As filed with the Securities Exchange Commission on June 16, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1 to
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Commission file number 0-23264
Date of Report (Date of earliest event reported): March 31, 1997
EMMIS BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 35-1542018
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
950 North Meridian Street, Suite 1200
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
(317)266-0100
Registrant's Telephone Number
Not applicable
(Former name or former address, and former
fiscal year, if changed since last report)
(1)
Item 7. Financial Statements and Exhibits
Financial statements of businesses acquired and pro forma financial
information:
Report of Independent Public Accountants
Balance Sheet of Zimco, Inc. as of December 31, 1996.
Statement of Operations and Accumulated Deficit of Zimco, Inc.
for the Year Ended December 31, 1996.
Statement of Cash Flows of Zimco, Inc. for the Year Ended
December 31, 1996.
Notes to Financial Statements of Zimco, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet of
Emmis Broadcasting Corporation and Subsidiaries as of February 28, 1997.
Unaudited Pro Forma Condensed Consolidated Statement of
Operations of Emmis Broadcasting Corporation and Subsidiaries
for the Year Ended February 28, 1997.
Exhibits:
23 Consent of Arthur Andersen LLP
(2)
ZIMCO, INC.
FINANCIAL STATEMENTS
--------------------
AS OF DECEMBER 31, 1996
-----------------------
TOGETHER WITH AUDITOR'S REPORT
------------------------------
(3)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Shareholders of Zimco, Inc.:
We have audited the accompanying balance sheet of ZIMCO, INC. (a
Missouri corporation) as of December 31, 1996, and the related
statements of operations and accumulated deficit and cash flows for
the year then ended. 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
audit.
We conducted our audit 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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Zimco,
Inc. as of December 31, 1996, and the results of its operations and
its cash flows for the year then ended in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
April 25, 1997.
(4)
ZIMCO, INC.
BALANCE SHEET
DECEMBER 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
CURRENT ASSETS:
Cash $69,140
Accounts receivable - trade, net of
allowance for doubtful accounts of
$196,934 551,070
Accounts receivable with affiliates,
noninterest bearing 1,009,338
Prepaid expenses and other 29,260
---------
Total current assets 1,658,808
---------
PROPERTY AND EQUIPMENT:
Land and related improvements 241,833
Buildings 294,407
Leasehold improvements 569,404
Broadcasting equipment 3,003,855
Furniture and fixtures 326,712
---------
4,436,211
Less - Accumulated depreciation
and amortization (1,787,309)
-----------
2,648,902
-----------
INTANGIBLE ASSETS:
FCC LICENSES 5,169,816
Less - Accumulated amortization (739,494)
---------
4,430,322
---------
Total assets $8,738,032
==========
(5)
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Debt and current maturities of
capital lease obligation $7,883,108
Accounts Payable 59,493
Accrued salaries and commissions 8,401
Other accrued liabilities 15,412
Nonrefundable deposit on sale
of stations (Note 2) 450,000
Accounts payable with affiliates,
noninterest bearing 2,919,462
----------
Total current liabilities 11,335,876
----------
CAPITAL LEASE OBLIGATION,
net of current maturities 37,842
----------
Total liabilities 11,373,718
----------
COMMITMENTS AND CONTINGENCIES (Note 6)
STOCKHOLDERS' DEFICIT:
Common stock, $5 par value, 6,000
shares authorized and issued,
500 shares outstanding 2,500
Accumulated deficit (2,638,186)
-----------
Total stockholders' deficit (2,635,686)
-----------
Total liabilities and
stockholders' deficit $8,738,032
===========
</TABLE>
The accompanying notes to financial statements are an integral
part of this balance sheet.
(6)
ZIMCO, INC.
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
<S> <C>
NET BROADCASTING REVENUES $5,057,172
BROADCASTING OPERATING EXPENSES 4,352,652
DEPRECIATION AND AMORTIZATION 731,435
---------
OPERATING LOSS (26,915)
OTHER INCOME (EXPENSE):
Interest expense (728,260)
Loss on retirement of assets (106,779)
Other Income (expense), net 11,525
---------
Total other income (expense) (823,514)
---------
NET LOSS (850,429)
ACCUMULATED DEFICIT, beginning of year (1,787,757)
------------
ACCUMULATED DEFICIT, end of year ($2,638,186)
============
</TABLE>
The accompanying notes to financial statements are an integral
part of this statement.
