<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 2 TO
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995 Commission File No. 1-8283
CITICASTERS INC.
Incorporated under the IRS Employer
laws of Florida Identification No. 59-2054850
One East Fourth Street
Cincinnati, Ohio 45202
Phone: (513) 562-8000
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<PAGE> 2
ITEM 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
GENERAL
The following discussion should be read in conjunction with the
Financial Statements beginning on page F-1.
LIQUIDITY AND CAPITAL RESOURCES
Citicasters is a holding company and depends on advances, dividends and
tax allocation payments from its operating subsidiary, Citicasters Co., to meet
its expenditures for administrative expenses and debt service obligations. Based
upon current levels of Citicasters Co.'s operations and anticipated growth, it
is expected that operating cash flow will be sufficient to meet expenditures for
operations (including capital expenditures which are anticipated to be
approximately $5 million or less annually), administrative expenses and debt
service. Citicasters Co. is permitted to advance funds or pay dividends to
Citicasters Inc. for administrative expenses, borrowing costs and payment of
dividends. Citicasters' credit agreement provides two credit facilities: an
acquisition facility of $125 million and a working capital facility of $25
million. At March 1, 1996, $26 million had been drawn under the acquisition
facility.
During January 1996, Citicasters purchased two FM radio stations and an
AM radio station in Columbus for $24 million. Citicasters borrowed from its
acquisition facility to fund the purchases.
RESULTS OF OPERATIONS
The financial results of Citicasters' business are seasonal. Revenues
are generally higher in the second and fourth calendar quarters than in the
first and third quarters.
The amount of broadcast advertising time available for sale by
Citicasters' stations is relatively fixed, and by its nature cannot be
stockpiled for later sale. Therefore, the primary variables affecting revenue
levels are the demand for advertising time, the viewing or listening audience of
the station and the entry of new stations in the marketplace. The major variable
costs of operation are programming (news, sports and entertainment), sales costs
related to revenues and promotional costs. The success of the programming
determines the audience levels and therefore affects revenue.
Citicasters' management believes that operating income before
depreciation and amortization is helpful in understanding cash flow generated
from its broadcasting operations which is available for debt service, capital
expenditures and taxes, and in comparing operating performance of Citicasters'
broadcast stations to other broadcast stations. Operating income before
depreciation and amortization is also a key factor in Citicasters' assessment of
station performance. Operating income before depreciation and amortization
should not be considered an alternative to net income as an indicator of
Citicasters' overall performance.
On December 28, 1993, Great American Communications Company completed
its comprehensive financial restructuring through a prepackaged plan of
reorganization under chapter 11 of the Bankruptcy Code. Pursuant to generally
accepted accounting principles for entities in reorganization under the
bankruptcy code, Great American Communications Company revalued its assets and
liabilities to estimated fair values upon consummation of the restructuring.
Great American Communications Company and its subsidiaries are hereafter
referred to as "Predecessor." See Note B to the Financial Statements.
The net earnings in 1994 and 1993 include significant non-recurring
transactions including gains from asset sales and debt refinancing transactions.
The gains realized from asset sales, debt discharge and debt refinancing
transactions totaled $50 million and $408 million in 1994 and 1993,
respectively. Gains from these types of transactions are not part of normal
operations and no assurance can be given that such transactions will recur in
the future or if they recur that gains will result.
9
<PAGE> 3
Net revenues and operating income are shown below (in thousands):
<TABLE>
<CAPTION>
Predecessor
-----------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net revenues
- ------------
Television broadcasting:
Local $ 31,485 $ 67,308 $ 73,085
National 27,332 56,972 60,027
Other 2,775 6,138 6,464
-------- -------- --------
Total 61,592 130,418 139,576
-------- -------- --------
Radio broadcasting:
Local 61,157 54,305 53,704
National 13,050 11,666 10,848
Other 615 654 1,040
-------- -------- --------
Total 74,822 66,625 65,592
-------- -------- --------
TOTAL NET REVENUES 136,414 197,043 205,168
Operating, selling, general
and administrative expenses (80,929) (117,718) (133,070)
Corporate general and
administrative expenses (4,303) (4,796) (3,996)
-------- -------- --------
OPERATING INCOME BEFORE
DEPRECIATION AND AMORTIZATION 51,182 74,529 68,102
Depreciation and amortization (14,635) (22,946) (28,119)
-------- -------- --------
OPERATING INCOME $ 36,547 $ 51,583 $ 39,983
======== ======== ========
</TABLE>
Net revenues and operating income adjusted to remove the operating
results of the four television stations sold in 1994 are shown below (in
thousands):
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net revenues
- ------------
Television broadcasting $ 61,592 $ 61,750 $ 54,005
Radio broadcasting 74,822 66,625 65,592
-------- -------- --------
TOTAL NET REVENUES 136,414 128,375 119,597
Operating, selling, general
and administrative expenses (80,929) (79,950) (81,199)
Corporate general and
administrative expenses (4,303) (4,796) (3,996)
-------- -------- --------
OPERATING INCOME BEFORE
DEPRECIATION AND
AMORTIZATION 51,182 43,629 34,402
Depreciation and amortization (14,635) (13,005) (14,260)
-------- -------- --------
OPERATING INCOME $ 36,547 $ 30,624 $ 20,142
======== ======== ========
</TABLE>
10
<PAGE> 4
1995 COMPARED TO 1994
Television revenues declined $68.8 million (53%) in 1995 primarily due to
the sale of four television stations in 1994. Excluding the results of the
stations sold, television revenues decreased slightly. Revenue increases at the
Cincinnati station were offset by decreases in Tampa where WTSP switched its
network affiliation from ABC to CBS. Radio revenues increased $8.2 million (12%)
in 1995 due to the expanding economy, sales efforts and the acquisition of two
additional FM stations. Excluding the results of stations purchased during 1995,
radio revenues increased $4 million (6%).
