Filed with the Securities and Exchange Commission pursuant to
Rule 424(b)(1) relating to Registration Statement No. 33-62711
PROSPECTUS
8,500,000 SHARES
INFINITY BROADCASTING CORPORATION
CLASS A COMMON STOCK
-------------------
All of the 8,500,000 shares of Class A Common Stock offered hereby are being
sold by Infinity Broadcasting Corporation ("Infinity" or the "Company"). Of the
8,500,000 shares of Class A Common Stock offered hereby, 6,800,000 shares are
being offered initially in the United States and Canada by the U.S. Underwriters
(the "U.S. Offering") and 1,700,000 shares are being offered in a concurrent
international offering outside the United States and Canada by the International
Underwriters (the "International Offering" and, together with the U.S. Offering,
the "Offerings"). The initial public offering price and the underwriting
discount per share are identical for both Offerings. See "Underwriting."
The Company's authorized capital stock includes Class A Common Stock, Class B
Common Stock and Class C Common Stock (collectively, the "Common Stock") and
preferred stock. The rights of holders of Common Stock are identical, except
that each share of Class B Common Stock generally entitles its holder to ten
votes, whereas each share of Class A Common Stock and Class C Common Stock
entitles its holder to one vote. In addition, the holders of Class A Common
Stock, voting as a separate class, are entitled to elect two of the Company's
nine directors and the holders of Class C Common Stock, voting as a separate
class, are also entitled to elect two of the Company's nine directors. Each
share of Class B Common Stock converts automatically into one share of Class A
Common Stock upon its sale or other transfer to a party unaffiliated with
certain of the existing stockholders of the Company or, if shares have been
transferred to an affiliated party, upon the death of the transferor of such
shares. Each share of Class C Common Stock converts automatically into one share
of Class A Common Stock upon its sale or other transfer to a party unaffiliated
with certain of the existing stockholders of the Company and upon the occurrence
of certain other events. See "Description of Capital Stock."
The Class A Common Stock has been traded on the New York Stock Exchange under
the symbol "INF" since June 22, 1995 and was formerly traded on the NASDAQ
National Market System under the symbol "INFTA." On October 18, 1995, the last
reported sale price of the Class A Common Stock on the New York Stock Exchange
was $32 7/8 per share. See "Price Range of Common Stock and Dividend Policy."
SEE "RISK FACTORS" ON PAGE 7 FOR CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
<S> <C> <C> <C>
Per Share............................ $32.875 $1.12 $31.755
Total(3)............................. $279,437,500 $9,520,000 $269,917,500
</TABLE>
(1) The Company has agreed to indemnify the several U.S. Underwriters and
International Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses, estimated at $578,746, payable by the Company.
(3) The Company has granted the U.S. Underwriters and the International
Underwriters options, exercisable within 30 days after the date hereof, to
purchase up to an aggregate of 1,020,000 and 255,000 shares of Class A
Common Stock, respectively, at the initial price to public per share, less
the underwriting discount, solely to cover over-allotments, if any. If such
options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to Company will be $321,353,125, $10,948,000 and
$310,405,125, respectively. See "Underwriting."
-------------------
The Class A Common Stock is being offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, and
subject to approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of certificates for the shares of Class A Common Stock will be
made in New York, New York on or about October 24, 1995.
-------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
ALEX. BROWN & SONS
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SMITH BARNEY INC.
-------------------
The date of this Prospectus is October 18, 1995.
<PAGE>
[Insert corporate logo for Infinity Broadcasting Corporation]
----------------------------
[Insert corporate logos for individual radio stations]
----------------------------
- --------------------------------------------------------------------------------
IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER- ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere or incorporated by
reference in this Prospectus. All references in this Prospectus to shares and
per share data assume that the Underwriters' options to purchase from the
Company up to 1,275,000 additional shares of Class A Common Stock to cover
over-allotments will not be exercised in connection with the Offerings. If the
over-allotment options are exercised in full, 1,275,000 additional shares of
Class A Common Stock would be sold by the Company. All references in this
Prospectus to shares and per share data also (i) are as of September 1, 1995
unless otherwise specified and (ii) give effect to a three-for-two stock split
effected by the Company on August 16, 1993, a three-for-two stock split effected
by the Company on November 19, 1993 and a three-for-two stock split effected by
the Company on May 19, 1995. Except as otherwise indicated by the context,
references in this Prospectus to the "Company" include all subsidiaries of the
Company. Prospective investors should carefully consider the information set
forth under the heading "Risk Factors."
THE COMPANY
Infinity Broadcasting Corporation is currently the largest owner and
operator of radio stations in the United States. Infinity owns and operates 27
radio stations serving 13 of the nation's largest radio markets, including each
of the nation's top ten radio markets. Based on information contained in
Duncan's Radio Market Guide (1995 ed.), Infinity ranked first in total radio
revenues in 1994 among all companies owning radio stations in the United States.
The Company serves markets accounting for approximately $2.7 billion in radio
advertising revenues in 1994, representing approximately 27% of the total radio
advertising expenditures in the United States in 1994. The Company also has an
investment in and manages Westwood One, Inc. ("Westwood One"), the largest
producer and distributor of radio programs in the U.S.
Since Infinity acquired its first radio station in May 1973, it has expanded
by acquiring and developing underperforming stations in the nation's largest
media markets, where the greatest proportion of radio advertising dollars is
spent. The Company believes that its presence in large markets makes it
attractive to advertisers and that the overall diversity of its stations reduces
its dependence on any single station, local economy or advertiser.
In each of its markets, the Company attracts a specific demographic group by
targeting its program format and hiring popular on-air talent. The Company's
stations serve diverse target demographics attractive to advertisers through a
broad range of programming formats such as rock, oldies, news/talk, adult
contemporary, all-sports and country. The Company's overall programming strategy
includes acquiring significant on-air talent and broadcasting rights for sports
franchises.
The diversity of the Company's station and market characteristics, combined
with its acquisition and operating strategies, have enabled the Company to
achieve consistent growth in revenues and operating cash flow (as used in this
Prospectus, the term "operating cash flow" means operating income plus
depreciation and amortization). The Company's net revenues increased from
approximately $150.2 million for 1992 to approximately $274.1 million for 1994,
while operating cash flow grew from approximately $64.3 million for 1992 to
approximately $125.2 million for 1994.
On September 22, 1995, the Company entered into an agreement to acquire
radio stations KYNG-FM and KSNN-FM in Dallas, KFRC-FM, KFRC-AM and KYCY-FM in
San Francisco, WYCD-FM in Detroit and KYCW-FM in Seattle (the "Alliance
Stations") from various entities affiliated with Alliance Broadcasting, L.P.
("Alliance"), for $275 million, including working capital of at least $10
million (the "Alliance Acquisition"). The consummation of the Alliance
Acquisition is subject to certain conditions, including approval of the Federal
Communications Commission (the "FCC"), which will require the Company to obtain
temporary divestiture waivers by the FCC of certain
3
<PAGE>
regulations limiting the number of radio stations which may be owned or
controlled by one entity both nationally and in a particular market. See "The
Company--Recent Developments--The Alliance Acquisition." Certain legislation
currently pending before Congress would significantly relax or eliminate these
regulatory restrictions. See "The Company--Recent
Developments--Telecommunications Bills." There can be no assurance that such
legislation will be enacted or what form any ultimate legislation will take. The
Company continues to seek opportunities for expansion through the acquisition of
additional radio stations, although its ability to make further acquisitions may
be limited by the regulatory requirements referred to above.
The Company was incorporated in 1972 in Delaware. Its Class A Common Stock,
par value $.002 per share (the "Class A Common Stock"), is listed on the New
York Stock Exchange.
THE OFFERINGS
<TABLE>
<CAPTION>
<S> <C>
Class A Common Stock offered:
U.S. Offering.............................. 6,800,000 shares
International Offering..................... 1,700,000 shares
Total.................................. 8,500,000 shares
Shares of Common Stock to be
outstanding after the Offerings(1)......... 49,498,405 shares of Class A Common Stock(2)
5,550,031 shares of Class B Common Stock(2)
744,171 shares of Class C Common Stock(2)
55,792,607 shares of Common Stock(2)
77,270,501 shares of Common Stock after
exercise of options and warrants and issuance
of deferred shares(3)
Voting rights................................ The Class A, Class B and Class C Common Stock
vote as a single class with respect to all
matters submitted to a vote of stockholders,
with each share of the Class A and Class C
Common Stock entitled to one vote and each
share of Class B Common Stock entitled to ten
votes, except (i) in the election of
directors, with respect to which the holders
of Class A and Class C Common Stock are each
entitled to elect two of the Company's nine
directors by a class vote, (ii) with respect
to any "going private" transaction between
the Company and any of Mel Karmazin, Michael
A. Wiener and Gerald Carrus (see "Principal
Stockholders") and (iii) as otherwise
provided by law. Each class of Common Stock
is equivalent, except with respect to voting
rights. See "Description of Capital Stock."
Use of proceeds.............................. The Company expects to use the net proceeds
from the Offerings to finance future
acquisitions of broadcasting properties,
including the Alliance Acquisition, and for
general corporate purposes. Until such net
proceeds are applied for such purposes, the
Company expects to use such net proceeds to
reduce certain borrowings. See "Use of
Proceeds."
NYSE symbol.................................. INF
</TABLE>
- ------------
(1) If the Underwriters' overallotment options were exercised in full,
50,773,405 shares of Class A Common Stock would be outstanding after the
Offerings. See "Underwriting."
(2) Excludes shares of Class A Common Stock issuable upon future conversions of
shares of Class B or Class C Common Stock and any future exercise of stock
options or warrants or issuance of deferred shares. See "Description of
Capital Stock--Warrants and Options."
(3) Includes 21,477,894 shares of Common Stock issuable upon the exercise of
options and warrants and issuance of deferred shares. See "Description of
Capital Stock--Warrants and Options."
4
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA SIX MONTHS ENDED PRO FORMA
YEARS ENDED DECEMBER 31, YEAR ENDED JUNE 30, SIX MONTHS ENDED
------------------------------ DECEMBER 31, ------------------- JUNE 30,
1992 1993 1994 1994(1) 1994 1995 1995(1)
-------- -------- -------- ------------ -------- -------- ----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:(2)
Total revenues......... $171,843 $234,240 $313,359 $370,963 $134,036 $169,162 $194,532
Net revenues........... 150,230 204,522 274,120 322,393 116,877 146,891 168,008
Station operating
expenses excluding
depreciation and
amortization........ 81,707 109,601 143,249 177,405 63,863 78,116 94,163
-------- -------- -------- ------------ -------- -------- --------
Station operating
income excluding
depreciation and
amortization........ 68,523 94,921 130,871 144,988 53,014 68,775 73,845
Depreciation and
amortization........ 28,926 38,853 46,606 73,088 22,050 24,000 34,463
Corporate general and
administrative
expenses............ 4,182 4,836 5,633 5,633 2,419 2,667 2,667
-------- -------- -------- ------------ -------- -------- --------
Operating income....... 35,415 51,232 78,632 66,267 28,545 42,108 36,715
Interest expense....... 39,390 36,776 44,689 51,609 20,906 23,883 25,181
Net earnings (loss)
before extraordinary
items(3)............ (9,432) 14,335 33,213 13,928 7,526 17,700 11,009
Net earnings (loss) per
share before
extraordinary
items(3)............ $ (.20) $ .23 $ .49 $ .18 $ .11 $ .26 $ .15
Cash dividends declared
per common share..... -- -- -- -- -- -- --
Weighted average number
of shares
outstanding(4)(5).... 47,001(6) 62,055 67,139 75,639 67,184 67,275 75,775
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, PRO FORMA
------------------------------ ------------------- JUNE 30,
1992 1993 1994 1994 1995 1995(7)
-------- -------- -------- -------- -------- ----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:(2)
Total assets....................... $271,952 $378,040 $562,153 $570,345 $597,992 $872,992
Long-term debt (including current
portion)......................... 380,625 365,062 531,750 544,187 562,000 567,661
Stockholders' equity
(deficiency)..................... (138,734) (24,240) (25,525) (28,858) (20,392) 248,947
Working capital.................... 4,656 10,610 28,877 (5,818) 34,565 44,565
</TABLE>
(footnotes on following page)
5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA SIX MONTHS ENDED PRO FORMA
YEARS ENDED DECEMBER 31, YEAR ENDED JUNE 30, SIX MONTHS ENDED
---------------------------- DECEMBER 31, ----------------- JUNE 30,
1992 1993 1994 1994(1) 1994 1995 1995(1)
------- ------- -------- ------------ ------- ------- ----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL RATIOS AND OTHER
DATA:(8)
Operating cash flow........ $64,341 $90,085 $125,238 $139,355 $50,595 $66,108 $ 71,178
Capital expenditures....... 1,300 1,901 1,606 3,251 674 1,189 1,628
Operating cash flow less
capital expenditures..... 63,041 88,184 123,632 136,104 49,921 64,919 69,550
Capital expenditures as a
percentage of operating
cash flow.............. 2.02% 2.11% 1.28% 2.33% 1.33% 1.80% 2.29%
Operating cash flow to
interest expense, net of
interest income.......... 1.68x 2.48x 2.81x 2.71x 2.43x 2.79x 2.84x
Operating cash flow less
capital expenditures to
interest expense, net of
interest income.......... 1.65x 2.43x 2.78x 2.65x 2.40x 2.74x 2.78x
</TABLE>
- ------------
(1) The pro forma statement of operations data and financial ratios and other
data for the six months ended June 30, 1995 and the year ended December 31,
1994 are presented as if, at the beginning of each such period, each of the
transactions and events described in the second and third paragraphs,
respectively, of "Pro Forma Combined Financial Statements" had occurred. The
pro forma financial information is not necessarily indicative of the results
that would have been reported had such transactions and events actually
occurred on the dates specified, nor is it indicative of the Company's
future results. See "Pro Forma Combined Financial Statements" and the
historical financial information relating to the Company set forth in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994
(the "1994 Form 10-K") and the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1995, as amended (the "June Form 10-Q"), both of
which are incorporated herein by reference, and the historical financial
information relating to the Alliance Stations set forth in the Company's
Current Report on Form 8-K (filed September 27, 1995) (the "Form 8-K"),
incorporated herein by reference.
(2) The historical consolidated financial results for the Company are not
comparable from year to year because of the acquisition of various
broadcasting properties by the Company during the periods covered. See
"Business--Background," appearing in the 1994 Form 10-K, incorporated herein
by reference, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
(3) For the year ended December 31, 1992, the Company recorded an extraordinary
loss of $12,318,000 ($0.26 per share) related to repayment of debt.
(4) See Notes 1(f) and 2 of the Notes to the Company's Consolidated Financial
Statements, appearing in the 1994 Form 10-K, incorporated herein by
reference.
(5) Includes shares of Class C Common Stock issuable upon the exercise of
warrants held by certain merchant banking partnerships affiliated with
Lehman Brothers Inc. See "Description of Capital Stock--Warrants and
Options."
(6) Excludes shares of Common Stock issuable upon the exercise of warrants and
options and issuance of deferred shares.
(7) The pro forma balance sheet data at June 30, 1995 are presented as if, at
such date, each of the transactions and events described in the first
paragraph of "Pro Forma Combined Financial Statements" had occurred. The pro
forma financial information is not necessarily indicative of the results
that would have been reported had such transactions and events actually
occurred on the date specified, nor is it indicative of the Company's future
results. See "Pro Forma Combined Financial Statements", and the historical
financial information relating to the Company and the Alliance Stations set
forth in the June Form 10-Q and the Form 8-K, respectively, both of which
are incorporated herein by reference.
(8) "Operating cash flow" means operating income plus depreciation and
amortization.
6
<PAGE>
RISK FACTORS
Prospective investors should consider carefully, in addition to the other
information contained in this Prospectus, the following factors before
purchasing the shares of Class A Common Stock offered hereby.
CONTROL BY THE PRINCIPAL STOCKHOLDERS
Prior to the Offerings, Mel Karmazin, Michael A. Wiener and Gerald Carrus
(the "Principal Stockholders"), together with certain of their affiliates, owned
in the aggregate approximately 57.3% of the combined voting power of all classes
of Common Stock and approximately 68.4% of such combined voting power assuming
the exercise of all outstanding warrants and options and the issuance of all
outstanding deferred shares held by the Principal Stockholders. Upon completion
of the Offerings, the Principal Stockholders' and their affiliates' aggregate
ownership interests in the Company will permit them to retain approximately
52.7% of the combined voting power of all three classes of Common Stock and
approximately 64.2% of such combined voting power assuming the exercise of all
outstanding warrants and options and the issuance of all outstanding deferred
shares held by the Principal Stockholders. Accordingly, the Principal
Stockholders will be able to control the vote on all matters submitted to a vote
of the Company's stockholders, except (i) in the election of directors, with
respect to which the holders of the Class A and Class C Common Stock each are
entitled to elect two of the Company's nine directors by a class vote, (ii) in
connection with any proposed "going private" transaction between the Company and
any Principal Stockholder, with respect to which each share of Common Stock is
entitled to one vote per share, and (iii) as otherwise provided by law (see
"Description of Capital Stock"). The Principal Stockholders are able to elect
five of the Company's nine directors. Such control by the Principal Stockholders
may have the effect of discouraging certain types of transactions involving an
actual or potential change of control of the Company, including transactions in
which the holders of Class A Common Stock might otherwise receive a premium for
their shares over then current market prices.
Upon completion of the Offerings, the Principal Stockholders, together with
certain merchant banking partnerships (the "Lehman Investors") affiliated with
Lehman Brothers Inc. ("Lehman Brothers"), will hold shares of Common Stock
having an aggregate of 32.2% of the voting power with respect to any proposed
"going private" transaction between the Company and any Principal Stockholder
(assuming the exercise of all outstanding options and warrants held by the
Principal Stockholders and the Lehman Investors and the issuance of all deferred
shares as to which rights have been granted to Mr. Karmazin). However, none of
the Principal Stockholders has a present intention to effect a "going private"
transaction and there is no agreement among any of the Principal Stockholders
and the Lehman Investors as to how they would vote their shares of Common Stock
if any such transaction were proposed in the future.
The Lehman Investors, as the holders of all the Class C Common Stock, are
entitled to elect two of the Company's nine directors. See "Description of
Capital Stock."
KEY PERSONNEL
The Company's business is partially dependent upon the performance of
certain key individuals, including its President and Chief Executive Officer.
The Company has generally entered into long-term employment agreements with such
individuals, including its President and Chief Executive Officer.
RESTRICTION ON DIVIDENDS
The Company is currently restricted under its Second Amended and Restated
Credit Agreement, dated as of December 22, 1994 (as amended, including an
amendment dated as of June 23, 1995, the
7
<PAGE>
"Credit Agreement"), and under the terms of the Indenture (the "Senior
Subordinated Indenture") governing the Company's 10 3/8% Senior Subordinated
Notes Due 2002 (the "Senior Subordinated Notes"), from paying dividends to its
stockholders. See "Price Range of Common Stock and Dividend Policy."
LEVERAGE
As of June 30, 1995, the Company's total long-term debt was approximately
$562 million, consisting of approximately $362 million under the Credit
Agreement and $200 million of Senior Subordinated Notes. These borrowings bore
interest as of such date at an average annual rate of approximately 8.2%. Until
the net proceeds from the sale of the shares of Class A Common Stock offered
hereby are applied to finance future acquisitions of broadcasting properties,
including the Alliance Acquisition, or for general corporate purposes, the
Company expects to use such net proceeds to reduce borrowings under the Credit
Agreement. The Company anticipates that the amounts repaid under the Credit
Agreement with such proceeds eventually will be reborrowed in order to finance
future acquisitions of broadcasting properties, including the Alliance
Acquisition, subject to the consent of the lenders under the Credit Agreement to
such acquisitions, and for general corporate purposes. See "Use of Proceeds."
The Company also has registered with the Securities and Exchange Commission (the
"Commission"), pursuant to a shelf registration statement, $500 million in
aggregate principal amount of its debt securities (the "Debt Securities"). The
Company may issue Debt Securities from time to time, subject, among other
things, to compliance with applicable limitations under the Credit Agreement.
See "The Company--Recent Developments--Debt Registration Statement."
FUTURE SALES OF SHARES
The Principal Stockholders and the Lehman Investors beneficially hold
23,453,480 shares of Common Stock, including 16,923,300 shares of Common Stock
issuable upon exercise of warrants and options and issuance of deferred shares.
All of such shares held by the Principal Stockholders and the Lehman Investors
(other than 3,471,352 shares issuable to Mr. Karmazin upon exercise of options
and issuance of deferred shares, which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), and 100 shares of Class A Common
Stock that were purchased by Mr. Karmazin in a market transaction) are
"restricted" shares as defined in Rule 144 under the Securities Act ("Rule
144"). All of these "restricted" shares (other than the shares issuable upon
exercise of warrants and options and issuance of deferred shares to the extent
that, under Rule 144, such shares are not deemed to have been acquired when such
warrants and options and rights to receive deferred shares were acquired) have
been owned beneficially for at least two years by existing stockholders and,
together with the 3,471,352 shares issuable to Mr. Karmazin upon exercise of
options and issuance of deferred shares and the 100 shares that were purchased
by Mr. Karmazin in a market transaction, may be sold in the market pursuant to
Rule 144, subject to the restrictions of such Rule with regard to sales by
affiliates. The Company and the Principal Stockholders have each agreed not to
sell or grant any option for the sale of, or otherwise dispose of, any Common
Stock, or any securities convertible into or exchangeable or exercisable for
shares of Common Stock, other than the shares of Common Stock that may be
offered by the Company in the Offerings and certain other limited exceptions,
and not to file or request to be filed, as the case may be, any registration
statement with respect to Common Stock, for a period of 90 days after the date
of this Prospectus without the consent of the Representatives (as defined in
"Underwriting"). In addition, the Lehman Investors have each agreed not to
effect any public sale or distribution of any shares of Common Stock, or any
securities convertible into or exchangeable or exercisable for shares of Common
Stock, for a period of 90 days after the date of this Prospectus without the
consent of the Representatives. See "Shares Eligible for Future Sale."
8
<PAGE>
The Principal Stockholders and the Lehman Investors have certain rights to
require the Company to register all or part of the shares of Common Stock that
they own or may acquire through exercise of warrants. See "Shares Eligible for
Future Sale."
The Company can make no prediction as to the effect, if any, that sales of
shares of Common Stock, or the availability of shares for future sale, will have
on the market price of the Class A Common Stock prevailing from time to time.
