<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K(A)
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: February 21, 1996
JACOR COMMUNICATIONS, INC.
OHIO
(State or Other Jurisdiction of Incorporation)
0-12404 31-0978313
(Commission File No.) (IRS Employer Identification No.)
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
(513) 621-1300
1
<PAGE>
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
Page
----
AUDITED--
Report of Independent Accountants . . . . . . . . . . . . . . . . . 3
Consolidated Balance Sheet at December 25, 1994 and
December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statement of Operations for the years ended
December 26, 1993, December 25, 1994 and December 31, 1995 . . . 5
Consolidated Statement of Changes in Stockholders' Deficit
for the years ended December 26, 1993, December 25, 1994 and
December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . 6
Consolidated Statement of Cash Flows for the years ended
December 26, 1993, December 25, 1994 and December 31, 1995 . . . 7
Notes to Consolidated Financial Statements. . . . . . . . . . . . . 8
UNAUDITED--
Condensed Consolidated Balance Sheet at December 31, 1995 and
March 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . 21
Condensed Consolidated Statement of Operations for the three
months ended March 26, 1995 and March 31, 1996 . . . . . . . . . 22
Condensed Consolidated Statement of Cash Flows for the three
months ended March 26, 1995 and March 31, 1996 . . . . . . . . . 23
Notes to Condensed Consolidated Financial Statements. . . . . . . . 24
(b) Pro Forma Financial Information.
UNAUDITED--
Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . 25
Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1995 . . . . . . . . . . . . . . . . 26
Pro Forma Condensed Consolidated Statement of Operations for
the three months ended March 31, 1996. . . . . . . . . . . . . . 27
Notes to Unaudited Pro Forma Financial Information. . . . . . . . . 28
(c) Exhibits
None
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 hereunto duly authorized.
JACOR COMMUNICATIONS, INC.
May 23, 1996 BY: /s/ R. Christopher Weber
-----------------------------------
R. Christopher Weber,
Senior Vice President and
Chief Financial Officer
2
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Noble Broadcast Group, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of changes in stockholders' deficit and
of cash flows present fairly, in all material respects, the financial position
of Noble Broadcast Group, Inc. and its subsidiaries at December 25, 1994 and
December 31, 1995, 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. These financial statements are
the responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
As discussed in Note 2 to the consolidated financial statements, in February
1996 the Company entered into an agreement to be purchased by Jacor
Communications, Inc.
PRICE WATERHOUSE LLP
San Diego, California
March 21, 1996
3
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 25, DECEMBER 31,
ASSETS 1994 1995
<S> <C> <C>
Current assets:
Cash and cash equivalents..................................................... $ 2,134,000 $ 447,000
Accounts receivable, less allowance for doubtful accounts of $515,000 and
$455,000.................................................................... 12,401,000 9,094,000
Prepaid expenses and other.................................................... 2,084,000 2,290,000
-------------- -------------
Total current assets...................................................... 16,619,000 11,831,000
Property, plant and equipment, net................................................ 7,623,000 9,333,000
Intangible assets, less accumulated amortization of $33,718,000 and $25,734,000... 89,849,000 50,730,000
Other assets...................................................................... 1,932,000 5,333,000
-------------- -------------
$ 116,023,000 $ 77,227,000
-------------- -------------
-------------- -------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.............................................................. $ 3,537,000 $ 2,867,000
Accrued interest.............................................................. 6,477,000 1,674,000
Accrued payroll and related expenses.......................................... 1,720,000 1,077,000
Other accrued liabilities..................................................... 4,364,000 3,081,000
Current portion of long-term debt............................................. 167,209,000 3,611,000
Unamortized carrying value of subordinated debt............................... 19,445,000
-------------- -------------
Total current liabilities................................................. 202,752,000 12,310,000
Long-term debt, less current portion.............................................. 232,000 78,000,000
Deferred income taxes............................................................. 8,568,000
Other long-term liabilities....................................................... 683,000 640,000
-------------- -------------
Total liabilities................................................................. 203,667,000 99,518,000
-------------- -------------
Mandatorily redeemable Class A-1 common stock, $.01 par value; 1,580,285 shares
authorized; 249,931 shares issued and outstanding in 1994........................ 35,066,000
-------------- -------------
Stockholders' deficit:
Class A common stock, $.000001 par value; 1,569,514 shares authorized, 49,904
shares issued and outstanding in 1995....................................... -- --
Class B common stock, $.01 par value and $.000001 par value in 1994 and 1995,
respectively; 2,293,235 and 254,018 shares authorized in 1994 and 1995,
respectively; 254,018 shares issued and outstanding......................... 3,000 --
Paid-in capital............................................................... 662,000 44,231,000
Accumulated deficit........................................................... (123,375,000) (66,522,000)
-------------- -------------
Total stockholders' deficit............................................... (122,710,000) (22,291,000)
Commitments (Note 11)
-------------- -------------
$ 116,023,000 $ 77,227,000
-------------- -------------
-------------- -------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-------------------------------------------------------
DECEMBER 26, DECEMBER 25, DECEMBER 31,
1993 1994 1995
<S> <C> <C> <C>
Broadcast revenue............................................ $ 53,860,000 $ 56,154,000 $ 47,061,000
Less agency commissions...................................... (6,351,000) (6,552,000) (5,159,000)
----------------- ----------------- -----------------
Net revenue.............................................. 47,509,000 49,602,000 41,902,000
----------------- ----------------- -----------------
Expenses:
Broadcast operating expenses............................. 36,944,000 37,892,000 31,445,000
Corporate general and administrative..................... 2,702,000 2,621,000 2,285,000
Depreciation and amortization............................ 6,916,000 6,311,000 4,107,000
Write-down of intangibles and other assets............... 7,804,000
----------------- ----------------- -----------------
46,562,000 54,628,000 37,837,000
----------------- ----------------- -----------------
Income (loss) from operations................................ 947,000 (5,026,000) 4,065,000
Interest expense............................................. (7,602,000) (10,976,000) (9,913,000)
Net gain on sale of radio stations........................... 7,909,000 2,619,000
----------------- ----------------- -----------------
Income (loss) before provision for income taxes,
extraordinary gain and cumulative effect of change in
accounting principle....................................... 1,254,000 (16,002,000) (3,229,000)
Provision for income taxes................................... (378,000) (36,000) (63,000)
----------------- ----------------- -----------------
Income (loss) before extraordinary gain and cumulative effect
of change in accounting principle.......................... 876,000 (16,038,000) (3,292,000)
Extraordinary gain on forgiveness of debt, net of income
taxes...................................................... 12,222,000 60,145,000
----------------- ----------------- -----------------
Income (loss) before cumulative effect of change in
accounting principle....................................... 13,098,000 (16,038,000) 56,853,000
Cumulative effect of change in accounting principle.......... 354,000
----------------- ----------------- -----------------
Net income (loss)............................................ $ 13,452,000 $ (16,038,000) $ 56,853,000
----------------- ----------------- -----------------
----------------- ----------------- -----------------
Primary earnings (loss) per share:
Before extraordinary item and cumulative effect of change
in accounting principle................................ $ 1.96 $ (31.82 ) $ (1.80 )
Extraordinary item....................................... 9.35 47.23
Cumulative effect of change in accounting principle...... .27
----------------- ----------------- -----------------
Total................................................ $ 11.58 $ (31.82 ) $ 45.43
----------------- ----------------- -----------------
----------------- ----------------- -----------------
Fully diluted earnings (loss) per share:
Before extraordinary item and cumulative effect of change
in accounting principle................................ $ 1.96 $ (31.82 ) $ (1.83 )
Extraordinary item....................................... 9.35 47.23
Cumulative effect of change in accounting principle...... .27
----------------- ----------------- -----------------
Total................................................ $ 11.58 $ (31.82 ) $ 45.40
----------------- ----------------- -----------------