Costs and expenses decreased $37.3 million (30%) as a result of the sale of
the television stations. Excluding expenses of the television stations sold in
1994 and the expenses of the radio stations acquired in 1995, costs and expenses
decreased $2.4 million (3%) in 1995 due to cost controls.
Depreciation and amortization decreased as a result of the sale of the four
television stations.
Operating income declined $15 million (29%) as a result of the sale of the
four television stations in 1994. Excluding the results of the television
stations sold in 1994 and the radio stations acquired in 1995 operating income
increased $5.3 million (17%) due to increases in net revenue and expense
controls.
1994 COMPARED TO 1993
Television revenues declined $9.2 million (7%) in 1994 due to the sale of
four television stations in September and October 1994. Excluding the results of
the four television stations sold, television revenues increased $7.7 million
(14%) during 1994. Revenue increases were due to several factors including: the
expanding economy's effect on advertising expenditures; national and local
elections; and sales efforts. Radio revenues increased $1.0 million (2%) during
1994. The results for 1993 include one more FM radio station than for 1994 and,
although the purchase and sale of radio stations in 1994 did not have a material
effect on the consolidated results for 1994, the percentage increases in
revenues and decreases in expenses were affected by these transactions. The
revenues of the eight FM and four AM stations owned in both years increased
9.6%.
Costs and expenses decreased $14.6 million (11%) during 1994 due primarily
to the sale of the four television stations. Excluding the results of the four
television stations sold, expenses declined 1% as a result of cost controls and
the decrease in the number of FM radio stations.
Operating income increased $11.6 million (29%) during 1994 despite the sale
of the four television stations. Excluding the sale of the four television
stations, operating income increased $10.5 million (52%) during 1994 due to the
combination of revenue increases and expense controls.
OTHER INCOME (EXPENSE) INFORMATION Interest expense decreased approximately $18
million in 1995 compared to 1994, due to reduced debt levels resulting from the
sale of the four television stations. Interest expense decreased $33.0 million
(51%) during 1994 compared to 1993 due primarily to reduced debt levels
resulting from the reorganization and to a lesser extent the sale of four
television stations. Minority interest in 1993 was attributable to the preferred
stock of a subsidiary which was converted into common stock of the parent as
part of the reorganization.
During 1994 Citicasters sold four television stations for $355 million in
cash and a five-year warrant to purchase 5 million shares of New World Class A
common stock at $16 per share. Citicasters recorded a pretax gain of $95.3
million ($50.1 million after tax) on these sales.
REORGANIZATION ITEMS Reorganization items represent the expenses incurred as a
result of the chapter 11 filings and subsequent reorganization, including, among
other things, the adjustments to record the fair values of assets and
liabilities at December 31, 1993 (see Note B to the Financial Statements).
11
<PAGE> 5
INCOME TAXES Income taxes decreased from $53.5 million in 1994 to $9.0 million
in 1995. Income taxes for 1994 included $45.2 million of taxes related to the
gain on the sale of four television stations. There were no income taxes during
1993 due primarily to the effects of certain reorganization items.
EXTRAORDINARY ITEMS Extraordinary gains in 1993 of $408.1 resulted from gains on
retirements and refinancing of long term debt.
NET EARNINGS Net earnings were $14.3 million, $63.1 million and $341.3 million
for 1995, 1994 and 1993, respectively.
CASH FLOW
Cash flow provided by operating activities was $23.2 million, $37.5 million
and $18.4 million for 1995, 1994 and 1993, respectively. Cash flow provided by
operating activities for 1995 resulted primarily from net earnings, the add-back
of non-cash charges (depreciation, amortization and non-cash interest expense),
less a net increase in working capital. Cash flow provided by operating
activities for 1994 resulted primarily from net earnings less realized gains on
sales of assets plus a net decrease in working capital and the add-back of
non-cash charges (depreciation, amortization and non-cash interest expense).
During 1993 cash flow from operating activities resulted primarily from a net
decrease in working capital and the add-back of non-cash charges including
depreciation, amortization, non-cash interest expense and minority interest
expense. Citicasters 1993 net earnings of $341.3 million resulted primarily from
$408.1 million of extraordinary gains on retirements and refinancing of long
term debt. The 1993 cash flow provided by operating activities of $18.4 million,
excluded $408.1 million of non-cash gains on retirements and refinancing of long
term debt.
Cash (used by) provided by investing activities was ($70.4) million, $365.2
million and ($11.6) million for 1995, 1994 and 1993 respectively. During 1995
Citicasters made capital expenditures, acquired three radio stations and made a
deposit to purchase an additional three radio stations. During 1994 Citicasters
made capital expenditures, sold four television stations and four radio stations
resulting in cash proceeds of $381.5 million, acquired one radio station and
received a cash distribution related to the 1991 sale of the Company's
entertainment business. During 1993 Citicasters made capital expenditures, sold
a radio station and incurred cash expenses in connection with the 1991 sale of
the Company's entertainment businesses.
Cash provided by (used by) financing activities was $4.4 million, ($361.2)
million and ($27.2) million for 1995, 1994 and 1993. Cash flow provided by
financing activities during 1995 resulted primarily from net borrowings of the
Company's bank credit facility partially offset by the repurchase of common
stock. Cash flow used by financing activities during 1994 resulted primarily
from retirement and refinancing of long-term debt and the repurchase of common
shares. Cash flow used by financing activities during 1993, resulted primarily
from retirement and refinancing of long-term debt related to the Company's
reorganization and the financing costs associated with it.
11a
<PAGE> 6
ITEM 8
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
-------------------------------------------
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Auditors F-1
Balance Sheet:
December 31, 1995 and 1994 F-2
Statement of Operations:
Years ended December 31, 1995, 1994 and 1993 F-3
Statement of Changes in Shareholders' Equity:
Years ended December 31, 1995, 1994 and 1993 F-4
Statement of Cash Flows:
Years ended December 31, 1995, 1994 and 1993 F-5
Notes to Financial Statements F-7
</TABLE>
"Selected Quarterly Financial Data" has been included in Note L to Citicasters'
Financial Statements.
