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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): June 5, 1998
EMMIS BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 0-23264 35-1542018
(State or jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
950 North Meridian Street, Suite 1200
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (317) 266-0100
Not applicable
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 5, 1998, Emmis Broadcasting Corporation (the "Company") acquired
through subsidiaries substantially all of the assets of radio station WQCD-FM
in New York City from Tribune New York Radio, Inc. (the "Seller"). Starting
in July 1997 and until the purchase of the station was completed, the Company
operated the station pursuant to a time brokerage agreement under which the
Company paid the Seller a monthly fee of approximately $700,000. As a result,
the operating results of WQCD-FM were included in the Company's operating
results beginning July 1, 1997. Under the acquisition agreement, the Seller
had the option to require the Company to purchase the station, which it
exercised in December 1997. The Seller also exercised its right under the
agreement to require the Company to purchase certain television stations which
were transferred by the Company to the Seller in exchange for the assets of
WQCD-FM. The purchase price for the acquisition was approximately $141
million after adjustments. The Company obtained the funds for the acquisition
from a loan made in the ordinary course of business by a group of banks, as
defined by Section 3(a)(6) of the Securities Exchange Act of 1934, pursuant to
the Company's existing credit agreement, a copy of which is on file with the
Commission and which contains a list of such banks. Prior to the acquisition,
the equipment acquired by the Company was used by the Seller in the operation
of its radio broadcasting business in New York City, and the Company intends
to continue to use such equipment in the operation of its radio broadcasting
business in New York City.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS OF BUSINESSES TO BE ACQUIRED:
Audited financial statements for Tribune New York Radio, Inc. at and for the
years ended December 28, 1997 and December 29, 1996, and unaudited financial
statements for Tribune New York Radio, Inc. at and for the three months ended
March 29, 1998 and for the three months ended March 30, 1997 are incorporated
by reference from the Company's Current Report on Form 8-K filed May 7, 1998.
Unaudited Pro Forma Condensed Consolidated Balance Sheet of Emmis Broadcasting
Corporation and Subsidiaries as of February 28, 1998.
Unaudited Pro Forma Condensed Consolidated Statement of Operations of Emmis
Broadcasting Corporation and Subsidiaries for the Year Ended February 28,
1998.
EXHIBITS:
Exhibit
Number Exhibit
- ------- -------
10 Option Agreement (WQCD-FM, New York, New York) dated May 15, 1997
and Time Brokerage Agreement (WQCD-FM, New York, New York) dated
May 15, 1997, incorporated by reference to Exhibits 10.2 and 10.3,
respectively, to the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended May 31, 1997.
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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, 1998 and the condensed
consolidated statement of operations for the year then ended,
combined with unaudited pro forma adjustments to reflect the June 5, 1998
acquisition by Emmis of substantially all the assets of
radio station WQCD-FM from Tribune New york Radio, Inc. for an aggregate
purchase price of approximately $141 million after adjustments.
The unaudited pro forma condensed consolidated balance sheet as of
February 28, 1998 is presented as if the acquisition had occurred
on February 28, 1998. The unaudited pro forma condensed
consolidated statement of operations for the year ended February
28, 1998 is presented as if the acquisition had occurred as of
March 1, 1997.
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 principles. 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, 1998.
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Emmis Broadcasting Corporation and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Balance Sheet
February 28, 1998
(Dollars in thousands)
<TABLE>
<CAPTION>
Emmis Pro Forma
(Historical) (1) Adjustments Pro Forma
------------- ----------- ----------
Current Assets
<S> <C> <C> <C>
Cash and cash equivalents $5,785 $ - $5,785
Accounts receivable, net 32,120 - 32,120
Prepaid expenses 4,900 - 4,900
Current income tax receivable 4,968 - 4,968
Other 3,379 - 3,379
------ ---- ------
Total current assets 51,152 - 51,152
------ ------
Property and equipment, net 33,446 5,925 (2) 39,371
Intangible assets, net 234,558 197,475 (2) 432,033
Other assets, net 14,232 - 14,232
------- ------- -------
Total assets $333,388 $203,400 $536,788
======= ======= =======
Current Liabilities:
Current maturities of
long-term debt $ 51 $ - $ 51
Accounts payable 13,140 - 13,140
Accrued salaries and commissions 2,893 - 2,893
Accrued interest 2,421 - 2,421
Deferred revenue 7,985 - 7,985
Other current liabilities 1,579 7,000 (2) 8,579
------ ------ ------
Total current liabilities 28,069 7,000 35,069
Long-term debt, net of
current maturities 231,371 141,000 (2) 372,371
Other noncurrent liabilities 604 - 604
Minority interest 1,875 - 1,875
Deferred income taxes 26,259 55,400 (2) 81,659
------- ------ ------
Total liabilities 288,178 203,400 491,578
------- ------ ------
Shareholders' Equity:
Class A Common Stock 84 - 84
Class B Common Stock 26 - 26
Additional paid-in capital 72,753 - 72,753
Accumulated deficit (27,653) - (27,653)
------- ---- -------
Total shareholders' equity 45,210 - 45,210
------- ---- -------
Total liabilities and
shareholders' equity $333,388 $203,400 $536,788
======= ======== =======
</TABLE>
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(1) Derived from the Company's February 28, 1998 audited consolidated
balance sheet included in its February 28, 1998 Form 10-K.