(7)
ZIMCO, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net loss $(850,429)
Adjustments to reconcile net loss to net
cash used in operating activities -
Depreciation and amortization 731,435
Provision for doubtful accounts 82,451
Loss on retirement of assets 106,779
Change in assets and liabilities -
Account receivable - trade 396,475
Accounts receivable with affiliates (1,009,338)
Prepaid expenses and other 3,313
Accounts payable (83,717)
Accrued salaries and commissions (92,626)
Other accrued liabilities (66,156)
Accounts payable with affiliates 726,777
---------
Net cash used in operating
activities (55,036)
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Receipt of nonrefundable deposit on sale
of stations 450,000
Purchases of property and equipment (607,641)
---------
Net cash used in investing
activities (157,641)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds of debt 1,350,000
Payments on debt (1,079,964)
Payments on capital lease obligation (11,382)
----------
Net cash provided by financing
activities 258,654
----------
NET INCREASE IN CASH 45,977
CASH at beginning of period 23,163
-------
CASH at end of period $69,140
=======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $728,260
</TABLE>
The accompanying notes to financial statements are an integral
part of this statement.
(8)
ZIMCO, INC.
- -----------
NOTES TO FINANCIAL STATEMENTS
- -----------------------------
DECEMBER 31, 1996
- -----------------
1. ORGANIZATION
------------
Prior to the events discussed in Note 2, Zimco, Inc. ("the
Company") owned and operated three radio stations in St. Louis,
Missouri. In connection with the acquisition discussed below, the
Company permitted Emmis Broadcasting Corporation ("Emmis") to
operate the three radio stations effective December 1, 1996.
Accordingly, the accompanying financial statements exclude revenues
and expenses during the period in which Emmis assumed
responsibility for the operations of the Stations. On January 1,
1997 the Company began operating two radio stations in Jefferson
City, Missouri and on March 1, 1997 began operating two radio
stations in Herrin, Illinois under local management agreements.
2. SALE OF STATIONS
----------------
On March 31, 1997, Emmis completed the acquisition of substantially
all of the assets of radio stations WALC-FM (formerly WKBQ-FM),
WKBQ-AM and WKKX-FM in St. Louis from Zimco, Inc. for an aggregate
cash purchase price of $43.1 million. Emmis also agreed to provide
the Company or its affiliates $1 million in radio advertising over
a period of several years and to assume certain lease obligations
and employment agreements, discussed more fully in Note 6. In
December 1996, the Company received a $450,000 non-refundable
deposit related to this transaction. The Company also agreed to
permit Emmis to operate the stations to be acquired until FCC
approval of the sale of the stations. Under this arrangement,
Emmis was entitled to all revenues and assumed responsibility for
all operating expenses of the stations effective December 1, 1996
through March 31, 1997.
In connection with the sale of the stations, the Company elected to
pay the former general manager of the stations approximately $1.5
million. As a result, during 1997, the Company utilized
approximately $1.5 million of the proceeds from the sale of
stations to purchase an annuity on behalf of the former general
manager of the stations. The annuity provides for annual payments
to be paid to the former general manager, his estate, or a
designated beneficiary commencing on January 1, 1998 and extending
through December 31, 2004. The Company has assumed no risk in the
event of a decline or loss in value of the annuity.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
A. Revenue Recognition
- ------------------------
(9)
Broadcasting revenue is recognized as advertisements are aired and
are recorded net of advertising agency commissions.
B. Barter Transactions
- ------------------------
The Company trades commercial air time for goods and services used
principally for promotional, sales and other business activities.
Barter transactions are recorded at the estimated fair value of the
goods or services received. Broadcast revenue from barter
transactions is recognized when advertisements are aired. The
appropriate expense or asset is recognized when goods or services
are used or received. Barter revenue included in net broadcasting
revenues approximated $507,300 for the year ended December 31,
1996.