---------------------
12
<PAGE> 7
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Citicasters Inc.
We have audited the accompanying balance sheets of Citicasters Inc. and
subsidiaries (formerly Great American Communications Company) as of December 31,
1995 and 1994, and the related statements of operations, shareholders' equity
and cash flows for each of the three years in the period ended December 31,
1995. Our audits also included the financial statement schedules listed in the
Index at Item 14(a). These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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.
As more fully described in Note B to the financial statements, effective
December 28, 1993, the Company emerged from bankruptcy pursuant to a plan of
reorganization confirmed by the Bankruptcy Court on December 7, 1993. In
accordance with an American Institute of Certified Public Accountants Statement
of Position, the Company has adopted "fresh-start reporting" whereby its assets,
liabilities, and new capital structure have been adjusted to reflect estimated
fair values as of December 31, 1993. As a result, the statements of operations,
shareholders' equity and cash flows for the years ended December 31, 1995 and
December 31, 1994 reflect the Company's new basis of accounting and,
accordingly, is not comparable to the Company's pre-reorganization statements of
operations, shareholders' equity and cash flows for the year ended December 31,
1993.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Citicasters Inc. and
subsidiaries at December 31, 1995 and 1994, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1995, in conformity with generally accepted accounting principles. Also, in
our opinion, the related financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly in
all material respects the information set forth therein.
ERNST & YOUNG LLP
Cincinnati, Ohio
February 23, 1996
F-1
<PAGE> 8
CITICASTERS INC. AND SUBSIDIARIES
BALANCE SHEET
(Dollars in Thousands)
<TABLE>
<CAPTION>
December 31,
-------------------
1995 1994
---- ----
<S> <C> <C>
ASSETS
------
Current assets:
Cash and short-term investments $ 3,572 $ 46,258
Trade receivables, less allowance for doubtful
accounts of $1,643 and $1,244 32,495 31,851
Broadcast program rights 5,162 5,488
Prepaid and other current assets 3,059 2,635
-------- --------
Total current assets 44,288 86,232
Broadcast program rights, less current portion 3,296 4,466
Property and equipment, net 33,878 25,083
Contracts, broadcasting licenses and other
intangibles, net 312,791 274,695
Deferred charges and other assets 22,093 13,016
-------- --------
$416,346 $403,492
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable, accrued expenses and other
current liabilities $ 17,061 $ 33,673
Broadcast program rights fees payable 5,298 5,041
-------- --------
Total current liabilities 22,359 38,714
Broadcast program rights fees payable, less
current portion 2,829 3,666
Long-term debt 132,481 122,291
Deferred income taxes 44,822 44,486
Other liabilities 54,163 43,398
-------- --------
Total liabilities 256,654 252,555
Shareholders' equity:
Class A Common Stock, $.01 par value, including
additional paid-in capital, 500,000,000
shares authorized; 19,976,927 and
20,203,247 shares outstanding 82,936 87,831
Retained earnings from January 1, 1994 76,756 63,106
-------- --------
Total shareholders' equity 159,692 150,937
-------- --------
$416,346 $403,492
======== ========
</TABLE>
See notes to financial statements.
F-2
<PAGE> 9
CITICASTERS INC. AND SUBSIDIARIES
STATEMENT OF OPERATIONS
(In Thousands except per share amounts)
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------
Predecessor
-----------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net revenues:
Television broadcasting $ 61,592 $ 130,418 $ 139,576
Radio broadcasting 74,822 66,625 65,592
--------- --------- ---------
136,414 197,043 205,168
--------- --------- ---------
Costs and expenses:
Operating expenses 37,416 60,682 71,730
Selling, general and administrative 43,513 57,036 61,340
Corporate, general and administrative
expenses 4,303 4,796 3,996
Depreciation and amortization 14,635 22,946 28,119
--------- --------- ---------
99,867 145,460 165,185
--------- --------- ---------
Operating income 36,547 51,583 39,983
Other income (expense):
Interest expense, (contractual interest
for 1993 was $69,806) (13,854) (31,979) (64,942)
Minority interest -- -- (26,776)
Investment income 1,231 1,216 305
Gain on sale of television stations -- 95,339 --
Miscellaneous, net (607) 447 (494)
--------- --------- ---------
(13,230) 65,023 (91,907)
--------- --------- ---------
Earnings (loss) before reorganization
items and income taxes 23,317 116,606 (51,924)
Reorganization items -- -- (14,872)
--------- --------- ---------
Earnings (loss) before income taxes
and extraordinary items 23,317 116,606 (66,796)
Income taxes 9,000 53,500 --
--------- --------- ---------
Earnings (loss) before extraordinary items 14,317 63,106 (66,796)
Extraordinary items, net of tax -- -- 408,140
--------- --------- ---------
NET EARNINGS $ 14,317 $ 63,106 $ 341,344
========= ========= =========
SHARE DATA:
Primary and Fully Diluted:
Net earnings $ .68 $ 2.55 *
Average common shares 21,017 24,777 *
<FN>
* Share amounts are not relevant due to the effects of the reorganization.
</TABLE>
See notes to financial statements.
F-3
<PAGE> 10
CITICASTERS INC. AND SUBSIDIARIES
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(In Thousands)
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------------
Predecessor
-----------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Common stock, including additional paid-in capital:
Beginning balance $ 87,831 $ 138,588 $ 270,891
Common stock issued:
Exercise of stock options 273 -- --
Stock bonus awarded -- 297 350
Common stock repurchased and retired (5,168) (51,054) --
Effect of restructuring -- -- (132,653)
--------- --------- ---------
Balance at end of period $ 82,936 $ 87,831 $ 138,588
========= ========= =========
Retained earnings:
Beginning balance $ 63,106 $ -- $(609,920)
Net earnings 14,317 63,106 341,344
Application of fresh-start accounting -- -- 268,576
Cash dividends (667) -- --
--------- --------- ---------
Balance at end of period $ 76,756 $ 63,106 $ --
========= ========= =========
TOTAL SHAREHOLDERS' EQUITY $ 159,692 $ 150,937 $ 138,588
========= ========= =========
</TABLE>
See notes to financial statements.
