EBITDA and after-tax cash flow are not recognized under generally
accepted accounting principles ("GAAP"), they are accepted by the broadcasting
industry as generally recognized measures of performance and are used by
analysts who report publicly on the condition and performance of broadcasting
companies. For the foregoing reasons, the Company believes that these measures
will be useful to investors. However, Broadcast Cash Flow, EBITDA or after-tax
cash flow should not be considered to be an alternative to operating income as
determined in accordance with GAAP, an alternative to cash flows from operating
activities (as a measure of liquidity) or an indicator of the Company's
performance under GAAP.
The primary source of the Company's revenues is the sale of local and
national advertising. Historically, approximately 73% and 25% of the Company's
gross revenues have been generated from local and national advertising,
respectively. The Company's most significant station operating expenses are
employees' salaries and benefits, commissions, programming expenses and
advertising and promotional expenditures.
The Company's revenues vary throughout the year. As is typical in the
radio broadcasting industry, the Company's revenues and broadcast cash flows are
typically lowest in the first quarter and higher in the second and fourth
quarters. The Company's operating results in any period may be affected by the
incurrence of advertising and promotional expenses that do not necessarily
produce commensurate revenues until the impact of the advertising and promotion
is realized in future periods.
11
<PAGE> 12
ACQUISITIONS AND DISPOSITIONS
During the past several years, the Company has actively managed its
portfolio of radio stations through selected acquisitions, dispositions and
swaps, as well as the use of LMA's, JSA's and TBAs. Specific transactions
entered into or consummated by the Company during the nine months ended
September 30, 1998 are discussed below.
In January 1998, the Company entered into an agreement to assign its
option to purchase KRIO-FM serving the San Antonio, Texas market for an
aggregate consideration of $.3 million (the "San Antonio Disposition"). The
closing of the San Antonio Disposition occurred in May 1998.
In February 1998, the Company entered into an agreement to acquire the
assets of radio station WTLN-FM serving the Orlando, Florida market for
consideration of $14.5 million. In a related transaction, the Company entered
into an agreement to dispose of the assets of radio station WTLN-AM (formerly
known as WZKD-AM), also serving the Orlando, Florida market for $.5 million (the
"Orlando Exchange"). Pending certain regulatory approvals, the Company
anticipates closing the Orlando Exchange in the fourth quarter of 1998 or the
first half of 1999.
In March 1998, the Company acquired KONO-FM and KONO-AM in San Antonio
for $23 million (the "San Antonio Acquisition II").
In May 1998, the Company acquired the assets of radio stations WBLI-FM,
WBAB-FM, WHFM-FM and WGBB-AM, serving the Nassau-Suffolk, New York market for
consideration of $48 million (the "Long Island Acquisition").
In September 1998, the Company entered into an agreement in principle
to acquire the assets of radio station WLVU-FM serving the Tampa, Florida
market. The Company has entered into a TBA for WLVU-FM commencing in September
1998. In a related transaction, the Company entered into an agreement to dispose
of the assets of radio station WSUN-AM, also serving the Tampa market (the
"Tampa Exchange"). Pending certain regulatory approvals, the Company anticipates
closing the Tampa Exchange in the first half of 1999.
In October 1998, the Company entered into an agreement with a third
party to dispose of the assets of radio station WGBB-AM (the "Long Island
Disposition") for consideration of $1.7 million. Pending certain regulatory
approvals, the Company anticipates closing the Long Island Disposition in the
first half of 1999.
In October 1998, the Company consummated the acquisition of radio
stations WCLR-FM, WZLR-FM and WPTW-AM serving the Dayton, Ohio market for
approximately $6 million (the "Dayton Acquisition"). The Company had been
operating these stations pursuant to an LMA since December 1997.
In November 1998, the Company consummated the acquisition of radio
stations WBHJ-FM and WBHK-FM in Birmingham, Alabama (the "Birmingham Acquisition
I") for an aggregate consideration of $17 million. Since August 1, 1997, the
Company has been operating WBHJ-FM AND WBHK-FM under an LMA.
