SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------------
AMENDMENT NO. 1
TO
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 or 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 20, 2000
SUSQUEHANNA MEDIA CO.
(Exact name of registrant as specified in charter)
Delaware 333-80523 23-2722964
(State of other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
140 East Market Street, York, PA 17401
(Address of principal executive offices)
Registrant's telephone number, including area code: (717) 848-5500
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses to be Acquired:
An audited combined statement of assets acquired and an audited combined
statement of revenues and direct operating expenses for radio stations KCMO-AM,
KCMO-FM and KCFX-FM (the "Stations") as of and for the year ended December 31,
1999 are being filed in lieu of full historical financial statements required by
Rule 3-05 of Regulation S-X.
Unaudited combined statements of revenues and direct operating expenses for the
three months ended March 31, 2000 and 1999 and June 30, 2000 and 1999 and the
six months ended June 30, 2000 and 1999 are being filed herewith in lieu of full
historical financial statements.
It was impracticable to prepare full financial statements for the Stations
acquired because they were not separate business units. The financial statements
presented are not indicative of the financial condition or results of operation
of the Stations going forward due to the changes in the business and the
omission of various expenses.
TABLE OF CONTENTS
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Page
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Report of Independent Accountants 2
Combined Financial Statements
Combined Statement of Assets Acquired 3
Combined Statements of Revenues and Direct Operating
Expenses For the Year Ended December 31, 1999 4
Combined Statements of Revenues and Direct Operating
Expenses For the Three Months Ended March 31, 2000
and 1999, June 30, 2000 and 1999 and the Six Months Ended
June 30, 2000 and 1999 (unaudited) 5
Notes to the Combined Financial Statements 6-8
1
<PAGE>
Report of Independent Accountants
To the Board of Directors and Stockholders
Susquehanna Media Co. and subsidiaries:
We have audited the accompanying combined statement of assets acquired as of
December 31, 1999 and the related combined statement of revenue and direct
operating expenses of KCMO-AM, KCMO-FM and KCFX-FM (collectively the Stations)
for the year ended December 31, 1999. These financial statements are the
responsibility of the Stations' management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the combined
statement of assets acquired and the related combined statement of revenues and
direct operating expenses 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
audit provides a reasonable basis for our opinion.
The accompanying combined financial statements reflect the assets acquired and
the revenues and direct operating expenses attributable to the Stations as
described in Note 1 and are not intended to be a complete presentation of the
assets or revenues and expenses of the Stations.
In our opinion, the combined statement of assets acquired and the related
combined statement of revenues and direct operating expenses present fairly, in
all material respects, the assets acquired as described in Note 1 as of December
31, 1999 and the revenues and direct operating expenses as described in Note 1
for the year ended December 31, 1999 in conformity with accounting principles
generally accepted in the United States of America.
/s/ PRICEWATERHOUSECOOPERS LLP
Harrisburg, Pennsylvania
September 27, 2000
2
<PAGE>
RADIO STATIONS KCMO-AM, KCMO-FM AND KCFX-FM
-------------------------------------------
COMBINED STATEMENT OF ASSETS ACQUIRED
-------------------------------------
December 31, 1999
-----------------
(in thousands)
--------------
Property and Equipment
Land and improvements $ 46
Building and leasehold improvements 679
Equipment 3,295
-------
4,020
Accumulated depreciation (828)
-------
Property and Equipment, net 3,192
-------
Intangible Assets
Broadcast licenses 25,197
Other intangibles 5,313
-------
Intangible assets, net 30,510
-------
$ 33,702
=======
The accompanying notes are an integral part of the combined financial
statements.