Sales of substantial amounts of Common Stock (including shares upon the exercise
of warrants or options) in the public market, or the perception that such sales
could occur, could depress prevailing market prices for the Class A Common
Stock. Such sales may also make it more difficult for the Company to sell equity
securities or equity-related securities in the future at a time and price which
it deems appropriate.
REGULATORY MATTERS
The radio broadcasting industry is subject to extensive federal regulation
which, among other things, requires approval by the FCC of transfers,
assignments and renewals of radio broadcasting licenses, limits the number of
radio broadcasting properties the Company may acquire and restricts alien
ownership of capital stock of and participation in the affairs of licensees.
Legislation is pending before Congress that would significantly alter FCC
regulations with respect to, among other things, the number of AM or FM
broadcast stations which may be owned or controlled by one entity. See "The
Company--Recent Developments--Telecommunications Bills." If legislation relaxing
radio multiple ownership rules is not enacted, however, or applicable FCC
regulations are not otherwise revised, current limitations imposed by the FCC on
the number of broadcasting properties the Company can acquire could limit the
Company's ability to grow through acquisitions in the future and would require
the Company to divest itself of two FM radio stations in the Dallas/Ft. Worth
area and one FM radio station in the San Francisco/San Jose area following the
Alliance Acquisition. See "The Company-- Company Strategy" and "--Recent
Developments--The Alliance Acquisition."
9
<PAGE>
THE COMPANY
GENERAL
Infinity Broadcasting Corporation is currently the largest owner and
operator of radio stations in the United States. Infinity currently owns and
operates 27 radio stations serving 13 of the nation's largest radio markets, and
has entered into an agreement to acquire the Alliance Stations.
The following table sets forth certain information about the Company's
current radio stations as well as the Alliance Stations:
<TABLE>
<CAPTION>
STATIONS
1995 1994 WITH
RADIO RADIO TARGET RANKINGS IN
MARKET MARKET TARGET DEMOGRAPHICS TARGET DEMO-
STATION MARKET STATION FORMAT RANK(1) REVENUES(2) DEMOGRAPHICS RANK(3) GRAPHICS(4)
- ------------------- ---------------- ---------------- ------- ------------ ------------- ------------ ------------
($ MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
WXRK-FM............ New York, NY Classic Rock 1 $401.2 Men 25-54 3 40
WZRC-AM............ New York, NY --(5) 1 401.2 --(5) -- --(5)
WFAN-AM............ New York, NY All Sports 1 401.2 Men 25-54 6T 40
KROQ-FM(6)......... Los Angeles, CA Alternative Rock 2 457.4 Men 18-34 1 41
KRTH-FM............ Los Angeles, CA Oldies 2 457.4 Persons 25-54 2 44
WJMK-FM/........... Chicago, IL Oldies/Talk 3 296.0 Persons 25-54 5T 38
WJJD-AM
WUSN-FM............ Chicago, IL Country 3 296.0 Persons 25-54 5T 38
KOME-FM(7)......... San Francisco/ Alternative Rock 4/30(8) 187.0/ Men 18-34 5/2 51/15
San Jose, CA 35.9
KFRC-AM/FM(9)...... San Francisco, Oldies 4 187.0 Persons 25-54 6 51
CA
KYCY-FM(9)......... San Francisco, Young Country 4 187.0 Persons 25-54 18T 51
CA
WYSP-FM............ Philadelphia, PA Classic Rock 5 168.1 Men 25-54 2 25
WIP-AM............. Philadelphia, PA All Sports 5 168.1 Men 25-54 3 25
WOMC-FM............ Detroit, MI Oldies 6 153.0 Persons 25-54 6 28
WXYT-AM............ Detroit, MI News/Talk 6 153.0 Persons 25-54 15 28
WYCD-FM(9)......... Detroit, MI Young Country 6 153.0 Persons 25-54 4 28
KVIL-FM(9)......... Dallas/ Adult 7 180.0 Women 25-54 1 34
KDMM-AM(10)........ Ft. Worth, TX Contemporary/
Nostalgia
KLUV-FM............ Dallas/ Oldies 7 180.0 Persons 25-54 6T 33
Ft. Worth, TX
KYNG-FM(9)......... Dallas/Ft. Young Country 7 180.0 Persons 25-54 4 33
Worth, TX
KSNN-FM(9)(11)..... Dallas/Ft. Country 7 180.0 Persons 25-54 19T 33
Worth, TX
WJFK-FM(12)........ Washington, DC Personality 8 182.2 Men 25-54 1 30
WPGC-.............. Washington, DC Contemporary/ 8 182.2 Persons 18-34 1 29
FM/AM(13) Urban
Contemporary
KXYZ-AM(14)........ Houston, TX Spanish 9 161.2 Persons 18-49 -- --
Language
WBCN-FM............ Boston, MA Album-Oriented 10 153.8 Men 18-34 1 28
Rock
WZLX-FM............ Boston, MA Classic Rock 10 153.8 Men 25-54 2T 30
WZGC-FM............ Atlanta, GA Classic Rock 12 149.6 Men 25-54 4 18
KYCW-FM(9)......... Seattle, WA Young Country 13 110.3 Persons 25-54 17 30
WLIF-FM............ Baltimore, MD Adult 18 70.1 Women 25-54 1 20
Contemporary
WJFK-AM............ Baltimore, MD Personality 18 70.1 Men 25-54 10 21
WQYK-.............. Tampa/ Country/Talk 21 73.0 Persons 25-54 1 25
FM/AM(15) St. Petersburg,
FL
<CAPTION>
EXPIRATION
DATE OF FCC
STATION AUTHORIZATION
- ------------------- -------------
<S> <C>
WXRK-FM............ 06/01/98
WZRC-AM............ 06/01/98
WFAN-AM............ 06/01/98
KROQ-FM(6)......... 12/01/97
KRTH-FM............ 12/01/97
WJMK-FM/........... 12/01/96
WJJD-AM 12/01/96
WUSN-FM............ 12/01/96
KOME-FM(7)......... 12/01/97
KFRC-AM/FM(9)...... 12/01/97
KYCY-FM(9)......... 12/01/97
WYSP-FM............ 08/01/98
WIP-AM............. 08/01/98
WOMC-FM............ 10/01/96
WXYT-AM............ 10/01/96
WYCD-FM(9)......... 10/01/96
KVIL-FM(9)......... 08/01/97
KDMM-AM(10)........ 08/01/97
KLUV-FM............ 08/01/97
KYNG-FM(9)......... 08/01/97
KSNN-FM(9)(11)..... 08/01/97
WJFK-FM(12)........ 10/01/95
WPGC-.............. 10/01/95
FM/AM(13)
KXYZ-AM(14)........ 08/01/97
WBCN-FM............ 04/01/98
WZLX-FM............ 04/01/98
WZGC-FM............ 04/01/96
KYCW-FM(9)......... 02/01/98
WLIF-FM............ 10/01/95
WJFK-AM............ 10/01/95
WQYK-.............. 02/01/96
FM/AM(15)
</TABLE>
- ------------
(1) Markets ranked by 1995 Arbitron metropolitan area population.
(2) Radio advertising revenues according to Duncan's Radio Market Guide
(1995 ed.).
(3) Target demographics rank by Spring 1995 Arbitron Radio Market Reports.
"T" indicates a tie in the rankings.
(footnotes continued on following page)
10
<PAGE>
(footnotes continued from preceding page)
(4) Number of stations in each market with rankings in the Company's target
demographics for such market, based on the Spring 1995 Arbitron Radio
Market Reports.
(5) Effective July 7, 1995, the Company entered into a Time Brokerage
and Option Agreement with Radio Korea New York, Inc. ("RKNY"),
pursuant to which the Company will make substantially all of
the programming time on WZRC-AM available to RKNY for its Korean
language programming for a period of one year.
(6) KROQ-FM is licensed to the community of Pasadena, California.
(7) KOME-FM is licensed to the community of San Jose, California.
(8) San Francisco and San Jose have radio market ranks of 4 and 30,
respectively, and KOME-FM's rankings within target demographics in
those markets are 5 and 2, respectively.
(9) The Company has agreed to acquire the Alliance Stations, subject to
certain conditions, including the approval of the FCC. In connection
with such approval, the Company will be required to obtain temporary
divestiture waivers by the FCC of certain regulations limiting the
number of radio stations which may be owned or controlled by one entity
both nationally and in a particular market. See "The Company--Recent
Developments--The Alliance Acquisition."
(10) KVIL-FM is licensed to the community of Highland Park-Dallas, Texas.
KDMM-AM is licensed to the community of Highland Park, Texas.
(11) KSNN-FM is licensed to the community of Arlington, Texas.
(12) WJFK-FM is licensed to the community of Manassas, Virginia.
(13) WPGC-FM/AM are licensed to the community of Morningside, Maryland.
(14) Not included in Arbitron rankings because the Company does not subscribe
to the Arbitron rankings in Houston.
(15) WQYK-FM is licensed to the community of St. Petersburg, Florida, and
WQYK-AM is licensed to the community of Seffner, Florida.
The Company currently holds 5,000,000 shares of common stock of Westwood
One (which represented approximately 15.8% of the issued and outstanding
capital stock of Westwood One as of June 30, 1995) and warrants to purchase
an additional 3,500,000 and 500,000 shares of such common stock at an exercise
price of $3.00 and $4.00 per share, respectively, subject in part to certain
vesting requirements. The Company also manages Westwood One pursuant to a
management agreement that provides for, among other things, the grant of
additional warrants to acquire up to 500,000 shares of Westwood One common
stock at an exercise price of $5.00 per share if certain targets are met. For
further information, see "Business--Recent Developments" in the 1994 Form
10-K, which is incorporated herein by reference.
The Company's principal executive offices are located at
600 Madison Avenue, New York, New York 10022, and its telephone number is
(212) 750-6400.
COMPANY STRATEGY
The Company's overall strategy is to own and operate radio stations in the
nation's largest radio revenue markets. The Company believes that its presence
in large markets makes it attractive to advertisers and that the overall
diversity of its stations reduces its dependence on any single station, local
economy or advertiser. The Company also believes that by serving major markets,
it is able to attract more highly skilled management, employees and on-air
talent.
In developing its stations, the Company takes a variety of actions to
improve a station's operating cash flow, including instituting strict financial
reporting requirements and cost controls, directing promotional activities,
developing programming to improve the station's appeal to a targeted audience
group and enhancing advertising sales efforts. In particular, the Company
emphasizes increasing local advertising revenues in order to reduce dependence
on national advertising revenues. During the year ended December 31, 1994, the
Company generated approximately 73% of its total revenues from local and
regional advertising.
In operating its stations, the Company concentrates on the development of
strong decentralized local management, which is responsible for the day-to-day
operations of the station. Local management, in cooperation with corporate
management, is responsible for developing programming. Corporate
11
<PAGE>
management is responsible for long-range planning, establishing policies and
procedures, maximizing cost savings where centralized purchasing is appropriate,
resource allocation and maintaining overall control of the stations.
The overall mix of a station's programming is designed to fit each station's
specific format and serve its local community. The Company's overall programming
strategy includes acquiring significant on-air talent and sports franchises for
its radio stations. The Company believes that this strategy, in addition to
developing loyal audiences for its radio stations, enables the Company to obtain
additional revenues, including revenues from syndicating such programming
franchises to other radio stations. In addition to its regular programming, all
of the Company's stations provide non-entertainment programming, such as news
and public affairs broadcasts.
The Company expects to continue to acquire radio stations with strong growth
potential in the Company's current markets, subject to the Communications Act of
1934, as amended (the "Communications Act"), and FCC rules, which currently
impose certain limits on the maximum number of radio stations the Company can
own nationwide and the number of stations the Company can own in the same
geographic market. FCC approval of the Alliance Acquisition will require the
Company to obtain temporary divestiture waivers by the FCC of these rules. See
"--Recent Developments--The Alliance Acquisition." Because the Company has
historically grown in part through the acquisition of broadcasting properties,
limitations imposed by the FCC on the number of broadcasting properties the
Company can acquire could limit the Company's ability to grow through
acquisitions in the future. For a discussion of certain pending federal
legislation that would significantly alter the FCC's radio multiple ownership
rules, see "--Recent Developments--Telecommunications Bills." See also
"Business-- General--Federal Regulation of Radio Broadcasting--Ownership
Matters" in the 1994 Form l0-K (which is incorporated herein by reference).
Other than as described in this Prospectus, the Company has no present
agreements or arrangements to acquire or sell any radio stations.
The Company's affiliation with Westwood One enables the Company to expand
its presence in the radio program distribution business while simultaneously
enhancing the programming lineups of Westwood One.
RECENT DEVELOPMENTS
The Alliance Acquisition
On September 22, 1995, the Company entered into an agreement to acquire the
Alliance Stations from various entities affiliated with Alliance for $275
million, including working capital of at least $10 million. The Company expects
to use the net proceeds of the Offerings to finance the purchase of the Alliance
Stations. Until such net proceeds are applied to finance such purchase, the
Company expects to use such net proceeds to reduce borrowings under the Credit
Agreement. See "Use of Proceeds."
The consummation of the Alliance Acquisition is subject to certain
conditions, including approval of the FCC. An application seeking consent of
the FCC to complete the Alliance Acquisition has been filed and is pending. As
part of such application, the Company has requested the FCC to grant temporary
divestiture waivers to allow the Company to exceed the limits imposed by the
FCC's current radio multiple ownership rules for a period of eighteen months
after completion of the Alliance Acquisition. These rules currently prohibit the
Company from owning, operating or controlling, directly or indirectly, more than
20 AM and 20 FM radio stations in the United States and more than two AM and two
FM radio stations in each of the markets in which the Company owns radio
stations. Upon completion of the Alliance Acquisition, the Company will own 23
FM radio stations, including four FM radio stations in the Dallas/Ft. Worth area
and three FM radio stations in the San Francisco/San Jose area. There can be no
assurance that the FCC will grant such temporary divestiture waivers. In the
event that such waivers are granted and the Alliance Acquisition is completed,
the Company will be required to divest itself of two of its FM stations in the
Dallas/Ft. Worth area and one of its FM stations
12
<PAGE>
in the San Francisco/San Jose area within eighteen months (or such shorter
period as may be specified in such waivers) of the date that the Alliance
Acquisition is completed unless the legislation described below under
"--Telecommunications Bills" is enacted in a form that permits the Company to
continue to own these stations or the FCC's radio multiple ownership rules are
otherwise relaxed to permit such continued ownership.
Telecommunications Bills
Both the Senate and the House of Representatives of the U.S. Congress have
reported out separate bills (S.652 and H.R. 1555) which, among other things,
contain provisions affecting multiple ownership of radio stations and broadcast
license renewal procedures. The Senate bill would require the FCC to modify its
rules to eliminate all regulations limiting the number of AM or FM broadcast
stations which may be owned or controlled by one entity either nationally or in
a particular market. However, the Senate bill would give the FCC authority to
refuse to approve the transfer or issuance of any AM or FM broadcast license to
a particular entity if the FCC determined that, by virtue of the acquisition,
the entity would thereby obtain an undue concentration of control or competition
would be harmed. The Senate bill also would extend broadcast license renewal
terms for radio stations from the present term of seven years to ten years, and
would implement a "two step" renewal process that would eliminate a challenger's
right to file a competing application for an incumbent's frequency at the end of
a renewal term. New applications would only be entertained upon FCC denial of
the incumbent's application for renewal due to failure to serve the public
interest or if the incumbent licensee had engaged in serious violations of the
Communications Act or FCC regulations. The incumbent's license could not be
denied until after it was afforded notice and an opportunity for hearing. The
House of Representatives bill, with respect to radio multiple ownership,
eliminates all restrictions, both nationally and within any particular
geographical area. The House bill maintains renewal terms at seven years, and
includes the identical "two-step" renewal language of the Senate bill. The bills
are scheduled to be reconciled in conference during the Fall of 1995. However,
there can be no assurance that final legislation will be enacted or what form
any such ultimate legislation will take.
FCC Settlement; Assignment Applications
The 1994 Form 10-K contains a description of then pending FCC proceedings
relating to the broadcast of allegedly indecent material by certain of the
Company's stations (see "Business-- General --Federal Regulation of Radio
Broadcasting--Programming and Operation" in the 1994 Form 10-K). On September 1,
1995, the Company, the FCC and the Department of Justice entered into a
Settlement Agreement which vacates or dismisses those proceedings as well as all
pending complaints against the Company's stations relating to indecency, and
expunges all of those proceedings and complaints from the Company's FCC records.
Without any admission of guilt, liability or wrongdoing, the Company has agreed
to make two voluntary contributions to the United States Treasury totaling
$1.715 million. On September 5, 1995, the FCC released an Order implementing the
terms of the Settlement Agreement which became final on October 5, 1995.
The 1994 Form 10-K also provides information with respect to a Formal
Petition to Deny filed by Americans for Responsible Television ("ART") against
the Company's application to purchase radio station KRTH-FM in Los Angeles (see
"Business--General-- Federal Regulation of Radio Broadcasting--Programming and
Operation" in the 1994 Form 10-K). On February 1, 1994, the FCC dismissed ART's
Petition to Deny and granted the KRTH-FM assignment application. On August 25,
1995, the FCC released an Order denying a petition for reconsideration filed by
ART. The KRTH-FM grant became final on September 25, 1995.
The same section of the 1994 Form 10-K referenced in the preceding paragraph
also provides information with respect to the filing of a Petition to Deny by
ART against the Company's application to acquire Station KLUV-FM in Dallas/Ft.
Worth, Texas. The FCC subsequently dismissed ART's Petition and granted the
KLUV-FM assignment application. The FCC's grant has since become final.
13
<PAGE>
Debt Registration Statement
The Company has registered with the Commission, pursuant to a shelf
registration statement, $500 million in aggregate principal amount of Debt
Securities. The Company may issue Debt Securities from time to time. The Credit
Agreement currently prohibits the incurrence of additional indebtedness by the
Company other than (a) under the Credit Agreement, or (b) subject to certain
limitations, (i) to repay or prepay existing indebtedness under the Credit
Agreement or existing senior subordinated indebtedness of the Company, or (ii)
in an aggregate principal amount not exceeding $35 million at any one time
outstanding. Pursuant to the amendment to the Credit Agreement dated as of June
23, 1995, subject to certain limitations, to the extent that the net proceeds
from sales of Debt Securities are received by the Company prior to December 31,
1995, up to $200 million of the amounts repaid under the Credit Agreement may be
reborrowed, subject under certain circumstances to the consent of the lenders
under the Credit Agreement, for general corporate purposes, including for
working capital, capital expenditures, investments in or loans to subsidiaries,
refinancing of debt, future acquisitions and restricted payments, including
repurchases of Class A Common Stock.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Class A
Common Stock offered hereby are estimated to be approximately $269.3 million (or
approximately $309.8 million if the Underwriters' over-allotment options are
exercised in full). The Company expects that such net proceeds will be used to
finance future acquisitions of broadcasting properties, including the Alliance
Acquisition, and for general corporate purposes. The Company has agreed to pay a
purchase price of $275 million (including working capital of at least $10
million) for the Alliance Stations. See "The Company--Recent Developments--The
Alliance Acquisition." The Company reviews potential acquisition opportunities
on an ongoing basis, and periodically engages in discussions with acquisition
candidates. The Company has not, however, entered into any definitive agreements
with respect to the acquisition of any broadcasting properties, other than with
respect to the Alliance Acquisition.
Until the net proceeds from the sale of the shares of Class A Common Stock
offered hereby are applied as described above, the Company expects to use such
net proceeds to reduce borrowings under the Credit Agreement. Such borrowings
bore interest as of June 30, 1995 at an average annual rate of approximately
7.0%, and have a final maturity of the unpaid principal amount thereof in June
2003. A total of approximately $362 million in borrowings was outstanding under
the Credit Agreement at June 30, 1995. The Company anticipates that the amounts
repaid under the Credit Agreement with such proceeds eventually will be
reborrowed in order to finance future acquisitions of broadcasting properties,
including the Alliance Acquisition, subject to the consent of the lenders under
the Credit Agreement to such acquisitions, and for general corporate purposes.
As of June 30, 1995, $338 million was available under the Credit Agreement for
acquisitions of radio stations (without taking into account any amounts that the
Company expects will be repaid using the proceeds of the Offerings). See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
14
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Class A Common Stock has been quoted on the New York Stock Exchange
under the symbol "INF" since June 22, 1995. Prior to such date, the Class A
Common Stock was quoted on the NASDAQ National Market System under the symbol
"INFTA." The following table sets forth, for the calendar quarters indicated,
the high and low sales prices in dollars per share of the Class A Common Stock
on the New York Stock Exchange or on the NASDAQ National Market System, as
applicable, as reported in published financial sources.
FISCAL YEAR HIGH LOW
- ------------------------------------------------------------ ------ ------
1993:
First Quarter............................................ $ 9.26 $ 6.81
Second Quarter........................................... 12.45 9.04
Third Quarter............................................ 21.45 13.55
Fourth Quarter........................................... 23.78 16.50
1994:
First Quarter............................................. $22.50 $16.67
Second Quarter............................................ 18.67 13.50
Third Quarter............................................. 22.00 16.00
Fourth Quarter............................................ 21.17 18.33
1995:
First Quarter............................................. $28.67 $20.17
Second Quarter............................................ 37.50 25.83
Third Quarter............................................. 37.63 29.38
Fourth Quarter (through October 18, 1995)................. 35.38 32.25
As of June 30, 1995, there were approximately 6,500 holders of Class A
Common Stock, eight holders of record of the Class B Common Stock and four
holders of record of the Class C Common Stock.
The closing sale price for the Class A Common Stock as of October 18, 1995,
as reported in published financial sources, is set forth on the cover page of
this Prospectus. There is no public trading market for the Class B Common Stock
or the Class C Common Stock.
The Company has never paid dividends on shares of Common Stock. The Company
intends to retain future earnings for use in its business and does not
anticipate paying any dividends on shares of Common Stock in the foreseeable
future. The Company is restricted by the Credit Agreement from paying dividends
on the Common Stock unless certain amounts are available and certain other
conditions are satisfied. In addition, under the terms of the Senior
Subordinated Indenture, the Company may only pay dividends if a specific
financial test is met. See "Description of Capital Stock-- Common
Stock--Dividends."
15
<PAGE>
CAPITALIZATION
The following table sets forth (i) the capitalization of the Company at June
30, 1995 and (ii) the pro forma capitalization of the Company at June 30, 1995,
reflecting (a) the sale of the 8,500,000 shares of Class A Common Stock offered
by the Company hereby at a price of $32.875 per share, (b) the application of
the net proceeds of the Offerings (estimated to be approximately $269.3 million)
together with approximately $5.7 million of borrowings under the Credit
Agreement, to finance the Alliance Acquisition and (c) the completion of the
pending Alliance Acquisition. See "The Company-- Recent Developments--The
Alliance Acquisition," "Use of Proceeds," "Pro Forma Combined Financial
Statements" and "Description of Capital Stock."