In November 1998, the Company entered into an LMA for WEDA-FM in
Homewood, Alabama serving the Birmingham market. The Company also acquired an
option to purchase the station, in September 1997, for an aggregate
consideration of $5.5 million and the assumption of debt in an amount not to
exceed $200,000 (the "Birmingham Acquisition III"). The Company expects to
consummate the acquisition in the fourth quarter of 1998 or the first half of
1999.
12
<PAGE> 13
RESULTS OF OPERATIONS
Three months ended September 30, 1998 compared to three months ended September
30, 1997
Net Revenues. Net revenues for the third quarter of 1998 increased
$14.0 million to $69.2 million, a 25.3% increase over the third quarter of 1997.
This increase was primarily attributable to strong revenue performance in the
Atlanta, Miami and Orlando markets as well as the Company's recent acquisitions.
These acquisitions included the August 1997 LMA of WBHJ-FM and WBHK-FM in
Birmingham, the September 1997 acquisition of KISS-FM, KSMG-FM and KLUP-AM in
San Antonio, the March 1998 acquisition of KONO-FM/AM in San Antonio, and the
May 1998 acquisition of WBAB-FM, WBLI-FM, WHFM-FM and WGBB-AM in Long Island,
New York.
Station Operating Expenses. Station operating expenses increased $7.9
million to $42.4 million, an increase of 22.7% over the third quarter of 1997.
The increase was primarily attributable to the August 1997 LMA of WBHJ-FM and
WBHK-FM in Birmingham, the September 1997 acquisition of KISS-FM, KSMG-FM and
KLUP-AM in San Antonio, the March 1998 acquisition of KONO-FM/AM in San Antonio,
and the May 1998 acquisition of WBAB-FM, WBLI-FM, WHFM-FM and WGBB-AM in Long
Island, New York. Increases were also due to higher programming and sales
related costs which are driven by ratings and revenues.
Broadcast Cash Flow. Broadcast cash flow increased $6.1 million to
$26.7 million, a 29.6% increase over the third quarter of 1997 for the reasons
discussed above.
Corporate General and Administrative Expenses. Corporate general and
administrative expenses for the third quarter totaled $2.0 million as compared
to $1.7 million for the third quarter of 1997 which reflects results of the
Company's efforts to control corporate overhead costs despite recent
acquisitions.
Operating Income. Operating income for the third quarter of 1998
increased $4.5 million to $18.6 million, an increase of 32.1% over the third
quarter of 1997 for the reasons discussed above.
Net Interest Expense. Net interest expense during the third quarter of
1998 totaled $4.6 million as compared to $3.3 million during the third quarter
of 1997 as a result of borrowings incurred to complete the Company's recent
acquisitions.
Net Income. Net income for the third quarter of 1998 increased $1.0
million to $7.0 million, an increase of 17.1% over the third quarter of 1997 for
the reasons discussed above.
Nine months ended September 30, 1998 compared to nine months ended September 30,
1997
Net Revenues. Net revenues for the first nine months of 1998 increased
$51.7 million to $190.4 million, a 37.3% increase over the first nine months of
1997. This increase was primarily attributable to acquisitions, the most
significant of which was the New City Acquisition in April 1997. Other
acquisitions included the August 1997 LMA of WBHJ-FM and WBHK-FM in Birmingham,
the September 1997 acquisition of KISS-FM, KSMG-FM and KLUP-AM in San Antonio,
the March 1998 acquisition of KONO-FM/AM in San Antonio, and the May 1998
acquisition of WBAB-FM, WBLI-FM, WHFM-FM and WGBB-AM in Long Island, New York
which all contributed to the increase in net revenues for the first nine months
of 1998. Also, substantial increases in net revenues at the stations in Atlanta,
Miami and Orlando were realized as a result of strong ratings performance.