F-4
<PAGE> 11
CITICASTERS INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------
Predecessor
-----------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net earnings $ 14,317 $ 63,106 $ 341,344
Adjustments:
Depreciation and amortization 14,635 22,946 28,119
Non-cash interest expense 190 198 8,780
Other non-cash adjustments (primarily non-
cash dividends on the preferred stock
of a former subsidiary) -- -- 26,941
Reorganization items -- -- 14,872
Realized gains on sales of assets -- (51,218) (1,871)
Extraordinary gains on retirements
and refinancing of long-term debt -- -- (408,140)
Decrease (increase) in trade receivables (644) 16,443 (1,635)
Decrease (increase) in broadcast program
rights, net of fees payable 916 (146) 201
Increase (decrease) in accounts payable,
accrued expenses and other liabilities (5,885) (2,891) 9,514
Increase (decrease) in deferred taxes 336 (6,559) --
Other (634) (4,389) 306
--------- --------- ---------
23,231 37,490 18,431
--------- --------- ---------
INVESTING ACTIVITIES:
Deposits on broadcast stations to be acquired (7,500) -- --
Purchases of:
Broadcast stations (50,598) (16,000) --
Real estate, property and equipment (11,857) (7,569) (5,967)
Sales of:
Broadcast stations -- 381,547 1,600
Entertainment businesses:
Cash proceeds received -- 5,000 --
Cash expenses related to sale (22) (813) (6,021)
Investments and other subsidiaries -- 2,841 --
Other (378) 204 (1,131)
--------- --------- ---------
(70,355) 365,210 (11,519)
--------- --------- ---------
FINANCING ACTIVITIES:
Retirements and refinancing of long-term debt (3,500) (505,824) (370,150)
Additional long-term borrowings 13,500 195,350 355,339
Financing costs -- -- (13,549)
Common shares repurchased (5,168) (51,054) --
Cash dividends paid on common stock (667) -- --
Proceeds from the sale of common stock -- -- 1,161
Other 273 297 --
--------- --------- ---------
4,438 (361,231) (27,199)
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM
INVESTMENTS (42,686) 41,469 (20,287)
Cash and short-term investments at beginning
of period 46,258 4,789 25,076
--------- --------- ---------
Cash and short-term investments at end
of period $ 3,572 $ 46,258 $ 4,789
========= ========= =========
</TABLE>
See notes to financial statements.
F-5
<PAGE> 12
CITICASTERS INC. AND SUBSIDIARIES
SUPPLEMENTARY SCHEDULE TO THE STATEMENT OF CASH FLOWS - REORGANIZATION ITEMS
(In Thousands)
<TABLE>
<CAPTION>
Year Ended
December 31, 1993
-----------------
Predecessor
-----------
<S> <C>
EFFECTS OF REORGANIZATION ACTIVITIES:
Cash Items:
Operating activities:
Professional fees and other expenses
related to bankruptcy proceedings
and consummation of the reorganization $ (10,633)
=========
Financing activities:
Long-term debt issued for cash $ 6,339
Common stock issued for cash 1,161
---------
$ 7,500
=========
Non Cash Items:
Increase in long-term debt (primarily
reduction in original issue discount) $ 25,967
Net adjustment of accounts to fair value (15,961)
Decrease in liabilities subject to exchange (40,423)
Increase in accrued liabilities
(professional fees and other expenses
related to consummation of the
reorganization) 1,438
Decrease in long-term debt through the
issuance of common stock (221,541)
Elimination of minority interest (preferred
stock of subsidiary) through the
issuance of common stock (274,932)
Common stock issued in reorganization 134,762
---------
$(390,690)
=========
</TABLE>
See notes to financial statements.
F-6
<PAGE> 13
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
A. ACCOUNTING POLICIES
-------------------
ORGANIZATION Citicasters is engaged in the ownership and operation of radio
and television stations and derives substantially all of its revenue from
the sale of advertising time. The amount of broadcast advertising time
available for sale by Citicasters' stations is relatively fixed, and by its
nature cannot be stockpiled for later sale. Therefore, the primary
variables affecting revenue levels are the demand for advertising time, the
viewing or listening audience of the station and the entry of new stations
in the marketplace. The major variable costs of operation are programming
(news, sports and entertainment), sales costs related to revenues and
promotional costs. The success of the programming determines the audience
levels and therefore affects revenue.
BASIS OF PRESENTATION The accompanying financial statements include the
accounts of Citicasters Inc. and its subsidiaries. For purposes of the
financial statements and notes hereto the term "Predecessor" refers to
Great American Communications Company and its subsidiaries prior to
emergence from chapter 11 bankruptcy. Significant intercompany balances and
transactions have been eliminated.
On December 28, 1993, the Predecessor completed its comprehensive financial
restructuring through a prepackaged plan of reorganization under chapter 11
of the Bankruptcy Code (see Note B for a description of the
reorganization). Pursuant to the reporting principles of AICPA Statement of
Position No. 90-7 entitled "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code" ("SOP 90-7"), Predecessor
adjusted its assets and liabilities to their estimated fair values upon
consummation of the reorganization. The adjustments to reflect the
consummation of the reorganization as of December 31, 1993, including among
other things, the gain on debt discharge and the adjustment to record
assets and liabilities at their fair values, have been reflected in the
accompanying financial statements. The Statements of Operations, Changes in
Shareholders' Equity and Cash Flows for the year ended December 31, 1993 is
presented on a historical cost basis without giving effect to the
reorganization. Therefore, the Statements of Operations, Changes in
Shareholders' Equity and Cash Flows for periods after December 31, 1993 are
generally not comparable to prior periods and are separated by a line (see
Note B).
All acquisitions have been treated as purchases. The accounts and results
of operations of companies since their formation or acquisition are
included in the consolidated financial statements.