<TABLE>
<CAPTION>
JUNE 30, 1995
------------------------
ACTUAL PRO FORMA
--------- -----------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Long-term debt:(1)
Credit Agreement(2)................................................ $ 362,000 $ 367,661
10 3/8% Senior Subordinated Notes Due 2002......................... 200,000 200,000
--------- -----------
Total long-term debt............................................. 562,000 567,661
Stockholders' equity (deficiency):(3)
Preferred Stock, $.01 par value; 1,000,000 shares authorized; no
shares issued and outstanding.................................... -- --
Class A Common Stock, $.002 par value; 200,000,000 shares
authorized (4); 43,549,202 shares issued (52,049,202 shares pro
forma)......................................................... 87 104
Class B Common Stock, $.002 par value; 17,500,000 shares
authorized; 5,550,031 shares issued and outstanding (5,550,031
shares pro forma).............................................. 11 11
Class C Common Stock, $.002 par value; 30,000,000 shares
authorized; 744,171 shares issued and outstanding (744,171 shares
pro forma)..................................................... 1 1
Additional paid-in capital......................................... 260,592 529,914
Retained earnings (accumulated deficit)............................ (233,141) (233,141)
Less 2,430,045 shares of treasury stock at cost (2,430,045 shares
pro forma)..................................................... (47,942) (47,942)
--------- -----------
Total stockholders' equity (deficiency).......................... (20,392) 248,947
--------- -----------
Total capitalization............................................. $ 541,608 $ 816,608
--------- -----------
--------- -----------
</TABLE>
- ------------
(1) For information concerning the Company's long-term debt, see the Notes to
the Company's Consolidated Financial Statements included in the 1994 Form
10-K and the Notes to the Company's Condensed Consolidated Financial
Statements included in the June Form 10-Q (both of which are incorporated
herein by reference).
(2) Until the net proceeds from the sale of the shares of Class A Common Stock
offered hereby are applied to finance future acquisitions of broadcasting
properties, including the Alliance Acquisition, or for general corporate
purposes, the Company intends to use such net proceeds to reduce borrowings
under the Credit Agreement.
(3) Excludes shares of Class A Common Stock issuable upon future conversions of
shares of Class B or Class C Common Stock and any future exercise of stock
options or warrants or issuance of deferred shares.
(4) The Company's authorized shares were increased from 75,000,000 to
200,000,000 on August 8, 1995.
16
<PAGE>
PRO FORMA COMBINED FINANCIAL STATEMENTS
The unaudited pro forma combined balance sheet data at June 30, 1995 are
presented as if, at such date, (i) the Company had completed the Alliance
Acquisition, (ii) the Offerings had been completed at a price of $32.875 per
share and (iii) the net proceeds of the Offerings (estimated to be approximately
$269.3 million), together with approximately $5.7 million of borrowings under
the Credit Agreement, had been used to finance the pending Alliance Acquisition.
See "The Company--Recent Developments--The Alliance Acquisition" and "Use of
Proceeds."
The unaudited pro forma combined statement of operations data for the six
months ended June 30, 1995 are presented as if, at the beginning of the period,
(i) the Company had completed the acquisition of radio station KLUV-FM (which
acquisition was completed in April 1995), (ii) the Company had completed the
pending Alliance Acquisition, (iii) the Offerings had been completed at a price
of $32.875 per share and (iv) the net proceeds of the Offerings (estimated to be
approximately $269.3 million), together with approximately $5.7 million of
borrowings under the Credit Agreement, had been used to finance the pending
Alliance Acquisition. See "The Company--Recent Developments--The Alliance
Acquisition" and "Use of Proceeds."
The unaudited pro forma combined statement of operations data for the year
ended December 31, 1994 are presented as if, at the beginning of the period, (i)
the Company had completed the acquisitions of radio stations KRTH-FM,
WPGC-AM/FM, WXYT-AM and KLUV-FM, (ii) the Company had completed the pending
Alliance Acquisition, (iii) the Offerings had been completed at a price of
$32.875 per share, (iv) the net proceeds of the Offerings (estimated to be
approximately $269.3 million), together with approximately $5.7 million of
borrowings under the Credit Agreement, had been used to finance the pending
Alliance Acquisition and (v) the Company had effected the May 19, 1995
three-for-two stock split. See "The Company--Recent Developments--The Alliance
Acquisition" and "Use of Proceeds."
In the opinion of management, all adjustments necessary to present fairly
this pro forma information have been made.
These pro forma combined financial statements should be read in conjunction
with the Company's Consolidated Financial Statements and the Notes thereto
(included in the 1994 Form 10-K incorporated herein by reference), the Company's
Condensed Consolidated Financial Statements and the Notes thereto (included in
the June Form 10-Q incorporated herein by reference) and the Consolidated
Financial Statements and the Notes thereto of Alliance (included in the Form 8-K
incorporated herein by reference). The pro forma information is not necessarily
indicative of the results that would have been reported had such events actually
occurred on the dates specified, nor is it indicative of the Company's future
results.
17
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA COMPANY
COMPANY AS ADJUSTMENTS ALLIANCE PRO FORMA
REPORTED FOR OFFERINGS (1) ACQUISITION (2) COMBINED
---------- ----------------- --------------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Current assets............................. $ 90,949 $ 269,339 $(259,339) $ 100,949
Property and equipment, net................ 21,433 6,876 28,309
Intangible assets, net..................... 472,268 258,124 730,392
Other assets............................... 13,342 13,342
---------- ----------------- --------------- ---------
Total assets........................... $597,992 $ 269,339 $ 5,661 $ 872,992
---------- ----------------- --------------- ---------
---------- ----------------- --------------- ---------
LIABILITIES:
Current liabilities........................ $ 56,384 $ 56,384
Long-term debt............................. 562,000 $ 5,661 567,661
Stockholders' equity (deficiency).......... (20,392) $ 269,339 248,947
---------- ----------------- --------------- ---------
Total liabilities and stockholders'
equity (deficiency).................. $597,992 $ 269,339 $ 5,661 $ 872,992
---------- ----------------- --------------- ---------
---------- ----------------- --------------- ---------
</TABLE>
- ------------
(1) To reflect the issuance of the shares of Class A Common Stock offered by
the Company hereby.
(2) To reflect the expected ultimate application of the net proceeds from the
Offerings of approximately $269.3 million and the use of approximately $5.7
million of borrowings under the Credit Agreement for the pending Alliance
Acquisition and to allocate the preliminary purchase price of $275 million
as follows:
<TABLE>
<CAPTION>
CARRYING VALUE
REPORTED BY ALLOCATION OF
ALLIANCE ADJUSTMENTS PURCHASE PRICE
-------------- ----------- --------------
<S> <C> <C> <C>
Assets:
Current assets.................................... $ 11,111 $ (1,111)(a) $ 10,000
Property and equipment, net....................... 6,876 6,876
Intangible assets, net............................ 68,384 189,740 258,124
------ ----------- -------
Total assets................................... $ 86,371 $ 188,629 $275,000
------ ----------- -------
------ ----------- -------
Liabilities:
Current liabilities............................... $ 10,761 $ (10,761)(a) $ 0
Long-term debt.................................... 54,500 (54,500)(a) 0
Other liabilities................................. 495 (495)(a) 0
------ ----------- -------
Total liabilities.............................. 65,756 (65,756) 0
------ ----------- -------
Partners' capital................................. 20,615 (20,615)(a) 0
------ ----------- -------
Total liabilities and partners' capital........ $ 86,371 $ (86,371) $ 0
------ ----------- -------
------ ----------- -------
</TABLE>
---------------
(a) Adjustments to eliminate assets not being acquired and liabilities not
being assumed in the Alliance Acquisition.
The information set forth with respect to the Alliance Acquisition assumes
that the Offerings and the Alliance Acquisition were completed on the same
date. The preliminary allocation of the purchase price may change upon final
appraisal of the fair values of the net assets acquired.
18
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
COMPANY AS COMPANY
REPORTED ACQUISITION OF ALLIANCE PRO FORMA
(1) KLUV-FM ACQUISITION COMBINED
---------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
Total revenues........................... $169,162 $ 2,462(2) $22,908(3) $ 194,532
Less agency commissions.................. 22,271 520(2) 3,733(3) 26,524
---------- ------- ----------- ---------
Net revenues............................. 146,891 1,942 19,175 168,008
Station operating expenses excluding
depreciation and amortization.......... 78,116 808(2) 15,239(3) 94,163
---------- ------- ----------- ---------
Station operating income excluding
depreciation and amortization............ 68,775 1,134 3,936 73,845
Depreciation and amortization............ 24,000 1,171(4) 9,292(5) 34,463
Corporate general and administrative
expenses............................... 2,667 2,667
---------- ------- ----------- ---------
Operating income (loss).................. 42,108 (37) (5,356) 36,715
Interest expense......................... (23,883) (1,100)(6) (198)(6) (25,181)
Interest income.......................... 161 161
Income taxes............................. (686) (686)
---------- ------- ----------- ---------
Net earnings (loss)...................... $ 17,700 $ (1,137) $(5,554) $ 11,009
---------- ------- ----------- ---------
---------- ------- ----------- ---------
Net earnings per share................... $0.26 $0.15
Weighted average shares.................. 67,275 75,775(7)
</TABLE>
- ------------
(1) The Company's historical consolidated results of operations for the six
months ended June 30, 1995 include the operating results of radio station
KLUV-FM from April 21, 1995, the date the Company acquired such station.
(2) To reflect the historical operating results of KLUV-FM for the period from
January 1, 1995 to April 20, 1995 (based upon the unaudited financial
statements of KLUV-FM).
(3) To reflect the historical operating results of Alliance as follows:
<TABLE>
<CAPTION>
ADJUSTED
CARRYING VALUE HISTORICAL
REPORTED BY RESULTS OF
ALLIANCE ADJUSTMENTS ALLIANCE
-------------- ----------- ----------
<S> <C> <C> <C>
Total revenues...................................... $ 22,399 $ 509(a) $ 22,908
Less agency commissions............................. 3,733 -- 3,733
------ ----- ----------
Net revenues........................................ 18,666 509 19,175
Station operating expenses excluding depreciation
and amortization...................................... 14,691 548(a) 15,239
------ ----- ----------
Station operating income excluding depreciation and
amortization.......................................... 3,975 (39) 3,936
Depreciation and amortization....................... 3,452 3,452
Corporate general and administrative expenses....... 843 (843)(b) 0
------ ----- ----------
Operating income (loss)............................. (320) 804 484
Interest and other expense.......................... (3,851) 3,851(a)(b) 0
Interest and other income........................... 565 (565)(a)(b) 0
------ ----- ----------
Net income (loss) before extraordinary item......... $ (3,606) $ 4,090 $ 484
------ ----- ----------
------ ----- ----------
</TABLE>
--------------
(a) To reclassify miscellaneous broadcasting revenues and expenses to
conform with the Company's presentation.
(b) Assumes these items would not have been incurred by the Company
during this period. Such items consisted primarily of corporate
and interest expenses.
(footnotes continued on following page)
19
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS--(CONTINUED)
(footnotes continued from preceding page)
(4) To reflect the pro forma depreciation and amortization expense from the
allocation of the purchase price of KLUV-FM based on the following:
franchise and other intangible assets of approximately $52.8 million over a
period of 15 years, and property and equipment of approximately $200,000
over 5 years.
(5) To reflect the pro forma depreciation and amortization expense from the
preliminary allocation of the purchase price of the Alliance Acquisition
based on the following: franchise and other intangible assets of
approximately $258 million over a period of 15 years, and property and
equipment of approximately $7 million over 5 years.
(6) To reflect additional interest expense on bank borrowings, at an interest
rate of approximately 7%, to finance the acquisition of KLUV-FM and a
portion of the Alliance Acquisition. The information set forth with respect
to the Alliance Acquisition assumes that the Offerings and the Alliance
Acquisition were completed on the same date.
(7) Adjusted to reflect the issuance of 8,500,000 shares of Class A Common Stock
in connection with the Offerings.
20
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ACQUISITION OF
COMPANY AS KRTH-FM COMPANY
REPORTED WPGC-AM/FM ACQUISITON OF ALLIANCE PRO FORMA
(1) AND WXYT-AM KLUV-FM ACQUISITION COMBINED
---------- ---------- -------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Total revenues............. $313,359 $ 14,852(2) $ 8,556(3) $ 34,196(4) $ 370,963
Less agency commissions.... 39,239 1,966(2) 1,724(3) 5,641(4) 48,570
---------- ---------- ------- -------------- ---------
Net revenues............... 274,120 12,886 6,832 28,555 322,393
Station operating expenses
excluding depreciation
and amortization......... 143,249 6,268(2) 2,620(3) 25,268(4) 177,405
---------- ---------- ------- -------------- ---------
Station operating income
excluding depreciation
and amortization......... 130,871 6,618 4,212 3,287 144,988
Depreciation and
amortization............... 46,606 4,099(5) 3,800(6) 18,583(7) 73,088
Corporate general and
administrative expenses.... 5,633 5,633
---------- ---------- ------- -------------- ---------
Operating income (loss).... 78,632 2,519 412 (15,296) 66,267
Interest expense........... (44,689) (2,954)(8) (3,570)(9) (396)(9) (51,609)
Interest income............ 160 160
Income taxes............... (890) (890)
---------- ---------- ------- -------------- ---------
Net earnings (loss)........ $ 33,213 $ (435) $ (3,158) $(15,692) $ 13,928
---------- ---------- ------- -------------- ---------
---------- ---------- ------- -------------- ---------
Net earnings per share..... $0.49(10) $0.18
Weighted average shares.... 67,139(10) 75,639(11)
</TABLE>
- ------------
(1) The Company's historical consolidated results of operations for the year
ended December 31, 1994 include the operating results of radio stations
KRTH-FM from February 15, 1994, WPGC-AM/FM from June 17, 1994 and WXYT-AM
from June 27, 1994, the dates the Company acquired such stations.
(2) To reflect the historical operating results of KRTH-FM for the period from
January 1, 1994 to February 14, 1994, WPGC-AM/FM from January 1, 1994 to
June 16, 1994, and WXYT-AM from January 1, 1994 to June 26, 1994 based upon
their respective unaudited financial statements.
(3) To reflect the historical operating results of KLUV-FM for the year ended
December 31, 1994 based upon its unaudited financial statements.
(footnotes continued on following page)
21
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS--(CONTINUED)
(footnotes continued from preceding page)
(4) To reflect the historical operating results of Alliance as follows:
<TABLE>
<CAPTION>
ADJUSTED
CARRYING VALUE HISTORICAL
REPORTED BY RESULTS OF
ALLIANCE ADJUSTMENTS ALLIANCE
-------------- ----------- ----------
<S> <C> <C> <C>
Total revenues....................................... $ 33,288 $ 908(a) $ 34,196
Less agency commissions.............................. 5,641 5,641
------ ----------- ----------
Net revenues......................................... 27,647 908 28,555
Station operating expenses excluding depreciation and
amortization....................................... 24,608 660(a) 25,268
------ ----------- ----------
Station operating income excluding depreciation and
amortization....................................... 3,039 248 3,287
Depreciation and amortization........................ 5,426 5,426
Corporate general and administrative expenses........ 1,789 (1,789)(b) 0
------ ----------- ----------
Operating income (loss).............................. (4,176) 2,037 (2,139)
Interest and other expense........................... (4,395) 4,395(a)(b) 0
Interest and other income............................ 973 (973)(a)(b) 0
------ ----------- ----------
Net income (loss) before extraordinary item.......... $ (7,598) $ 5,459 $ (2,139)
------ ----------- ----------
------ ----------- ----------
</TABLE>
--------------
(a) To reclassify miscellaneous broadcasting revenues and expenses to
conform with the Company's presentation.
(b) Assumes these items would not have been incurred by the Company
during this period. Such items consisted primarily of corporate
and interest expenses.
(5) To reflect the pro forma depreciation and amortization expense from the
allocation of the purchase price of KRTH-FM, WPGC-AM/FM and WXYT-AM based
on the following: franchise and other intangible assets of approximately
$206 million over a period of 15 years, and property and equipment of
approximately $6 million principally over 5 years.
(6) To reflect the pro forma depreciation and amortization expense from the
allocation of the purchase price of KLUV-FM based on the following:
franchise and other intangible assets of approximately $52.8 million over a
period of 15 years, and property and equipment of approximately $200,000
over 5 years.
(7) To reflect the pro forma depreciation and amortization expense from the
preliminary allocation of the purchase price of the Alliance Acquisition
based on the following: franchise and other intangible assets of
approximately $258 million over a period of 15 years, and property and
equipment of approximately $7 million over 5 years.
(8) To reflect additional interest expense on bank borrowings, at an interest
rate of approximately 5.2%, to finance the acquisitions.
(9) To reflect additional interest expense on bank borrowings, at an interest
rate of approximately 7%, to finance the acquisition of KLUV-FM and a
portion of the Alliance Acquisition. The information set forth with respect
to the Alliance Acquisition assumes that the Offerings and the Alliance
Acquisition were completed on the same date.
(10) Adjusted to reflect the three-for-two stock split effected by the Company
on May 19, 1995.
(11) Adjusted to reflect the issuance of 8,500,000 shares of Class A Common
Stock in connection with the Offerings.
22
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The summary consolidated financial information for the Company presented
below under the captions "Statement of Operations Data" and "Balance Sheet Data"
for, and as of the end of, each of the years in the three-year period ended
December 31, 1994, is derived from the Company's Consolidated Financial
Statements, which financial statements have been audited by KPMG Peat Marwick
LLP, independent certified public accountants. The Company's Consolidated
Financial Statements as of December 31, 1993 and 1994 and for each of the years
in the three-year period ended December 31, 1994, and the report thereon, have
been incorporated herein by reference. This summary consolidated financial
information should be read in conjunction with the Company's Consolidated
Financial Statements and the Notes thereto, included in the 1994 Form 10-K
incorporated herein by reference, and with "Management's Discussion and Analysis
of Financial Condition and Results of Operations." The historical consolidated
financial results for the Company are not comparable from year to year because
of the acquisition of various broadcasting properties by the Company during the
periods covered.
The summary consolidated financial information for the Company presented
below under the captions "Statement of Operations Data" and "Balance Sheet Data"
for the six-month periods ended June 30, 1994 and 1995 and as of June 30, 1994
and 1995, is derived from the Company's unaudited Consolidated Financial
Statements, included in the June Form 10-Q incorporated herein by reference.
Such unaudited Consolidated Financial Statements include all adjustments
management considers necessary for a fair presentation of the data for such
periods. The historical financial results for the Company for the six months
ended June 30, 1995 are not necessarily indicative of results to be expected for
the full year. This unaudited summary consolidated financial information should
be read in conjunction with the Company's unaudited Consolidated Financial
Statements and the Notes thereto, included in the June Form 10-Q incorporated
herein by reference, and with "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
23
<PAGE>
INFINITY BROADCASTING CORPORATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
---------------------------------- --------------------
1992 1993 1994 1994 1995
--------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:(1)
Total revenues......................... $ 171,843 $234,240 $313,359 $134,036 $169,162
Net revenues........................... 150,230 204,522 274,120 116,877 146,891
Station operating expenses excluding
depreciation and amortization.......... 81,707 109,601 143,249 63,863 78,116
--------- -------- -------- -------- --------
Station operating income excluding
depreciation and amortization.......... 68,523 94,921 130,871 53,014 68,775
Dereciation and amortization.......... 28,926 38,853 46,606 22,050 24,000
Corporate general and administrative
expenses............................... 4,182 4,836 5,633 2,419 2,667
--------- -------- -------- -------- --------
Operating income....................... 35,415 51,232 78,632 28,545 42,108
Interest expense....................... 39,390 36,776 44,689 20,906 23,883
Net earnings (loss) before
extraordinary items(2)............... (9,432) 14,335 33,213 7,526 17,700
Net earnings (loss) per share before
extraordinary items(2)............... $ (.20) $ .23 $ .49 $ .11 $ .26
Cash dividends declared per common
share................................ -- -- -- -- --
Weighted average number of shares
outstanding(3)(4).................... 47,001(5) 62,055 67,139 67,184 67,275
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
---------------------------------- --------------------
1992 1993 1994 1994 1995
--------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:(1)
Total assets........................... $ 271,952 $378,040 $562,153 $570,345 $597,992
Long-term debt (including current
portion)............................. 380,625 365,062 531,750 544,187 562,000
Stockholders' equity (deficiency)...... (138,734) (24,240) (25,525) (28,858) (20,392)
Working capital........................ 4,656 10,610 28,877 (5,818) 34,565
</TABLE>
(footnotes on following page)
24
<PAGE>
INFINITY BROADCASTING CORPORATION (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------ ------------------
1992 1993 1994 1994 1995
------- ------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
FINANCIAL RATIOS AND OTHER DATA:(6)
Operating cash flow........................... $64,341 $90,085 $125,238 $50,595 $66,108
Capital expenditures.......................... 1,300 1,901 1,606 674 1,189
Operating cash flow less capital
expenditures................................ 63,041 88,184 123,632 49,921 64,919
Capital expenditures as a percentage of
operating cash flow......................... 2.02% 2.11% 1.28% 1.33% 1.80%
Operating cash flow to interest expense, net
of interest income.......................... 1.68x 2.48x 2.81x 2.43x 2.79x
Operating cash flow less capital expenditures
to interest expense, net of interest
income...................................... 1.65x 2.43x 2.78x 2.40x 2.74x
</TABLE>
- ------------
(1) The historical consolidated financial results for the Company are not
comparable from year to year because of the acquisition of various
broadcasting properties by the Company during the periods covered. See
"Business--Background" appearing in the 1994 Form 10-K, incorporated herein
by reference, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
(2) For the year ended December 31, 1992, the Company recorded an extraordinary
loss of $12,318,000 ($0.26 per share) related to repayment of debt.
(3) See Notes 1(f) and 2 of the Notes to the Company's Consolidated Financial
Statements, appearing in the 1994 Form 10-K, incorporated herein by
reference.
(4) Includes shares of Class C Common Stock issuable upon the exercise of
warrants held by the Lehman Investors.
(5) Excludes shares of Common Stock issuable upon the exercise of warrants and
options and issuance of deferred shares.
(6) "Operating cash flow" means operating income plus depreciation and
amortization.