----------------- ----------------- -----------------
Common equivalent shares:
Primary.................................................. 1,307,541 503,949 1,273,569
Fully diluted............................................ 1,307,541 503,949 1,273,569
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
CLASS A CLASS B
COMMON STOCK COMMON STOCK
------------------------ ---------------------- PAID-IN ACCUMULATED
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 27, 1992...... 254,018 $ 3,000 $ 662,000 $(120,789,000) $(120,124,000)
Net income.................... 13,452,000 13,452,000
----------- ----- --------- ----------- ---------- ------------ ------------
Balance at December 26, 1993...... 254,018 3,000 662,000 (107,337,000) (106,672,000)
Net loss...................... (16,038,000) (16,038,000)
----------- ----- --------- ----------- ---------- ------------ ------------
Balance at December 25, 1994...... 254,018 3,000 662,000 (123,375,000) (122,710,000)
Cancellation of Class A-1
Mandatorily Redeemable
Common Stock................ 26,562,000 26,562,000
Exchange of Class A-1
Mandatorily Redeemable
Common Stock................ 49,904 -- 8,504,000 8,504,000
Change in par value of Class B
Common Stock from $.01 per
share to $.000001 per
share....................... (3,000) 3,000
Issuance of warrant to
purchase common stock....... 8,500,000 8,500,000
Net income.................... 56,853,000 56,853,000
----------- ----- --------- ----------- ---------- ------------ ------------
Balance at December 31, 1995...... 49,904 $ -- 254,018 $ -- $44,231,000 $(66,522,000) $(22,291,000)
----------- ----- --------- ----------- ---------- ------------ ------------
----------- ----- --------- ----------- ---------- ------------ ------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
-----------------------------------------------
DECEMBER 26, DECEMBER 25, DECEMBER 31,
1993 1994 1995
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................... $ 13,452,000 $ (16,038,000) $ 56,853,000
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Cumulative effect of change in accounting principle..... (354,000)
Interest expense added to long-term debt................ 2,309,000 2,465,000 3,631,000
Depreciation and amortization........................... 6,916,000 6,311,000 4,107,000
Amortization of debt issuance costs and unamortized
carrying value of subordinated debt................... (1,002,000) (1,312,000) 392,000
Net (revenue) expense on barter transactions............ 81,000 (288,000) (210,000)
(Gain) loss on disposition of assets.................... (7,930,000) 138,000 (2,287,000)
Extraordinary gain on forgiveness of debt............... (12,222,000) (60,145,000)
Write-down of intangibles and other assets.............. 9,297,000
Changes in assets and liabilities, net of effects of
acquisitions:
Accounts receivable................................. (1,318,000) (2,367,000) 3,698,000
Prepaid expenses and other.......................... 233,000 (14,000) 4,000
Other assets........................................ (610,000) 732,000 (224,000)
Accounts payable.................................... 679,000 1,360,000 (670,000)
Accrued interest.................................... (223,000) 2,070,000 (1,674,000)
Other accrued liabilities........................... (888,000) 924,000 (1,926,000)
Other long-term liabilities......................... 2,577,000 (107,000) (43,000)
-------------- -------------- ---------------
Net cash provided by (used in) operating
activities........................................ 1,700,000 3,171,000 1,506,000
-------------- -------------- ---------------
Cash flows from investing activities:
Proceeds from disposition of assets......................... 35,002,000 6,000 47,650,000
Acquisition of property, plant and equipment................ (3,009,000) (1,124,000) (2,851,000)
Acquisition of radio stations............................... (6,834,000)
-------------- -------------- ---------------
Net cash flows provided by (used in) investing
activities........................................ 31,993,000 (1,118,000) 37,965,000
-------------- -------------- ---------------
Cash flows from financing activities:
Payments on long-term debt.................................. (34,036,000) (2,534,000) (126,450,000)
Borrowings.................................................. 90,500,000
Payments related to financing costs......................... (5,208,000)
-------------- -------------- ---------------
Net cash used in financing activities............... (34,036,000) (2,534,000) (41,158,000)
-------------- -------------- ---------------
Net decrease in cash and cash equivalents....................... (343,000) (481,000) (1,687,000)
Cash and cash equivalents at beginning of period................ 2,958,000 2,615,000 2,134,000
-------------- -------------- ---------------
Cash and cash equivalents at end of period...................... $ 2,615,000 $ 2,134,000 $ 447,000
-------------- -------------- ---------------
-------------- -------------- ---------------
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
7
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1--THE COMPANY
Noble Broadcast Group, Inc. (the Company), a privately held Delaware
corporation, owned and operated the following radio stations during 1995:
WSSH-AM serving Boston, Massachusetts; KBEQ-FM and AM, serving Kansas City,
Missouri; KMJQ-FM and KYOK-AM serving Houston, Texas; KBCO-FM and AM and KHIH-FM
and KHOW-AM, serving Denver, Colorado; KMJM-FM, KNJZ-FM and KATZ-AM, serving St.
Louis, Missouri; WVKS-FM, WRVF-FM and WSPD-AM, serving Toledo, Ohio. Four of
these stations were sold and two stations were purchased during 1995 (Note 8).
In addition, the Company also provided programming for and had exclusive rights
to sell advertising time on two radio stations located in Baja California,
Mexico, XETRA-FM and XETRA-AM, which primarily serve the metropolitan San Diego
area broadcasting as XTRA-FM and AM.
NOTE 2--SUBSEQUENT EVENT-SALE OF THE COMPANY
In February 1996, the Company entered into a Stock Purchase and Stock and
Warrant Redemption Agreement (the Agreement) whereby Jacor Communications, Inc.
(Jacor) agreed to purchase both the Company's outstanding Class B common stock
and a newly-issued warrant allowing Jacor to purchase the Company's Class A
common stock. This transaction is subject to Federal Communications Commission
approval and certain other conditions. Simultaneously, the Company entered into
an Asset Purchase Agreement and sold the assets of certain subsidiaries of the
Company to a wholly-owned subsidiary of Jacor and assigned to this subsidiary
its rights and obligations under certain contracts including the Exclusive Sales
Agency Agreement (Note 10). The aggregate value of the above transactions, when
fully consummated, is $152,000,000 plus certain closing costs. At that time,
Jacor will own 100% of the equity interests in the Company. The Company also
entered into time brokerage agreements with Jacor for the stations in St. Louis
and Toledo. The Company received approximately $99,000,000 in February 1996 in
conjunction with the transactions.
In connection with this transaction, the Company entered into a Credit
Agreement with another wholly-owned subsidiary of Jacor providing for a
$40,000,000 Term Loan Facility, which was borrowed in full in February 1996, and
a $1,000,000 Revolving Loan Facility. The loans bear interest at the Prime rate,
payable quarterly. Both facilities are to be repaid on February 1, 2002 or upon
occurrence of certain ownership changes, whichever occurs earlier.
The Company used the total proceeds received in February 1996 to repay the
outstanding indebtedness under the Senior Secured Term Loan, the Senior
Revolving Credit Facility and the Subordinated Notes, to redeem and retire the
warrant held by the subordinated debtholder, and to redeem and retire all of the
Company's Class A shares outstanding (Notes 5 and 6). In the event that the
transaction cannot be consummated, none of the proceeds previously paid to the
Class A stockholders or the warrant holders shall be returned. If the
transaction is terminated by the buyer, the Class B stockholders shall be
entitled to the balance of the amounts due under the Agreement; if terminated by
the Company, the buyer shall be entitled only to the amounts previously paid to
the Class B stockholders as well as certain other amounts.
NOTE 3--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. Significant intercompany balances and
transactions have been eliminated.
FINANCIAL STATEMENT PREPARATION
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
8
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
FISCAL YEAR
The Company's fiscal year ends on the last Sunday of December to coincide
with the standard broadcast year.
REVENUES
Revenues for commercial broadcasting advertisements are recognized when the
commercial is broadcast.
CASH AND CASH EQUIVALENTS
Cash equivalents are highly liquid investments (money market funds) with
original maturities of three months or less. Included in cash and cash
equivalents at December 25, 1994 is $1,600,000 of restricted cash. Restricted
cash of $1,500,000 was released to the Company on December 31, 1994 in
conjunction with its sale of KMJQ-FM and KYOK-AM (Note 8). The remaining
$100,000 of restricted cash was released to the Company in January 1995 in
conjunction with the sale of WSSH-AM (Note 8).
BARTER TRANSACTIONS
Revenue from barter transactions (advertising provided in exchange for goods
and services) is recognized as income when advertisements are broadcast, and
merchandise or services received are charged to expense when received or used.
If merchandise or services are received prior to the broadcast of the
advertising, a liability (deferred barter revenue) is recorded. If the
advertising is broadcast before the receipt of the goods or services, a
receivable is recorded.