American Financial Group, Inc. and its Subsidiaries ("American Financial")
owned 7,566,889 shares (37.8%) of Citicasters' outstanding Common Stock at
March 1, 1996. At that date, American Financial's Chairman, Carl H.
Lindner, owned an additional 3,428,166 shares (17.1%) of Citicasters'
outstanding Common Stock.
USE OF ESTIMATES The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Changes in circumstances could cause
actual results to differ materially from those estimates.
BROADCAST PROGRAM RIGHTS The rights to broadcast non-network programs on
Citicasters' television stations are stated at cost, less accumulated
amortization. These costs are charged to operations on a straight-line
basis over the contract period or on a per showing basis, whichever results
in the greater aggregate amortization.
F-7
<PAGE> 14
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
PROPERTY AND EQUIPMENT Property and equipment are based on cost and
depreciation is calculated primarily using the straight-line method.
Depreciable lives are: land improvements, 8-20 years; buildings and
improvements, 8-40 years; operating and other equipment, 3-20 years; and
leasehold improvements, over the life of the lease.
CONTRACTS, BROADCASTING LICENSES AND OTHER INTANGIBLES Contracts,
broadcasting licenses and other intangibles represent the excess of the
value of the broadcast station over the values of their net tangible
assets, and is attributable to FCC licenses, network affiliation agreements
and other contractual or market related factors. Reorganization value in
excess of amounts allocable to identifiable assets represents the excess of
the estimated fair value of Citicasters at the time of the reorganization
over the estimated fair value allocated to its net identifiable assets.
Intangible assets are being amortized on a straight-line basis over an
average of 34 years. On an ongoing basis, Citicasters reviews the carrying
value of its intangible assets. If this review indicates that intangible
assets will not be recoverable, as determined based on undiscounted cash
flows of broadcast stations over the remaining amortization period,
Citicasters' carrying value of intangible assets are reduced by the amount
of the estimated shortfall of cash flows.
INCOME TAXES Citicasters files a consolidated Federal income tax return
which includes all 80% or more owned subsidiaries. Deferred income tax
assets and liabilities are determined based on differences between
financial reporting and tax bases and are measured using enacted tax rates.
Deferred tax assets are recognized if it is more likely than not that a
benefit will be realized.
EARNINGS PER SHARE Primary and fully diluted earnings per share in 1995 and
1994 are based upon the weighted average number of common shares and gives
effect to common equivalent shares (dilutive options) outstanding during
the respective periods. As a result of the effects of the reorganization,
per share data for the year ended December 31, 1993 has been rendered
meaningless and, therefore, per share information for this period has been
omitted from the accompanying financial statements.
STOCK BASED COMPENSATION The Company grants stock options for a fixed
number of shares to employees with an exercise price equal to the fair
value of the shares at the date of grant. The Company accounts for stock
option grants in accordance with APB Opinion No. 25, Accounting for Stock
Issued to Employees, and, accordingly, recognizes no compensation expense
for the stock option grants.
STATEMENT OF CASH FLOWS For cash flow purposes, "investing activities" are
defined as making and collecting loans and acquiring and disposing of debt
or equity instruments and property and equipment. "Financing activities"
include obtaining resources from owners and providing them with a return on
their investments, borrowing money and repaying amounts borrowed. All other
activities are considered "operating." Short-term investments for purposes
of the financial statements are those which had a maturity of three months
or less when acquired.
B. REORGANIZATION On December 28, 1993, Citicasters completed its
comprehensive financial restructuring that was designed to enhance its
long-term viability by adjusting its capitalization to reflect current and
projected operating performance levels. The Predecessor accomplished the
reorganization of its debt and preferred stock obligations through
"prepackaged" bankruptcy filings made under chapter 11 of the Bankruptcy
Code by the Predecessor and two of its former non-operating subsidiaries.
The Predecessor's primary operating subsidiary, Great American Television
and Radio Company, Inc., was not a party to any such filings under the
Bankruptcy Code.
F-8
<PAGE> 15
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Acceptances for a prepackaged plan of reorganization were solicited in
October and early November 1993. The plan of reorganization described below
was overwhelmingly approved by the creditors and shareholders. The
Predecessor filed its bankruptcy petition with the Bankruptcy Court on
November 5, 1993. The plan was confirmed on December 7, 1993 and became
effective on December 28, 1993.
Under the terms of the plan the following occurred:
* Predecessor effected a reverse stock split; issuing 2.25 shares
of a new class of common stock for each 300 shares of common
stock outstanding prior to the reorganization.
* Debt with a carrying value of $634.8 million was exchanged for
23,256,913 shares of common stock and $426.6 million in debt.
* Preferred stock of a subsidiary was exchanged for 1,515,499
shares of common stock.
* American Financial fulfilled a commitment to contribute $7.5
million in cash for which it received approximately $6.3 million
principal amount of 14% Notes and 213,383 shares of common stock.
The net expense incurred as a result of the chapter 11 filings and
subsequent reorganization has been segregated from ordinary operations in
the Statement of Operations. Reorganization items for 1993 include the
following (in thousands):
<TABLE>
<S> <C>
Financing costs $25,967
Adjustments to fair value (15,961)
Professional fees and other expenses
related to bankruptcy 4,914
Interest income (48)
-------
$14,872
=======
</TABLE>
Financing costs consist of the unamortized portion of original issue
discount and deferred financing costs relating to debt subject to exchange
as of the date the petition for bankruptcy was filed (November 5, 1993).
Adjustments to fair value reflect the net change to state assets and
liabilities at estimated fair value as of December 31, 1993. Interest
income is attributable to the accumulation of cash and short-term
investments after commencement of the chapter 11 cases.
Pursuant to the fresh-start reporting provisions of SOP 90-7, the
Predecessor's assets and liabilities were revalued and a new reporting
entity was created with no retained earnings or accumulated deficit as of
the effective date. The period from the effective date to December 31, 1993
was considered immaterial thus, December 31, 1993 was used as the effective
date for recording the fresh-start adjustments. Predecessor's results of
operations for the period from the effective date of the restructuring to
December 31, 1993 have been reflected in the Statement of Operations for
the year ended December 31, 1993.