25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994
Net revenues for the six months ended June 30, 1995 were $146,891,000 as
compared to $116,877,000 for the first six months of 1994, an increase of
approximately 26%. The increase was due principally to higher advertising
revenues at most of the Company's stations, and the acquisitions of the radio
stations KRTH-FM (Los Angeles), WPGC-AM/FM (Washington, D.C.), WXYT-AM
(Detroit), and KLUV-FM (Dallas/Ft. Worth). On a pro forma basis, assuming the
above acquisitions had occurred as of the beginning of 1994, net revenues for
the first six months of 1995 would have increased by approximately 13%.
Station operating expenses excluding depreciation and amortization for the
six months ended June 30, 1995 were $78,116,000 as compared to $63,863,000 for
the first six months of 1994, an increase of approximately 22%. The increase
was principally due to the above acquisitions, expenses associated with higher
revenues and higher programming expenses. On a pro forma basis, assuming the
above acquisitions had occurred as of the beginning of 1994, station operating
expenses for the first six months of 1995 would have increased by approximately
10%.
Depreciation and amortization expense for the first six months of 1995 was
$24,000,000 as compared to $22,050,000 for the first six months of 1994, an
increase of approximately $1,950,000 or 9%. The increase was due to the
depreciation and amortization expense associated with the above acquisitions.
Operating income for the first six months of 1995 was $42,108,000 as
compared to $28,545,000 for the first six months of 1994, an increase of
approximately 48%. The increase was due principally to improved results at the
Company's radio stations.
Net financing expense (defined as interest expense less interest income)
for the first six months of 1995 was $23,722,000 as compared to $20,817,000
for thefirst six months of 1994, an increase of approximately 14%. The
increase was due principally to additional interest expense associated with
the additional borrowings incurred to finance the above acquisitions.
Net income for the first six months of 1995 was $17,700,000 ($0.26 per
share) as compared to $7,526,000 ($0.11 per share) for the first six months of
1994, an increase of approximately $10,174,000, or 135%.
Year Ended December 31, 1994 Compared to Year Ended December 31, 1993
Net revenues for the year ended December 31, 1994 were $274,120,000 as
compared to $204,522,000 for the year ended December 31, 1993, an increase of
approximately 34%. The increase was due principally to higher advertising
revenues at most of the Company's stations and the acquisitions of radio
stations KRTH-FM, WPGC-AM/FM and WXYT-AM. On a pro forma basis, assuming the
above acquisitions had occurred as of the beginning of 1993, net revenues for
the year ended December 31, 1994 would have increased by approximately 14%.
Station operating expenses (excluding depreciation and amortization) for
the year ended December 31, 1994 were $143,249,000 as compared to $109,601,000
for the year ended December 31, 1993, an increase of approximately 31%. The
increase was due principally to the above acquisitions, expenses associated
with higher revenues and higher programming expenses. On a pro forma basis,
assuming the above acquisitions had occurred as of the beginning of 1993,
station operating expenses in 1994 would have increased by approximately 11%.
26
<PAGE>
Depreciation and amortization expense for the year ended December 31, 1994
was $46,606,000 as compared to $38,853,000 for the year ended December 31, 1993,
an increase of approximately $7,753,000 or 20%. The increase was due to
depreciation and amortization expense associated with the above acquisitions.
Operating income for the year ended December 31, 1994 was $78,632,000, as
compared to $51,232,000 for the year ended December 31, 1993, an increase of
approximately 53%. The increase was due principally to improved results at the
Company's radio stations.
Net financing expense (defined as interest expense less interest income) for
the year ended December 31, 1994 was $44,529,000 as compared to $36,291,000 for
the year ended December 31, 1993, an increase of approximately 23%. The increase
was due principally to additional borrowings in connection with the above
acquisitions as well as higher interest rates during 1994.
Income taxes, principally state and local income taxes, for the year ended
December 31, 1994 were $890,000 as compared to $606,000 for the year ended
December 31, 1993, an increase of $284,000. No federal income taxes have been
provided as a result of available tax loss carry forwards.
Net earnings for the year ended December 31, 1994 was $33,213,000 ($0.49 per
share) as compared to $14,335,000 ($0.23 per share) for the year ended December
31, 1993, an increase of approximately $18,878,000 or 132%.
Year Ended December 31, 1993 Compared to Year Ended December 31, 1992
Net revenues for the year ended December 31, 1993 were $204,522,000 as
compared to $150,230,000 for the year ended December 31, 1992, an increase of
approximately 36%. The increase was due principally to higher advertising
revenues at most of the Company's stations and the acquisitions of radio
stations WIP-AM (Philadelphia) on September 1, 1993 and the WZGC-FM (Atlanta),
WZLX-FM (Boston) and WUSN-FM (Chicago) on February 1, 1993, and the acquisition
of WFAN-AM (New York) effective April 16, 1992. On a pro forma basis, assuming
the above acquisitions had occurred as of the beginning of 1992, net revenues
for the year ended December 31, 1993 would have increased by approximately 14%.
Station operating expenses (excluding depreciation and amortization) for the
year ended December 31, 1993 were $109,601,000 as compared to $81,707,000 for
the year ended December 31, 1992, an increase of approximately 34%. The increase
was due principally to the above acquisitions, expenses associated with higher
revenues and higher programming expenses. On a pro forma basis, assuming the
above acquisitions had occurred as of the beginning of 1992, station operating
expenses in 1993 would have increased by approximately 12%.
Depreciation and amortization expense for the year ended December 31, 1993
was $38,853,000 as compared to $28,926,000 for the year ended December 31, 1992,
an increase of approximately $9,927,000 or 34%. The increase was due to
depreciation and amortization expense associated with the above acquisitions,
partially offset by lower depreciation and amortization expense at the Company's
other radio stations.
Operating income for the year ended December 31, 1993 was $51,232,000, as
compared to $35,415,000 for the year ended December 31, 1992, an increase of
approximately 45%. The increase was due principally to improved results at the
Company's radio stations.
Net financing expense (defined as interest expense less interest income) for
the year ended December 31, 1993 was $36,291,000 as compared to $38,238,000 for
the year ended December 31, 1992, a decrease of approximately 5%. The decrease
was due principally to lower interest rates during 1993.
27
<PAGE>
Net earnings before extraordinary items for the year ended December 31, 1993
was $14,335,000 ($0.23 per share) as compared to a net loss of $9,432,000 ($0.20
per share) for the year ended December 31, 1992, an increase of approximately
$23,767,000. As a result of the sale of shares of Class A Common Stock in
February 1992 through an initial public offering, the Company recorded in 1992 a
non-recurring charge of approximately $6,503,000, resulting from the issuance in
1990 of Common Stock to management.
In 1992, the Company recorded extraordinary charges of approximately
$12,318,000, including the write-off of deferred financing costs of
approximately $7,416,000 as a result of (a) the redemption of all of the
remaining approximately $98,000,000 principal amount of the Company's 14.25%
Subordinated Discount Debentures, and (b) the refinancing of the Company's then
existing bank credit agreement.
LIQUIDITY AND CAPITAL RESOURCES
For the first six months of 1995, net cash flow from operating activities
was approximately $38,068,000, as compared to $32,617,000 for the first six
months of 1994, an increase of approximately $5,451,000. The increase was
principally due to higher net income. The operating cash flow was used
principally to repay debt (approximately $20 million) and purchase approximately
473,000 shares of treasury stock (approximately $13.1 million). During the first
six months of 1995, the Company also borrowed approximately $50 million under
the Credit Agreement to finance the purchase of radio station KLUV-FM in
Dallas/Ft. Worth.
For the year ended December 31, 1994, net cash flow from operating
activities was approximately $73,944,000 as compared to $42,781,000 for the year
ended December 31, 1993, an increase of approximately $31,163,000, or 73%. The
increase was principally due to higher earnings in 1994, partially offset by
higher working capital requirements. During 1994, the Company borrowed
approximately $200 million under its then existing credit agreement to finance
the acquisition and working capital of radio stations KRTH-FM, WPGC-AM/FM and
WXYT-AM. The net cash flow from operating activities of approximately $73.9
million was used principally to repay debt and purchase treasury stock.
The Company's primary needs for capital are to make acquisitions of radio
stations and to cover interest payments on its indebtedness. The Company's radio
stations do not typically require substantial capital expenditures. The Company
expects its operations to generate sufficient cash to meet its capital
expenditure and debt service requirements.
On December 22, 1994, the Company and its subsidiaries amended and restated
the Credit Agreement, which provides for aggregate borrowings of up to $700
million, including an acquisition facility of $250 million and a revolving
credit facility of $150 million (which may be used to finance acquisitions of
radio stations). Approximately $332 million of borrowings under the Credit
Agreement were used to refinance the Company's existing debt. Pursuant to an
amendment to the Credit Agreement dated as of June 23, 1995, the Company's term
loans were converted into a reducing revolving credit facility, under which
amounts may be repaid and reborrowed from time to time for general corporate
purposes, including to finance acquisitions of radio stations. The lenders'
commitments under this reducing revolving credit facility and under the Credit
Agreement's acquisition facility will periodically be permanently reduced
starting in September 1998. As a result of this amendment, all of the amounts
outstanding under the Credit Agreement from time to time may be repaid and
reborrowed to finance acquisitions of radio stations. The Credit Agreement
permits voluntary prepayments in whole or in part at any time, and it requires
mandatory prepayments under specified circumstances. As of June 30, 1995, $138
million was available under the Credit Agreement for general corporate purposes,
including acquisitions of radio stations, investments and repurchases of Class A
Common Stock, and an additional $200 million was available solely for
acquisitions of radio stations.
28
<PAGE>
The Credit Agreement contains various covenants and restrictions that impose
certain limitations on the Company and its subsidiaries, including, among
others, limitations on the incurrence of additional indebtedness by the Company
or its subsidiaries, the payment of cash dividends or other distributions, the
redemption or repurchase of the capital stock of the Company, the making of
investments and acquisitions and other similar limitations.
Under the terms of a Security Agreement among the Company, its subsidiaries,
and one of the Company's lenders acting as collateral agent, substantially all
of the assets of the Company and its subsidiaries, as well as the stock of the
Company's subsidiaries, are pledged to secure borrowings under the Credit
Agreement.
The Company has registered with the Commission, pursuant to a shelf
registration statement, $500 million in aggregate principal amount of Debt
Securities. The Company may issue Debt Securities from time to time, subject,
among other things, to compliance with applicable limitations under the Credit
Agreement. See "The Company--Recent Developments--Debt Registration Statement."
The Company expects that the net proceeds from the Offerings will be used to
finance future acquisitions of broadcasting properties, including the Alliance
Acquisition, and for general corporate purposes. Pending such application, the
Company expects to use such net proceeds to reduce borrowings under the
acquisition and revolving credit facilities of the Credit Agreement. The Company
anticipates that the amounts repaid with such net proceeds eventually will be
reborrowed in order to finance such future acquisitions, including the Alliance
Acquisition, subject to the consent of the lenders under the Credit Agreement to
such acquisitions, and for general corporate purposes. See "Use of Proceeds."
29
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Common Stock as of September 1, 1995 (as adjusted to give
effect to the sale of shares of Class A Common Stock in the Offerings), by (1)
each person known to the Company to own beneficially more than 5% of any class
of Common Stock, (2) each director of the Company, (3) each executive officer of
the Company and (4) all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMMON STOCK COMMON STOCK COMMON STOCK
-------------------------- --------------------------- --------------------------
PERCENT PERCENT PERCENT
NAME SHARES (1) OF CLASS (1) SHARES (1) OF CLASS **(1) SHARES (1) OF CLASS (1)
- ----------------------------------- ---------- ------------ ---------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gerald Carrus (2).................. -- -- 2,749,518 30.8% -- --
Michael A. Wiener (2).............. -- -- 2,389,708(3) 26.7% -- --
Mel Karmazin (2)................... 368,850(4) * 3,797,944(5) 42.5% -- --
Farid Suleman (2).................. 236,462(6) * -- -- --
Steven A. Lerman................... -- -- -- -- -- --
Alan R. Batkin..................... 23,624(7) * -- -- -- --
Jeffrey Sherman.................... 3,000(8) -- -- -- -- --
James L. Singelton................. -- -- -- -- -- --
James A. Stern..................... -- -- -- -- -- --
Lehman Investors (9)............... -- -- -- -- 14,147,460(10) 100%
The Putnam Advisory Company, Inc.
(11)............................. 710,363 1.4% -- -- -- --
Putnam Investment Management, Inc.
(11)............................. 5,294,536 10.7% -- -- -- --
College Retirement Equities Fund
(12)............................. 2,868,975 5.8% -- -- -- --
Nicholas-Applegate Capital
Management (13).................... 2,588,483 5.2%
All directors and executive
officers as a group (9 persons).. 631,936 1.3% 8,937,170 100.0%
<CAPTION>
PERCENT OF
TOTAL
VOTING
NAME POWER (1)
- ----------------------------------- ----------
<S> <C>
Gerald Carrus (2).................. 26.0%
Michael A. Wiener (2).............. 22.6%
Mel Karmazin (2)................... 27.4%
Farid Suleman (2).................. *
Steven A. Lerman................... --
Alan R. Batkin..................... *
Jeffrey Sherman.................... --
James L. Singelton................. --
James A. Stern..................... --
Lehman Investors (9)............... 11.9%
The Putnam Advisory Company, Inc.
(11)............................. *
Putnam Investment Management, Inc.
(11)............................. 5.0%
College Retirement Equities Fund
(12)............................. 2.7%
Nicholas-Applegate Capital
Management (13).................... 2.4%
All directors and executive
officers as a group (9 persons).. 64.3%
</TABLE>
- ------------
* Less than 1%
** Assumes the exercise of all options and deferred shares for the purchase of
Class B Common Stock beneficially owned. Such percentages for Messrs. Carrus
and Wiener would be 49.5% and 43.1%, respectively, assuming such options and
deferred shares are not exercised.
(1) The information as to beneficial ownership is based on information filed
with the Commission or furnished to the Company by the beneficial owners.
As used in the Table, "beneficial ownership" means the sole or shared power
to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to a security (i.e., the power to dispose of,
or to direct the disposition of, a security). For purposes of this Table, a
person is deemed to have "beneficial ownership" of any security that such
person has the right to acquire within 60 days after September 1, 1995,
except that "beneficial ownership" does not include the number of shares of
Class A Common Stock issuable upon conversion of Class B Common Stock or
Class C Common Stock, even though shares of Class B Common Stock and Class
C Common Stock are freely convertible into Class A Common Stock.
(2) The address of each person is Infinity Broadcasting Corporation, 600
Madison Avenue, New York, New York 10022.
(3) Includes 2,224,707 shares as to which Mr. Wiener has sole voting and
investment power.
(4) Includes options and warrants exercisable for 132,872 shares of Class A
Common Stock.
(5) Includes options and deferred shares exercisable for 3,387,139 shares of
Class B Common Stock.
(6) Includes options exercisable for 188,250 shares of Class A Common Stock.
(7) Includes options exercisable for 20,250 shares of Class A Common Stock,
1,687 shares as to which Mr. Batkin has sole voting and investment power
and 1,687 shares as to which Mr. Batkin has shared voting and investment
power.
(8) Includes options exercisable for 3,000 shares of Class A Common Stock.
(9) The general partners of the limited partnerships included in the Lehman
Investors are subsidiaries of Lehman Brothers Holdings Inc. The address for
each of the Lehman Investors is Three World Financial Center, New York, New
York 10285.
(10) Includes warrants exercisable for 13,403,289 shares of Class C Common
Stock.
(11) Includes Class A Common Stock beneficially owned by the Putnam Advisory
Company, Inc. ("PAC") and Putnam Investment Management, Inc. ("PIM") as
reported to the Company on January 23, 1995. PAC and PIM are both
wholly-owned subsidiaries of Putnam Investments, Inc. ("PI"), a
wholly-owned subsidiary of Marsh & McLennan Companies, Inc. ("M&MC"). Of
the 710,363 shares of Class A Common Stock beneficially owned by PAC,
552,026 shares are owned with shared voting power and all are owned with
shared dispositive power. Of the 4,584,173 shares of Class A Common Stock
beneficially owned by PIM, all are
(footnotes continued on following page)
30
<PAGE>
(footnotes continued from preceding page)
owned with shared dispositive power. M&MC disclaims beneficial ownership of
all shares of Class A Common Stock beneficially owned by PAC and PIM. The
address of PAC, PIM and PI is One Post Office Square, Boston, Massachusetts
02109 and of M&MC is 1166 Avenue of the Americas, New York, New York 10036.
(12) Includes Class A Common Stock beneficially owned by College Retirement
Equities Fund ("CREF") as reported to the Company in June, 1995. The
address of CREF is 730 Third Avenue, New York, New York 10017.
(13) Of the 2,588,483 shares of Class A Common Stock beneficially owned by
Nicholas-Applegate Capital Management ("Nicholas-Applegate"), all of such
shares are owned with sole dispositive power and 2,052,478 shares are owned
with sole voting power. Nicholas-Applegate does not have any voting power
with respect to 536,005 of such shares. The address of Nicholas-Applegate
is 600 West Broadway, Floor 29, San Diego, California 92101.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 200,000,000 shares of
Class A Common Stock, $.002 par value, 40,998,405 of which were issued and
outstanding at September 1, 1995; 17,500,000 shares of Class B Common Stock,
$.002 par value, 5,550,031 of which were issued and outstanding at September 1,
1995; 30,000,000 shares of Class C Common Stock, $.002 par value, 744,171 of
which were issued and outstanding at September 1, 1995; and 1,000,000 shares of
Preferred Stock, $.01 par value, none of which was issued or outstanding at such
date. Upon completion of the Offerings, the Company will have outstanding
49,498,405 shares of Class A Common Stock, 5,550,031 shares of Class B Common
Stock and 744,171 shares of Class C Common Stock. In addition, the Company will
have reserved for issuance (i) 23,084,630 shares of Class A Common Stock upon
the conversion of Class B or Class C Common Stock, (ii) an aggregate of 48,659
shares of Class A Common Stock upon the exercise of warrants exercisable for
Class A Common Stock, (iii) 6,190,337 shares of Class A Common Stock and
1,181,250 shares of Class B Common Stock under the Company's Stock Option Plan,
(iv) 263,250 shares of Class A Common Stock and 281,253 shares of Class B Common
Stock under the Company's Deferred Share Plan, (v) an aggregate of 2,908,960
shares of Class B Common Stock upon the exercise of options exercisable for
Class B Common Stock and (vi) an aggregate of 13,403,289 shares of Class C
Common Stock upon the exercise of Lehman Warrants. See "Description of Capital
Stock--Warrants and Options."
COMMON STOCK
Dividends. Holders of shares of Common Stock are entitled to receive such
dividends as may be declared by the Company's Board of Directors out of funds
legally available for such purpose. No dividends may be declared or paid in cash
or property on any share of any class of Common Stock, however, unless
simultaneously the same dividend is declared or paid on each share of the other
classes of Common Stock. In the case of any stock dividend, holders of Class A
Common Stock are entitled to receive the same percentage dividend (payable in
shares of Class A Common Stock) as the holders of Class B Common Stock receive
(payable in shares of Class B Common Stock) or the holders of Class C Common
Stock receive (payable in shares of Class C Common Stock). The payment of
dividends is currently restricted by the Credit Agreement and by the
Subordinated Indenture. See "Price Range of Common Stock and Dividends."
Voting Rights. Holders of shares of Common Stock vote as a single class on
all matters submitted to a vote of the stockholders, with each share of Class A
and Class C Common Stock entitled to one vote and each share of Class B Common
Stock entitled to ten votes, except (i) for the election of directors, (ii) with
respect to any proposed "going private" transaction between the Company and any
Principal Stockholder, and (iii) as otherwise provided by law.
In the election of directors, the holders of Class A Common Stock, voting as
a separate class, are entitled to elect two of the Company's nine directors and
holders of the Class C Common Stock, voting as a separate class, are also
entitled to elect two of the Company's nine directors. The holders of
31
<PAGE>
Common Stock, voting as a single class with each share of Class A and Class C
Common Stock entitled to one vote and each share of Class B Common Stock
entitled to ten votes, are entitled to elect the remaining five directors.
Holders of Common Stock are not entitled to cumulative votes in the election of
directors.
In the event that all of the issued and outstanding shares of Class C Common
Stock are converted into shares of Class A Common Stock in accordance with the
terms of the Company's Restated Certificate of Incorporation (see "Common
Stock--Other Provisions"), the holders of the remaining shares of the
outstanding classes of Common Stock, voting as a single class, will be entitled
to elect the directors previously elected by the holders of the Class C Common
Stock.
The holders of the Common Stock vote as a single class with respect to any
proposed "going private" transaction with a Principal Stockholder, with each
share of each class of Common Stock entitled to one vote per share.
Under Delaware law, the affirmative vote of the holders of a majority of the
outstanding shares of any class of common stock is required to approve, among
other things, a change in the designations, preferences and limitations of the
shares of such class of common stock.
Liquidation Rights. Upon liquidation, dissolution, or winding-up of the
Company, the holders of Class A Common Stock are entitled to share ratably with
the holders of Class B and Class C Common Stock in all assets available for
distribution after payment in full of creditors.
Other Provisions. Each share of Class B Common Stock is convertible, at the
option of its holder, into one share of Class A Common Stock at any time. One
share of Class B Common Stock converts automatically into one share of Class A
Common Stock upon its sale or other transfer to a party unaffiliated with a
Principal Stockholder or, in the event of a transfer to an affiliated party,
upon the death of the transferor. Each share of Class C Common Stock is
convertible, at the option of its holder, into one share of Class A Common Stock
at any time. One share of Class C Common Stock converts automatically into one
share of Class A Common Stock upon its sale or other transfer to a party
unaffiliated with the Lehman Investors. In addition, all outstanding shares of
Class C Common Stock convert automatically into an equal number of shares of
Class A Common Stock upon the date on which the Lehman Investors no longer own
at least 10% of the shares of all classes of Common Stock on a fully diluted
basis. The holders of Common Stock are not entitled to preemptive or
subscription rights. The shares of Common Stock presently outstanding are, and
the shares of Class A Common Stock offered hereby will be, upon issuance,
validly issued, fully paid and nonassessable. In any merger, consolidation or
business combination, the consideration to be received per share by holders of
Class A Common Stock must be identical to that received by holders of Class B
and Class C Common Stock, except that in any such transaction in which shares of
Common Stock are distributed, such shares may differ as to voting rights to the
extent that voting rights now differ among the classes of Common Stock. No class
of Common Stock may be subdivided, consolidated, reclassified or otherwise
changed unless concurrently the other classes of Common Stock are subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.