CONCENTRATIONS OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash investments and
accounts receivable. The Company places its cash and temporary cash investments
in money market funds with high quality institutions. Concentrations of credit
risk with respect to accounts receivable are limited due to the large number of
customers comprising the Company's customer base and their dispersion across
many different geographic areas of the United States.
EARNINGS (LOSS) PER COMMON SHARE
Primary earnings (loss) per common share are calculated on the basis of the
weighted average number of common shares outstanding plus (in periods in which
they have a dilutive effect) the effect of common equivalent shares arising from
Senior Subordinated Convertible Notes, using the if-converted method, and the
effect of warrants to purchase common stock using the treasury stock method. The
calculation of fully diluted earnings per common share also includes the effect
of the assumed conversion of Senior Subordinated Convertible Notes and exercise
of warrants to purchase common stock in periods in which such conversion would
cause dilution.
PROPERTY, PLANT AND EQUIPMENT
Purchases of property, plant and equipment, including additions and
improvements and expenditures for repairs and maintenance that significantly add
to productivity or extend the economic lives of the assets, are capitalized at
cost and depreciated on the straight-line basis over their estimated useful
lives as follows:
<TABLE>
<S> <C>
Technical and office equipment.................................. 5-8 years
10-30
Buildings and building improvements............................. years
Furniture and fixtures.......................................... 10 years
Leasehold improvements.......................................... 10 years
Land improvements............................................... 8 years
Automobiles..................................................... 3 years
</TABLE>
9
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Maintenance and repairs are expensed as incurred.
INTANGIBLE ASSETS
Intangible assets represents the aggregate excess purchase cost over the
fair market value of radio station net assets acquired. Intangible assets are
stated at the lower of cost or net realizable value and are being amortized
using the straight-line method over periods not exceeding 40 years. The Company
evaluates the realizability of intangible assets by comparing the asset carrying
amount to future anticipated undiscounted cash flows.
In 1994, the Company determined that intangibles related to its Houston
stations were impaired and, accordingly, it recorded a $7,450,000 loss (Note 8).
Additionally, in 1994, the Company determined that $354,000 in other assets
would not be realized, and recorded a loss.
DEBT ISSUANCE COSTS
Debt issuance costs incurred in connection with executing long-term debt
agreements are amortized over the term of associated debt to interest expense.
FINANCIAL INSTRUMENTS
Interest rate swaps are entered into as a hedge against interest exposure of
variable rate debt. The differences to be paid or received on the swaps are
included in interest expense. Gains and losses are recognized when the swaps are
settled. The interest rate swaps are subject to market risk as interest rates
fluctuate.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial Accounting Standards Board Statement No. 107, "Disclosures about
Fair Value of Financial Instruments," (FAS 107) requires disclosure of fair
value information about financial instruments, whether or not recognized in the
balance sheet, for which it is practicable to estimate that value. Fair values
are based on estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used. The carrying
amount of all financial instruments on the consolidated balance sheet are
considered reasonable estimates of fair value, with the exception of long-term
debt as of December 25, 1994, of which $50,301,000 was forgiven in August 1995
(Note 5) and the interest rate swap agreement (Note 5).
NOTE 4--COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS
<TABLE>
<CAPTION>
DECEMBER 25, DECEMBER 31,
1994 1995
<S> <C> <C>
Property, plant and equipment
Technical and office equipment................................................. $ 12,295,000 $ 10,196,000
Land and land improvements..................................................... 978,000 1,067,000
Buildings and building improvements............................................ 2,880,000 2,517,000
Furniture and fixtures......................................................... 1,531,000 1,244,000
Leasehold improvements......................................................... 1,640,000 1,057,000
Automobiles.................................................................... 327,000 314,000
------------- --------------
19,651,000 16,395,000
Less accumulated depreciation and amortization................................. (12,028,000) (7,062,000)
------------- --------------
$ 7,623,000 $ 9,333,000
------------- --------------
------------- --------------
Other non-current assets
Debt issuance costs............................................................ $ 646,000 $ 4,267,000
Other.......................................................................... 1,286,000 1,066,000
------------- --------------
$ 1,932,000 $ 5,333,000
------------- --------------
------------- --------------
</TABLE>
10
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Statement of Cash Flows Information
Schedule of certain non-cash financing activities:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
----------------------------------------------
DECEMBER 26, DECEMBER 25, DECEMBER 31,
1993 1994 1995
------------ --------------- ---------------
<S> <C> <C> <C>
Acquisition of assets in exchange for debt.................... $ 463,000 $ -- $ --
------------ ----- -----
------------ ----- -----
</TABLE>
NOTE 5--LONG-TERM DEBT
Long-term debt is comprised of:
<TABLE>
<CAPTION>
DECEMBER 25, DECEMBER 31,
1994 1995
<S> <C> <C>
Senior Secured Term Loan..................................... $ 45,000,000
Senior Revolving Credit Facility............................. 7,050,000
Subordinated Notes........................................... 29,325,000
Tranche A Notes.............................................. $ 87,364,000
Tranche B Notes.............................................. 11,587,000
Series A Senior Subordinated Notes........................... 29,617,000
Series B Senior Subordinated Convertible Notes............... 37,000,000
Other........................................................ 1,873,000 236,000
--------------- -------------
167,441,000 81,611,000
Less current portion......................................... (167,209,000) (3,611,000)
--------------- -------------
$ 232,000 $ 78,000,000
--------------- -------------
--------------- -------------
</TABLE>
Interest paid during 1993, 1994 and 1995 aggregated $4,354,000, $6,152,000
and $3,673,000, respectively.
TRANCHE A NOTES AND TRANCHE B NOTES--The Tranche A and Tranche B Notes,
which were outstanding as of December 25, 1994, were extinguished in conjunction
with the Company's August 1995 debt restructuring (see Debt Restructuring
below). The Tranche A Notes bore interest at the 30-day LIBOR rate plus an
applicable margin. The Tranche B Notes bore interest at 4 percent. The senior
debt agreement provided for principal prepayments at the option of the Company
and called for mandatory principal prepayments from the net proceeds of sales of
certain radio station properties or from 50 percent of the net proceeds of sales
by the Company of any stock or warrants issued by the Company or from the
exercise of any such warrants or from excess operating cash, as defined.
During 1993, the Company sold certain radio station properties and other
assets (Note 8) and utilized resultant net proceeds of $32,960,000 to repay
Tranche A Notes of $18,498,000 and Tranche B Notes of $14,462,000. Pursuant to
agreements with the senior debtholders, $12,222,000 of the Tranche A Notes was
forgiven, resulting in an extraordinary gain during the year ended December 26,
1993.
The Company's agreement with the Senior debtholders contained, among other
things, certain covenants as to the maintenance of certain financial ratios and
cash flows, as well as restrictions on additional indebtedness, property sales
and liens, mergers and acquisitions, contingent liabilities, certain lease
transactions, investments, transactions with affiliates, corporate overhead,
capital expenditures, prepaid expenditures, and employment and certain other
contracts.
Based on agreements between the Company and the holders of the Tranche A
Notes and Tranche B Notes, the outstanding debt was to be repaid as of August
18, 1995 and the Company classified the debt as current as of December 25, 1994.
11
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
SENIOR SUBORDINATED NOTES AND SENIOR SUBORDINATED CONVERTIBLE NOTES--The
Series A Senior Subordinated Notes (Subordinated Notes) and Series B Senior
Subordinated Convertible Notes (Convertible Notes), which were outstanding as of
December 25, 1994, were extinguished in conjunction with the Company's 1995 debt
restructuring (see Debt Restructuring below).
In fiscal year 1991 the Company restructured its debt with the subordinated
debtholders by modifying certain terms. The $24,423,000 excess of the carrying
amount of the old subordinated debt instruments over the principal amount of the
Subordinated and Convertible Notes was recorded as unamortized carrying value of
subordinated debt in 1991 and was being amortized against future interest
expense over the term of the restructured Subordinated and Convertible Notes.
The Subordinated Notes bore interest at an annual rate of 9%; interest was added
to principal semiannually. During 1993, 1994 and 1995, approximately $2,309,000,
$2,465,000 and $3,631,000 of interest was added to the principal, respectively.