3
<PAGE>
RADIO STATIONS KCMO-AM, KCMO-FM AND KCFX-FM
-------------------------------------------
COMBINED STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES
------------------------------------------------------------
For The Year Ended December 31, 1999
------------------------------------
(in thousands)
--------------
Revenues
Sales $ 16,154
Less agency commissions (1,822)
-------
Total 14,332
-------
Direct Operating Expenses
Operating and programming 5,294
Selling 2,960
General and administrative 1,748
-------
Total 10,002
-------
Revenues in Excess of Direct Operating Expenses $ 4,330
=======
The accompanying notes are an integral part of the combined financial
statements.
4
<PAGE>
RADIO STATIONS KCMO-AM, KCMO-FM AND KCFX-FM
-------------------------------------------
COMBINED STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
-------------------------------------------------------------
(in thousands)
--------------
(unaudited)
-----------
<TABLE>
<CAPTION>
For the Three Months For the Three Months For the Six Months
Ended March 31, Ended June 30, Ended June 30,
2000 1999 2000 1999 2000 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Revenues
Sales $2,358 $2,664 $3,311 $3,522 $5,669 $6,186
Less agency commissions (283) (311) (420) (446) (703) (757)
------ ------ ------ ------ ------ ------
Total 2,075 2,353 2,891 3,076 4,966 5,429
------ ------ ------ ------ ------ ------
Direct Operating Expenses
Operating and programming 662 633 910 850 1,572 1,483
Selling 528 612 631 692 1,159 1,304
General and administrative 489 388 389 391 878 779
------ ------ ----- ------ ------ ------
Total 1,679 1,633 1,930 1,933 3,609 3,566
------ ------ ------ ------ ------ ------
Revenues in Excess of Direct
Operating Expenses $ 396 $ 720 $ 961 $ 1,143 $ 1,357 $ 1,863
====== ====== ====== ======= ======= =====
</TABLE>
The accompanying notes are an integral part of the combined financial
statements.
5
<PAGE>
RADIO STATIONS KCMO-AM, KCMO-FM AND KCFX-FM
-------------------------------------------
NOTES TO THE COMBINED FINANCIAL STATEMENTS
------------------------------------------
1. Organization and Basis of Presentation
--------------------------------------
The accompanying combined financial statements include certain assets,
revenues and direct expenses of KCMO-AM, KCMO-FM and KCFX-FM, (collectively
the "Stations").
On July 20, 2000, pursuant to an Asset Purchase Agreement between
Susquehanna Media Co. (Media), as Purchaser, and Entercom Communications
Corp., Entercom Kansas City, LLC and Entercom Kansas City License, LLC, as
Sellers, Media acquired, in consideration of the payment of $113,150,000,
certain assets of Kansas City radio stations KCMO-AM, KCMO-FM and KCFX-FM.
Radio broadcast rights for the Kansas City Chiefs National Football League
franchise through the 2002 football season were included in the purchase.
No liabilities were assumed by Media in the transaction. The Sellers'
historical financial statements included an intangible asset and equal
liability related to the radio broadcast rights. The combined statement of
assets acquired includes neither the asset nor the liability. The 1999
radio broadcast rights payment (Note 3) has been shown as a direct
programming expense in the combined statement of revenues and direct
operating expenses. The historical financial statements included the
expense in amortization. The accompanying financial statements do not
reflect any adjustments relating to this transaction.
The accompanying combined statement of assets acquired and combined
statement of revenues and direct operating expenses have been prepared in
accordance with generally accepted accounting principles and were derived
from the historical accounting records of the previous owners. Significant
intercompany balances and transactions have been eliminated in combination.
In Media's opinion, it was impracticable to obtain full financial
statements for the Stations because they were not separate business units,
certain expenses were not historically allocated and separate balance
sheets were not prepared for the Stations. The financial statements
presented are not indicative of the financial condition or results of
operations of the Stations going forward due to the changes in operations
resulting from the acquisition and the omission of various operating
expenses. Information concerning the Stations' operating, investing and
financing cash flows was not available.
The combined statement of assets acquired includes only assets subsequently
acquired by Media on July 20, 2000.