PREFERRED STOCK
The 1,000,000 authorized and unissued shares of Preferred Stock may be
issued with such designations, voting powers, preferences, and relative,
participating, optional, or other special rights, and qualifications,
limitations and restrictions of such rights, as the Company's Board of Directors
may authorize, including, but not limited to: (i) the distinctive designation of
each series and the number of shares that will constitute such series; (ii) the
voting rights, if any, of shares of such series; (iii) the dividend rate on the
shares of such series, any restriction, limitation or condition upon the payment
of such dividends, whether dividends shall be cumulative, and the dates on which
dividends are payable; (iv) the prices at which, and the terms and conditions on
which, the shares of such series may be
32
<PAGE>
redeemed, if such shares are redeemable; (v) the purchase or sinking fund
provisions, if any, for the purchase or redemption of shares of such series;
(vi) any preferential amount payable upon shares of such series in the event of
the liquidation, dissolution, or winding-up of the Company or the distribution
of its assets; and (vii) the prices or rates of conversion at which, and the
terms and conditions on which, the shares of such series may be converted into
other securities, if such shares are convertible. Although the Company has no
present intention to issue shares of Preferred Stock, the issuance of Preferred
Stock, or the issuance of rights to purchase such shares, could discourage an
unsolicited acquisition proposal.
WARRANTS AND OPTIONS
In September 1990, the Company issued warrants to purchase shares of Class C
Common Stock to the Lehman Investors for a net purchase price of approximately
$22.2 million, and the Company issued additional warrants to purchase shares of
Class C Common Stock to the Lehman Investors in September 1991 for a purchase
price of approximately $26.1 million (all such warrants issued in these two
transactions, the "Lehman Warrants"). The outstanding Lehman Warrants will
entitle the Lehman Investors to purchase an aggregate of 13,403,289 shares of
Class A Common Stock at an exercise price of $.00178 per share.
In June 1988, the Company issued options to Mr. Karmazin and in September
1991, the Company issued warrants to Mr. Karmazin (such options and warrants,
collectively, the "Karmazin Warrants"). The currently outstanding options
constituting the Karmazin Warrants entitle Mr. Karmazin to purchase an aggregate
of 2,908,960 shares of Class B Common Stock at an exercise price of $.0178 per
share, and the currently outstanding warrants constituting the Karmazin Warrants
entitle Mr. Karmazin to purchase an aggregate of 48,659 shares of Class A Common
Stock at an exercise price of $.0006 per share. In addition, in April 1993,
March 1994 and January 1995, in accordance with Mr. Karmazin's employment
agreement with the Company, the Company issued options and granted rights to
receive deferred shares to Mr. Karmazin under the Company's Stock Option and
Deferred Share Plans. These options and rights to receive deferred shares
entitle Mr. Karmazin to purchase an aggregate of 84,213 shares of Class A Common
Stock at an exercise price of $17.00 per share and 168,750, 112,500, 177,126 and
19,803 shares of Class B Common Stock at an exercise price of $6.17, $17.00,
$21.08 and $.002 per share, respectively.
The Company has reserved 48,659 shares of Class A Common Stock for issuance
upon the exercise of a portion of the Karmazin Warrants, 2,908,960 shares of
Class B Common Stock for issuance upon the exercise of the other Karmazin
Warrants and 13,403,289 shares of Class A Common Stock for issuance upon
exercise of the Lehman Warrants. All such warrants contain provisions that
prevent dilution of the rights of the holders of such warrants, including
provisions for adjusting the number of shares of common stock covered by such
warrants and the per share price of those shares in the event of the declaration
of any dividend on the Common Stock in shares of Common Stock or any
subdivision, combination or reclassification of the Common Stock. In addition,
the Company has reserved 6,453,587 shares of Class A Common Stock and 1,462,503
shares of Class B Common Stock for issuance under the Company's Stock Option and
Deferred Share Plans.
TRANSFER AGENT
Harris Trust Company of New York is the Transfer Agent and Registrar for the
Class A Common Stock.
FOREIGN OWNERSHIP
The Company's Restated Certificate of Incorporation restricts the ownership,
voting and transfer of the Company's capital stock, including the Common Stock,
in accordance with the Communications
33
<PAGE>
Act and the rules of the FCC, to prohibit ownership of more than 25% of the
Company's outstanding capital stock (or more than 25% of the voting rights it
represents) by or for the account of aliens or corporations otherwise subject to
domination or control by aliens. Such Certificate also prohibits any transfer of
the Company's capital stock that would cause the Company to violate this
prohibition. In addition, the Certificate authorizes the Board of Directors of
the Company to adopt such provisions as it deems necessary to enforce these
prohibitions.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the Offerings, the Company will have outstanding
49,498,405 shares of Class A Common Stock, 5,550,031 shares of Class B Common
Stock and 744,171 shares of Class C Common Stock. Each share of Class B Common
Stock is convertible at the option of its holder into one share of Class A
Common Stock at any time, and each share automatically converts into one share
of Class A Common Stock upon the sale or other transfer to a party unaffiliated
with a Principal Stockholder or, if shares have been transferred to an
affiliated party, upon the death of the transferor of such shares. Each share of
Class C Common Stock is convertible, at the option of its holder, into one share
of Class A Common Stock at any time. One share of Class C Common Stock converts
automatically into one share of Class A Common Stock upon its sale or other
transfer to a party unaffiliated with the Lehman Investors. In addition, all
outstanding shares of Class C Common Stock convert automatically into an equal
number of shares of Class A Common Stock on the date on which the Lehman
Investors no longer own at least 10% of the shares of all classes of Common
Stock of the Company on a fully diluted basis. See "Description of Capital
Stock--Common Stock." The 8,500,000 shares of Class A Common Stock sold in the
Offerings will be freely tradeable without restriction or further registration
under the Securities Act, except by affiliates of the Company.
284,537 shares of Class A Common Stock, 5,550,031 shares of Class B Common
Stock and 14,147,460 shares of Class C Common Stock beneficially owned by the
Principal Stockholders and the Lehman Investors (including 48,659 shares of
Class A Common Stock and 13,403,289 shares of Class C Common Stock issuable upon
exercise of the Lehman Warrants and a portion of the Karmazin Warrants) are
"restricted" shares as defined in Rule 144. All of these "restricted" shares
(other than the shares issuable upon exercise of Lehman Warrants and Karmazin
Warrants to the extent that, under Rule 144, such shares are not deemed to have
been acquired when the Lehman Warrants and Karmazin Warrants were acquired) have
been beneficially owned for at least two years by existing stockholders and may
be sold in the open market pursuant to Rule 144, subject, in the case of the
shares of Class C Common Stock issuable to the Lehman Investors upon the
exercise of Lehman Warrants, to certain conditions which are likely to be
satisfied and, in the case of all such "restricted" shares, to the restrictions
of such Rule with regard to sales by affiliates. In general, under Rule 144, an
affiliate of the Company may sell within any three-month period a number of
shares that does not exceed the greater of 1% of the then outstanding shares of
Class A Common Stock or the average weekly trading volume of the Class A Common
Stock on all national securities exchanges and/or reported through the automated
quotation system of registered securities associations during the four calendar
weeks preceding such sale. In addition, sales under Rule 144 may be made only
through unsolicited "broker's transactions" or directly with a market maker and
are subject to various other conditions, including the availability of certain
public information about the Company for 90 days.
6,502,246 shares of Class A Common Stock and 4,371,463 shares of Class B
Common Stock that have been reserved for issuance under the Company's Stock
Option and Deferred Share Plans and the Karmazin Warrants, including 84,213
shares of Class A Common Stock and 3,387,139 shares of Class B Common Stock
issuable to Mr. Karmazin upon exercise of options and issuance of deferred
shares, have been registered under the Act and will be freely tradeable upon
issuance and, in the case of shares of Class B Common Stock, conversion into
Class A Common Stock, without restriction or further
34
<PAGE>
registration under the Securities Act, except that shares held by affiliates of
the Company must be sold subject to the applicable restrictions of Rule 144
under the Securities Act.
The Company and the Principal Stockholders have each agreed not to sell or
grant any option for the sale of, or otherwise dispose of, any Common Stock, or
any securities convertible into or exchangeable or exercisable for shares of
Common Stock, other than the shares of Common Stock that may be offered by the
Company in the Offerings and certain other limited exceptions, and not to file
or request to be filed, as the case may be, any registration statement with
respect to Common Stock, for a period of 90 days after the date of this
Prospectus without the consent of the Representatives. In addition, the Lehman
Investors have each agreed not to effect any public sale or distribution of any
shares of Common Stock, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, for a period of 90 days after the date
of this Prospectus without the consent of the Representatives.
The Stockholders' Agreement among the Company, the Principal Stockholders
and the Lehman Investors (the "Stockholders' Agreement") provides that each of
the Principal Stockholders has the right to require the Company to prepare and
file one registration statement under the Securities Act with respect to their
shares of Common Stock, and the Company is required to use its best efforts to
effect such registration, subject to certain conditions and limitations. The
Stockholders' Agreement also provides that the Lehman Investors have one
remaining right to require the Company to prepare and file a registration
statement under the Securities Act with respect to their shares of Common Stock,
and the Company is required to use its best efforts to effect such registration,
subject to certain conditions and limitations. The Stockholders' Agreement also
provides that in the event the Company proposes to register any of its
securities under the Securities Act, whether or not for its own account, at any
time or times, each of the Principal Stockholders and the Lehman Investors shall
be entitled, with certain exceptions, to include their shares of Common Stock in
such registration unless the managing underwriters of such offering exclude for
marketing reasons some or all of such shares from such registration.
The Company can make no prediction as to the effect, if any, that sales of
shares of the Common Stock, or the availability of shares for future sale, will
have on the market price of the Class A Common Stock prevailing from time to
time. Sales of substantial amounts of Common Stock (including shares issued upon
the exercise of warrants or options) in the public market, or the perception
that such sales could occur, could depress the prevailing market price for the
Class A Common Stock. Such sales may also make it more difficult for the Company
to sell equity securities or equity-related securities in the future at a time
and price which it deems appropriate.
35
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"U.S. Purchase Agreement"), the Company has agreed to sell to each of the
underwriters named below (the "U.S. Underwriters"), and each of the U.S.
Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman, Sachs & Co., Alex. Brown & Sons Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation and Smith Barney Inc. are acting as
representatives (the "U.S. Representatives"), severally has agreed to purchase,
the aggregate number of shares of Class A Common Stock set forth opposite its
name below.
<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
----------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................................................... 645,000
Goldman, Sachs & Co.............................................................. 645,000
Alex. Brown & Sons Incorporated.................................................. 645,000
Donaldson, Lufkin & Jenrette Securities Corporation.............................. 645,000
Smith Barney Inc................................................................. 645,000
Allen & Company Incorporated..................................................... 275,000
CS First Boston Corporation...................................................... 275,000
Bear, Stearns & Co. Inc.......................................................... 275,000
Chase Securities, Inc............................................................ 275,000
Lehman Brothers Inc.............................................................. 275,000
NatWest Securities Limited....................................................... 275,000
PaineWebber Incorporated......................................................... 275,000
Salomon Brothers Inc............................................................. 275,000
Schroder Wertheim & Co. Incorporated............................................. 275,000
UBS Securities Inc............................................................... 275,000
S.G.Warburg & Co. Inc............................................................ 275,000
Wasserstein Perella Securities, Inc.............................................. 275,000
Moran & Associates, Inc. Securities Brokerage.................................... 275,000
---------
Total................................................................ 6,800,000
---------
---------
</TABLE>
The Company has also entered into a purchase agreement (the "International
Purchase Agreement" and, together with the U.S. Purchase Agreement, the
"Purchase Agreements") with Merrill Lynch International Limited, Goldman Sachs
International, Alex. Brown & Sons Incorporated, Donaldson, Lufkin & Jenrette
Securities Corporation and Smith Barney Inc., acting as representatives (the
"International Representatives" and, together with the U.S. Representatives, the
"Representatives"), and certain other underwriters outside the United States and
Canada (collectively, the "International Underwriters" and, together with the
U.S. Underwriters, the "Underwriters"). Subject to the terms and conditions set
forth in the International Purchase Agreement, the Company has agreed to sell to
the International Underwriters, and the International Underwriters severally
have agreed to purchase, an aggregate of 1,700,000 shares of Class A Common
Stock.
In each Purchase Agreement, the Underwriters named therein have agreed,
subject to the terms and conditions set forth in such Purchase Agreement, to
purchase all of the shares of Class A Common Stock being sold pursuant to such
Purchase Agreement if any of the shares of Class A Common Stock being sold
pursuant to such Purchase Agreement are purchased. Under certain circumstances,
under the Purchase Agreements, the commitments of non-defaulting Underwriters
may be increased. Each Purchase Agreement provides that the Company is not
obligated to sell, and the Underwriters named therein are not obligated to
purchase, the shares of Class A Common Stock under the terms of the Purchase
Agreement unless all of the shares of Class A Common Stock to be sold pursuant
to the Purchase Agreements are contemporaneously sold.
36
<PAGE>
The U.S. Representatives have advised the Company that the U.S. Underwriters
propose to offer the shares of Class A Common Stock offered hereby to the public
initially at the public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in excess
of $.68 per share of Class A Common Stock, and that the U.S. Underwriters may
allow, and such dealers may reallow, a discount not in excess of $.10 per share
of Class A Common Stock on sales to certain other dealers. After the initial
public offering, the public offering price, concession and discount may be
changed.
The public offering price per share of Class A Common Stock and the
underwriting discount per share of Class A Common Stock are identical for both
Offerings.
The Company has granted to the U.S. Underwriters and the International
Underwriters options to purchase up to an aggregate of 1,020,000 and 255,000
shares of Class A Common Stock, respectively, at the initial public offering
price, less the underwriting discount. Such options, which will expire 30 days
after the date of this Prospectus, may be exercised solely to cover
over-allotments. To the extent that the Underwriters exercise such options, each
of the Underwriters will have a firm commitment, subject to certain conditions,
to purchase approximately the same percentage of the option shares that the
number of shares to be purchased initially by that Underwriter is of the
8,500,000 shares of Class A Common Stock initially purchased by the
Underwriters.
The Company has been informed that the Underwriters have entered into an
agreement (the "Intersyndicate Agreement") providing for the coordination of
their activities. Pursuant to the Intersyndicate Agreement, the U.S.
Underwriters and the International Underwriters are permitted to sell shares of
Class A Common Stock to each other.
The Company and the Principal Stockholders have each agreed not to sell or
grant any option for the sale of, or otherwise dispose of, any Common Stock, or
any securities convertible into or exchangeable or exercisable for shares of
Common Stock, other than the shares of Common Stock that may be offered by the
Company in the Offerings and certain other limited exceptions, and not to file
or request to be filed, as the case may be, any registration statement with
respect to Common Stock, for a period of 90 days after the date of this
Prospectus without the consent of the Representatives. In addition, the Lehman
Investors have each agreed not to effect any public sale or distribution of any
shares of Common Stock, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, for a period of 90 days after the date
of this Prospectus without the consent of the Representatives.
The Company has been informed that, under the terms of the Intersyndicate
Agreement, the U.S. Underwriters and any dealer to whom they sell shares of
Class A Common Stock will not offer to sell or resell shares of Class A Common
Stock to persons who are non-U.S. or non-Canadian persons or to persons they
believe intend to resell to persons who are non-U.S. or non-Canadian persons,
and the International Underwriters and any bank, broker or dealer to whom they
sell shares of Class A Common Stock will not offer to resell shares of Class A
Common Stock to U.S. persons or to Canadian persons or to persons they believe
intend to resell to U.S. persons or to Canadian persons, except in the case of
transactions pursuant to the Intersyndicate Agreement which, among other things,
permits the Underwriters to purchase from each other and to offer to resell such
number of shares of Class A Common Stock as the selling Underwriter or
Underwriters and the purchasing Underwriter or Underwriters may agree.
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments the Underwriters may be required to make in respect thereof.
Alliance is an affiliate of Goldman, Sachs & Co. Upon consummation of the
Alliance Acquisition, Goldman, Sachs & Co. may be deemed to have received more
than 10% of the net proceeds of the Offerings. See "Use of Proceeds." The
Offerings are being made pursuant to the provisions of paragraph (8) of Article
III, Section 44 of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD") regarding participation by an NASD member
in a public
37
<PAGE>
offering of an issuer's securities where more than 10% of the net offering
proceeds are intended to be paid to members participating in the distribution or
associated or affiliated persons of such members.
The Lehman Investors, who hold 100% of the Class C Common Stock and,
therefor, are entitled to elect two of the Company's nine directors, are certain
merchant banking partnerships affiliated with Lehman Brothers. See "Principal
Stockholders." Lehman Brothers is an NASD member which is participating in the
distribution of the Class A Common Stock. Accordingly, the underwriting
arrangements for the Offerings will comply with the requirements of Schedule E
to the By-laws of the NASD regarding an NASD member firm's participation in
distributing its affiliate's securities. As of the date of filing of the
Registration Statement (as defined in "Available Information") of which this
Prospectus is a part and as of the effective date of the Registration Statement,
there existed a bona fide independent market (within the meaning of Schedule E
to the By-laws of the NASD) with respect to the Class A Common Stock.
LEGAL MATTERS
The validity of the shares of Class A Common Stock being offered by this
Prospectus will be passed upon for the Company by Debevoise & Plimpton, 875
Third Avenue, New York, New York 10022. Certain legal matters will be passed
upon for the Underwriters by Simpson Thacher & Bartlett (a partnership which
includes professional corporations), 425 Lexington Avenue, New York, New York
10017.
EXPERTS
The consolidated financial statements and consolidated financial statement
schedule of Infinity Broadcasting Corporation and subsidiaries as of December
31, 1994 and 1993, and for each of the years in the three-year period ended
December 31, 1994, have been incorporated by reference herein and in the
registration statement in reliance on the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
To the extent that KPMG Peat Marwick LLP audits and reports on financial
statements of Infinity Broadcasting Corporation and subsidiaries issued at
future dates, and consents to the use of their report thereon, such financial
statements also will be incorporated by reference in the Registration Statement
in reliance upon their report and said authority.
The consolidated financial statements of Alliance Broadcasting, L.P. as of
December 31, 1993 and 1994 and for each of the three years in the period ended
December 31, 1994, incorporated herein and elsewhere in the Registration
Statement by reference to the Form 8-K, have been so incorporated in reliance on
the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and
at the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, Suite 1300, New York, New York 10048 and Citicorp Center, 14th Floor,
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. In addition, such reports, proxy statements and other
information can be inspected at the offices of The New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
38
<PAGE>
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments thereto, the "Registration Statement") under
the Securities Act with respect to the shares of Class A Common Stock offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
omits certain information contained in the Registration Statement as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company and the shares of Class A Common Stock offered hereby,
reference is made to the Registration Statement and the exhibits and the
financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference:
1. the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (filed March 31, 1995);
2. the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995 (filed May 12, 1995);
3. the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995 (filed August 14, 1995), as amended on August 15, 1995;
4. the Company's Current Report on Form 8-K (filed September 27, 1995);
and
5. the description of the Class A Common Stock in the Company's
Registration Statement on Form 8-A (filed January 24, 1992), as amended by
Amendment No. 1 thereto (filed January 29, 1992).
All documents or reports filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the Offerings described herein shall be deemed to be incorporated
by reference into this Prospectus and to be a part of this Prospectus from the
date of filing of such document. Any statement contained herein, or in a
document all or a portion of which is incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference (other than
exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: Infinity
Broadcasting Corporation, 600 Madison Avenue, New York, New York 10022,
Attention: Secretary's Office (telephone: (212) 750-6400).
39
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE CLASS A
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. CLASS A COMMON STOCK NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.
-------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.................... 3
Risk Factors.......................... 7
The Company........................... 10
Use of Proceeds....................... 14
Price Range of Common Stock and
Dividend Policy..................... 15
Capitalization........................ 16
Pro Forma Combined Financial
Statements.......................... 17
Summary Consolidated Financial
Information......................... 23
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 26
Principal Stockholders................ 30
Description of Capital Stock.......... 31
Shares Eligible for Future Sale....... 34
Underwriting.......................... 36
Legal Matters......................... 38
Experts............................... 38
Available Information................. 38
Incorporation of Certain Documents by
Reference........................... 39
8,500,000 SHARES
[INFINITY LOGO]
BROADCASTING CORPORATION
CLASS A COMMON STOCK
-------------------
PROSPECTUS
-------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
ALEX. BROWN & SONS
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SMITH BARNEY INC.
OCTOBER 18, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Filed with the Securities and Exchange Commission pursuant to
Rule 424(b)(1) relating to Registration Statement No. 33-62711
PROSPECTUS
8,500,000 SHARES
INFINITY BROADCASTING CORPORATION
CLASS A COMMON STOCK
------------
All of the 8,500,000 shares of Class A Common Stock offered hereby are being
sold by Infinity Broadcasting Corporation ("Infinity" or the "Company"). Of the
8,500,000 shares of Class A Common Stock offered hereby, 1,700,000 shares are
being initially offered in an international offering outside the United States
and Canada by the International Underwriters (the "International Offering") and
6,800,000 shares are being offered concurrently in the United States and Canada
by the U.S. Underwriters (the "U.S. Offering" and, together with the
International Offering, the "Offerings"). The initial public offering price and
the underwriting discount per share are identical for both Offerings. See
"Underwriting."
The Company's authorized capital stock includes Class A Common Stock, Class B
Common Stock and Class C Common Stock (collectively, the "Common Stock") and
preferred stock. The rights of holders of Common Stock are identical, except
that each share of Class B Common Stock generally entitles its holder to ten
votes, whereas each share of Class A Common Stock and Class C Common Stock
entitles its holder to one vote. In addition, the holders of Class A Common
Stock, voting as a separate class, are entitled to elect two of the Company's
nine directors and the holders of Class C Common Stock, voting as a separate
class, are also entitled to elect two of the Company's nine directors. Each
share of Class B Common Stock converts automatically into one share of Class A
Common Stock upon its sale or other transfer to a party unaffiliated with
certain of the existing stockholders of the Company or, if shares have been
transferred to an affiliated party, upon the death of the transferor of such
shares. Each share of Class C Common Stock converts automatically into one share
of Class A Common Stock upon its sale or other transfer to a party unaffiliated
with certain of the existing stockholders of the Company and upon the occurrence
of certain other events. See "Description of Capital Stock."