The Convertible Notes bore interest at the non-compounding annual rate of 5
percent and such interest was due and payable at such time as the principal
became payable. The Convertible Notes were convertible as to both principal and
accrued interest into 803,592 shares of Mandatorily Redeemable Class A-1 common
stock at the option of the holders after April 30, 1994.
The Subordinated Notes and Convertible Notes were subordinated to the
Tranche A and B Notes and contained, among other things, covenants as to the
maintenance of certain financial ratios and cash flows, and certain restrictions
as to additional indebtedness, amounts and types of payments and investments,
dividends, liens and encumbrances, sale and leaseback transactions, equity
interests of subsidiaries, sales of assets, mergers, corporate overhead, capital
expenditures, prepayment of expenses, and employment contracts.
Based on agreements between the Company and the holders of Subordinated
Notes and Convertible Notes, the outstanding debt was to be repaid as of August
18, 1995 and the Company classified the debt and associated unamortized carrying
value of subordinated debt as current as of December 25, 1994.
DEBT RESTRUCTURING--In August 1995, the Company completed a restructuring of
its debt, resulting in the extinguishment of $175,301,000 of Tranche A Notes,
Tranche B Notes, Subordinated Notes and Convertible Notes plus accrued interest
for an aggregate amount of $125,000,000 in cash. Additionally, the Company
repurchased or exchanged the shares of Class A-1 common stock held by the
holders of these debt instruments. The Company sold its Houston, Boston and
Kansas City stations in 1995 and utilized the resultant net proceeds of
$47,650,000, along with $1,500,000 restricted cash released to the Company (Note
3), to repay outstanding debt prior to the completion of the restructuring (Note
8), entered into a new senior $60,000,000 Credit Agreement and obtained new
subordinated debt for $37,000,000. The former debtholders forgave $50,301,000 of
principal and accrued interest which has been recognized as an extraordinary
gain in 1995. Also included in the extraordinary gain for 1995 is $18,412,000,
representing the remaining unamortized carrying value of subordinated debt as of
the date of the related debt extinguishment.
SENIOR SECURED TERM LOAN AND SENIOR REVOLVING CREDIT FACILITY--In August
1995, the Company and its wholly-owned subsidiaries entered into a $60,000,000
Credit Agreement with a consortium of banks, consisting of a $45,000,000 Senior
Secured Term Loan (the Term Loan) and a $15,000,000 Senior Revolving Credit
Facility (the Revolver). The Company borrowed all of the $45,000,000 Term Loan
and $7,500,000 of the Revolver and paid transaction costs of approximately
$4,700,000. Under the Term Loan and the Revolver, principal payments were due in
varying amounts through 2001. As discussed in Note 2, the outstanding debt under
the Credit Agreement was paid in full and cancelled in February 1996.
12
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Borrowings under the Credit Agreement bore interest, at the option of the
Company, at either the London Interbank Offered Rate (LIBOR) plus an applicable
margin of up to 2.625%, or at a base rate (defined as the higher of the Federal
Funds Rate plus .5% or the bank's Prime rate) plus an applicable margin of up to
1.375% per annum. The Term Loan and the Revolver were secured by substantially
all of the Company's assets, including the common stock and tangible and
intangible assets and major lease rights of the Company's operating
subsidiaries.
In conjunction with entering into the Credit Agreement, the Company issued a
warrant to purchase 10% of the common stock of the Company's primary operating
subsidiary, exercisable only in the event of certain specified occurrences
through June 30, 1996, for an exercise price of $1.00. The Company determined
that the value of the warrant was de minimus because of the nature of the
specified events required for warrant exercise. As discussed in Note 2, the
warrant was cancelled in February 1996.
INTEREST RATE SWAP AGREEMENT--In accordance with the terms of the Credit
Agreement, the Company entered into a three year interest rate swap agreement in
September 1995 on a notional principal amount of $30,000,000. Under the interest
rate swap agreement, on a quarterly basis the Company pays the counterparty
interest at a fixed rate of 5.87%, and the counterparty pays the Company
interest at a variable rate based on the LIBOR.
As of December 31, 1995, the interest rate swap agreement had a nominal
carrying value and a ($425,000) fair value. The fair value was estimated by
obtaining a quotation from the counterparty. In February 1996, the Company
terminated the interest rate swap agreement in conjunction with its debt
extinguishment, and realized a loss of $686,000 upon termination.
SUBORDINATED NOTES--In August 1995, the Company entered into an Investment
Agreement with a new subordinated debtholder, consisting of $37,000,000 in
subordinated notes. The subordinated notes bore interest at a rate of 8.108% per
annum compounded quarterly, of which 50% was to be paid annually with the
remainder being added to principal. The notes were due in August 2002. As
discussed in Note 2, the debt was paid in full and cancelled in February 1996.
Under the Investment Agreement, the Company issued a warrant for 75% of the
Company's Class A common stock, exercisable through August 2005, with an
exercise price of $1.00. Management has determined that the fair value of the
warrant on the date of issuance was approximately $8,500,000, which has been
recorded as a discount on the related debt and was being amortized to interest
expense over the term of the debt. As discussed in Note 2, the Company
repurchased the warrant in February 1996.
COVENANTS--The Credit Agreement and the Investment Agreement required the
Company to comply with certain financial and operating covenants, including,
among others, limitations on: capital expenditures, acquisitions and additional
indebtedness, engaging in a business other than radio broadcasting, paying cash
dividends, corporate overhead levels, the use of borrowings, and requirements to
maintain certain financial ratios.
NOTE 6--COMMON STOCK
In conjunction with the August 1995 refinancing, the Company entered into an
agreement with its former debtholders providing for the repurchase or exchange
of all of their Class A-1 shares of common stock. Under the agreement, 189,321
Class A-1 shares were repurchased by the Company for a de minimus amount and the
remaining 60,610 shares were exchanged for 49,904 shares of Class A common
stock. There were 249,931 shares of Mandatorily Redeemable Class A-1 common
stock outstanding in 1993 and 1994.
The Company's authorized capital stock subsequent to the August 1995
restructuring consists of 1,569,514 shares of Class A common stock, $.000001 par
value, of which 49,904 shares are issued and outstanding, and
13
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
254,018 shares of Class B voting common stock, $.000001 par value, all of which
are issued and outstanding. Prior to August 1995, the Class B common stock had a
par value of $.01. Class B common stock is voting common stock, while Class A
common stock has no right to vote with respect to the election of directors, or
other corporate actions other than certain major events set forth in the
Company's Restated Certificate of Incorporation. The holders of Class B common
stock, voting as a class, are entitled to elect six members of the Board of
Directors. Class B common stock may convert their shares into stock that is
registered pursuant to certain firm commitment underwritten public offerings, as
defined.
Shares of Class A common stock are convertible into an equal number of
shares of Class B common stock subsequent to a public offering, as described in
the Restated Certificate of Incorporation, upon certain events as defined in the
Company's agreements with the subordinated debtholders, or as of August 18,
2000. In addition, holders of both Class A and Class B common stock may convert
their shares into stock that is registered pursuant to a public offering.
Holders of Class A common stock are entitled to participate on a pro rata basis
with the holders of Class B common stock with respect to dividends, when and as
declared by the Board of Directors, provided there are funds legally available
for such purpose, and with respect to any redemption or repurchase by the
Company of any Class B common stock.
The Mandatorily Redeemable Class A-1 common stock contained a liquidation
preference over Class B common stock in an amount equal to a prescribed formula
value solely in the event of a liquidation resulting from bankruptcy, insolvency
or other similar proceeding. Such liquidation preference was zero at December
25, 1994. The Mandatorily Redeemable Class A-1 common stock was not entitled to
vote except for the right, voting as a separate class, to elect one member of
the Company's Board of Directors and except that certain transactions specified
in the Company's Restated Certificate of Incorporation required the consent of
the majority of the then-outstanding shares of Mandatorily Redeemable Class A-1
common stock. Holders of Mandatorily Redeemable Class A-1 common stock were
entitled to participate on a pro rata basis with the holders of Class B common
stock upon any redemption or repurchase by the Company of any Class B common
stock or other equity securities of the Company.