The reorganization values of the assets and liabilities were determined
based upon several factors including: prices and multiples of broadcast
cash flow (operating income before depreciation and amortization) paid in
purchase and business combination transactions, projected operating results
of the broadcast stations, market values of publicly traded broadcast
companies, economic and industry information and the reorganized capital
structure. The foregoing factors resulted in a range of reorganization
values between $75 and $200 million. Based upon an analysis of all of this
data, management determined that the reorganization value of the company
would be $138.6 million.
F-9
<PAGE> 16
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
The gain on debt discharge is summarized as follows (in thousands):
<TABLE>
<S> <C>
Carrying value of debt securities subject to
exchange, including accrued interest $ 318,447
Carrying value of preferred stock of subsidiary,
including accrued dividends 309,608
Aggregate principal amount of 14% Senior
Extendable Notes issued in exchanges,
including accrued interest since June 30, 1993 (71,236)
Aggregate value of common stock
issued in exchanges (134,762)
Expenses attributable to consummation of the
reorganization (7,573)
---------
Total gain on debt discharge (See Note J) $ 414,484
=========
</TABLE>
C. ACQUISITIONS AND DISPOSITIONS During June 1995, Citicasters acquired its
second FM station in Portland (KKCW) for $30 million. During August 1995,
Citicasters acquired a second FM radio station in Tampa (WTBT) for $5.5
million. The purchase price for WTBT-FM could increase to $8 million
depending on the satisfaction of certain conditions. Citicasters began
operating WTBT-FM during March 1995. In December 1995, the Company began
operating WHOK-FM, WLLD-FM and WLOH-AM in Columbus under a local marketing
agreement and acquired the stations in January 1996 for $24 million.
During 1994, Citicasters sold one AM and three FM radio stations and
acquired or commenced the operation of two FM radio stations. The following
table sets forth certain information regarding these radio station
transactions:
<TABLE>
<CAPTION>
Date Operations Date of Acquisition Price/
Commenced/Ceased Closing Sales Price
---------------- ------- -----------
<S> <C> <C> <C>
ACQUISITIONS:
-------------
Sacramento (KRXQ-FM) January 1, 1994 May 27, 1994 $16 million
Cincinnati (WWNK-FM) April 25, 1994 April 21, 1995 $15 million
DISPOSITIONS:
-------------
Detroit (WRIF-FM) January 23, 1994 September 23, 1994 $11.5 million
Milwaukee (WLZR-FM&AM) April 14, 1994 April 14, 1994 $7 million
Denver (KBPI-FM) April 19, 1994 August 5, 1994 $8 million
</TABLE>
In the aggregate, the purchases and sales of radio stations completed in
1994 and 1995 did not have a material effect on Citicasters' results. No
gain or loss was recognized on the radio stations sold during 1994, because
those stations were valued at their respective sales price under the
fresh-start reporting provision of SOP 90-7.
During September and October 1994, Citicasters sold four of its network
affiliated television stations to entities affiliated with New World
Communications Group Incorporated ("New World"). The stations sold included
KSAZ in Phoenix, WDAF in Kansas City, WBRC in Birmingham and WGHP in
Greensboro/Highpoint. Citicasters received $355.5 million in cash and a
warrant to purchase, for five years, 5,000,000 shares of New World Common
Stock at $15 per share. The warrant was valued at $10 million and is
included in the balance sheet caption "Deferred charges and other assets."
Citicasters recorded a pretax gain of $95.3 million ($50.1 million after
tax) on these sales. Proceeds from the sales were used to retire long-term
debt and to repurchase shares of the Company's Common Stock. During 1995,
the terms of the warrant were amended to modify the registration rights
relating to the underlying shares. In consideration for such modification,
the exercise price was increased from $15 to $16 per share.
F-10
<PAGE> 17
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
The following unaudited proforma financial information is based on the
historical financial statements of Citicasters, adjusted to reflect the
television station sales, retirement of long-term debt, the effects of the
December 1993 reorganization and the February 1994 refinancing of
subordinated debt (in thousands except per share data).
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------
1994 1993
---- ----
<S> <C> <C>
Net revenues $128,375 $119,597
======== ========
Operating income $ 30,624 $ 20,142
======== ========
Net earnings $ 11,582 $ 4,244
======== ========
Net earnings per share $ .47 $ .16
======== ========
</TABLE>
D. PROPERTY AND EQUIPMENT Property and equipment at December 31, consisted of
the following (in thousands):
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Land and land improvements $ 5,883 $ 5,305
Buildings and improvements 15,458 10,710
Operating and other equipment 22,771 13,873
-------- --------
44,112 29,888
Accumulated depreciation (10,234) (4,805)
-------- --------
$ 33,878 $ 25,083
======== ========
</TABLE>
Pursuant to the fresh-start reporting principles of SOP 90-7, the carrying
value of property and equipment was adjusted to estimated fair value as of
the effective date of the reorganization, which included the restarting of
accumulated depreciation. Depreciation expense relating to property and
equipment was $5.4 million in 1995; $8.7 million in 1994; and $11.6 million
in 1993.
E. CONTRACTS, BROADCASTING LICENSES AND OTHER INTANGIBLES Contracts,
broadcasting licenses and other intangibles at December 31, consisted of
the following (in thousands):
<TABLE>
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Licenses, network affiliation agreements
and other market related intangibles $ 322,749 $ 275,629
Reorganization value in excess of amounts
allocable to identifiable assets 7,998 7,998
--------- ---------
330,747 283,627
Accumulated amortization (17,956) (8,932)
--------- ---------
$ 312,791 $ 274,695
========= =========
</TABLE>
F-11
<PAGE> 18
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Citicasters' carrying value of its broadcasting assets was adjusted to
estimated fair value as of the effective date of the reorganization
pursuant to the reporting principles of SOP 90-7. This adjustment included,
among other things, the restarting of accumulated amortization related to
intangibles.