The Class A Common Stock has been traded on the New York Stock Exchange under
the symbol "INF" since June 22, 1995 and was formerly traded on the NASDAQ
National Market System under the symbol "INFTA." On October 18, 1995, the last
reported sale price of the Class A Common Stock on the New York Stock Exchange
was $32 7/8 per share. See "Price Range of Common Stock and Dividend Policy."
SEE "RISK FACTORS" ON PAGE 7 FOR CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
<S> <C> <C> <C>
Per Share............................ $32.875 $1.12 $31.755
Total(3)............................. $279,437,500 $9,520,000 $269,917,500
</TABLE>
(1) The Company has agreed to indemnify the several U.S. Underwriters and
International Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses, estimated at $578,746, payable by the Company.
(3) The Company has granted the International Underwriters and the U.S.
Underwriters options, exercisable within 30 days after the date hereof, to
purchase up to an aggregate of 255,000 and 1,020,000 shares of Class A
Common Stock, respectively, at the initial price to public per share, less
the underwriting discount, solely to cover over-allotments, if any. If such
options are exercised in full, the total Price to Public, Underwriting
Discount and Proceeds to Company will be $321,353,125, $10,948,000 and
$310,405,125, respectively. See "Underwriting."
-------------------
The Class A Common Stock is being offered by the several Underwriters,
subject to prior sale, when, as and if issued to and accepted by them, and
subject to approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of certificates for the shares of Class A Common Stock will be
made in New York, New York on or about October 24, 1995.
-------------------
MERRILL LYNCH INTERNATIONAL LIMITED
GOLDMAN SACHS INTERNATIONAL
ALEX. BROWN & SONS
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SMITH BARNEY INC.
PARIBAS CAPITAL MARKETS SBC WARBURG UBS LIMITED
A DIVISION OF SWISS BANK CORPORATION
-------------------
The date of this Prospectus is October 18, 1995.
<PAGE>
[Insert corporate logo for Infinity Broadcasting Corporation]
----------------------------
[Insert corporate logos for individual radio stations]
----------------------------
- --------------------------------------------------------------------------------
IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER- ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere or incorporated by
reference in this Prospectus. All references in this Prospectus to shares and
per share data assume that the Underwriters' options to purchase from the
Company up to 1,275,000 additional shares of Class A Common Stock to cover
over-allotments will not be exercised in connection with the Offerings. If the
over-allotment options are exercised in full, 1,275,000 additional shares of
Class A Common Stock would be sold by the Company. All references in this
Prospectus to shares and per share data also (i) are as of September 1, 1995
unless otherwise specified and (ii) give effect to a three-for-two stock split
effected by the Company on August 16, 1993, a three-for-two stock split effected
by the Company on November 19, 1993 and a three-for-two stock split effected by
the Company on May 19, 1995. Except as otherwise indicated by the context,
references in this Prospectus to the "Company" include all subsidiaries of the
Company. Prospective investors should carefully consider the information set
forth under the heading "Risk Factors."
THE COMPANY
Infinity Broadcasting Corporation is currently the largest owner and
operator of radio stations in the United States. Infinity owns and operates 27
radio stations serving 13 of the nation's largest radio markets, including each
of the nation's top ten radio markets. Based on information contained in
Duncan's Radio Market Guide (1995 ed.), Infinity ranked first in total radio
revenues in 1994 among all companies owning radio stations in the United States.
The Company serves markets accounting for approximately $2.7 billion in radio
advertising revenues in 1994, representing approximately 27% of the total radio
advertising expenditures in the United States in 1994. The Company also has an
investment in and manages Westwood One, Inc. ("Westwood One"), the largest
producer and distributor of radio programs in the U.S.
Since Infinity acquired its first radio station in May 1973, it has expanded
by acquiring and developing underperforming stations in the nation's largest
media markets, where the greatest proportion of radio advertising dollars is
spent. The Company believes that its presence in large markets makes it
attractive to advertisers and that the overall diversity of its stations reduces
its dependence on any single station, local economy or advertiser.
In each of its markets, the Company attracts a specific demographic group by
targeting its program format and hiring popular on-air talent. The Company's
stations serve diverse target demographics attractive to advertisers through a
broad range of programming formats such as rock, oldies, news/talk, adult
contemporary, all-sports and country. The Company's overall programming strategy
includes acquiring significant on-air talent and broadcasting rights for sports
franchises.
The diversity of the Company's station and market characteristics, combined
with its acquisition and operating strategies, have enabled the Company to
achieve consistent growth in revenues and operating cash flow (as used in this
Prospectus, the term "operating cash flow" means operating income plus
depreciation and amortization). The Company's net revenues increased from
approximately $150.2 million for 1992 to approximately $274.1 million for 1994,
while operating cash flow grew from approximately $64.3 million for 1992 to
approximately $125.2 million for 1994.
On September 22, 1995, the Company entered into an agreement to acquire
radio stations KYNG-FM and KSNN-FM in Dallas, KFRC-FM, KFRC-AM and KYCY-FM in
San Francisco, WYCD-FM in Detroit and KYCW-FM in Seattle (the "Alliance
Stations") from various entities affiliated with Alliance Broadcasting, L.P.
("Alliance"), for $275 million, including working capital of at least $10
million (the "Alliance Acquisition"). The consummation of the Alliance
Acquisition is subject to certain conditions, including approval of the Federal
Communications Commission (the "FCC"), which will require the Company to obtain
temporary divestiture waivers by the FCC of certain
3
<PAGE>
regulations limiting the number of radio stations which may be owned or
controlled by one entity both nationally and in a particular market. See "The
Company--Recent Developments--The Alliance Acquisition." Certain legislation
currently pending before Congress would significantly relax or eliminate these
regulatory restrictions. See "The Company--Recent
Developments--Telecommunications Bills." There can be no assurance that such
legislation will be enacted or what form any ultimate legislation will take. The
Company continues to seek opportunities for expansion through the acquisition of
additional radio stations, although its ability to make further acquisitions may
be limited by the regulatory requirements referred to above.
The Company was incorporated in 1972 in Delaware. Its Class A Common Stock,
par value $.002 per share (the "Class A Common Stock"), is listed on the New
York Stock Exchange.
THE OFFERINGS
<TABLE>
<CAPTION>
<S> <C>
Class A Common Stock offered:
U.S. Offering.............................. 6,800,000 shares
International Offering..................... 1,700,000 shares
Total.................................. 8,500,000 shares
Shares of Common Stock to be
outstanding after the Offerings(1)......... 49,498,405 shares of Class A Common Stock(2)
5,550,031 shares of Class B Common Stock(2)
744,171 shares of Class C Common Stock(2)
55,792,607 shares of Common Stock(2)
77,270,501 shares of Common Stock after
exercise of options and warrants and issuance
of deferred shares(3)
Voting rights................................ The Class A, Class B and Class C Common Stock
vote as a single class with respect to all
matters submitted to a vote of stockholders,
with each share of the Class A and Class C
Common Stock entitled to one vote and each
share of Class B Common Stock entitled to ten
votes, except (i) in the election of
directors, with respect to which the holders
of Class A and Class C Common Stock are each
entitled to elect two of the Company's nine
directors by a class vote, (ii) with respect
to any "going private" transaction between
the Company and any of Mel Karmazin, Michael
A. Wiener and Gerald Carrus (see "Principal
Stockholders") and (iii) as otherwise
provided by law. Each class of Common Stock
is equivalent, except with respect to voting
rights. See "Description of Capital Stock."
Use of proceeds.............................. The Company expects to use the net proceeds
from the Offerings to finance future
acquisitions of broadcasting properties,
including the Alliance Acquisition, and for
general corporate purposes. Until such net
proceeds are applied for such purposes, the
Company expects to use such net proceeds to
reduce certain borrowings. See "Use of
Proceeds."
NYSE symbol.................................. INF
</TABLE>
- ------------
(1) If the Underwriters' overallotment options were exercised in full,
50,773,405 shares of Class A Common Stock would be outstanding after the
Offerings. See "Underwriting."
(2) Excludes shares of Class A Common Stock issuable upon future conversions of
shares of Class B or Class C Common Stock and any future exercise of stock
options or warrants or issuance of deferred shares. See "Description of
Capital Stock--Warrants and Options."
(3) Includes 21,477,894 shares of Common Stock issuable upon the exercise of
options and warrants and issuance of deferred shares. See "Description of
Capital Stock--Warrants and Options."
4
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA SIX MONTHS ENDED PRO FORMA
YEARS ENDED DECEMBER 31, YEAR ENDED JUNE 30, SIX MONTHS ENDED
------------------------------ DECEMBER 31, ------------------- JUNE 30,
1992 1993 1994 1994(1) 1994 1995 1995(1)
-------- -------- -------- ------------ -------- -------- ----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:(2)
Total revenues......... $171,843 $234,240 $313,359 $370,963 $134,036 $169,162 $194,532
Net revenues........... 150,230 204,522 274,120 322,393 116,877 146,891 168,008
Station operating
expenses excluding
depreciation and
amortization........ 81,707 109,601 143,249 177,405 63,863 78,116 94,163
-------- -------- -------- ------------ -------- -------- --------
Station operating
income excluding
depreciation and
amortization........ 68,523 94,921 130,871 144,988 53,014 68,775 73,845
Depreciation and
amortization........ 28,926 38,853 46,606 73,088 22,050 24,000 34,463
Corporate general and
administrative
expenses............ 4,182 4,836 5,633 5,633 2,419 2,667 2,667
-------- -------- -------- ------------ -------- -------- --------
Operating income....... 35,415 51,232 78,632 66,267 28,545 42,108 36,715
Interest expense....... 39,390 36,776 44,689 51,609 20,906 23,883 25,181
Net earnings (loss)
before extraordinary
items(3)............ (9,432) 14,335 33,213 13,928 7,526 17,700 11,009
Net earnings (loss) per
share before
extraordinary
items(3)............ $ (.20) $ .23 $ .49 $ .18 $ .11 $ .26 $ .15
Cash dividends declared
per common share..... -- -- -- -- -- -- --
Weighted average number
of shares
outstanding(4)(5).... 47,001(6) 62,055 67,139 75,639 67,184 67,275 75,775
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, PRO FORMA
------------------------------ ------------------- JUNE 30,
1992 1993 1994 1994 1995 1995(7)
-------- -------- -------- -------- -------- ----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:(2)
Total assets....................... $271,952 $378,040 $562,153 $570,345 $597,992 $872,992
Long-term debt (including current
portion)......................... 380,625 365,062 531,750 544,187 562,000 567,661
Stockholders' equity
(deficiency)..................... (138,734) (24,240) (25,525) (28,858) (20,392) 248,947
Working capital.................... 4,656 10,610 28,877 (5,818) 34,565 44,565
</TABLE>
(footnotes on following page)
5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA--(CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA SIX MONTHS ENDED PRO FORMA
YEARS ENDED DECEMBER 31, YEAR ENDED JUNE 30, SIX MONTHS ENDED
---------------------------- DECEMBER 31, ----------------- JUNE 30,
1992 1993 1994 1994(1) 1994 1995 1995(1)
------- ------- -------- ------------ ------- ------- ----------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL RATIOS AND OTHER
DATA:(8)
Operating cash flow........ $64,341 $90,085 $125,238 $139,355 $50,595 $66,108 $ 71,178
Capital expenditures....... 1,300 1,901 1,606 3,251 674 1,189 1,628
Operating cash flow less
capital expenditures..... 63,041 88,184 123,632 136,104 49,921 64,919 69,550
Capital expenditures as a
percentage of operating
cash flow.............. 2.02% 2.11% 1.28% 2.33% 1.33% 1.80% 2.29%
Operating cash flow to
interest expense, net of
interest income.......... 1.68x 2.48x 2.81x 2.71x 2.43x 2.79x 2.84x
Operating cash flow less
capital expenditures to
interest expense, net of
interest income.......... 1.65x 2.43x 2.78x 2.65x 2.40x 2.74x 2.78x
</TABLE>
- ------------
(1) The pro forma statement of operations data and financial ratios and other
data for the six months ended June 30, 1995 and the year ended December 31,
1994 are presented as if, at the beginning of each such period, each of the
transactions and events described in the second and third paragraphs,
respectively, of "Pro Forma Combined Financial Statements" had occurred. The
pro forma financial information is not necessarily indicative of the results
that would have been reported had such transactions and events actually
occurred on the dates specified, nor is it indicative of the Company's
future results. See "Pro Forma Combined Financial Statements" and the
historical financial information relating to the Company set forth in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994
(the "1994 Form 10-K") and the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1995, as amended (the "June Form 10-Q"), both of
which are incorporated herein by reference, and the historical financial
information relating to the Alliance Stations set forth in the Company's
Current Report on Form 8-K (filed September 27, 1995) (the "Form 8-K"),
incorporated herein by reference.
(2) The historical consolidated financial results for the Company are not
comparable from year to year because of the acquisition of various
broadcasting properties by the Company during the periods covered. See
"Business--Background," appearing in the 1994 Form 10-K, incorporated herein
by reference, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
(3) For the year ended December 31, 1992, the Company recorded an extraordinary
loss of $12,318,000 ($0.26 per share) related to repayment of debt.
(4) See Notes 1(f) and 2 of the Notes to the Company's Consolidated Financial
Statements, appearing in the 1994 Form 10-K, incorporated herein by
reference.
(5) Includes shares of Class C Common Stock issuable upon the exercise of
warrants held by certain merchant banking partnerships affiliated with
Lehman Brothers Inc. See "Description of Capital Stock--Warrants and
Options."
(6) Excludes shares of Common Stock issuable upon the exercise of warrants and
options and issuance of deferred shares.
(7) The pro forma balance sheet data at June 30, 1995 are presented as if, at
such date, each of the transactions and events described in the first
paragraph of "Pro Forma Combined Financial Statements" had occurred. The pro
forma financial information is not necessarily indicative of the results
that would have been reported had such transactions and events actually
occurred on the date specified, nor is it indicative of the Company's future
results. See "Pro Forma Combined Financial Statements", and the historical
financial information relating to the Company and the Alliance Stations set
forth in the June Form 10-Q and the Form 8-K, respectively, both of which
are incorporated herein by reference.
(8) "Operating cash flow" means operating income plus depreciation and
amortization.
6
<PAGE>
RISK FACTORS
Prospective investors should consider carefully, in addition to the other
information contained in this Prospectus, the following factors before
purchasing the shares of Class A Common Stock offered hereby.
CONTROL BY THE PRINCIPAL STOCKHOLDERS
Prior to the Offerings, Mel Karmazin, Michael A. Wiener and Gerald Carrus
(the "Principal Stockholders"), together with certain of their affiliates, owned
in the aggregate approximately 57.3% of the combined voting power of all classes
of Common Stock and approximately 68.4% of such combined voting power assuming
the exercise of all outstanding warrants and options and the issuance of all
outstanding deferred shares held by the Principal Stockholders. Upon completion
of the Offerings, the Principal Stockholders' and their affiliates' aggregate
ownership interests in the Company will permit them to retain approximately
52.7% of the combined voting power of all three classes of Common Stock and
approximately 64.2% of such combined voting power assuming the exercise of all
outstanding warrants and options and the issuance of all outstanding deferred
shares held by the Principal Stockholders. Accordingly, the Principal
Stockholders will be able to control the vote on all matters submitted to a vote
of the Company's stockholders, except (i) in the election of directors, with
respect to which the holders of the Class A and Class C Common Stock each are
entitled to elect two of the Company's nine directors by a class vote, (ii) in
connection with any proposed "going private" transaction between the Company and
any Principal Stockholder, with respect to which each share of Common Stock is
entitled to one vote per share, and (iii) as otherwise provided by law (see
"Description of Capital Stock"). The Principal Stockholders are able to elect
five of the Company's nine directors. Such control by the Principal Stockholders
may have the effect of discouraging certain types of transactions involving an
actual or potential change of control of the Company, including transactions in
which the holders of Class A Common Stock might otherwise receive a premium for
their shares over then current market prices.
Upon completion of the Offerings, the Principal Stockholders, together with
certain merchant banking partnerships (the "Lehman Investors") affiliated with
Lehman Brothers Inc. ("Lehman Brothers"), will hold shares of Common Stock
having an aggregate of 32.2% of the voting power with respect to any proposed
"going private" transaction between the Company and any Principal Stockholder
(assuming the exercise of all outstanding options and warrants held by the
Principal Stockholders and the Lehman Investors and the issuance of all deferred
shares as to which rights have been granted to Mr. Karmazin). However, none of
the Principal Stockholders has a present intention to effect a "going private"
transaction and there is no agreement among any of the Principal Stockholders
and the Lehman Investors as to how they would vote their shares of Common Stock
if any such transaction were proposed in the future.
The Lehman Investors, as the holders of all the Class C Common Stock, are
entitled to elect two of the Company's nine directors. See "Description of
Capital Stock."
KEY PERSONNEL
The Company's business is partially dependent upon the performance of
certain key individuals, including its President and Chief Executive Officer.
The Company has generally entered into long-term employment agreements with such
individuals, including its President and Chief Executive Officer.
RESTRICTION ON DIVIDENDS
The Company is currently restricted under its Second Amended and Restated
Credit Agreement, dated as of December 22, 1994 (as amended, including an
amendment dated as of June 23, 1995, the
7
<PAGE>
"Credit Agreement"), and under the terms of the Indenture (the "Senior
Subordinated Indenture") governing the Company's 10 3/8% Senior Subordinated
Notes Due 2002 (the "Senior Subordinated Notes"), from paying dividends to its
stockholders. See "Price Range of Common Stock and Dividend Policy."
LEVERAGE
As of June 30, 1995, the Company's total long-term debt was approximately
$562 million, consisting of approximately $362 million under the Credit
Agreement and $200 million of Senior Subordinated Notes. These borrowings bore
interest as of such date at an average annual rate of approximately 8.2%. Until
the net proceeds from the sale of the shares of Class A Common Stock offered
hereby are applied to finance future acquisitions of broadcasting properties,
including the Alliance Acquisition, or for general corporate purposes, the
Company expects to use such net proceeds to reduce borrowings under the Credit
Agreement. The Company anticipates that the amounts repaid under the Credit
Agreement with such proceeds eventually will be reborrowed in order to finance
future acquisitions of broadcasting properties, including the Alliance
Acquisition, subject to the consent of the lenders under the Credit Agreement to
such acquisitions, and for general corporate purposes. See "Use of Proceeds."
The Company also has registered with the Securities and Exchange Commission (the
"Commission"), pursuant to a shelf registration statement, $500 million in
aggregate principal amount of its debt securities (the "Debt Securities"). The
Company may issue Debt Securities from time to time, subject, among other
things, to compliance with applicable limitations under the Credit Agreement.
See "The Company--Recent Developments--Debt Registration Statement."
FUTURE SALES OF SHARES
The Principal Stockholders and the Lehman Investors beneficially hold
23,453,480 shares of Common Stock, including 16,923,300 shares of Common Stock
issuable upon exercise of warrants and options and issuance of deferred shares.
All of such shares held by the Principal Stockholders and the Lehman Investors
(other than 3,471,352 shares issuable to Mr. Karmazin upon exercise of options
and issuance of deferred shares, which have been registered under the Securities
Act of 1933, as amended (the "Securities Act"), and 100 shares of Class A Common
Stock that were purchased by Mr. Karmazin in a market transaction) are
"restricted" shares as defined in Rule 144 under the Securities Act ("Rule
144"). All of these "restricted" shares (other than the shares issuable upon
exercise of warrants and options and issuance of deferred shares to the extent
that, under Rule 144, such shares are not deemed to have been acquired when such
warrants and options and rights to receive deferred shares were acquired) have
been owned beneficially for at least two years by existing stockholders and,
together with the 3,471,352 shares issuable to Mr. Karmazin upon exercise of
options and issuance of deferred shares and the 100 shares that were purchased
by Mr. Karmazin in a market transaction, may be sold in the market pursuant to
Rule 144, subject to the restrictions of such Rule with regard to sales by
affiliates. The Company and the Principal Stockholders have each agreed not to
sell or grant any option for the sale of, or otherwise dispose of, any Common
Stock, or any securities convertible into or exchangeable or exercisable for
shares of Common Stock, other than the shares of Common Stock that may be
offered by the Company in the Offerings and certain other limited exceptions,
and not to file or request to be filed, as the case may be, any registration
statement with respect to Common Stock, for a period of 90 days after the date
of this Prospectus without the consent of the Representatives (as defined in
"Underwriting"). In addition, the Lehman Investors have each agreed not to
effect any public sale or distribution of any shares of Common Stock, or any
securities convertible into or exchangeable or exercisable for shares of Common
Stock, for a period of 90 days after the date of this Prospectus without the
consent of the Representatives. See "Shares Eligible for Future Sale."
8
<PAGE>
The Principal Stockholders and the Lehman Investors have certain rights to
require the Company to register all or part of the shares of Common Stock that
they own or may acquire through exercise of warrants. See "Shares Eligible for
Future Sale."
The Company can make no prediction as to the effect, if any, that sales of
shares of Common Stock, or the availability of shares for future sale, will have
on the market price of the Class A Common Stock prevailing from time to time.
Sales of substantial amounts of Common Stock (including shares upon the exercise
of warrants or options) in the public market, or the perception that such sales
could occur, could depress prevailing market prices for the Class A Common
Stock. Such sales may also make it more difficult for the Company to sell equity
securities or equity-related securities in the future at a time and price which
it deems appropriate.
REGULATORY MATTERS
The radio broadcasting industry is subject to extensive federal regulation
which, among other things, requires approval by the FCC of transfers,
assignments and renewals of radio broadcasting licenses, limits the number of
radio broadcasting properties the Company may acquire and restricts alien
ownership of capital stock of and participation in the affairs of licensees.
Legislation is pending before Congress that would significantly alter FCC
regulations with respect to, among other things, the number of AM or FM
broadcast stations which may be owned or controlled by one entity. See "The
Company--Recent Developments--Telecommunications Bills." If legislation relaxing
radio multiple ownership rules is not enacted, however, or applicable FCC
regulations are not otherwise revised, current limitations imposed by the FCC on
the number of broadcasting properties the Company can acquire could limit the
Company's ability to grow through acquisitions in the future and would require
the Company to divest itself of two FM radio stations in the Dallas/Ft. Worth
area and one FM radio station in the San Francisco/San Jose area following the
Alliance Acquisition. See "The Company-- Company Strategy" and "--Recent
Developments--The Alliance Acquisition."
9
<PAGE>
THE COMPANY
GENERAL
Infinity Broadcasting Corporation is currently the largest owner and
operator of radio stations in the United States. Infinity currently owns and
operates 27 radio stations serving 13 of the nation's largest radio markets, and
has entered into an agreement to acquire the Alliance Stations.