Shares of Class A-1 common stock were convertible into an equal number of
shares of Class B common stock subsequent to a public offering, or under certain
specified circumstances. In addition, holders of Class A-1 common stock were
entitled to convert their shares into stock registered pursuant to certain firm
commitment underwritten public offerings, as defined. Prior to an initial public
offering (IPO), holders of Class A-1 common stock were entitled to, in the event
of a defined change of voting control of the Company, require the Company to
repurchase their shares of Class A-1 common stock in accordance with specified
formula prices. In addition, if the Company had not effected an IPO by December
2002, then holders of a majority of the then-outstanding Class A-1 common stock,
on or after December 31, 2003, could require the Company to repurchase the Class
A-1 common stock owned by them at a specified formula repurchase price.
The Mandatorily Redeemable Class A-1 common stock was recorded at an "issue
price" equivalent to the carrying value of the equity instruments exchanged
therefor. No subsequent adjustment to the valuation of the Mandatorily
Redeemable Class A-1 common stock was required prior to its repurchase and
exchange in August 1995.
NOTE 7--STOCK OPTIONS
The Company had two stock option plans, the Executive Stock Option Plan
(Executive Plan) and the 1991 Stock Option Plan (1991 Plan). No options were
granted under the Executive Plan or the 1991 Plan. In conjunction with the
August 1995 debt restructuring, the Company cancelled the 1991 Plan and the
Executive Plan.
15
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 8--STATION TRANSACTIONS
In August 1995, concurrent with the debt restructuring, the Company
purchased substantially all of the assets and certain liabilities of WSPD-AM and
WRVF-FM, Toledo, Ohio, for $6,660,000 using cash proceeds obtained through the
August 1995 debt restructuring. The acquisition has been accounted for using the
purchase method. The assets acquired were comprised of accounts receivable of
$391,000 and property, plant and equipment of $1,525,000. The excess of the
purchase price over the fair value of the assets and liabilities acquired was
$4,744,000, which is attributable to intangible assets and is being amortized
over 40 years using the straight-line method. The results of operations are
included in the results of operations of the Company since their acquisition.
The following unaudited pro forma summary information presents the results
of operations of the Company as if the acquisition of WSPD-AM and WRVF-FM had
occurred on December 27, 1993, after giving effect to certain adjustments,
principally intangible amortization and interest. These pro forma results have
been prepared for comparative purposes only and do not purport to be indicative
of what would have occurred had the acquisition been effected as of December 27,
1993 or of the results which may occur in the future.
<TABLE>
<CAPTION>
(UNAUDITED)
YEAR ENDED
-----------------------------
DECEMBER 25, DECEMBER 31,
1994 1995
<S> <C> <C>
Net revenue.................................................... $ 59,455,000 $ 47,945,000
Loss before extraordinary item................................. $ (16,230,000) $ (4,015,000)
Net income (loss).............................................. $ (16,230,000) $ 57,576,000
Earnings (loss) per share before extraordinary item............ $ (32.21) $ (3.15)
Earnings (loss) per share...................................... $ (32.21) $ 45.21
</TABLE>
In March 1995, the Company sold substantially all of the assets (excluding
cash and accounts receivable) and certain liabilities of Noble Broadcast of
Kansas City, Inc. (KBEQ-FM and KBEQ-AM) for $7,650,000. The sale of these assets
resulted in a gain of approximately $1,982,000 and has been reflected in the
Company's 1995 results of operations.
In January 1995, the Company sold substantially all of the assets (excluding
cash and accounts receivable) and certain liabilities of Noble Broadcast of
Ballybunion, Inc. (WSSH-AM) for $1,500,000. The sale of these assets resulted in
a gain of approximately $637,000 and has been reflected in the Company's 1995
results of operations.
On December 31, 1994, the Company sold substantially all of the non-cash
assets and certain liabilities of Noble Broadcast of Houston, Inc. (KMJQ-FM and
KYOK-AM) for $38,500,000 and released restricted cash of $1,500,000 (Note 3).
The sale of these assets resulted in a loss on the sale of $7,450,000. This loss
was considered to result from permanent impairment of intangible assets as of
December 25, 1994 and has been reflected in the Company's results of operations
in 1994.
In March 1993, the Company sold substantially all of the assets of Noble
Broadcast of New York, Inc. (WBAB-FM and WGBB-AM) for $16,000,000. Net proceeds
from this sale of $15,000,000 were used to reduce the Tranche A and Tranche B
Notes (Note 5) resulting in the forgiveness of $5,562,000 of Tranche A Notes.
The sale of these assets resulted in a gain on the sale of $6,555,000.
In April 1993, the Company sold substantially all of the assets of WSSH-FM
Boston, Massachusetts, for $18,500,000. Net proceeds from this sale of
$15,250,000 were used to reduce the Tranche A and Tranche B Notes (Note 5)
resulting in the forgiveness of $5,655,000 of the Notes. The sale of these
assets resulted in a gain of $1,354,000.
16
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In May 1993, the Company purchased substantially all of the assets of
KATZ-AM and KNJZ-FM in St. Louis for $2,750,000. The Company paid $2,250,000 in
cash and issued a non-interest bearing promissory note for $500,000. The note is
payable in equal installments of $250,000 in May 1994 and May 1996. The
acquisition has been accounted for using the purchase method. The assets and
liabilities acquired were comprised entirely of intangible assets which are
being amortized over 40 years using the straight-line method. The results of
operations are included in the results of operations of the Company since their
acquisition.
NOTE 9--INCOME TAXES
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
109 on a prospective basis, effective January 1, 1993. SFAS 109 requires
recognition of deferred tax assets and liabilities for the expected future tax
consequences of events that have been included in the financial statements or
tax returns. Under the SFAS 109 asset and liability method, deferred tax assets
and liabilities are determined based upon the difference between the financial
statement and tax bases of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse. Upon
implementation of SFAS 109, the Company recorded a cumulative effect (benefit)
of a change in accounting principle of $354,000, which represented the future
tax benefits expected to be realized upon utilization of the Company's state tax
loss carryforwards. The benefit of these loss carryforwards was realized during
1993.
The following is a summary of the provision for income taxes, for the years
ended December 26, 1993, December 25, 1994 and December 31, 1995:
<TABLE>
<CAPTION>
1993 1994 1995
<S> <C> <C> <C>
Current:
Federal................................................. $ -- $ -- $ --
State................................................... 24,000 36,000 63,000
Deferred:
Federal................................................. -- --
State................................................... 354,000 -- --
---------- --------- ---------
Provision................................................... $ 378,000 $ 36,000 $ 63,000
---------- --------- ---------
---------- --------- ---------
</TABLE>
A reconciliation of the provision for income taxes to the amount computed by
applying the statutory Federal income tax rate to income before income taxes
follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
------------------------------------------
DECEMBER 26, DECEMBER 25, DECEMBER 31,
1993 1994 1995
<S> <C> <C> <C>
Federal statutory rate......................................... $ 439,000 $ (5,601,000) $ (1,176,000)
State income taxes, net of federal benefit..................... 57,000 (728,000) (153,000)
Amortization and write down of intangibles..................... (496,000) 3,348,000 1,329,000
Losses for which no current benefit is available............... -- 2,847,000 --
State net operating loss utilization........................... 354,000 -- --
Other.......................................................... 24,000 170,000 63,000
------------ ------------- -------------
$ 378,000 $ 36,000 $ 63,000
------------ ------------- -------------
------------ ------------- -------------
</TABLE>
17
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The components of deferred income taxes at December 25, 1994 and December
31, 1995 are as follows:
<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Deferred tax assets:
Available net operating loss carryforwards for financial reporting
purposes........................................................... $ 30,060,000 $ --
Charitable contribution carryovers................................... 250,000 250,000
Book and tax amortization differences................................ 12,530,000 --
Accrued liabilities and reserves..................................... 200,000 180,000
-------------- -------------
43,040,000 430,000
Deferred tax liabilities:
Book and tax basis differences....................................... (14,272,000) (7,256,000)
Book and tax depreciation and amortization differences............... (4,458,000) (1,312,000)
-------------- -------------
Net deferred tax assets (liabilities)................................ 24,310,000 (8,138,000)
Valuation allowance.................................................. (24,310,000) (430,000)
-------------- -------------
$ -- $ (8,568,000)
-------------- -------------
-------------- -------------
</TABLE>
The Company recorded a provision for income taxes in 1993, 1994 and 1995 due
to taxable income for state tax reporting purposes related to entities in the
consolidated group which were subject to state income tax. The Company recorded
a valuation allowance for those deferred tax assets for which the Company's
management determined that the realization of such future tax benefits is not
more likely than not. Taxes paid during 1993, 1994 and 1995 aggregated $24,000,
$36,000 and $63,000, respectively.
