<PAGE> 1
WEDR-FM, WFOX-FM, WAPE-FM, WFYV-FM,
WKQL-FM, WMXQ-FM, WOKV-AM,
WBWL-AM, WPLR-FM, WKHL-FM,
WSTC-AM, WEFX-FM and WNLK-AM
(Radio Stations owned by AMFM Inc.)
COMBINED STATEMENT OF ASSETS ACQUIRED
As of June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
(Unaudited)
June 30, 2000
-------------
<S> <C>
Property and equipment, net............................... $ 15,329
Intangible assets, net.................................... 334,140
-----------
Total........................................... $ 349,469
===========
</TABLE>
See notes to combined financial statements.
<PAGE> 2
WEDR-FM, WFOX-FM, WAPE-FM, WFYV-FM,
WKQL-FM, WMXQ-FM, WOKV-AM,
WBWL-AM, WPLR-FM, WKHL-FM,
WSTC-AM, WEFX-FM and WNLK-AM
(Radio Stations owned by AMFM Inc.)
COMBINED STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
For the Six-Month Periods Ended June 30, 2000 and 1999 (Unaudited)
<TABLE>
<CAPTION>
For the
Six-Month Period Six-Month Period
Ended June 30, 2000 Ended June 30, 1999
(Unaudited) (Unaudited)
---------------------- --------------------
<S> <C> <C>
Revenues:
Gross revenues................................... $ 15,039
Less: Agency commissions........................ (1,855)
---------
Total net revenues....................... 13,184
Direct operating expenses:
Programming, technical and news................. 1,445
Selling, promotional, general
And administrative........................... 3,711
Depreciation and amortization.................... $ 13,456 5,084
--------- ---------
Total direct operating expenses.......... 13,456 10,240
--------- ---------
Excess (Deficiency) of net revenues over direct
operating expenses............................ ($13,456) $ 2,944
========= =========
</TABLE>
See notes to the combined financial statements.
<PAGE> 3
WEDR-FM, WFOX-FM, WAPE-FM, WFYV-FM,
WKQL-FM, WMXQ-FM, WOKV-AM,
WBWL-AM, WPLR-FM, WKHL-FM,
WSTC-AM, WEFX-FM and WNLK-AM
(Radio Stations owned by AMFM Inc.)
NOTES TO COMBINED FINANCIAL STATEMENTS
1. Organization and Basis of Presentation
The accompanying combined financial statements include certain accounts of
WEDR-FM Miami, Florida; WFOX-FM Atlanta, Georgia; WAPE-FM Jacksonville,
Florida; WFYV-FM Jacksonville, Florida; WKQL-FM Jacksonville, Florida;
WMXQ-FM Jacksonville, Florida; WOKV-AM Jacksonville, Florida; WBWL-AM
Jacksonville, Florida; WPLR-FM New Haven, Connecticut; WKHL-FM
Stamford-Norwalk, Connecticut; WSTC-AM Stamford-Norwalk, Connecticut;
WEFX-FM Stamford-Norwalk, Connecticut; and WNLK-AM Stamford-Norwalk,
Connecticut (collectively referred to as the "Radio Stations"), while
under the ownership of AMFM Inc. (formerly Chancellor Media Corporation)
(the "Company") as of and during the periods presented.
The combined statement of assets acquired and combined statements of
revenues and direct operating expenses have been prepared in accordance
with accounting principles generally accepted in the United Stated of
America and were derived from the historical accounting records of the
Radio Stations. Significant intercompany balances and transactions have
been eliminated in combination.
On August 30, 1999, the Company entered into an agreement with Cox Radio,
Inc. ("Cox Radio") to exchange the property, intangibles and FCC broadcast
licenses of the Radio Stations for the property, intangibles and FCC
broadcast licenses of KFI-AM and KOST-FM in Los Angeles, California, plus
$3 million in cash. Effective October 1, 1999, the Company and Cox Radio
entered into a Time Brokerage Agreement under which Cox Radio provides the
programming for the Radio Stations. This transaction was consummated on
August 25, 2000.
The accompanying combined statement of assets acquired includes the
property and equipment and intangible assets of the Radio Stations
acquired by Cox Radio, Inc. This statements does not include cash,
accounts receivable, prepaid or other assets, accounts payable, accrued
expenses or other liabilities. The combined statements of revenues and
direct operating expenses included the revenues and expenses directly
attributable to the Radio stations. These statements do not include
corporate overhead costs, interest expense or income taxes. Since Cox
Radio legally owns the operations of the Radio Stations under the Time
Brokerage Agreement, beginning October 1, 1999, the net revenues and
direct operating expenses, excluding depreciation and amortization, have
been excluded from the results of operations of the Radio Stations.
Complete combined financial statements, including historical balance
sheets and statements of cash flows, were not prepared as the Company has
not segregated indirect corporate operating cost information or related
assets and liabilities in its accounting records. The Radio Stations were
not accounted for as separate entities.
<PAGE> 4
2. Summary of Significant Accounting Policies
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method at rates based
upon the estimated useful lives. Repairs and maintenance costs are charged
to expense when incurred. At the time of retirements, sales or other
dispositions of property, the original cost and related accumulated
depreciation are written off.