13
<PAGE> 14
Station Operating Expenses. Station operating expenses increased $32.6
million to $122.9 million, an increase of 36.2% over the first nine months of
1997. This increase was primarily attributable to recent acquisitions, the most
significant of which was the New City Acquisition in April 1997. Other recent
acquisitions included the August 1997 LMA of WBHJ-FM and WBHK-FM in Birmingham,
the September 1997 acquisition of KISS-FM, KSMG-FM and KLUP-AM in San Antonio,
the March 1998 acquisition of KONO-FM/AM in San Antonio, and the May 1998
acquisition of WBAB-FM, WBLI-FM, WHFM-FM and WGBB-AM in Long Island, New York
which all contributed to increases in station operating expenses. Also,
increases in station operating expenses were realized due to higher programming
and sales related costs which are driven by ratings and revenues.
Broadcast Cash Flow. Broadcast cash flow increased $19.0 million to
$67.5 million, a 39.3% increase over the first nine months of 1997 for the
reasons discussed above.
Corporate General and Administrative Expenses. Corporate general and
administrative expenses for the first nine months of 1998 totaled $5.9 million
as compared to $5.2 million for the first nine months of 1997. The increase is
primarily due to higher overhead costs incurred as a result of the significant
increase in number of stations owned and/or operated in 1998 offset by the
Company's efforts to control corporate overhead costs.
Operating Income. Operating income for the first nine months of 1998
increased $13.2 million to $44.5 million, an increase of 42.2% over the first
nine months of 1997 for the reasons discussed above.
Net Interest Expense. Net interest expense during the first nine months
of 1998 totaled $12.2 million as compared to $5.5 million during the first nine
months of 1997 as a result of borrowings incurred to complete the Company's
recent acquisitions, the most significant of which was the NewCity Acquisition
in April 1997.
Net Income. Net income decreased $28.0 million from the first nine
months of 1997 to $16.1 million primarily as a result of the first quarter 1997
after-tax gain on the sale of WCKG-FM and WYSY-FM (Chicago) of approximately
$29.3 million in addition to the reasons discussed above.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary source of liquidity is cash provided by
operations. Historically, cash requirements have been funded by Cox Radio's
operating activities and through borrowings under the Credit Agreement (as
defined below). For the nine months ended September 30, 1998 as compared to the
nine months ended September 30, 1997, cash from operations increased $7.6
million to $36.7 million, primarily attributable to an increase in net income
excluding the gain on WCKG-FM and WYSY-FM (Chicago), an increase in non-cash
charges for depreciation and amortization and the net change in working capital
accounts. In addition, cash requirements historically have been funded on a
temporary basis through intercompany advances from CEI under a revolving credit
facility with CEI (the "CEI Credit Facility"). Borrowings, if any, by the
Company under the CEI Credit Facility would typically be repaid by the Company
within 30 days. Borrowings, if any, under the CEI Credit Facility would accrue
interest at CEI's commercial paper rate plus .40%. CEI continues to perform
day-to-day cash management services for Cox Radio.
On March 7, 1997, Cox Radio entered into a $300 million, five-year,
senior, unsecured revolving credit facility (the "Credit Agreement"). The
interest rate is based on the London Interbank Offered Rate plus a spread
determined by certain leverage ratios. This facility also includes a commitment
fee on the unused portion of the total amount available of .1% to .25% based on
certain leverage ratios.
14
<PAGE> 15
At September 30, 1998, the Company had $100 million of outstanding
indebtedness under the Credit Agreement and had $200 million available under the
Credit Agreement. The interest rate applied to amounts due under the Credit
Agreement was 6.0% at September 30, 1998.
On May 26, 1998, the Company issued and sold an aggregate of $200
million principal amount of notes (the "Original Notes") in an offering exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to Rule 144A thereunder. As provided in the Registration Rights
Agreement dated as of May 26, 1998 among the Company, its then wholly owned
subsidiaries WSB, Inc. and WHIO, Inc. (each a guarantor of the Original Notes),
NationsBanc Montgomery Securities LLC, Chase Securities, Inc., and J.P. Morgan
Securities, Inc.. The Company, in November 1998, commenced an offer to exchange
the Original Notes for an aggregate of $200 million principal amount of notes
(the terms and form of which are the same in all material respects as the
Original Notes, except as to restrictions on transfer) which have been
registered under the Securities Act.