At December 31, 1995, the Company had available Federal net operating losses
of approximately $46,000,000 for tax reporting purposes. Additionally, the
Company had available net operating losses of approximately $41,000,000 for
state income tax purposes. The net operating losses for tax purposes expire
between 2001 and 2009. In certain circumstances, as specified in the Internal
Revenue Code, a 50 percent or more ownership change by certain combinations of
the Company's stockholders during any three year period would result in
limitations on the Company's ability to utilize its net operating loss
carryforwards. The value of the Company's stock at the time of the ownership
change is the primary factor in determining the limit on the Company's ability
to utilize its net operating loss carryforwards. As a result of the August 1995
debt and equity restructuring, an ownership change occurred, and consequently
the Company's net operating loss carryforwards generated prior to the ownership
change are limited. The purchase of the Company by Jacor (Note 2) will also
result in an ownership change as specified in the Internal Revenue Code. As a
result of the August 1995 debt and equity restructuring, certain deferred tax
assets were reduced for financial reporting purposes. The increase in deferred
tax liabilities of $8,568,000 that occurred in conjunction with the August 1995
debt and equity restructuring was recorded as a component of the extraordinary
gain resulting from the August 1995 restructuring.
NOTE 10--BROADCAST LICENSE AGREEMENT
The Company's consolidated net sales for 1993, 1994 and 1995, include
XTRA-FM and XTRA-AM sales of approximately $13,346,000, $14,087,000 and
$15,613,000, respectively, pursuant to an Exclusive Sales Agency Agreement (the
Agreement) with the broadcast licensee expiring in 2015. Under the Agreement,
the Company acts as the agent for the sale of advertising time on XTRA-FM and
XTRA-AM for all areas outside Mexico. The Company operated a broadcasting tower
under a month-to-month lease until February 1996 when it moved to a new location
in Mexico owned by the Company. The broadcast licenses for these stations from
the Ministry of Communications of the Republic of Mexico are scheduled to expire
on July 3, 2004.
18
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Company is not aware of any information which would lead it to believe that
any specific risks exist which threaten the continuance of the Company's
relationship with the broadcast licensee.
Pursuant to the terms of the Agreement, as amended, the Company provides
programming for and purchases advertising time directly from the broadcast
licensee and resells such time to United States advertisers and agencies. The
Company incurred $555,000, $584,000 and $415,000 in expenses under the Agreement
during 1993, 1994 and 1995.
NOTE 11--BARTER TRANSACTIONS
Barter revenue was approximately $2,956,000, $2,551,000 and $2,461,000, in
1993, 1994 and 1995, respectively. Barter expense was approximately $3,037,000,
$2,263,000 and $2,251,000, in 1993, 1994 and 1995, respectively.
Included in prepaid expenses and other current assets and accrued
liabilities in the accompanying consolidated balance sheets for 1995 and 1994
are barter receivables (merchandise or services due to the Company) of
approximately $1,640,000 and $1,540,000, respectively and barter accounts
payable (air time due to suppliers of merchandise or services) of approximately
$1,384,000 and $1,385,000, respectively.
NOTE 12--COMMITMENTS
BROADCAST COMMITMENTS
The Company has agreements to broadcast a series of professional sports
games and related events through 1998. The Company incurred total expenses of
$2,142,000, $2,744,000 and $3,757,000 during 1993, 1994 and 1995, respectively,
in accordance with the agreements. Future minimum annual payments under the
agreements become due and payable as follows:
<TABLE>
<S> <C>
1996............................................ $2,765,000
1997............................................ 1,172,000
1998............................................ 385,000
---------
$4,322,000
---------
---------
</TABLE>
LEASE COMMITMENTS
The Company incurred total rental expenses of $1,389,000, $1,378,000 and
$538,000 in 1993, 1994 and 1995, respectively, under operating leases for
facilities and equipment. Future annual rental commitments expected under such
leases at December 31, 1995 are as follows:
<TABLE>
<S> <C>
1996............................................ $ 489,000
1997............................................ 406,000
1998............................................ 415,000
1999............................................ 404,000
2000............................................ 368,000
Thereafter...................................... 1,038,000
---------
$3,120,000
---------
---------
</TABLE>
TIME BROKERAGE AGREEMENTS
The Company, through various subsidiaries, previously provided programming
through time brokerage agreements. These agreements, which were terminated in
August 1995, allowed the Company to purchase a
19
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
specified amount of broadcast time per week in exchange for the rights to all
advertising revenues. The Company incurred related total expenses of $1,294,000,
$1,517,000 and $479,000 during 1993, 1994 and 1995, respectively.
NOTE 13--LITIGATION
The Company is involved in litigation on certain matters arising in the
ordinary course of business. Management has consulted with legal counsel and
does not believe that the resolution of such matters will have a material
adverse effect on the Company's financial position, results of operations, or
cash flows.
20
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
UNAUDITED
DECEMBER 31, MARCH 31,
1995 1996
-------------- --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents..................................................... $ 447,000 $ 592,000
Restricted cash............................................................... 1,978,000
Accounts receivable, less allowance for doubtful accounts of $455,000 and
$466,000.................................................................... 9,094,000 3,239,000
Prepaid expenses and other ................................................... 2,290,000 1,399,000
-------------- --------------
Total current assets...................................................... 11,831,000 7,208,000
Property, plant and equipment, net............................................ 9,333,000 4,670,000
Intangible assets, less accumulated amortization of $25,734,000 and
$23,968,000................................................................. 50,730,000 49,965,000
Other assets.................................................................. 5,333,000 1,289,000
-------------- --------------
$ 77,227,000 $ 63,132,000
-------------- --------------
-------------- --------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable.............................................................. $ 2,867,000 $ 1,395,000
Accrued interest.............................................................. 1,674,000 320,000
Accrued payroll and related expenses.......................................... 1,077,000 739,000
Other accrued liabilities..................................................... 3,081,000 9,039,000
Current portion of long-term debt............................................. 3,611,000 40,000,000
Unamortized carrying value of subordinated debt...............................
-------------- --------------
Total current liabilities................................................. 12,310,000 51,493,000
Long-term debt, less current portion.............................................. 78,000,000
Deferred income taxes and other long-term liabilities............................. 9,208,000 18,228,000
-------------- --------------
Total liabilities......................................................... 99,518,000 69,721,000
-------------- --------------
Stockholders' deficit:
Class A common stock $.000001 par value; 1,569,514 shares authorized, 49,904
shares issued and outstanding............................................... -- --
Class B common stock $.000001 par value; 254,018 shares issued and
outstanding................................................................. -- --
Paid-in capital............................................................... 44,231,000 49,791,000
Accumulated deficit........................................................... (66,522,000) (56,380,000)
-------------- --------------
Total stockholders' deficit............................................... (22,291,000) (6,589,000)
Commitments...............................................................