The following table sets forth certain information about the Company's
current radio stations as well as the Alliance Stations:
<TABLE>
<CAPTION>
STATIONS
1995 1994 WITH
RADIO RADIO TARGET RANKINGS IN
MARKET MARKET TARGET DEMOGRAPHICS TARGET DEMO-
STATION MARKET STATION FORMAT RANK(1) REVENUES(2) DEMOGRAPHICS RANK(3) GRAPHICS(4)
- ------------------- ---------------- ---------------- ------- ------------ ------------- ------------ ------------
($ MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
WXRK-FM............ New York, NY Classic Rock 1 $401.2 Men 25-54 3 40
WZRC-AM............ New York, NY --(5) 1 401.2 --(5) -- --(5)
WFAN-AM............ New York, NY All Sports 1 401.2 Men 25-54 6T 40
KROQ-FM(6)......... Los Angeles, CA Alternative Rock 2 457.4 Men 18-34 1 41
KRTH-FM............ Los Angeles, CA Oldies 2 457.4 Persons 25-54 2 44
WJMK-FM/........... Chicago, IL Oldies/Talk 3 296.0 Persons 25-54 5T 38
WJJD-AM
WUSN-FM............ Chicago, IL Country 3 296.0 Persons 25-54 5T 38
KOME-FM(7)......... San Francisco/ Alternative Rock 4/30(8) 187.0/ Men 18-34 5/2 51/15
San Jose, CA 35.9
KFRC-AM/FM(9)...... San Francisco, Oldies 4 187.0 Persons 25-54 6 51
CA
KYCY-FM(9)......... San Francisco, Young Country 4 187.0 Persons 25-54 18T 51
CA
WYSP-FM............ Philadelphia, PA Classic Rock 5 168.1 Men 25-54 2 25
WIP-AM............. Philadelphia, PA All Sports 5 168.1 Men 25-54 3 25
WOMC-FM............ Detroit, MI Oldies 6 153.0 Persons 25-54 6 28
WXYT-AM............ Detroit, MI News/Talk 6 153.0 Persons 25-54 15 28
WYCD-FM(9)......... Detroit, MI Young Country 6 153.0 Persons 25-54 4 28
KVIL-FM(9)......... Dallas/ Adult 7 180.0 Women 25-54 1 34
KDMM-AM(10)........ Ft. Worth, TX Contemporary/
Nostalgia
KLUV-FM............ Dallas/ Oldies 7 180.0 Persons 25-54 6T 33
Ft. Worth, TX
KYNG-FM(9)......... Dallas/Ft. Young Country 7 180.0 Persons 25-54 4 33
Worth, TX
KSNN-FM(9)(11)..... Dallas/Ft. Country 7 180.0 Persons 25-54 19T 33
Worth, TX
WJFK-FM(12)........ Washington, DC Personality 8 182.2 Men 25-54 1 30
WPGC-.............. Washington, DC Contemporary/ 8 182.2 Persons 18-34 1 29
FM/AM(13) Urban
Contemporary
KXYZ-AM(14)........ Houston, TX Spanish 9 161.2 Persons 18-49 -- --
Language
WBCN-FM............ Boston, MA Album-Oriented 10 153.8 Men 18-34 1 28
Rock
WZLX-FM............ Boston, MA Classic Rock 10 153.8 Men 25-54 2T 30
WZGC-FM............ Atlanta, GA Classic Rock 12 149.6 Men 25-54 4 18
KYCW-FM(9)......... Seattle, WA Young Country 13 110.3 Persons 25-54 17 30
WLIF-FM............ Baltimore, MD Adult 18 70.1 Women 25-54 1 20
Contemporary
WJFK-AM............ Baltimore, MD Personality 18 70.1 Men 25-54 10 21
WQYK-.............. Tampa/ Country/Talk 21 73.0 Persons 25-54 1 25
FM/AM(15) St. Petersburg,
FL
<CAPTION>
EXPIRATION
DATE OF FCC
STATION AUTHORIZATION
- ------------------- -------------
<S> <C>
WXRK-FM............ 06/01/98
WZRC-AM............ 06/01/98
WFAN-AM............ 06/01/98
KROQ-FM(6)......... 12/01/97
KRTH-FM............ 12/01/97
WJMK-FM/........... 12/01/96
WJJD-AM 12/01/96
WUSN-FM............ 12/01/96
KOME-FM(7)......... 12/01/97
KFRC-AM/FM(9)...... 12/01/97
KYCY-FM(9)......... 12/01/97
WYSP-FM............ 08/01/98
WIP-AM............. 08/01/98
WOMC-FM............ 10/01/96
WXYT-AM............ 10/01/96
WYCD-FM(9)......... 10/01/96
KVIL-FM(9)......... 08/01/97
KDMM-AM(10)........ 08/01/97
KLUV-FM............ 08/01/97
KYNG-FM(9)......... 08/01/97
KSNN-FM(9)(11)..... 08/01/97
WJFK-FM(12)........ 10/01/95
WPGC-.............. 10/01/95
FM/AM(13)
KXYZ-AM(14)........ 08/01/97
WBCN-FM............ 04/01/98
WZLX-FM............ 04/01/98
WZGC-FM............ 04/01/96
KYCW-FM(9)......... 02/01/98
WLIF-FM............ 10/01/95
WJFK-AM............ 10/01/95
WQYK-.............. 02/01/96
FM/AM(15)
</TABLE>
- ------------
(1) Markets ranked by 1995 Arbitron metropolitan area population.
(2) Radio advertising revenues according to Duncan's Radio Market Guide
(1995 ed.).
(3) Target demographics rank by Spring 1995 Arbitron Radio Market Reports.
"T" indicates a tie in the rankings.
(footnotes continued on following page)
10
<PAGE>
(footnotes continued from preceding page)
(4) Number of stations in each market with rankings in the Company's target
demographics for such market, based on the Spring 1995 Arbitron Radio
Market Reports.
(5) Effective July 7, 1995, the Company entered into a Time Brokerage
and Option Agreement with Radio Korea New York, Inc. ("RKNY"),
pursuant to which the Company will make substantially all of
the programming time on WZRC-AM available to RKNY for its Korean
language programming for a period of one year.
(6) KROQ-FM is licensed to the community of Pasadena, California.
(7) KOME-FM is licensed to the community of San Jose, California.
(8) San Francisco and San Jose have radio market ranks of 4 and 30,
respectively, and KOME-FM's rankings within target demographics in
those markets are 5 and 2, respectively.
(9) The Company has agreed to acquire the Alliance Stations, subject to
certain conditions, including the approval of the FCC. In connection
with such approval, the Company will be required to obtain temporary
divestiture waivers by the FCC of certain regulations limiting the
number of radio stations which may be owned or controlled by one entity
both nationally and in a particular market. See "The Company--Recent
Developments--The Alliance Acquisition."
(10) KVIL-FM is licensed to the community of Highland Park-Dallas, Texas.
KDMM-AM is licensed to the community of Highland Park, Texas.
(11) KSNN-FM is licensed to the community of Arlington, Texas.
(12) WJFK-FM is licensed to the community of Manassas, Virginia.
(13) WPGC-FM/AM are licensed to the community of Morningside, Maryland.
(14) Not included in Arbitron rankings because the Company does not subscribe
to the Arbitron rankings in Houston.
(15) WQYK-FM is licensed to the community of St. Petersburg, Florida, and
WQYK-AM is licensed to the community of Seffner, Florida.
The Company currently holds 5,000,000 shares of common stock of Westwood
One (which represented approximately 15.8% of the issued and outstanding
capital stock of Westwood One as of June 30, 1995) and warrants to purchase
an additional 3,500,000 and 500,000 shares of such common stock at an exercise
price of $3.00 and $4.00 per share, respectively, subject in part to certain
vesting requirements. The Company also manages Westwood One pursuant to a
management agreement that provides for, among other things, the grant of
additional warrants to acquire up to 500,000 shares of Westwood One common
stock at an exercise price of $5.00 per share if certain targets are met. For
further information, see "Business--Recent Developments" in the 1994 Form
10-K, which is incorporated herein by reference.
The Company's principal executive offices are located at
600 Madison Avenue, New York, New York 10022, and its telephone number is
(212) 750-6400.
COMPANY STRATEGY
The Company's overall strategy is to own and operate radio stations in the
nation's largest radio revenue markets. The Company believes that its presence
in large markets makes it attractive to advertisers and that the overall
diversity of its stations reduces its dependence on any single station, local
economy or advertiser. The Company also believes that by serving major markets,
it is able to attract more highly skilled management, employees and on-air
talent.
In developing its stations, the Company takes a variety of actions to
improve a station's operating cash flow, including instituting strict financial
reporting requirements and cost controls, directing promotional activities,
developing programming to improve the station's appeal to a targeted audience
group and enhancing advertising sales efforts. In particular, the Company
emphasizes increasing local advertising revenues in order to reduce dependence
on national advertising revenues. During the year ended December 31, 1994, the
Company generated approximately 73% of its total revenues from local and
regional advertising.
In operating its stations, the Company concentrates on the development of
strong decentralized local management, which is responsible for the day-to-day
operations of the station. Local management, in cooperation with corporate
management, is responsible for developing programming. Corporate
11
<PAGE>
management is responsible for long-range planning, establishing policies and
procedures, maximizing cost savings where centralized purchasing is appropriate,
resource allocation and maintaining overall control of the stations.
The overall mix of a station's programming is designed to fit each station's
specific format and serve its local community. The Company's overall programming
strategy includes acquiring significant on-air talent and sports franchises for
its radio stations. The Company believes that this strategy, in addition to
developing loyal audiences for its radio stations, enables the Company to obtain
additional revenues, including revenues from syndicating such programming
franchises to other radio stations. In addition to its regular programming, all
of the Company's stations provide non-entertainment programming, such as news
and public affairs broadcasts.
The Company expects to continue to acquire radio stations with strong growth
potential in the Company's current markets, subject to the Communications Act of
1934, as amended (the "Communications Act"), and FCC rules, which currently
impose certain limits on the maximum number of radio stations the Company can
own nationwide and the number of stations the Company can own in the same
geographic market. FCC approval of the Alliance Acquisition will require the
Company to obtain temporary divestiture waivers by the FCC of these rules. See
"--Recent Developments--The Alliance Acquisition." Because the Company has
historically grown in part through the acquisition of broadcasting properties,
limitations imposed by the FCC on the number of broadcasting properties the
Company can acquire could limit the Company's ability to grow through
acquisitions in the future. For a discussion of certain pending federal
legislation that would significantly alter the FCC's radio multiple ownership
rules, see "--Recent Developments--Telecommunications Bills." See also
"Business-- General--Federal Regulation of Radio Broadcasting--Ownership
Matters" in the 1994 Form l0-K (which is incorporated herein by reference).
Other than as described in this Prospectus, the Company has no present
agreements or arrangements to acquire or sell any radio stations.
The Company's affiliation with Westwood One enables the Company to expand
its presence in the radio program distribution business while simultaneously
enhancing the programming lineups of Westwood One.
RECENT DEVELOPMENTS
The Alliance Acquisition
On September 22, 1995, the Company entered into an agreement to acquire the
Alliance Stations from various entities affiliated with Alliance for $275
million, including working capital of at least $10 million. The Company expects
to use the net proceeds of the Offerings to finance the purchase of the Alliance
Stations. Until such net proceeds are applied to finance such purchase, the
Company expects to use such net proceeds to reduce borrowings under the Credit
Agreement. See "Use of Proceeds."
The consummation of the Alliance Acquisition is subject to certain
conditions, including approval of the FCC. An application seeking consent of
the FCC to complete the Alliance Acquisition has been filed and is pending. As
part of such application, the Company has requested the FCC to grant temporary
divestiture waivers to allow the Company to exceed the limits imposed by the
FCC's current radio multiple ownership rules for a period of eighteen months
after completion of the Alliance Acquisition. These rules currently prohibit the
Company from owning, operating or controlling, directly or indirectly, more than
20 AM and 20 FM radio stations in the United States and more than two AM and two
FM radio stations in each of the markets in which the Company owns radio
stations. Upon completion of the Alliance Acquisition, the Company will own 23
FM radio stations, including four FM radio stations in the Dallas/Ft. Worth area
and three FM radio stations in the San Francisco/San Jose area. There can be no
assurance that the FCC will grant such temporary divestiture waivers. In the
event that such waivers are granted and the Alliance Acquisition is completed,
the Company will be required to divest itself of two of its FM stations in the
Dallas/Ft. Worth area and one of its FM stations
12
<PAGE>
in the San Francisco/San Jose area within eighteen months (or such shorter
period as may be specified in such waivers) of the date that the Alliance
Acquisition is completed unless the legislation described below under
"--Telecommunications Bills" is enacted in a form that permits the Company to
continue to own these stations or the FCC's radio multiple ownership rules are
otherwise relaxed to permit such continued ownership.
Telecommunications Bills
Both the Senate and the House of Representatives of the U.S. Congress have
reported out separate bills (S.652 and H.R. 1555) which, among other things,
contain provisions affecting multiple ownership of radio stations and broadcast
license renewal procedures. The Senate bill would require the FCC to modify its
rules to eliminate all regulations limiting the number of AM or FM broadcast
stations which may be owned or controlled by one entity either nationally or in
a particular market. However, the Senate bill would give the FCC authority to
refuse to approve the transfer or issuance of any AM or FM broadcast license to
a particular entity if the FCC determined that, by virtue of the acquisition,
the entity would thereby obtain an undue concentration of control or competition
would be harmed. The Senate bill also would extend broadcast license renewal
terms for radio stations from the present term of seven years to ten years, and
would implement a "two step" renewal process that would eliminate a challenger's
right to file a competing application for an incumbent's frequency at the end of
a renewal term. New applications would only be entertained upon FCC denial of
the incumbent's application for renewal due to failure to serve the public
interest or if the incumbent licensee had engaged in serious violations of the
Communications Act or FCC regulations. The incumbent's license could not be
denied until after it was afforded notice and an opportunity for hearing. The
House of Representatives bill, with respect to radio multiple ownership,
eliminates all restrictions, both nationally and within any particular
geographical area. The House bill maintains renewal terms at seven years, and
includes the identical "two-step" renewal language of the Senate bill. The bills
are scheduled to be reconciled in conference during the Fall of 1995. However,
there can be no assurance that final legislation will be enacted or what form
any such ultimate legislation will take.
FCC Settlement; Assignment Applications
The 1994 Form 10-K contains a description of then pending FCC proceedings
relating to the broadcast of allegedly indecent material by certain of the
Company's stations (see "Business-- General --Federal Regulation of Radio
Broadcasting--Programming and Operation" in the 1994 Form 10-K). On September 1,
1995, the Company, the FCC and the Department of Justice entered into a
Settlement Agreement which vacates or dismisses those proceedings as well as all
pending complaints against the Company's stations relating to indecency, and
expunges all of those proceedings and complaints from the Company's FCC records.
Without any admission of guilt, liability or wrongdoing, the Company has agreed
to make two voluntary contributions to the United States Treasury totaling
$1.715 million. On September 5, 1995, the FCC released an Order implementing the
terms of the Settlement Agreement which became final on October 5, 1995.
The 1994 Form 10-K also provides information with respect to a Formal
Petition to Deny filed by Americans for Responsible Television ("ART") against
the Company's application to purchase radio station KRTH-FM in Los Angeles (see
"Business--General-- Federal Regulation of Radio Broadcasting--Programming and
Operation" in the 1994 Form 10-K). On February 1, 1994, the FCC dismissed ART's
Petition to Deny and granted the KRTH-FM assignment application. On August 25,
1995, the FCC released an Order denying a petition for reconsideration filed by
ART. The KRTH-FM grant became final on September 25, 1995.
The same section of the 1994 Form 10-K referenced in the preceding paragraph
also provides information with respect to the filing of a Petition to Deny by
ART against the Company's application to acquire Station KLUV-FM in Dallas/Ft.
Worth, Texas. The FCC subsequently dismissed ART's Petition and granted the
KLUV-FM assignment application. The FCC's grant has since become final.
13
<PAGE>
Debt Registration Statement
The Company has registered with the Commission, pursuant to a shelf
registration statement, $500 million in aggregate principal amount of Debt
Securities. The Company may issue Debt Securities from time to time. The Credit
Agreement currently prohibits the incurrence of additional indebtedness by the
Company other than (a) under the Credit Agreement, or (b) subject to certain
limitations, (i) to repay or prepay existing indebtedness under the Credit
Agreement or existing senior subordinated indebtedness of the Company, or (ii)
in an aggregate principal amount not exceeding $35 million at any one time
outstanding. Pursuant to the amendment to the Credit Agreement dated as of June
23, 1995, subject to certain limitations, to the extent that the net proceeds
from sales of Debt Securities are received by the Company prior to December 31,
1995, up to $200 million of the amounts repaid under the Credit Agreement may be
reborrowed, subject under certain circumstances to the consent of the lenders
under the Credit Agreement, for general corporate purposes, including for
working capital, capital expenditures, investments in or loans to subsidiaries,
refinancing of debt, future acquisitions and restricted payments, including
repurchases of Class A Common Stock.
USE OF PROCEEDS
The net proceeds to the Company from the sale of the shares of Class A
Common Stock offered hereby are estimated to be approximately $269.3 million (or
approximately $309.8 million if the Underwriters' over-allotment options are
exercised in full). The Company expects that such net proceeds will be used to
finance future acquisitions of broadcasting properties, including the Alliance
Acquisition, and for general corporate purposes. The Company has agreed to pay a
purchase price of $275 million (including working capital of at least $10
million) for the Alliance Stations. See "The Company--Recent Developments--The
Alliance Acquisition." The Company reviews potential acquisition opportunities
on an ongoing basis, and periodically engages in discussions with acquisition
candidates. The Company has not, however, entered into any definitive agreements
with respect to the acquisition of any broadcasting properties, other than with
respect to the Alliance Acquisition.
Until the net proceeds from the sale of the shares of Class A Common Stock
offered hereby are applied as described above, the Company expects to use such
net proceeds to reduce borrowings under the Credit Agreement. Such borrowings
bore interest as of June 30, 1995 at an average annual rate of approximately
7.0%, and have a final maturity of the unpaid principal amount thereof in June
2003. A total of approximately $362 million in borrowings was outstanding under
the Credit Agreement at June 30, 1995. The Company anticipates that the amounts
repaid under the Credit Agreement with such proceeds eventually will be
reborrowed in order to finance future acquisitions of broadcasting properties,
including the Alliance Acquisition, subject to the consent of the lenders under
the Credit Agreement to such acquisitions, and for general corporate purposes.
As of June 30, 1995, $338 million was available under the Credit Agreement for
acquisitions of radio stations (without taking into account any amounts that the
Company expects will be repaid using the proceeds of the Offerings). See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
14
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
The Class A Common Stock has been quoted on the New York Stock Exchange
under the symbol "INF" since June 22, 1995. Prior to such date, the Class A
Common Stock was quoted on the NASDAQ National Market System under the symbol
"INFTA." The following table sets forth, for the calendar quarters indicated,
the high and low sales prices in dollars per share of the Class A Common Stock
on the New York Stock Exchange or on the NASDAQ National Market System, as
applicable, as reported in published financial sources.
FISCAL YEAR HIGH LOW
- ------------------------------------------------------------ ------ ------
1993:
First Quarter............................................ $ 9.26 $ 6.81
Second Quarter........................................... 12.45 9.04
Third Quarter............................................ 21.45 13.55
Fourth Quarter........................................... 23.78 16.50
1994:
First Quarter............................................. $22.50 $16.67
Second Quarter............................................ 18.67 13.50
Third Quarter............................................. 22.00 16.00
Fourth Quarter............................................ 21.17 18.33
1995:
First Quarter............................................. $28.67 $20.17
Second Quarter............................................ 37.50 25.83
Third Quarter............................................. 37.63 29.38
Fourth Quarter (through October 18, 1995)................. 35.38 32.25
As of June 30, 1995, there were approximately 6,500 holders of Class A
Common Stock, eight holders of record of the Class B Common Stock and four
holders of record of the Class C Common Stock.
The closing sale price for the Class A Common Stock as of October 18, 1995,
as reported in published financial sources, is set forth on the cover page of
this Prospectus. There is no public trading market for the Class B Common Stock
or the Class C Common Stock.
The Company has never paid dividends on shares of Common Stock. The Company
intends to retain future earnings for use in its business and does not
anticipate paying any dividends on shares of Common Stock in the foreseeable
future. The Company is restricted by the Credit Agreement from paying dividends
on the Common Stock unless certain amounts are available and certain other
conditions are satisfied. In addition, under the terms of the Senior
Subordinated Indenture, the Company may only pay dividends if a specific
financial test is met. See "Description of Capital Stock-- Common
Stock--Dividends."
15
<PAGE>
CAPITALIZATION
The following table sets forth (i) the capitalization of the Company at June
30, 1995 and (ii) the pro forma capitalization of the Company at June 30, 1995,
reflecting (a) the sale of the 8,500,000 shares of Class A Common Stock offered
by the Company hereby at a price of $32.875 per share, (b) the application of
the net proceeds of the Offerings (estimated to be approximately $269.3 million)
together with approximately $5.7 million of borrowings under the Credit
Agreement, to finance the Alliance Acquisition and (c) the completion of the
pending Alliance Acquisition. See "The Company-- Recent Developments--The
Alliance Acquisition," "Use of Proceeds," "Pro Forma Combined Financial
Statements" and "Description of Capital Stock."
<TABLE>
<CAPTION>
JUNE 30, 1995
------------------------
ACTUAL PRO FORMA
--------- -----------
(IN THOUSANDS)
(UNAUDITED)
<S> <C> <C>
Long-term debt:(1)
Credit Agreement(2)................................................ $ 362,000 $ 367,661
10 3/8% Senior Subordinated Notes Due 2002......................... 200,000 200,000
--------- -----------
Total long-term debt............................................. 562,000 567,661
Stockholders' equity (deficiency):(3)
Preferred Stock, $.01 par value; 1,000,000 shares authorized; no
shares issued and outstanding.................................... -- --
Class A Common Stock, $.002 par value; 200,000,000 shares
authorized (4); 43,549,202 shares issued (52,049,202 shares pro
forma)......................................................... 87 104
Class B Common Stock, $.002 par value; 17,500,000 shares
authorized; 5,550,031 shares issued and outstanding (5,550,031
shares pro forma).............................................. 11 11
Class C Common Stock, $.002 par value; 30,000,000 shares
authorized; 744,171 shares issued and outstanding (744,171 shares
pro forma)..................................................... 1 1
Additional paid-in capital......................................... 260,592 529,914
Retained earnings (accumulated deficit)............................ (233,141) (233,141)
Less 2,430,045 shares of treasury stock at cost (2,430,045 shares
pro forma)..................................................... (47,942) (47,942)
--------- -----------
Total stockholders' equity (deficiency).......................... (20,392) 248,947
--------- -----------
Total capitalization............................................. $ 541,608 $ 816,608
--------- -----------
--------- -----------
</TABLE>
- ------------
(1) For information concerning the Company's long-term debt, see the Notes to
the Company's Consolidated Financial Statements included in the 1994 Form
10-K and the Notes to the Company's Condensed Consolidated Financial
Statements included in the June Form 10-Q (both of which are incorporated
herein by reference).