C. Property and Equipment
- ---------------------------
Property and equipment are recorded at cost. Depreciation and
amortization are computed by the straight-line method over the
estimated useful lives of the related assets which are 31.5 years
for buildings, 5 to 7 years for broadcasting equipment and 7 years
for furniture and fixtures. Leasehold improvements are amortized
using the straight-line method over the lesser of the terms of the
related leases or the estimated useful lives of the assets.
Maintenance, repairs and minor renewals are expensed; improvements
are capitalized. On a continuing basis, the Company reviews the
financial statement carrying value of property and equipment for
impairment. Whenever events or changes in circumstances indicate
that the carrying value may not be recoverable, a writedown of the
asset would be recorded through a charge to operations.
D. FCC Licenses
- -------------------
FCC Licenses are recorded at cost and are amortized by the
straight-line method over 40 years.
The Company continually evaluates its intangible assets in light of
events and circumstances that may indicate that the remaining
estimated useful life may warrant revision or that the remaining
value may not be recoverable. When factors indicate that
intangible assets should be evaluated for possible impairment, the
Company uses an estimate of the related cash flows over the
remaining life of the asset in measuring whether that asset is
recoverable. To the extent an impairment has occurred, the excess
of the carrying value of the intangibles over their estimated
recoverable value would be recorded through a charge to operations.
E. Income Taxes
- -----------------
The stockholders of the Company have elected, under Section 1362 of
the Internal Revenue Code, to be an S Corporation. Accordingly,
the Company's income is taxed directly to them. No federal or
state income taxes are provided in these financial statements.
(10)
F. Estimates
- --------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that effect 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 revenues and expenses during the reporting
period. Actual results could differ from those estimates.
4. DEBT AND CAPITAL LEASE OBLIGATION
---------------------------------
Debt outstanding under the Company's credit agreements, as amended,
was comprised of the following at December 31, 1996:
<TABLE>
<CAPTION>
<S> <C>
$600,000 line of credit (subject
to certain restrictions) with
bank, interest at bank's variable
base lending rate (8.25% at
December 31, 1996), due March 31, 1997,
interest only payments due monthly. $ 500,000
Note payable to bank,interest at bank's
variable base lending rate (8.25% at
December 31, 1996), due March 31, 1997,
interest only payments due monthly. 4,800,000
Note payable to stockholders, interest
at Company's borrowing rate (8.25% at
December 31, 1996), due March 31, 1997,
interest only payments due monthly. 1,500,000
Note payable to stockholders, interest
at Company's borrowing rate (8.25% at
December 31, 1996), due March 30, 1997,
monthly principal payments of $14,087
plus interest, until March 30, 1997,
on which date the entire unpaid principal
balance and all interest accrued thereon
shall be due and payable. 1,070,657
Capital lease obligation 50,293
---------
7,920,950
Less - Current maturities (7,883,108)
----------
$37,842
=======
</TABLE>
(11)
The line of credit, the note payable to bank and the notes payable
to stockholders are secured by the stock and assets of Zimco, Inc.
and are subject to a credit agreement in which the following
related parties are corporate guarantors: Zimmer Broadcasting Co.,
Inc., Zimmer Communications, Inc., Missouri-Illinois Broadcasting,
Inc., and Zimmer Radio of Mid-Missouri, Inc.
The Company has also guaranteed certain notes payable arrangements
between the Company's stockholders and a bank. The proceeds from
these notes payable arrangements ($2,570,657 outstanding at
December 31, 1996) were loaned to the Company by the stockholders.
The notes payable to the stockholders contain identical terms and
conditions as those notes payable arrangements between the
Company's stockholders and the bank.
The Company utilized approximately $7.8 million of the proceeds
from the sale of stations (discussed in Note 2) to retire its
outstanding debt and related accrued interest as of March 31, 1997.