The Company has entered into interest rate swap agreements with certain
lenders providing bank financing. Pursuant to the interest rate swap agreements,
the Company has exchanged its floating rate interest obligations on an aggregate
of $100 million in principal at an average fixed rate of 6.23% per annum for an
average maturity of 6.25 years. The fixing of interest rates for this period
reduces in part the Company's exposure to the uncertainty of floating interest
rates. The differentials paid or received on the interest rate swap agreements
are recognized as adjustments to interest expense. The counterparties to these
interest rate swap agreements are a diverse group of major financial
institutions. The Company is exposed to credit loss in the event of
nonperformance by these counterparties. However, the Company does not anticipate
nonperformance by such counterparties, and no material loss from their
nonperformance is expected. The fair value of the interest rate swap agreements
was not recognized in the consolidated financial statements since they are
accounted for as hedges. Interest expense of $138,000 and $354,000 was recorded
on these interest rate swap agreements for the three and nine month periods
ending September 30, 1998, respectively. At September 30, 1998, the estimated
fair value of the interest rate swap agreements, based on current market rates,
approximated a net liability of $5.9 million.
Future cash requirements are expected to include capital expenditures,
principal and interest payments on indebtedness and funds for acquisitions. The
Company expects its operations to generate sufficient cash to meet its capital
expenditures and debt service requirements. Additional cash requirements,
including funds for pending or other acquisitions, will be funded by various
sources, including the proceeds from bank financing and, if or when appropriate,
other issuances of Company securities.
SUBSEQUENT EVENTS
WSB, Inc., a Delaware corporation ("WSB"), and WHIO, Inc., a Delaware
corporation ("WHIO") were merged with and into the Company on November 10, 1998,
and November 1, 1998, respectively (collectively, the "Mergers"). As a result of
such Mergers, the Initial Note Guarantors are no longer Note Guarantors and, as
of the date hereof, the Notes do not have the benefit of any Note Guarantees.
The Company anticipates transferring the licenses, permits and
authorizations it holds from the Federal Communications Commission (the "FCC")
in respect of the radio stations it owns (other than in respect of the radio
stations it owns in the states of California and Florida) to CXR Holdings, Inc.,
a Nevada corporation and a wholly-owned subsidiary of the Company ("CXR
Holdings"), upon receipt of consent from the FCC and the satisfaction of certain
other conditions (the "License Drop-Down"). The Company has received the consent
of the FCC with respect to most of the stations that will be involved in the
License Drop-Down and expects to apply for and receive such FCC consents in
respect of the remaining stations. The Company currently anticipates that the
License Drop-Down will be consummated in the first quarter of 1999. If the
License Drop-Down is consummated, CXR Holdings will become a Note Guarantor.
There can be no assurance as to the timing of License Drop-Down or if the
License Drop-Down shall occur at all (in which case, CXR Holdings will not
become a Note Guarantor).
15
<PAGE> 16
OTHER MATTERS
IMPACT OF THE YEAR 2000 ISSUE AND YEAR 2000 READINESS DISCLOSURE
The Company recognizes the importance of the Year 2000 issue and is
taking a proactive approach intended to facilitate an appropriate transition
into the year 2000. The Year 2000 issue is the result of computer programs and
embedded computer microprocessors being unable to distinguish between the year
1900 and the year 2000, or misinterpreting the date field. Any of the Company's
systems that have time-sensitive software may recognize a date using "00" as the
year 1900 rather than the year 2000, which could result in miscalculations or
system failures. A system or application is deemed Year 2000 compliant when it
continues to produce understandable, accurate and predictable results which
conform to the original functional specifications, regardless of the millennium
change.
STATE OF READINESS
The Company has implemented a project team utilizing both internal and
external resources, including those of majority shareholder, Cox Broadcasting,
Inc., to develop its Year 2000 initiative, which may, as necessary, involve
upgrading or replacing affected computer systems, software and equipment with
embedded chips, and preparing contingency and disaster recovery plans.