-------------- --------------
$ 77,227,000 $ 63,132,000
-------------- --------------
-------------- --------------
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
21
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
MARCH 26, MARCH 31,
1995 1996
------------- -------------
<S> <C> <C>
Broadcast revenue.................................................................. $ 10,054,000 $ 6,717,000
Less agency commissions........................................................ (1,048,000) (659,000)
------------- -------------
Net revenue.................................................................. 9,006,000 6,058,000
Expenses:
Broadcast operating expenses................................................... 7,638,000 5,626,000
Corporate general and administrative........................................... 602,000 577,000
Depreciation and amortization.................................................. 1,027,000 1,079,000
------------- -------------
9,267,000 7,282,000
------------- -------------
Income (loss) from operations...................................................... (261,000) (1,224,000)
Interest expense................................................................... (2,549,000) (1,875,000)
Net gain on sale of radio stations................................................. 2,619,000 37,669,000
------------- -------------
Income (loss) before provision for income taxes and extraordinary loss............. (191,000) 34,570,000
Provision for income taxes......................................................... (16,000) (14,683,000)
------------- -------------
Income (loss) before extraordinary loss............................................ (207,000) 19,887,000
Extraordinary loss on extinguishment of debt, net of tax effect.................... (9,745,000)
------------- -------------
Net income (loss).................................................................. $ (207,000) $ 10,142,000
------------- -------------
------------- -------------
Primary earnings (loss) per share:
Before extraordinary item...................................................... $ (.41) $ 16.36
Extraordinary item............................................................. (8.02)
------------- -------------
Total...................................................................... $ (.41) $ 8.34
------------- -------------
------------- -------------
Fully diluted earnings (loss) per share:
Before extraordinary item...................................................... $ (.41) $ 13.69
Extraordinary item............................................................. (8.02)
------------- -------------
Total...................................................................... $ (.41) $ 5.67
------------- -------------
------------- -------------
Common equivalent shares:
Primary........................................................................ 503,949 1,215,688
Fully diluted.................................................................. 503,949 1,215,688
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
22
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 26, MARCH 31,
1995 1996
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)............................................................. $ (207,000) $ 10,142,000
Adjustments to reconcile net income (loss) to net cash used in operating
activities:
Interest expense added to long-term debt.................................... 667,000
Depreciation and amortization............................................... 1,027,000 1,079,000
Amortization of debt issuance costs and unamortized carrying value of
subordinated debt......................................................... (339,000) 116,000
Revenue on Barter transactions.............................................. (57,000) 77,000
Gain on disposition of assets............................................... (2,619,000) (32,676,000)
Extraordinary loss on extinguishment of debt................................ 7,675,000
Write-down of intangibles and other assets.................................. 519,000
Changes in assets and liabilities, net of effects of acquisition:
Restricted cash........................................................... (1,978,000)
Accounts receivable....................................................... 2,474,000 1,619,000
Prepaid expenses and other................................................ (423,000) 644,000
Other assets.............................................................. (890,000)
Accounts payable.......................................................... (323,000) (1,472,000)
Accued interest........................................................... 268,000 (1,354,000)
Other accrued liabilities................................................. (1,574,000) 3,565,000
Deferred income taxes and other long-term liabilities..................... (113,000) 9,660,000
-------------- --------------
Net cash used in operating activities............................................. (1,590,000) (2,903,000)
-------------- --------------
Cash flows from investing activities:
Proceeds from disposition of assets........................................... 47,650,000 46,753,000
Acquisition of fixed assets................................................... (532,000) (352,000)
-------------- --------------
Net cash flows provided by investing activities............................... 47,118,000 46,401,000
-------------- --------------
Cash flows from financing activities:
Payments on long-term debt.................................................... (47,662,000) (89,924,000)
Borrowings.................................................................... 40,000,000
Payments of deferred financing costs.......................................... (966,000)
Redemption of Class A common stock............................................ (2,347,000)
Proceeds from issuance of stock purchase Warrant.............................. 52,775,000
Redemption of stock purchase Warrant.......................................... (42,891,000)
-------------- --------------
Net cash used in financing activities......................................... (47,662,000) (43,353,000)
-------------- --------------
Net decrease in cash and cash equivalents......................................... (2,134,000) 145,000
Cash and cash equivalents at beginning of period.................................. 2,134,000 447,000
-------------- --------------
Cash and cash equivalents at end of period........................................ $ -- $ 592,000
-------------- --------------
-------------- --------------
</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
23
<PAGE>
NOBLE BROADCAST GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. FINANCIAL STATEMENTS
The December 31, 1995 condensed consolidated balance sheet data was derived
from audited financial statements, but does not include all disclosures required
by generally accepted accounting principles. The financial statements included
herein have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. Although certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, the Company
believes that the disclosures are adequate to make the information presented not
misleading and reflect all adjustments (consisting only of normal recurring
adjustments) which are necessary for a fair presentation of results of
operations for such periods. Results for interim periods may not be indicative
of results for the full year. It is suggested that these financial statements
be read in conjunction with the consolidated financial statements for the year
ended December 31, 1995 and the notes thereto.
2. SALE OF THE COMPANY
In February 1996, the Company entered into a Stock Purchase and a Stock and
Warrant Purchase Redemption Agreement (the Agreement) whereby Jacor
Communications, Inc. (Jacor) agreed to purchase both the Company's outstanding
Class B common stock and a newly-issued warrant allowing Jacor to purchase the
Company's Class A common stock. This transaction is subject to Federal
Communications Commission approval, which has been obtained; a Department of
Justice review, which is ongoing and certain other conditions. Simultaneously,
the Company entered into an Asset Purchase Agreement and sold the assets of
certain subsidiaries of the Company to a wholly-owned subsidiary of Jacor and
assigned to this subsidiary its rights and obligations under certain contracts.
The aggregate value of the above transactions, when fully consummated, is
$152,000,000 plus certain closing costs. At that time, Jacor will own 100% of
the equity interests in the Company. The Company also entered into time
brokerage agreements with Jacor for the stations in St. Louis and Toledo. The
Company received approximately $99,000,000 in February 1996 in conjunction with
the transactions.
In connection with the transaction, the Company entered into a Credit
Agreement with another wholly-owned subsidiary of Jacor providing for a
$40,000,000 Term Loan Facility, which was borrowed in full in February 1996, and
a $1,000,000 Revolving Loan Facility. The loans bear interest at the Prime rate,
payable quarterly. Both facilities are to be repaid February 1, 2002 or upon
occurrence of certain ownership changes, whichever occurs earlier.
The Company used the total proceeds received in February 1996 to repay the
outstanding indebtedness under the Senior Secured Term Loan, the Senior
Revolving Credit Facility and the Subordinated Notes, to redeem and retire the
warrant held by the subordinated debtholder, and to redeem and retire all of the
Company's Class A shares outstanding. In the event that the transaction cannot
be consummated, none of the proceeds previously paid to the Class A stockholders
or the warrant holders shall be returned. If the transaction is terminated by
the buyer, the Class B stockholders shall be entitled to the balance of the
amounts due under the Agreement; if terminated by the Company, the buyer shall
be entitled only to the amounts previously paid to the Class B stockholders as
well as certain other amounts.
24
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF MARCH 31, 1996
------------------------------------------------------------
JACOR/NOBLE
HISTORICAL HISTORICAL NOBLE PRO FORMA COMBINED PRO
JACOR NOBLE ADJUSTMENTS FORMA
---------- ---------- ----------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash....................................... $ 5,889 $ 592 $ 6,481
Accounts receivable........................ 25,301 3,239 28,540
Broadcast program rights...................