5. EMPLOYEE BENEFIT PLANS
----------------------
A. 401(k) Retirement Savings Plan
- -----------------------------------
Zimco, Inc. participates in a 401(k) defined contribution plan
which covers substantially all full-time employees age 21 years and
older who have at least one year of service. Participants are
permitted to make pre-tax contributions of 2% up to 15% of their
compensation, not to exceed the annual limit prescribed by the
Internal Revenue Service. The Company matches 50% of these
contributions up to 6% of each participant's compensation. During
the year ended December 31, 1996, the Company contributed
approximately $26,650 to the plan on behalf of the participants.
B. Health and Welfare Plan
- ---------------------------
Zimco, Inc. participates in a defined contribution health and
welfare plan which covers substantially all full-time employees.
Amounts charged to expense related to this plan was $45,500 for the
year ended December 31, 1996.
6. COMMITMENTS AND CONTINGENCIES
-----------------------------
The Company leases certain office space, three transmitter sites
and various items of equipment under noncancellable operating
leases expiring at various dates through September 2009. Certain
of these lease agreements contain renewal options and annual rental
escalation clauses (generally tied to the Consumer Price Index or
increase in the lessor's operating costs), as well as provisions
for payment of utilities and maintenance costs.
The future minimum rental payments (exclusive of future escalation
costs) required by noncancellable operating leases which have
remaining terms in excess of one year as of December 31, 1996, are
summarized below:
(12)
<TABLE>
<CAPTION>
<S> <C>
Payable in Year Ending
December 31, Payments
------------ ---------
1997 $ 276,120
1998 229,269
1999 218,031
2000 216,795
2001 226,394
Thereafter 1,008,032
------------
$ 2,174,641
============
</TABLE>
Rent expense totaled approximately $311,900 for the year ended
December 31, 1996.
Zimco, Inc. has an employment agreement with certain on-air talent
which continues through December 31, 1999 and provides for an
annual base salary and certain performance bonuses as specified
within the agreement. At December 31, 1996, future cash
commitments under this contract totaled $600,000.
In connection with the sale of the stations (discussed in Note 2),
Emmis assumed the lease obligations and the employment agreement
discussed above.
Zimco, Inc. currently and from time to time is involved in
litigation incidental to the conduct of its business; however, the
Company is not currently party to any lawsuit or proceeding which,
in the opinion of management, is likely to have a material adverse
effect on the financial position or results of operations of Zimco,
Inc.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
- -----------------------------------
The carrying amounts of the current assets and liabilities
approximate fair value because of the short maturity of these
instruments.
8. RENTAL INCOME
-------------
The Company leases space at its existing tower site to a third
party under a noncancellable agreement which expires February 17,
1998. Rental income generated under this lease is $10,800
annually. The lease agreement also provides for five additional
and successive renewal options for additional terms of five years
each, commencing with the original expiration date. Provisions of
the agreement specify escalating rents for each five-year renewal
period. This lease was assumed by Emmis in connection with the
sale of the stations (discussed in Note 2).
(13)
9. OTHER RELATED PARTY TRANSACTIONS
--------------------------------
The stockholder's of the Company own and operate several businesses
in addition to Zimco, Inc. During 1996, the Company's owners
adopted centralized cash disbursement procedures for the Company
and its affiliates which resulted in the accounts receivable and
payable balances with affiliates reflected in the accompanying
balance sheet. No interest has been charged or accrued as of
December 31, 1996 related to these affiliated receivables and
payables.
Zimco, Inc. has been charged for certain management services
provided by its affiliates and for certain costs incurred by the
affiliates on the Company's behalf. Payments remitted to the
affiliates for these charges during the year ended December 31,
1996 were $124,000.
Throughout 1996 an affiliate provided certain data processing
services to the Company. Accordingly, the Company remits to the
affiliate a flat percentage of its gross payroll representing
reimbursement for estimated payroll related taxes and processing
costs incurred. Payments remitted to the affiliate during the
year ended December 31, 1996 were $95,100.
During the year, the Company provided radio advertising to an
affiliate in exchange for local and long distance telephone
services. In connection therewith, the Company recognized
approximately $21,000 in revenues based on the fair value of the
services received.
10. SUBSEQUENT EVENT (UNAUDITED)
----------------------------
In June 1997, the Company purchased two radio stations in
Jefferson City, Missouri for approximately $2,650,000 and two
radio stations in Herrin, Illinois for approximately $1,250,000.