The Company has substantially completed an inventory of current systems
and operations to identify any information technology and non-information
technology systems (including equipment with embedded chips) that do not
properly recognize dates after December 31, 1999. The project team has developed
a plan to assess, remediate, test, and, sufficiently in advance of the Year
2000, ascertain that the systems of the Company that are critical to the
Company's operations will properly recognize such dates. The plan includes
on-site audits at each of the Company's radio stations. The project team has
commenced the audit process, which is scheduled to be complete by the end of the
second quarter of 1999.
Based on the results of the inventory, the Company began in second
quarter of 1998 to remediate noncompliant systems. The Company anticipates that
remediation will be complete by the end of third quarter 1999. The Company uses
CEI's financial and human resources information systems, which are being tested
by CEI.
The Company has substantially completed a formal communication program
with its significant vendors to determine the extent to which the Company is
vulnerable to those third parties who fail to remediate their own Year 2000
non-compliance. The Company is to a large degree dependent on vendor remediation
and testing of vendor systems. The Company's two most significant vendors are
Marketron, which provides the Company's traffic and billing system, and ADP
which provides payroll services. The Company uses Marketron's Version 28 running
on DOS 6.2, which Marketron has indicated is Year 2000 compliant and ADP Version
2.5 running on Windows 95, which ADP has indicated is Year 2000 compliant. The
Company has not performed its own tests on these systems, and no assurance can
be given at this time that these systems are compliant.
COSTS
As of September 30, 1998, approximately $120,000 of outside consulting
costs have been incurred related to the Company's Year 2000 initiative. The
Company will incur capital expenditures and internal staff costs as well as
additional outside consulting and other expenditures related to this initiative.
The Company expects these costs to total approximately $2 million, based on
currently available information. Total incremental expenses (including
depreciation and amortization) of bringing current systems into compliance,
writing off existing non-compliant systems, and capital replacements have not
16
<PAGE> 17
had a material impact on the Company's financial condition to date and are not
at present, based on known facts, expected to have a material impact on the
Company's financial condition.
RISKS AND MOST REASONABLY LIKELY WORST CASE SCENARIO
If systems critical to the Company's operations are not Year 2000
compliant, the most reasonably likely worst case scenario would include service
interruptions resulting from failure in electrical power and satellite feeds
providing news, weather and syndicated shows for broadcast and failure of
equipment with embedded chips including master clocks, studio equipment,
transmission equipment and telephone, security and environmental control
systems.
Based on the information currently available, the Company is not aware
of any likely Year 2000 non-compliance by the Company or its vendors or
customers that will materially affect the Company's business operations;
however, the Company does not control the systems of other companies, and cannot
assure that such systems will be timely converted and, if not converted, would
not have an adverse effect on the Company's business operations. Furthermore, no
assurance can be given at this time that any or all of the Company's systems are
or will be Year 2000 compliant, or that the ultimate costs required to address
the Year 2000 issue or the impact of any failure to achieve substantial Year
2000 compliance by the Company, its vendors or customers will not have a
material adverse effect on the Company's financial condition.
Like most other businesses, the Company is dependent on general service
outside vendors including providers of electrical power, telephony, water, fuel
for vehicles and other necessary commodities. The Company also relies upon the
interstate banking system and related electronic communications for such
functions as transmitting financial data from field locations to the home office
and sweeping cash into lockboxes. The Company is currently not aware of any
material non-compliance by these providers that will materially affect the
Company's business operations; however, the Company does not control these
systems and cannot assure that they will be converted in a timely fashion and if
not converted would not have an adverse effect on the Company's business
operations.
CONTINGENCY PLANS
The Year 2000 project team is working with each station to expand and
modify existing emergency contingency plans to encompass potential Year 2000
exposures, including increased risk of loss of electrical power, and satellite
failures resulting in need for alternate delivery system for programming,
potential multiple systems failures and other relevant issues. It is anticipated
that contingency plans will be in place for each station by third quarter 1999.
All statements relating to the Year 2000 issue made in Forms 10-K, 10-
Q or Registration Statements filed by the Company with the Securities and
Exchange Commission after January 1, 1996 are hereby incorporated herein by
reference and designated as Year 2000 Readiness Disclosures.