Intangible Assets
Intangible assets consist of Federal Communications Commission ("FCC")
broadcast licenses and goodwill. Intangible assets resulting from
acquisitions are valued based upon estimated fair values. The Company
amortizes such intangible assets using the straight-line method at rates
based upon the estimated useful lives.
Impairment of Long Lived Assets
Long-lived assets and certain intangibles are required to be reviewed for
impairment when events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable, with any impairment
losses being reported in the period in which any impairment is first
identified. Long-lived assets and certain intangibles to be disposed of
are required to be reported at the lower of carrying amount or fair value
less cost to sell.
The Radio Stations continually evaluate the propriety of the carrying
amount of property and equipment to determine whether current events or
circumstances warrant adjustment of the carrying value. At this time, the
Radio Stations believe that no impairment of property and equipment has
occurred and that no revisions to the depreciation periods are warranted.
The Radio Stations continually evaluate the propriety of the carrying
amount of goodwill and other intangible assets and related amortization
periods to determine whether current events or circumstances warrant
adjustments to the carrying value and/or revised estimates of amortization
periods. These evaluations consist of the projection of undiscounted cash
flows over the remaining amortization periods of the related intangible
assets. The projections are based on historical trend lines of actual
results, adjusted for expected changes in operating results. To the extent
such projections indicate that undiscounted cash flows is not expected to
be adequate to recover the carrying amounts of the related intangible
assets, such carrying amounts are written down by charges to expense,
based on a discounted cash flow analysis. At this time, the Radio Stations
believe that no impairment of goodwill or other intangible assets has
occurred and that no revisions to the amortization periods are warranted.
<PAGE> 5
Use of Estimates
The preparation of combined financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets to be acquired at the date of the financial
statements and the reported amounts of revenues and direct operating
expenses during the reporting period. Actual results could differ from
those estimates.
<PAGE> 6
Unaudited Interim Financial Statements
The unaudited financial statements as of June 30, 2000 and for the
six-month periods ended June 30, 2000 and 1999 include all adjustments,
consisting of normal recurring adjustments, necessary for a fair
presentation of the combined statement of assets acquired and combined
statements of revenues and direct operating expenses for these periods.
Revenues and direct operating expenses for the six-month periods ended June
30, 2000 and 1999 are not necessarily indicative of the results that may be
expected for the entire year.
3. Property and Equipment
<TABLE>
<CAPTION>
Useful (Unaudited)
Lives June 30, 2000
----- -------------
<S> <C> <C>
Land and land improvements.................. -- $ 861
Buildings and building improvements......... 3-35 Years 2,566
Furniture and fixtures...................... 5-7 Years 525
Office equipment............................ 5-7 Years 638
Vehicles.................................... 5-7 Years 448
Broadcast equipment......................... 3-20 Years 13,758
Computer software........................... 3-5 Years 197
Construction in progress.................... -- 112
Property and equipment, at cost............. 19,105
Less accumulated depreciation............... (3,776)
--------
Net property and equipment.................. $ 15,329
========
</TABLE>
4. Intangible Assets
<TABLE>
<CAPTION>
Useful (Unaudited)
Lives June 30, 2000
----- -------------
<S> <C> <C>
FCC broadcast licenses...................... 15 Years 369,163
Goodwill.................................... 15 Years 10,742
Intangible assets, at cost.................. 379,905
Less accumulated amortization............... (45,765)
---------
Net intangible assets............ $ 334,140
=========
</TABLE>
<PAGE> 7
5. Transactions with Affiliated Companies
The Company operates a national radio network, the AMFM Radio Networks,
which broadcasts advertising and syndicated programming shows to a
national audience. As of June 30, 2000 the AMFM Radio Networks broadcast
to approximately 68 million listeners in the United States (including
approximately 59 million listeners from the Company's portfolio of
stations). The revenues and direct operating expenses of the AMFM Radio
Networks allocated to the Radio Stations for the six-month period ended
June 30, 1999 were as follows:
<TABLE>
<CAPTION>
(Unaudited)
Six-Month Period ended June
30, 1999
(Amounts in thousands)
<S> <C>
Revenues............................................. $ 605
Direct operating expenses............................ (198)
-------
Revenues in excess of direct operating expenses...... $ 407
=======
</TABLE>
The revenues and direct operating expenses allocated to the Radio Stations
for the six-month period ended June 30, 2000 have not been presented as
the revenues and direct operating expenses of the Radio Stations are
included in the operations of Cox Radio as a result of the Time Brokerage
Agreement discussed in Note 1.
The AMFM Radio Networks allocates revenues and direct operating expenses to
the Radio Stations based upon the individual station's percentage of the
total AMFM Radio Networks listening audience. Management believes that
these allocations were made on a reasonable basis.
6. Commitments
The Radio Stations have long-term operating leases for land, office space,
and certain broadcasting facilities and equipment. The leases expire at
various dates, generally during the next ten years, and have varying
options to renew and cancel. Rental expense for operating leases was
approximately (in thousands) $179 for the six-month periods ended June 30,
1999 (unaudited). The rent expense of the Radio Stations for the six-month
period ended June 30, 2000 has not been presented, as revenues and direct
operating expenses of the Radio Stations are included in the operations
of Cox Radio as a result of the Time Brokerage Agreement discussed in
Note 1.