These transactions were financed with cash and borrowings.
(14)
Emmis Broadcasting Corporation and Subsidiaries
Unaudited Pro Forma Condensed Condolidated Financial Information
The accompanying financial information presents the condensed
consolidated balance sheet of Emmis Broadcasting Corporation and
Subsidiaries ("Emmis") as of February 28, 1997 and the condensed
consolidated statement of operations for the year then ended,
combined with unaudited pro forma adjustments to reflect the March
31, 1997 acquisition by Emmis of substantially all the assets of
radio stations WALC-FM (formerly WKBQ-FM), WKBQ-AM and WKKX-FM in
St. Louis from Zimco, Inc., for an aggregate purchase price of $43.1
million.
The unaudited pro forma condensed consolidated balance sheet as of
February 28, 1997 is presented as if the acquisition had occurred
on February 28, 1997. The unaudited pro forma condensed
consolidated statement of operations for the year ended February
28, 1997 is presented as if the acquisition had occurred as of
March 1, 1996.
Preparation of the pro forma condensed consolidated financial
information was based on assumptions deemed appropriate by
management. The assumptions give effect to the acquisition under
the purchase method of accounting in accordance with generally
accepted accounting principals. The pro forma condensed
consolidated financial information is unaudited and is not
necessarily indicative of the results which actually would have
occurred if the acquisition had been consummated at the beginning
of the period presented, nor does it purport to represent the
future financial position and results of operations for future
periods. The pro forma information should be read in conjunction
with the historical financial statements of Emmis Broadasting
Corporation and Subsidiaries' Annual Report on Form 10-K for the
year ended February 28, 1997.
(15)
Emmis Broadcasting Corporation and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
February 28, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
Emmis Pro Forma
(Historical) Adjustments Pro Forma
------------- ----------- ----------
(1)
CURRENT ASSETS
<S> <C> <C> <C>
Cash and cash equivalents $1,191 $1,191
Accounts receivable, net 20,831 20,831
Prepaid expenses and other 4,243 4,243
Current income tax receivable 2,482 2,482
------ ------
Total current assets 28,747 0 28,747
------ ------
PROPERTY AND EQUIPMENT, NET 12,991 4,668 (2) 17,659
INTANGIBLE ASSETS, NET 131,743 39,416 (2) 171,159
OTHER ASSETS, NET 16,235 (6,600) (2) 9,635
------- ------- -------
Total assets $189,716 $37,484 $227,200
======= ======= =======
CURRENT LIABILITIES:
Current maturities of
long-term debt $2,868 $1,600 (2) $4,468
Book cash overdraft 1,942 1,942
Accounts payable 3,687 3,687
Accrued salaries and commissions 1,561 1,561
Accrued interest 174 174
Deferred revenue 1,593 1,000 (2) 2,593
Other 1,459 1,459
------ ------ ------
Total current liabilities 13,284 2,600 15,884
LONG-TERM DEBT, NET OF
CURRENT MATURITIES 112,304 34,884 (2) 147,188
OTHER NONCURRENT LIABILITIES 436 436
DEFERRED INCOME TAXES 29,270 29,270
------- ------ ------
Total liabilities 155,294 37,484 192,778
------- ------ ------
(16)
SHAREHOLDERS' EQUITY (DEFICIT):
Class A common stock 84 84
Class B common stock 26 26
Additional paid-in capital 70,949 70,949
Accumulated Deficit (36,637) (36,637)
------- -- -------
Total shareholders' equity
(deficit) 34,422 0 34,422
------- -- -------
Total liabilities and
shareholders' equity
(deficit) $189,716 $37,484 $227,200
======= ======== =======
</TABLE>
Acquisition of Zimco, Inc.
(1) Derived from Emmis' February 28, 1997 audited consolidated
balance sheet included in Emmis' February 28, 1997 Form 10-K.