The combined statement of revenues and direct operating expenses includes
the revenues and expenses directly attributable to the Stations. The
statement does not include depreciation and amortization expense, corporate
general and administrative costs, interest expense or income taxes.
6
<PAGE>
RADIO STATIONS KCMO-AM, KCMO-FM AND KCFX-FM
-------------------------------------------
NOTES TO THE COMBINED FINANCIAL STATEMENTS
------------------------------------------
2. Summary of Significant Accounting Policies
------------------------------------------
Property and Equipment - Property and equipment are stated at cost less
accumulated depreciation. Repairs and maintenance costs are charged to
expense when incurred.
Broadcast Licenses - Broadcast licenses are stated at cost less accumulated
amortization.
Revenue Recognition - Revenue arises primarily from the sale of commercial
announcements to local and national advertisers. Revenue is recognized as
commercials are broadcast.
Disclosure of Certain Significant Risks and Uncertainties - 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 the reported
amounts of revenues and expenses. Actual results could differ from those
estimates.
Unaudited Interim Financial Information - In the opinion of the Sellers,
the unaudited interim combined statements of revenues and direct operating
expenses for the three months ended March 31, 2000 and 1999, and the three
and six months ended June 30, 2000 and 1999, reflect all adjustments,
consisting of only normal and recurring items, which are necessary for a
fair presentation of the results for the interim periods presented.
Financial information for the interim periods are not necessarily
indicative of results to be expected for any other interim periods or for
the full year.
3. Radio Broadcast Rights
----------------------
Included in the purchase of KCFX-FM, were radio broadcast rights for the
Kansas City Chiefs National Football League franchise (Chiefs). Under terms
of a Radio Broadcast Agreement, the station has the right to broadcast
Chief's games through the 2002 football season. A $1,750,000 fee was paid
in 1999 for the 1999 football season. Fees for the 2000, 2001 and 2002
seasons are payable in the third and fourth quarters of those years as
follows:
2000 $1,900,000
2001 2,000,000
2002 2,000,000
Additional fees are payable for playoff games. Contract provisions provide
for proportionally reduced fees if games are not played.
7
<PAGE>
The Radio Broadcast Agreement grants the broadcaster a right of first
refusal for subsequent seasons on terms satisfactory to the Chiefs and
subject to NFL approval.
8
<PAGE>
(b) Pro Forma Financial Information:
Unaudited pro forma condensed and consolidated balance sheet of Susquehanna
Media Co. and Subsidiaries as of December 31, 1999 with accompanying notes.
On July 20, 2000, pursuant to an Asset Purchase Agreement between Susquehanna
Media Co. (Media), as Purchaser, and Entercom Communications Corp., Entercom
Kansas City, LLC and Entercom Kansas City License, LLC as Sellers, Media
acquired, in consideration of the payment of $113,150,000, certain assets of
Kansas City radio stations KCMO-AM, KCMO-FM and KCFX-FM (the "Stations"). Radio
broadcast rights for the Kansas City Chiefs National Football League franchise
through the 2002 football season were included in the purchase. No liabilities
were assumed by Media in the transaction.
In Media's opinion, it was impracticable to obtain full financial statements
for the Stations acquired because they were not separate business units,
certain expenses were not historically allocated and separate balance sheets
were not prepared for the Stations.
The unaudited pro forma consolidated financial information set forth below for
Media gives effect to the acquisition of the Stations as if it had been
completed on December 31, 1999 for purposes of the condensed consolidated
Balance Sheet as of December 31, 1999. This financial information is based on
the historical consolidated balance sheets of Media and the acquired Stations
giving effect of the acquisition using the purchase method of accounting for
business combinations.
A pro forma condensed and consolidated statement of operations has not been
provided since the use of forward-looking information is necessary to
meaningfully present the effects of the acquisition.
Information concerning the Stations' operating, investing and financing cash
flows was not available.