This Management's Discussion and Analysis of Financial Condition and
Results of Operations and liquidity and Capital Resources, and other parts of
this report, contain "forward-looking" statements about matters that are
inherently difficult to predict. Those statements include statements regarding
the intent, belief or current expectations of the Company and its management.
Some of the important factors that affect these statements involve risks and
uncertainties that may affect future developments such as, for example the
ability to deal with the Year 2000 issue, including problems that may arise on
the part of third parties. If the modifications and conversions required to make
the Company Year 2000 ready are not made or are not completed on a timely basis,
the resulting problems could have a material impact on the operations of the
Company.
17
<PAGE> 18
ITEM 3. Quantitative and qualitative disclosure about market risk
The Company has entered into interest rate swap agreements with certain
lenders providing bank financing. Pursuant to the interest rate swap agreements,
the Company has exchanged its floating rate interest obligations on an aggregate
of $100 million in principal at an average fixed rate of 6.23% per annum for an
average maturity of 6.25 years. The fixing of interest rates for this period
reduces in part the Company's exposure to the uncertainty of floating interest
rates. The differentials paid or received on the interest rate swap agreements
are recognized as adjustments to interest expense. Interest expense of $138,000
and $354,000 was recorded on these interest rate swap agreements for the three
and nine month periods ending September 30, 1998, respectively. At September 30,
1998 the estimated fair value of the interest rate swap agreements, based on
current market rates, approximated a net liability of $5.9 million.
18
<PAGE> 19
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Listed below are the exhibits which are filed as part of this
Report (according to the number assigned to them in Item 601
of Regulation S-K):
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------------------------------
<S> <C> <C>
2.1 -- Agreement and Plan of Merger, dated
as of July 1, 1996, by and among
Cox Radio, Inc., New Cox Radio II,
Inc., NewCity Communications, Inc.
and certain stockholders of NewCity
Communications, Inc. (1)**
2.2 -- Guaranty by Cox Broadcasting, Inc.,
dated as of July 1, 1996, in favor
of NewCity Communications, Inc. (1)
3.1 -- Amended and Restated Certificate of
Incorporation of Cox Radio, Inc.
(1)
3.2 -- Amended and Restated Bylaws of Cox
Radio, Inc. (1)
4.1 -- Indenture between NewCity
Communications, Inc. and Shawmut
Bank Connecticut, National
Association, as Trustee, dated as
of November 2, 1993, related to the
11 3/8% Notes due 2003 of NewCity
Communications, Inc. (1)**
4.2 -- First Supplemental Indenture
between NewCity Communications,
Inc. and Shawmut Bank Connecticut,
National Association, as Trustee,
dated as of September 16, 1994,
relating to the 11 3/8% Notes due
2003 of NewCity Communications,
Inc. (1)
4.3 -- Second Supplemental Indenture
between Cox Radio, Inc. and Fleet
National Bank, as Trustee, dated as
of April 1, 1997, relating to the
11 3/8% Notes due 2003 of Cox
Radio, Inc. (as successor by merger
to NewCity Communications,
Inc.)(2)
4.4 -- Third Supplemental Indenture
between Cox Radio, Inc. and Fleet
National Bank, as Trustee, dated as
of April 16, 1997, relating to the
11 3/8% Notes due 2003 of Cox
Radio, Inc. (as successor by merger
to NewCity Communications,
Inc.) (3)
4.5 -- Specimen of Class A Common Stock
Certificate. (1)
4.6 -- Indenture between Cox Radio, Inc.
and The Bank of New York, as
trustee, dated as of May 26, 1998**
4.7 -- Form of 6.250% Senior Notes due
2003(4)
4.8 -- Form of 6.375% Senior Notes due
2005(5)
10.1 -- Credit Agreement, dated as of March
7, 1997, by and among Cox Radio,
Inc., Texas Commerce Bank National
Association, Nationsbank of Texas,
N.A. and Citibank, N.A.,
individually and as agents, and the
other banks signatory thereto.