(2) Reflects the acquisition of substantially all of the assets of radio
station WQCD-FM in New York City for an assumed cash purchase price of
$141.0 million plus $7.0 million of net current liabilities assumed
and $55.4 million of deferred tax liabilities resulting from the
transaction. The funding of the purchase price reflects $141.0 million
in borrowings under the Company's credit facility. Acquisition costs have
been allocated to property and equipment at 100% of predecessor company's
carrying value at December 28, 1997. The remaining residual purchase
price is allocated to broadcast licenses.
-5-
Emmis Broadcasting Corporation and Subsidiaries
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended February 28, 1998
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Emmis (1) Pro Forma
(Historical) Adjustments Pro Forma
----------- ----------- ----------
<S> <C> <C> <C>
Net broadcasting revenues $125,855 $6,773 (2) $132,628
Broadcasting operating expenses 67,646 3,570 (2) 71,216
Publication and other revenue,
net of operating expenses 1,204 - 1,204
International business
development expenses 999 - 999
Corporate expenses 6,846 - 6,846
Time brokerage fee 5,667 (5,667) (2) -
Depreciation and amortization 7,536 5,783 (3) 13,319
Noncash compensation 4,882 - 4,882
------- ----- ------
Operating income (loss) 33,483 3,087 36,570
------- ----- ------
Other income (expense):
Interest expense (13,772) (11,193) (4) (24,965)
Loss on donation of radio station (4,833) - (4,833)
Other income, net 6 - 6
------- ------ -------
Total other income (expense) (18,599) (11,193) (29,792)
------- ------ -------
Income (loss) before income taxes 14,884 (8,106) 6,778
Provision (benefit) for income taxes 5,900 (3,242) (5) 2,658
------- ------- --------
Net income (loss) $ 8,984 ($4,864) $4,120
======= ======= ========
Basic net income (loss) per share $ .82 $ .38
====== ======
Diluted net income (loss) per share $ .79 $ .36
====== ======
Weighted average common
shares outstanding:
Basic 10,903,333 10,903,333
Diluted 11,377,765 11,377,765
</TABLE>
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(1) Derived from the Company's audited consolidated statement of
operations for the year ended February 28, 1998 included in the Company's
February 28, 1998 Form 10-K. Starting in July 1997 and until the
purchase of the station was completed, the Company operated the station
pursuant to a time brokerage agreement under which the Company paid the
Seller a monthly fee of approximately $700,000. As a result, the
operating results of WQCD-FM were included in the Company's operating
results beginning July 1, 1997.
(2) Represents the historical operating results of WQCD-FM in New York
City for the period from March 1, 1997 to June 30, 1997. Actual
operating results for the period from July 1, 1997 to February 28, 1998
are reflected in historical operations because the Company began
operating the station on July 1, 1997 under a time brokerage agreement.
The time brokerage fees for pro forma purposes have been eliminated.
(3) Reflects pro forma depreciation of property and equipment and
amortization expense for the year ended February 28, 1998 resulting
from the acquisition cost of the station.
(4) Pro forma interest expense reflects additional interest expense at an
average interest rate of 7.938% resulting from $141 million additional
borrowings under the Company's existing credit facility related to the
acquisition.
(5) Calculated assuming an effective tax rate of approximately 40% on all
adjustments.
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 19, 1998 By: /s/ Howard L. Schrott
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Howard L. Schrott
Vice President, Chief
Financial Officer and
Treasurer