(2) Reflects the March 31, 1997 acquisition of substantially
all of the assets of radio stations WALC-FM (formerly WKBQ-FM),
WKBQ-AM and WKKX-FM in St. Louis from Zimco, Inc. for an aggregate
cash purchase price of $43.1 million, plus an agreement to
broadcast approximately $1 million in radio advertising over a
period of several years, as if the acquisition had occurred on
February 28, 1997. The purchase price was allocated to the assets
acquired based upon their estimated fair market value. In
accordance with the asset purchase agreement, Emmis made an escrow
payment of $6,000 and paid $600 in nonrefundable deposits. The
aforementioned escrow payment and the deposits are reflected as
other assets in the February 28, 1997 Emmis (Historical) Balance
Sheet. The purchase price was funded through additional borrowings
under Emmis' existing credit facility. As a result of additional
borrowings, $2.2 million would be paid within the next year and
therefore classified as a current liability.
(17)
Emmis Broadcasting Corporation and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended February 28, 1997
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Emmis Pro Forma
(Historical) Adjustments Pro Forma
----------- ----------- ----------
(1)
<S> <C> <C> <C>
NET BROADCASTING REVENUES $103,292 $4,158 (2) $107,450
Broadcasting operating expenses 52,839 3,333 (2) 56,172
Publication and other revenue,
net of operating expenses 834 834
International business
development expenses 1,164 1,164
Corporate expenses 5,929 5,929
Depreciation and amortization 5,481 1,604 (3) 7,085
Noncash compensation 3,465 3,465
------- ----- ------
OPERATING INCOME (LOSS) 35,248 (779) 34,469
------- ----- ------
OTHER INCOME (EXPENSE):
Interest expense (9,633) (2,895) (4) (12,528)
Other income (expense), net 325 8 (2) 333
------- ------ -------
Total other income (expense) (9,308) (2,887) (12,195)
------- ------ -------
INCOME (LOSS) BEFORE INCOME TAXES 25,940 (3,666) 22,274
PROVISION (BENEFIT) FOR INCOME TAXES 10,500 (1,466) (5) 9,034
------- ------- --------
NET INCOME (LOSS) $15,440 ($2,200) $13,240
======= ======= ========
Net income per common and
common equivalent share $1.35 $1.16
====== ======
Net income per common share
assuming full-dilution $1.35 $1.16
====== ======
Weighted average common
shares outstanding:
Before full dilution 11,451,590 11,451,590
Assuming full dilution 11,451,590 11,451,590
</TABLE>
(18)
Acquisition of Zimco, Inc.
(1) Derived from Emmis' audited consolidated statement of
operations for the year ended February 28, 1997 included in Emmis'
February 28, 1997 Form 10-K. Concurrent with the signing of the
asset purchase agreement, Emmis entered into a time brokerage
agreement that permitted Emmis to operate the stations acquired
from Zimco, Inc. effective on December 1, 1996. Accordingly, the
operating results for the year ended February 28, 1997 includes
three months of operations of the stations acquired from Zimco,
Inc.
(2) Represents estimated, unaudited historical operating results
of radio stations WALC-FM (formerly WKBQ-FM), WKBQ-AM and WKKX-FM
(the stations acquired from Zimco, Inc.) for the nine months ended
September 30, 1996, which includes $124 in management fees charged
by an affiliate which will not be charged to the stations by Emmis.
(3) Reflects pro forma depreciation of property and equipment
over estimated useful lives of 5 to 7 years and amortization of
intangible assets over estimated useful lives of 40 years,
resulting from the purchase price allocation.
(4) Represents additional interest expense at an average
interest rate of 6.97% resulting from additional borrowings under
Emmis' existing credit facility related to the stations acquired
from Zimco, Inc.
(5) Calculated utilizing a tax rate of 40% applied to income
(loss) before income taxes.
(19)
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.
EMMIS BROADCASTING CORPORATION
Date: June 16, 1997 By: /s/ Howard L. Schrott
-------------------------
Howard L. Schrott
Executive Vice President,
Chief Financial Officer and
Treasurer (Authorized
Corporate Officer)
(20)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 8-K/A, into the
Company's previously filed Registration Statement File Nos. 333-83890 and
333-14657.
ARTHUR ANDERSEN LLP
Indianapolis, Indiana,
June 11, 1997.