(6)**
10.2 -- CEI Credit Facility. (1)
10.3 -- Cox Radio, Inc. Long-Term Incentive
Plan. (1)
10.4 -- Cox Radio, Inc. Employee Stock
Purchase Plan. (1)
10.5 -- Cox Radio, Inc. Restricted Stock
Plan for Non-Employee Directors (1)
10.6 -- Tax Allocation and Indemnification
Agreement, dated as of September
30, 1996, by and between Cox
Enterprises, Inc. and Cox Radio,
Inc. (2)
11 -- Statement Re: Computation of Per
Share Earnings
27.1 -- Financial Data Schedule (for SEC
use only)
</TABLE>
- ----------
(1) Incorporated by reference to Cox Radio's Registration Statement on
Form S-1 (Commission File No. 333-08737).
(2) Incorporated by reference to Exhibit 4.3 to Cox Radio's Quarterly
Report on Form 10-Q for the period ended March 31, 1997 (Commission
File No. 1-12187).
(3) Incorporated by reference to Exhibit 4.4 to Cox Radio's Quarterly
Report on Form 10-Q for the period ended March 31, 1997 (Commission
File No. 1-12187).
(4) Incorporated by reference to Exhibit 4.5 to Cox Radio's Quarterly
Report on Form 10-Q for the period ended June 30, 1998 (Commission
File No. 1-12187).
(5) Incorporated by reference to Exhibit 4.6 to Cox Radio's Quarterly
Report on Form 10-Q for the period ended June 30, 1998 (Commission
File No. 1-12187).
(6) Incorporated by reference to Cox Radio's Annual Report on Form 10-K
for the period ended December 31, 1996 (Commission File No. 1-12187).
** Schedules and Exhibits intentionally omitted.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for
which this report is filed.
19
<PAGE> 20
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Cox Radio, Inc.
November 16, 1998 /s/ Maritza C. Pichon
----------------------
Maritza C. Pichon
Chief Financial Officer
(Principal Financial Officer and
duly authorized officer)
<PAGE> 1
EXHIBIT 11
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------- -------------------
1998 1997 1998 1997
---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
NET INCOME $ 7,020 $ 5,995 $ 16,140 $ 44,135
======== ======== ======== ========
BASIC EPS
Weighted-average common shares outstanding 28,462 28,337 28,446 28,329
======== ======== ======== ========
Basic net income per common share $ .25 $ .21 $ .57 $ 1.56
======== ======== ======== ========
DILUTED EPS
Weighted-average common shares outstanding 28,462 28,337 28,446 28,329
Shares issuable on exercise of dilutive options 668 577 668 577
Shares assumed to be purchased with proceeds from options (395) (421) (388) (545)
Shares issuable pursuant to employee stock purchase plan 186 186 186 186
Shares assumed to be purchased with proceeds from
employee stock purchase plan (31) (108) (30) (176)
-------- -------- -------- --------
Shares applicable to diluted EPS 28,890 28,571 28,882 28,371
======== ======== ======== ========
Diluted net income per common share $ .24 $ .21 $ .56 $ 1.56
======== ======== ======== ========
</TABLE>
21
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF COX RADIO, INC. FOR THE NINE MONTH PERIOD ENDED
SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 7,453
<SECURITIES> 0
<RECEIVABLES> 58,990
<ALLOWANCES> 2,315
<INVENTORY> 0
<CURRENT-ASSETS> 68,831
<PP&E> 88,196
<DEPRECIATION> 37,980
<TOTAL-ASSETS> 744,287
<CURRENT-LIABILITIES> 34,506
<BONDS> 300,410
0
0
<COMMON> 28,473
<OTHER-SE> 276,193
<TOTAL-LIABILITY-AND-EQUITY> 744,287
<SALES> 0
<TOTAL-REVENUES> 190,376
<CGS> 0
<TOTAL-COSTS> (122,858)
<OTHER-EXPENSES> (23,022)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (12,229)
<INCOME-PRETAX> 31,964
<INCOME-TAX> 15,824
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,140
<EPS-PRIMARY> .57
<EPS-DILUTED> .56
</TABLE>