This pro forma financial information should be read in conjunction with the
historical consolidated financial statements of Media and the respective notes
thereto.
This pro forma financial information should also be read in conjunction with the
financial statements of the Stations and the accompanying notes thereto.
The pro forma financial information is not necessarily indicative of the
financial position that would have occurred had the acquisition been consummated
on the date for which such transaction has been given effect.
9
<PAGE>
Susquehanna Media Co.
Unaudited Pro Forma Condensed and Consolidated Balance Sheet
As of December 31, 1999
(dollars in thousands)
<TABLE>
<CAPTION>
Media Assets Acquired Pro Forma Media
Historical (Historical Value) Adjustments Pro Forma
ASSETS
<S> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents $ 639 - - $ 639
Accounts receivable, net 43,017 - - 43,017
Other current assets 4,400 - - 4,400
--------- --------- --------- ---------
Total Current Assets 48,056 - - 48,056
--------- --------- --------- ---------
Property, Plant and Equipment, at cost
Land 4,363 46 43 (1) 4,452
Buildings and improvements 10,556 679 5 (1) 11,240
Equipment 178,244 3,295 (268) (1) 181,271
Construction-in-progress 25,656 - - 25,656
--------- --------- --------- ---------
218,819 4,020 (220) 222,619
Accumulated depreciation and amortization 94,731 828 (828) (2) 94,731
--------- --------- --------- ---------
Property, plant and equipment, net 124,088 3,192 608 127,888
--------- --------- --------- ---------
Intangible Assets, net 215,125 30,510 78,690 (1) 324,325
--------- --------- --------- ---------
Note Receivable from Parent 111,329 - - 111,329
--------- --------- --------- ---------
Investments and Other Assets 27,544 - - 27,544
--------- --------- --------- ---------
$ 526,142 33,702 79,298 639,142
========= ========= ========= =========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C>
Current Liabilities
Current portion of long term debt 59 - - 59
Accounts payable 15,350 - - 15,350
Accrued interest 3,108 - - 3,108
Accrued income taxes 227 - - 227
Deferred income taxes 815 - - 815
Accrued ESOP benefit costs 1,370 - - 1,370
Other accrued expenses 11,919 - - 11,919
--------- --------- --------- ---------
Total Current Liabilities 32,848 - - 32,848
--------- --------- --------- ---------
Long-term Debt 405,562 - 113,000 (3) 518,562
--------- --------- --------- ---------
Deferred Compensation Liability 832 - - 832
--------- --------- --------- ---------
Deferred Income Taxes 37,166 - - 37,166
--------- --------- --------- ---------
Minority Interests 18,453 - - 18,453
--------- --------- --------- ---------
Stockholders' Equity
Preferred stock 7,050 7,050
Common stock 1,100 33,702 (33,702) (4) 1,100
Retained earnings 23,131 - - 23,131
--------- --------- --------- ---------
Total Stockholders' Equity 31,281 33,702 (33,702) 31,281
--------- --------- --------- ---------
526,142 33,702 79,298 639,142
========= ========= ========= =========
</TABLE>
10
<PAGE>
Notes To Unaudited Condensed And Consolidated Pro forma
Susquehanna Media Co. Balance Sheet:
The following adjustments and elimination entries have been made to the
unaudited condensed and consolidated balance sheet to reflect the acquisition.
1. Represents purchase accounting adjustments to historical value of
assets acquired based on fair value, as determined by an independent appraisal.
2. Accumulated depreciation adjustment represents purchase accounting
adjustment to eliminate historical depreciation on acquired assets.
3. The existing credit facility was used to fund the acquisition.
4. Represents the elimination of the acquired Stations' net book value.
11
<PAGE>
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.
Dated: October 3, 2000 SUSQUEHANNA MEDIA CO.
(Registrant)
By: /s/ John L. Finlayson
---------------------
John L. Finlayson
Vice President and Principal Financial
and Accounting Officer
12