Prepaid expenses and other current
assets................................... 8,460 3,377 11,837
---------- ---------- --------------
Total current assets................... 39,650 7,208 46,858
Property and equipment....................... 39,214 4,670 $ 4,980 (a) 48,864
Intangible assets............................ 165,282 49,965 99,009 (a) 314,256
Deferred charges and other assets............ 109,102 1,289 (54,275)(a) 16,116
(40,000)(b)
---------- ---------- -------- --------------
Total assets........................... $ 353,248 $ 63,132 $ 9,714 $426,094
---------- ---------- -------- --------------
---------- ---------- -------- --------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, accrued liabilities and
other current liabilities................ $ 14,601 $ 11,493 $ 26,094
Current portion of Long-term debt.......... 40,000 $(40,000)(b)
---------- ---------- -------- --------------
Total current liabilities.............. 14,601 51,493 (40,000) 26,094
Long-term debt, net of current maturities...... 183,500 15,125 (b) 198,625
Other liabilities.............................. 14,772 18,228 28,000 (a)(c) 61,000
Shareholders' equity:
Common stock............................... 1,824 1,824
Additional paid-in capital................. 117,102 49,791 (49,791)(d) 117,102
Common stock warrants...................... 388 388
Retained earnings.......................... 21,061 (56,380) 56,380 (d) 21,061
---------- ---------- -------- --------------
Total shareholders' equity............. 140,375 (6,589) 6,589 140,375
---------- ---------- -------- --------------
Total liabilities and shareholders'
equity............................... $ 353,248 $ 63,132 $ 9,714 $426,094
---------- ---------- -------- --------------
---------- ---------- -------- --------------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
25
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
-----------------------------------------------------------------------------
JACOR NOBLE PRO JACOR/NOBLE
HISTORICAL PRO FORMA JACOR PRO HISTORICAL FORMA COMBINED
JACOR ADJUSTMENTS FORMA NOBLE ADJUSTMENTS PRO FORMA
---------- ----------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net revenue......................................... $ 118,891 $ (678)(e) $118,213 $41,902 $ 87 (f) $160,202
Broadcast operating expenses........................ 87,290 (1,425)(e) 85,865 31,445 (429)(f) 116,881
Depreciation and amortization....................... 9,483 400 (e) 9,883 4,107 2,710 (g) 16,700
Corporate general and administrative expenses....... 3,501 3,501 2,285 (1,388)(h) 4,398
---------- ----------- --------- ---------- ----------- -----------
Operating income................................ 18,617 347 18,964 4,065 (806) 22,223
Interest expense.................................... (1,444) (1,444) (9,913) (3,143)(i) (14,500)
Interest and investment
income............................................ 1,260 (854)(e) 406 406
Other income (expense), net......................... (168) 6 (e) (162) 2,619 (2,619)(j) (162)
---------- ----------- --------- ---------- ----------- -----------
Income (loss) before income taxes and
extraordinary items........................... 18,265 (501) 17,764 (3,229) (6,568) 7,967
Income tax expense.................................. (7,300) 200 (k) (7,100) (63) 2,100 (k) (5,063)
---------- ----------- --------- ---------- ----------- -----------
Income (loss) before extraordinary items........ $ 10,965 $ (301) $ 10,664 $(3,292) $(4,468) $ 2,904
---------- ----------- --------- ---------- ----------- -----------
---------- ----------- --------- ---------- ----------- -----------
Income per common
share......................................... $ 0.52 $ 0.51 $ 0.14
---------- --------- -----------
---------- --------- -----------
Number of common shares used in per share
computations...................................... 20,913 20,913 20,913
---------- --------- -----------
---------- --------- -----------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
26
<PAGE>
JACOR COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1996
------------------------------------------------------------------------------
JACOR NOBLE PRO JACOR/NOBLE
HISTORICAL PRO FORMA JACOR PRO HISTORICAL FORMA COMBINED
JACOR ADJUSTMENTS FORMA NOBLE ADJUSTMENTS PRO FORMA
---------- ----------- --------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net revenue........................................ $ 30,074 $ 1,850 (l) $ 31,924 $ 6,058 $ (2,154)(h) $ 35,828
Broadcast operating
expenses......................................... 23,871 1,693 (l) 25,564 5,626 (2,075)(h) 29,115
Depreciation and amortization...................... 2,619 30 (l) 2,649 1,079 625 (g) 4,353
Corporate general and administrative expenses...... 1,139 1,139 577 (378)(o) 1,338
---------- ----------- --------- ---------- ------------ -----------
Operating income............................... 2,445 127 2,572 (1,224) (326) 1,022
Interest expense................................... (2,111) (2,111) (1,875) 361 (i) (3,625)
Interest and investment
income...........................................
Other income (expense), net........................ 2,767 (2,539)(m) 228 37,669 (37,669)(h) 228
---------- ----------- --------- ---------- ------------ -----------
Income (loss) before income taxes and
extraordinary items.......................... 3,101 (2,412) 689 34,570 (37,634) (2,375)
Income tax expense................................. (1,259) 965 (k) (294) (14,683) 14,925 (k) (52)
---------- ----------- --------- ---------- ------------ -----------
Income (loss) before extraordinary items....... $ 1,842 $(1,447) $ 395 $ 19,887 $(22,709) $ (2,427)
---------- ----------- --------- ---------- ------------ -----------
---------- ----------- --------- ---------- ------------ -----------
Income per common
share........................................ $ 0.09 $ 0.02 $ (0.13)
---------- --------- -----------
---------- --------- -----------
Number of common shares used in per share
computations..................................... 20,503 20,503 18,183
---------- --------- -----------
---------- --------- -----------
</TABLE>
See Notes to Unaudited Pro Forma Financial Information
27
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)
(a) The adjustment represents the allocation of the remaining purchase price of
Noble and the portion of the Noble Acquisition already funded, including the
Noble warrant in the amount of $54,275, to the estimated fair value of the
assets acquired and liabilities assumed, and the recording of goodwill
associated with the acquisition. In February 1996, Jacor completed the
acquisition of Noble's operating assets in San Diego and certain assets
related to the Mexican properties for $50,800 and recorded the transaction
as a purchase.
<TABLE>
<CAPTION>
ESTIMATED FAIR
MARKET VALUE
--------------
<S> <C>
Property and equipment........................................................ $ 9,650
Intangible assets............................................................. 148,974
Cash.......................................................................... 592
Accounts receivable........................................................... 3,239
Prepaid expenses and other current assets..................................... 3,377
Deferred charges and other assets............................................. 1,289
Accounts payable, accrued liabilities and other current liabilities........... (11,493)
Other liabilities............................................................. (46,228)
--------------
$ 109,400
--------------
--------------
</TABLE>
(b) The adjustment represents the net additional borrowings to complete the
Noble Acquisition as follows:
<TABLE>
<S> <C>
Historical Jacor debt.......................................... $ 183,500
Historical Noble debt.......................................... 40,000
Loan receivable from Noble..................................... (40,000)
Pro forma adjustment........................................... 15,125
-----------
Assumed borrowings after Noble Acquisition..................... $ 198,625
-----------
-----------
</TABLE>
(c) The adjustment represents the additional deferred tax liability associated
with the difference between the book and tax basis of assets and
liabilities, excluding goodwill, after the allocation of the purchase price.
(d) The adjustment reflects the elimination of historical stockholders' equity,
as the Noble Acquisition will be accounted for as a purchase.
28
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)--(CONTINUED)
(e) These adjustments reflect additional revenues and expenses for Jacor's
acquisitions of radio stations WDUV-FM and WBRD-AM in Tampa Bay and WJBT-FM,
WSOL-FM, and WZAZ-AM in Jacksonville, which were completed at various dates
in 1995, net of the elimination of 1995 revenues and expenses for radio
stations WMYU-FM and WWST-FM in Knoxville, which were sold in February 1996.
(f) These adjustments reflect additional revenues and expenses for Noble's
acquisition of radio stations WRVF-FM (formerly WLQR-FM) and WSPD-AM in
Toledo, and the elimination of revenues and expenses for the sale of radio
stations KBEQ-FM and KBEQ-AM in Kansas City, and other miscellaneous
non-recurring expenses related to dispositions of properties in 1995. The
acquisitions were completed in August 1995 and the dispositions were
completed in March 1995.
(g) The adjustment reflects the additional depreciation and amortization expense
resulting from the allocation of Jacor's purchase price to the assets
acquired including an increase in property and equipment and identifiable
intangible assets, to their estimated fair market values and the recording
of goodwill associated with the acquisition of Noble. See Note (u). Goodwill
is amortized over 40 years.
(h) The adjustment represents $1,513 of corporate overhead savings for the
elimination of redundant management costs and other expenses resulting from
the combination of the Jacor and Noble entities, net of $125 additional
corporate expenses associated with the purchase of the Toledo stations.
(i) The adjustment represents additional interest expense associated with
Jacor's borrowings under the Existing Credit Facility to finance the Noble
acquisition and refinance existing outstanding borrowings. The assumed
interest rate is 7.3%, which represents the current rate as of May 1996 on
outstanding borrowings.
(j) The adjustment reflects the elimination of the gain on the sale of radio
stations KBEQ-FM and AM in Kansas City, and WSSH-AM in Boston, which were
sold in March 1995 and January 1995, respectively.
(k) To provide for the tax effect of pro forma adjustments using an estimated
statutory rate of 40%. The Noble pro forma adjustments include
non-deductible amortization of goodwill estimated to be approximately $1,300
for the year ended December 31, 1995 and $325 for the three months ended
March 31, 1996.
29
<PAGE>
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)--(CONTINUED)
(l) These adjustments reflect additional revenues and expenses for Jacor's
February 1996 acquisition of Noble's operating assets in San Diego, net of
the elimination of revenues and expenses for radio stations WMYU-FM and
WWST-FM in Knoxville, which were sold in February 1996.
(m) The adjustment reflects the elimination of the gain on the sale of radio
stations WMYU-FM and WWST-FM in Knoxville, which were sold in February 1996
for $6,500.
(n) These adjustments represent the elimination of revenues, operating expenses
and the related gain from the sale of the San Diego operating assets in
February 1996. See note (u).
(o) The adjustment represents corporate overhead savings from the elimination of
redundant management costs and other expenses resulting from the combination
of the Jacor and Noble entities.
30