Amortization expense relating to contracts, broadcasting licenses and other
intangibles was $9.3 million in 1995; $14.2 million in 1994; and $16.5
million in 1993.
F. LONG-TERM DEBT Long-term debt at December 31, consisted of the following
(in thousands):
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Citicasters:
9-3/4% Senior Subordinated Notes
due February 2004, less unamortized
discount of $2,519 and $2,709
(imputed interest rate 10.13%) $122,481 $122,291
Subsidiaries:
Bank credit facility 10,000 --
-------- --------
Total long-term debt $132,481 $122,291
======== ========
</TABLE>
At December 31, 1995, the only sinking fund or other scheduled principal
payments due during the next five years is $10 million, due in 1998.
Cash interest payments were $12.9 million in 1995; $27.1 million in 1994;
and $45.1 million in 1993.
In February 1994, Citicasters refinanced its 14% Notes and the 13% Senior
Subordinated Notes due 2001 through the issuance of $200 million principal
amount of 9-3/4% Senior Subordinated Notes due 2004 ("9-3/4% Notes"). The
9-3/4% Notes were issued at a discount; the net proceeds were $195.4
million. No gain or loss was recognized on these transactions. A portion of
the proceeds from the sale of the four television stations ($305 million)
was used to retire long-term debt including $75 million principal amount of
the 9-3/4% Notes.
In October 1994, Citicasters entered into a bank credit agreement with a
group of banks providing two revolving credit facilities: a $125 million
facility to fund future acquisitions and a $25 million working capital
facility. The acquisition facility is available through December 31, 2001.
The maximum amount available under this facility will be reduced by $7.5
million per quarter beginning in the first quarter of 1998. The working
capital facility is available through December 31, 1997. Citicasters is
required to use excess cash flow to reduce amounts outstanding under the
facilities if leverage ratios exceed certain levels.
The interest rate under the facilities varies depending on Citicasters'
leverage ratio. In the case of the base rate option, the rate ranges from
the base rate to the base rate plus .75%. In the case of the eurodollar
rate option, the rate ranges from 1% to 2% over the eurodollar rate. The
weighted average interest rate on Citicasters outstanding bank debt as of
December 31, 1996 was 6.84%. The bank credit facilities are secured by
substantially all the assets of Citicasters. As of March 1, 1996,
Citicasters had $26 million outstanding under the acquisition facility.
F-12
<PAGE> 19
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Citicasters' 9-3/4% Notes require a prepayment of the 9-3/4% Notes in the
event of certain changes in the control of Citicasters and further require
the proceeds from certain asset sales to be used to partially redeem 9-3/4%
Notes.
At December 31, 1995 the market of the 9-3/4% Notes exceeded carrying value
by approximately $1.5 million.
G. SHAREHOLDERS' EQUITY Citicasters is authorized to issue 500 million shares
of Class A Common Stock, $.01 par value, 125 million shares of Class B
Common Stock, $.01 par value and 9.5 million shares of Serial Preferred
Stock, $.01 par value. The preferred stock may have such preferences and
other rights and limitations as the Board of Directors may designate with
respect to each series.
During 1995 and 1994, Citicasters acquired 254,760 and 2,354,475 shares of
its common stock from several unaffiliated institutions for $5.2 million
and $51.1 million, respectively. Under the most restrictive provision of
Citicasters' debt covenants, Citicasters may acquire an additional $8.7
million of its common stock.
During 1995, Citicasters' Board of Directors twice declared three-for-two
stock splits of its outstanding common stock. All share and per share data
have been restated to reflect both stock splits.
The Company's debt instruments contain certain covenants which limit the
amount of dividends which Citicasters is able to pay on its common stock.
Under the most restrictive provision of Citicasters' debt covenants,
dividends are limited to a maximum of $2.5 million annually. Citicasters
paid a dividend of $.03 per common share in 1995. Under the merger
agreement with Jacor (see Note M), Citicasters will not be permitted to pay
dividends without the prior consent of Jacor.
Changes in the number of shares of common stock are shown in the following
table:
<TABLE>
<S> <C>
PREDECESSOR:
------------
Outstanding at January 1, 1993 56,729,434
Effect of reverse stock split
in restructuring (56,303,963)
Issued in restructuring for
exchanges of securities 24,772,412
Issued for cash 213,383
CITICASTERS:
------------
Stock bonuses awarded to employees 52,425
-----------
Outstanding at December 31, 1993 25,463,691
Stock bonuses awarded to employees 37,125
Stock repurchased and retired (5,297,569)
-----------
Outstanding at December 31, 1994 20,203,247
Exercise of stock option 29,812
Stock repurchased and retired (256,132)
-----------
Outstanding at December 31, 1995 19,976,927
===========
</TABLE>
F-13
<PAGE> 20
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
Following the consummation of the reorganization, the Board of Directors
established the 1993 Stock Option Plan. The Plan provides for granting both
non-qualified and incentive stock options to key employees. There are
1,800,000 common shares reserved for issuance under the 1993 Plan. During
1994, the Board of Directors established the 1994 Directors Stock Option
Plan. The Plan provides for the granting of options to non-employee
directors of Citicasters. There are 450,000 common shares reserved for
issuance under the 1994 Plan. Options under both plans become exercisable
at the rate of 20% per year commencing one year after grant and expire at
the earlier of 10 years from the date of grant, three months after
termination of employment or retirement as a director, or one year after
the death or disability of the holder.
Stock option data for Citicasters' stock option plans are as follows:
<TABLE>
<CAPTION>
1995 1994
------------------------------- -------------------------------
Option Price Option Price
Shares Per Share Shares Per Share
------ ------------ ------ ------------
<S> <C> <C> <C> <C>
Outstanding, beginning
of period 1,614,375 $6.67-$10.33 1,307,250 $6.67
Granted 57,500 $18.00-$25.50 498,375 $9.77-$10.33
Exercised (29,812) $6.67 - -
Terminated - - (191,250) $6.67
--------- ---------
Outstanding, December 31 1,642,063 $6.67-$25.50 1,614,375 $6.67-$10.33
========= =========
Exercisable, December 31 516,263 $6.67-$10.33 223,200 $6.67
========= =========
Available for grant
December 31 607,937 635,625
========= =========
</TABLE>
H. INCOME TAXES Deferred income taxes reflect the impact of temporary
differences between the carrying amounts of assets and liabilities
recognized for financial reporting purposes and the amounts recognized for
income tax purposes. Significant components of Citicasters' deferred tax
assets and liability as of December 31, are as follows (in thousands):
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Deferred tax assets:
Accrued expenses and other $ 8,409 $ 8,190
Deferred tax liability:
Book over tax basis of depreciable
assets 53,231 52,676
------- -------
Net deferred tax liability $44,822 $44,486
======= =======
</TABLE>
F-14
<PAGE> 21
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
The following is a reconciliation of Federal income taxes at the
"statutory" rate of 35% in 1995, 1994, and 1993 and as shown in the
Statement of Operations (in thousands):
<TABLE>
<CAPTION>
Predecessor
-----------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Earnings (loss) from continuing
operations before income taxes $23,317 $116,606 ($ 66,796)
Extraordinary items -- -- 408,140
------- -------- ---------
Adjusted earnings before
income taxes $23,317 $116,606 $ 341,344
======= ======== =========
Income taxes at the statutory rate $ 8,161 $ 40,812 $ 119,470
Effect of:
Book basis over tax basis of
stations sold -- 8,472 --
Goodwill 74 599 (630)
Minority interest -- -- 9,372
Certain reorganization items -- -- (127,606)
State taxes net of Federal
income tax benefit 650 3,575 --
Other 115 42 (606)
------- -------- ---------
Income taxes as shown in the
Statement of Operations $ 9,000 $ 53,500 $ --
======= ======== =========
</TABLE>
Income tax provision as applied to continuing operations consists of (in
thousands):
<TABLE>
<CAPTION>
Predecessor
-----------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Current taxes $ 7,300 $ 42,800 $ --
Deferred taxes 700 5,200 --
State taxes 1,000 5,500 --
------- -------- --------
$ 9,000 $ 53,500 $ --
======= ======== ========
</TABLE>
Federal income taxes of $8.4 million and $7 million were paid in cash
during 1995 and 1994, respectively.
I. DISCONTINUED OPERATIONS During 1994, Citicasters received an additional $5
million related to the 1991 sale of its entertainment businesses. The
after-tax proceeds were credited to reorganization intangibles. A final
distribution is scheduled to occur in December 1996. It is not possible to
quantify the amount of the distribution Citicasters will receive at that
time.
J. EXTRAORDINARY ITEMS Predecessor's extraordinary items in 1993 consisted of
a loss of $6.3 million from the retirement of debt prior to the
reorganization and a gain of $414.5 million on debt discharge in the
reorganization.
F-15
<PAGE> 22
CITICASTERS INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
K. PENDING LEGAL PROCEEDINGS Management, after review and consultation with
counsel, considers that any liability from litigation pending against
Citicasters and any of its subsidiaries would not materially affect the
consolidated financial position or results of operations of Citicasters and
its subsidiaries.
L. ADDITIONAL INFORMATION QUARTERLY OPERATING RESULTS (UNAUDITED) - The
following are quarterly results of consolidated operations for 1995 and
1994 (in thousands except per share data).
<TABLE>
<CAPTION>
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
------- ------- ------- ------- -----
<S> <C> <C> <C> <C> <C>
1995
----
Net revenues $ 29,045 $36,886 $34,126 $36,357 $136,414
Operating income 4,724 11,588 8,910 11,325 36,547
Net earnings 1,278 5,242 3,282 4,515 14,317
* Net earnings
per share $ .06 $ .25 $ .15 $ .21 $ .68
1994
----
Net revenues $ 48,449 $60,423 $50,908 $37,263 $197,043
Operating income 7,193 18,321 13,386 12,683 51,583
Net earnings (loss) (1,752) 5,161 44,851 14,846 63,106
Net earnings (loss)
per share ($ .07) $ .20 $ 1.75 $ .67 $ 2.55
<FN>
* The sum of the quarterly earnings per share does not equal the
earnings per share computed on a year-to-date basis due to rounding.
</TABLE>
Citicasters' financial results are seasonal. Revenues are higher in the
second and fourth quarter and lower in the first and third quarter; the
first quarter is the lowest of the year.
During the third and fourth quarters of 1994, Citicasters recorded net
earnings of $41.7 million and $8.4 million respectively, attributable to
the sale of the four television stations.
Included in selling, general and administrative expenses in 1995, 1994 and
1993 are charges of $5.8 million, $7.2 million and $6.6 million,
respectively, for advertising and charges of $1.3 million, $2.2 million and
$2.4 million, respectively, for repairs and maintenance.
M. SUBSEQUENT EVENT On February 12, 1996, Citicasters and Jacor
Communications, Inc. entered into a merger agreement by which Jacor will
acquire Citicasters. Under the agreement, for each share of Citicasters'
stock, Jacor will pay cash of $29.50 plus a five-year warrant to purchase
approximately .2 shares of Jacor common stock at $28 per share. If the
closing occurs after September 1996 the exercise price of the warrant would
be reduced to $26 per share and the per share cash price would increase at
the rate of $.2215 per month. American Financial and certain of its
affiliates have agreed to execute irrevocable consents in favor of the
Jacor transaction on March 13, 1996. The closing of the transaction is
conditioned on, among other things, receipt of FCC and other regulatory
approvals. Upon consummation of the merger, holders of the 9-3/4% Notes
have the right to put their notes to the Company at 101% of principal.
F-16
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Citicasters Inc. Has duly caused this Amendment to be signed on its behalf by
the undersigned, thereunto duly authorized.
Citicasters Inc.
By: /s/ GREGORY C. THOMAS
-------------------------------
Gregory C. Thomas
Executive Vice President and
Chief Financial Officer
Signed: June 24, 1996