(2) Until the net proceeds from the sale of the shares of Class A Common Stock
offered hereby are applied to finance future acquisitions of broadcasting
properties, including the Alliance Acquisition, or for general corporate
purposes, the Company intends to use such net proceeds to reduce borrowings
under the Credit Agreement.
(3) Excludes shares of Class A Common Stock issuable upon future conversions of
shares of Class B or Class C Common Stock and any future exercise of stock
options or warrants or issuance of deferred shares.
(4) The Company's authorized shares were increased from 75,000,000 to
200,000,000 on August 8, 1995.
16
<PAGE>
PRO FORMA COMBINED FINANCIAL STATEMENTS
The unaudited pro forma combined balance sheet data at June 30, 1995 are
presented as if, at such date, (i) the Company had completed the Alliance
Acquisition, (ii) the Offerings had been completed at a price of $32.875 per
share and (iii) the net proceeds of the Offerings (estimated to be approximately
$269.3 million), together with approximately $5.7 million of borrowings under
the Credit Agreement, had been used to finance the pending Alliance Acquisition.
See "The Company--Recent Developments--The Alliance Acquisition" and "Use of
Proceeds."
The unaudited pro forma combined statement of operations data for the six
months ended June 30, 1995 are presented as if, at the beginning of the period,
(i) the Company had completed the acquisition of radio station KLUV-FM (which
acquisition was completed in April 1995), (ii) the Company had completed the
pending Alliance Acquisition, (iii) the Offerings had been completed at a price
of $32.875 per share and (iv) the net proceeds of the Offerings (estimated to be
approximately $269.3 million), together with approximately $5.7 million of
borrowings under the Credit Agreement, had been used to finance the pending
Alliance Acquisition. See "The Company--Recent Developments--The Alliance
Acquisition" and "Use of Proceeds."
The unaudited pro forma combined statement of operations data for the year
ended December 31, 1994 are presented as if, at the beginning of the period, (i)
the Company had completed the acquisitions of radio stations KRTH-FM,
WPGC-AM/FM, WXYT-AM and KLUV-FM, (ii) the Company had completed the pending
Alliance Acquisition, (iii) the Offerings had been completed at a price of
$32.875 per share, (iv) the net proceeds of the Offerings (estimated to be
approximately $269.3 million), together with approximately $5.7 million of
borrowings under the Credit Agreement, had been used to finance the pending
Alliance Acquisition and (v) the Company had effected the May 19, 1995
three-for-two stock split. See "The Company--Recent Developments--The Alliance
Acquisition" and "Use of Proceeds."
In the opinion of management, all adjustments necessary to present fairly
this pro forma information have been made.
These pro forma combined financial statements should be read in conjunction
with the Company's Consolidated Financial Statements and the Notes thereto
(included in the 1994 Form 10-K incorporated herein by reference), the Company's
Condensed Consolidated Financial Statements and the Notes thereto (included in
the June Form 10-Q incorporated herein by reference) and the Consolidated
Financial Statements and the Notes thereto of Alliance (included in the Form 8-K
incorporated herein by reference). The pro forma information is not necessarily
indicative of the results that would have been reported had such events actually
occurred on the dates specified, nor is it indicative of the Company's future
results.
17
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 1995
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA COMPANY
COMPANY AS ADJUSTMENTS ALLIANCE PRO FORMA
REPORTED FOR OFFERINGS (1) ACQUISITION (2) COMBINED
---------- ----------------- --------------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Current assets............................. $ 90,949 $ 269,339 $(259,339) $ 100,949
Property and equipment, net................ 21,433 6,876 28,309
Intangible assets, net..................... 472,268 258,124 730,392
Other assets............................... 13,342 13,342
---------- ----------------- --------------- ---------
Total assets........................... $597,992 $ 269,339 $ 5,661 $ 872,992
---------- ----------------- --------------- ---------
---------- ----------------- --------------- ---------
LIABILITIES:
Current liabilities........................ $ 56,384 $ 56,384
Long-term debt............................. 562,000 $ 5,661 567,661
Stockholders' equity (deficiency).......... (20,392) $ 269,339 248,947
---------- ----------------- --------------- ---------
Total liabilities and stockholders'
equity (deficiency).................. $597,992 $ 269,339 $ 5,661 $ 872,992
---------- ----------------- --------------- ---------
---------- ----------------- --------------- ---------
</TABLE>
- ------------
(1) To reflect the issuance of the shares of Class A Common Stock offered by
the Company hereby.
(2) To reflect the expected ultimate application of the net proceeds from the
Offerings of approximately $269.3 million and the use of approximately $5.7
million of borrowings under the Credit Agreement for the pending Alliance
Acquisition and to allocate the preliminary purchase price of $275 million
as follows:
<TABLE>
<CAPTION>
CARRYING VALUE
REPORTED BY ALLOCATION OF
ALLIANCE ADJUSTMENTS PURCHASE PRICE
-------------- ----------- --------------
<S> <C> <C> <C>
Assets:
Current assets.................................... $ 11,111 $ (1,111)(a) $ 10,000
Property and equipment, net....................... 6,876 6,876
Intangible assets, net............................ 68,384 189,740 258,124
------ ----------- -------
Total assets................................... $ 86,371 $ 188,629 $275,000
------ ----------- -------
------ ----------- -------
Liabilities:
Current liabilities............................... $ 10,761 $ (10,761)(a) $ 0
Long-term debt.................................... 54,500 (54,500)(a) 0
Other liabilities................................. 495 (495)(a) 0
------ ----------- -------
Total liabilities.............................. 65,756 (65,756) 0
------ ----------- -------
Partners' capital................................. 20,615 (20,615)(a) 0
------ ----------- -------
Total liabilities and partners' capital........ $ 86,371 $ (86,371) $ 0
------ ----------- -------
------ ----------- -------
</TABLE>
---------------
(a) Adjustments to eliminate assets not being acquired and liabilities not
being assumed in the Alliance Acquisition.
The information set forth with respect to the Alliance Acquisition assumes
that the Offerings and the Alliance Acquisition were completed on the same
date. The preliminary allocation of the purchase price may change upon final
appraisal of the fair values of the net assets acquired.
18
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
COMPANY AS COMPANY
REPORTED ACQUISITION OF ALLIANCE PRO FORMA
(1) KLUV-FM ACQUISITION COMBINED
---------- -------------- ----------- ---------
<S> <C> <C> <C> <C>
Total revenues........................... $169,162 $ 2,462(2) $22,908(3) $ 194,532
Less agency commissions.................. 22,271 520(2) 3,733(3) 26,524
---------- ------- ----------- ---------
Net revenues............................. 146,891 1,942 19,175 168,008
Station operating expenses excluding
depreciation and amortization.......... 78,116 808(2) 15,239(3) 94,163
---------- ------- ----------- ---------
Station operating income excluding
depreciation and amortization............ 68,775 1,134 3,936 73,845
Depreciation and amortization............ 24,000 1,171(4) 9,292(5) 34,463
Corporate general and administrative
expenses............................... 2,667 2,667
---------- ------- ----------- ---------
Operating income (loss).................. 42,108 (37) (5,356) 36,715
Interest expense......................... (23,883) (1,100)(6) (198)(6) (25,181)
Interest income.......................... 161 161
Income taxes............................. (686) (686)
---------- ------- ----------- ---------
Net earnings (loss)...................... $ 17,700 $ (1,137) $(5,554) $ 11,009
---------- ------- ----------- ---------
---------- ------- ----------- ---------
Net earnings per share................... $0.26 $0.15
Weighted average shares.................. 67,275 75,775(7)
</TABLE>
- ------------
(1) The Company's historical consolidated results of operations for the six
months ended June 30, 1995 include the operating results of radio station
KLUV-FM from April 21, 1995, the date the Company acquired such station.
(2) To reflect the historical operating results of KLUV-FM for the period from
January 1, 1995 to April 20, 1995 (based upon the unaudited financial
statements of KLUV-FM).
(3) To reflect the historical operating results of Alliance as follows:
<TABLE>
<CAPTION>
ADJUSTED
CARRYING VALUE HISTORICAL
REPORTED BY RESULTS OF
ALLIANCE ADJUSTMENTS ALLIANCE
-------------- ----------- ----------
<S> <C> <C> <C>
Total revenues...................................... $ 22,399 $ 509(a) $ 22,908
Less agency commissions............................. 3,733 -- 3,733
------ ----- ----------
Net revenues........................................ 18,666 509 19,175
Station operating expenses excluding depreciation
and amortization...................................... 14,691 548(a) 15,239
------ ----- ----------
Station operating income excluding depreciation and
amortization.......................................... 3,975 (39) 3,936
Depreciation and amortization....................... 3,452 3,452
Corporate general and administrative expenses....... 843 (843)(b) 0
------ ----- ----------
Operating income (loss)............................. (320) 804 484
Interest and other expense.......................... (3,851) 3,851(a)(b) 0
Interest and other income........................... 565 (565)(a)(b) 0
------ ----- ----------
Net income (loss) before extraordinary item......... $ (3,606) $ 4,090 $ 484
------ ----- ----------
------ ----- ----------
</TABLE>
--------------
(a) To reclassify miscellaneous broadcasting revenues and expenses to
conform with the Company's presentation.
(b) Assumes these items would not have been incurred by the Company
during this period. Such items consisted primarily of corporate
and interest expenses.
(footnotes continued on following page)
19
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS--(CONTINUED)
(footnotes continued from preceding page)
(4) To reflect the pro forma depreciation and amortization expense from the
allocation of the purchase price of KLUV-FM based on the following:
franchise and other intangible assets of approximately $52.8 million over a
period of 15 years, and property and equipment of approximately $200,000
over 5 years.
(5) To reflect the pro forma depreciation and amortization expense from the
preliminary allocation of the purchase price of the Alliance Acquisition
based on the following: franchise and other intangible assets of
approximately $258 million over a period of 15 years, and property and
equipment of approximately $7 million over 5 years.
(6) To reflect additional interest expense on bank borrowings, at an interest
rate of approximately 7%, to finance the acquisition of KLUV-FM and a
portion of the Alliance Acquisition. The information set forth with respect
to the Alliance Acquisition assumes that the Offerings and the Alliance
Acquisition were completed on the same date.
(7) Adjusted to reflect the issuance of 8,500,000 shares of Class A Common Stock
in connection with the Offerings.
20
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ACQUISITION OF
COMPANY AS KRTH-FM COMPANY
REPORTED WPGC-AM/FM ACQUISITON OF ALLIANCE PRO FORMA
(1) AND WXYT-AM KLUV-FM ACQUISITION COMBINED
---------- ---------- -------------- -------------- ---------
<S> <C> <C> <C> <C> <C>
Total revenues............. $313,359 $ 14,852(2) $ 8,556(3) $ 34,196(4) $ 370,963
Less agency commissions.... 39,239 1,966(2) 1,724(3) 5,641(4) 48,570
---------- ---------- ------- -------------- ---------
Net revenues............... 274,120 12,886 6,832 28,555 322,393
Station operating expenses
excluding depreciation
and amortization......... 143,249 6,268(2) 2,620(3) 25,268(4) 177,405
---------- ---------- ------- -------------- ---------
Station operating income
excluding depreciation
and amortization......... 130,871 6,618 4,212 3,287 144,988
Depreciation and
amortization............... 46,606 4,099(5) 3,800(6) 18,583(7) 73,088
Corporate general and
administrative expenses.... 5,633 5,633
---------- ---------- ------- -------------- ---------
Operating income (loss).... 78,632 2,519 412 (15,296) 66,267
Interest expense........... (44,689) (2,954)(8) (3,570)(9) (396)(9) (51,609)
Interest income............ 160 160
Income taxes............... (890) (890)
---------- ---------- ------- -------------- ---------
Net earnings (loss)........ $ 33,213 $ (435) $ (3,158) $(15,692) $ 13,928
---------- ---------- ------- -------------- ---------
---------- ---------- ------- -------------- ---------
Net earnings per share..... $0.49(10) $0.18
Weighted average shares.... 67,139(10) 75,639(11)
</TABLE>
- ------------
(1) The Company's historical consolidated results of operations for the year
ended December 31, 1994 include the operating results of radio stations
KRTH-FM from February 15, 1994, WPGC-AM/FM from June 17, 1994 and WXYT-AM
from June 27, 1994, the dates the Company acquired such stations.
(2) To reflect the historical operating results of KRTH-FM for the period from
January 1, 1994 to February 14, 1994, WPGC-AM/FM from January 1, 1994 to
June 16, 1994, and WXYT-AM from January 1, 1994 to June 26, 1994 based upon
their respective unaudited financial statements.
(3) To reflect the historical operating results of KLUV-FM for the year ended
December 31, 1994 based upon its unaudited financial statements.
(footnotes continued on following page)
21
<PAGE>
INFINITY BROADCASTING CORPORATION
PRO FORMA COMBINED STATEMENT OF OPERATIONS--(CONTINUED)
(footnotes continued from preceding page)
(4) To reflect the historical operating results of Alliance as follows:
<TABLE>
<CAPTION>
ADJUSTED
CARRYING VALUE HISTORICAL
REPORTED BY RESULTS OF
ALLIANCE ADJUSTMENTS ALLIANCE
-------------- ----------- ----------
<S> <C> <C> <C>
Total revenues....................................... $ 33,288 $ 908(a) $ 34,196
Less agency commissions.............................. 5,641 5,641
------ ----------- ----------
Net revenues......................................... 27,647 908 28,555
Station operating expenses excluding depreciation and
amortization....................................... 24,608 660(a) 25,268
------ ----------- ----------
Station operating income excluding depreciation and
amortization....................................... 3,039 248 3,287
Depreciation and amortization........................ 5,426 5,426
Corporate general and administrative expenses........ 1,789 (1,789)(b) 0
------ ----------- ----------
Operating income (loss).............................. (4,176) 2,037 (2,139)
Interest and other expense........................... (4,395) 4,395(a)(b) 0
Interest and other income............................ 973 (973)(a)(b) 0
------ ----------- ----------
Net income (loss) before extraordinary item.......... $ (7,598) $ 5,459 $ (2,139)
------ ----------- ----------
------ ----------- ----------
</TABLE>
--------------
(a) To reclassify miscellaneous broadcasting revenues and expenses to
conform with the Company's presentation.
(b) Assumes these items would not have been incurred by the Company
during this period. Such items consisted primarily of corporate
and interest expenses.
(5) To reflect the pro forma depreciation and amortization expense from the
allocation of the purchase price of KRTH-FM, WPGC-AM/FM and WXYT-AM based
on the following: franchise and other intangible assets of approximately
$206 million over a period of 15 years, and property and equipment of
approximately $6 million principally over 5 years.
(6) To reflect the pro forma depreciation and amortization expense from the
allocation of the purchase price of KLUV-FM based on the following:
franchise and other intangible assets of approximately $52.8 million over a
period of 15 years, and property and equipment of approximately $200,000
over 5 years.
(7) To reflect the pro forma depreciation and amortization expense from the
preliminary allocation of the purchase price of the Alliance Acquisition
based on the following: franchise and other intangible assets of
approximately $258 million over a period of 15 years, and property and
equipment of approximately $7 million over 5 years.
(8) To reflect additional interest expense on bank borrowings, at an interest
rate of approximately 5.2%, to finance the acquisitions.
(9) To reflect additional interest expense on bank borrowings, at an interest
rate of approximately 7%, to finance the acquisition of KLUV-FM and a
portion of the Alliance Acquisition. The information set forth with respect
to the Alliance Acquisition assumes that the Offerings and the Alliance
Acquisition were completed on the same date.
(10) Adjusted to reflect the three-for-two stock split effected by the Company
on May 19, 1995.
(11) Adjusted to reflect the issuance of 8,500,000 shares of Class A Common
Stock in connection with the Offerings.
22
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The summary consolidated financial information for the Company presented
below under the captions "Statement of Operations Data" and "Balance Sheet Data"
for, and as of the end of, each of the years in the three-year period ended
December 31, 1994, is derived from the Company's Consolidated Financial
Statements, which financial statements have been audited by KPMG Peat Marwick
LLP, independent certified public accountants. The Company's Consolidated
Financial Statements as of December 31, 1993 and 1994 and for each of the years
in the three-year period ended December 31, 1994, and the report thereon, have
been incorporated herein by reference. This summary consolidated financial
information should be read in conjunction with the Company's Consolidated
Financial Statements and the Notes thereto, included in the 1994 Form 10-K
incorporated herein by reference, and with "Management's Discussion and Analysis
of Financial Condition and Results of Operations." The historical consolidated
financial results for the Company are not comparable from year to year because
of the acquisition of various broadcasting properties by the Company during the
periods covered.
The summary consolidated financial information for the Company presented
below under the captions "Statement of Operations Data" and "Balance Sheet Data"
for the six-month periods ended June 30, 1994 and 1995 and as of June 30, 1994
and 1995, is derived from the Company's unaudited Consolidated Financial
Statements, included in the June Form 10-Q incorporated herein by reference.
Such unaudited Consolidated Financial Statements include all adjustments
management considers necessary for a fair presentation of the data for such
periods. The historical financial results for the Company for the six months
ended June 30, 1995 are not necessarily indicative of results to be expected for
the full year. This unaudited summary consolidated financial information should
be read in conjunction with the Company's unaudited Consolidated Financial
Statements and the Notes thereto, included in the June Form 10-Q incorporated
herein by reference, and with "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
23
<PAGE>
INFINITY BROADCASTING CORPORATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
---------------------------------- --------------------
1992 1993 1994 1994 1995
--------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:(1)
Total revenues......................... $ 171,843 $234,240 $313,359 $134,036 $169,162
Net revenues........................... 150,230 204,522 274,120 116,877 146,891
Station operating expenses excluding
depreciation and amortization.......... 81,707 109,601 143,249 63,863 78,116
--------- -------- -------- -------- --------
Station operating income excluding
depreciation and amortization.......... 68,523 94,921 130,871 53,014 68,775
Dereciation and amortization.......... 28,926 38,853 46,606 22,050 24,000
Corporate general and administrative
expenses............................... 4,182 4,836 5,633 2,419 2,667
--------- -------- -------- -------- --------
Operating income....................... 35,415 51,232 78,632 28,545 42,108
Interest expense....................... 39,390 36,776 44,689 20,906 23,883
Net earnings (loss) before
extraordinary items(2)............... (9,432) 14,335 33,213 7,526 17,700
Net earnings (loss) per share before
extraordinary items(2)............... $ (.20) $ .23 $ .49 $ .11 $ .26
Cash dividends declared per common
share................................ -- -- -- -- --
Weighted average number of shares
outstanding(3)(4).................... 47,001(5) 62,055 67,139 67,184 67,275
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
---------------------------------- --------------------
1992 1993 1994 1994 1995
--------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:(1)
Total assets........................... $ 271,952 $378,040 $562,153 $570,345 $597,992
Long-term debt (including current
portion)............................. 380,625 365,062 531,750 544,187 562,000
Stockholders' equity (deficiency)...... (138,734) (24,240) (25,525) (28,858) (20,392)
Working capital........................ 4,656 10,610 28,877 (5,818) 34,565
</TABLE>
(footnotes on following page)
24
<PAGE>
INFINITY BROADCASTING CORPORATION (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------ ------------------
1992 1993 1994 1994 1995
------- ------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
FINANCIAL RATIOS AND OTHER DATA:(6)
Operating cash flow........................... $64,341 $90,085 $125,238 $50,595 $66,108
Capital expenditures.......................... 1,300 1,901 1,606 674 1,189
Operating cash flow less capital
expenditures................................ 63,041 88,184 123,632 49,921 64,919
Capital expenditures as a percentage of
operating cash flow......................... 2.02% 2.11% 1.28% 1.33% 1.80%
Operating cash flow to interest expense, net
of interest income.......................... 1.68x 2.48x 2.81x 2.43x 2.79x
Operating cash flow less capital expenditures
to interest expense, net of interest
income...................................... 1.65x 2.43x 2.78x 2.40x 2.74x
</TABLE>
- ------------
(1) The historical consolidated financial results for the Company are not
comparable from year to year because of the acquisition of various
broadcasting properties by the Company during the periods covered. See
"Business--Background" appearing in the 1994 Form 10-K, incorporated herein
by reference, and "Management's Discussion and Analysis of Financial
Condition and Results of Operations."
(2) For the year ended December 31, 1992, the Company recorded an extraordinary
loss of $12,318,000 ($0.26 per share) related to repayment of debt.
(3) See Notes 1(f) and 2 of the Notes to the Company's Consolidated Financial
Statements, appearing in the 1994 Form 10-K, incorporated herein by
reference.
(4) Includes shares of Class C Common Stock issuable upon the exercise of
warrants held by the Lehman Investors.
(5) Excludes shares of Common Stock issuable upon the exercise of warrants and
options and issuance of deferred shares.
(6) "Operating cash flow" means operating income plus depreciation and
amortization.
25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994
Net revenues for the six months ended June 30, 1995 were $146,891,000 as
compared to $116,877,000 for the first six months of 1994, an increase of
approximately 26%. The increase was due principally to higher advertising
revenues at most of the Company's stations, and the acquisitions of the radio
stations KRTH-FM (Los Angeles), WPGC-AM/FM (Washington, D.C.), WXYT-AM
(Detroit), and KLUV-FM (Dallas/Ft. Worth). On a pro forma basis, assuming the
above acquisitions had occurred as of the beginning of 1994, net revenues for
the first six months of 1995 would have increased by approximately 13%.
Station operating expenses excluding depreciation and amortization for the
six months ended June 30, 1995 were $78,116,000 as compared to $63,863,000 for
the first six months of 1994, an increase of approximately 22%. The increase
was principally due to the above acquisitions, expenses associated with higher
revenues and higher programming expenses. On a pro forma basis, assuming the
above acquisitions had occurred as of the beginning of 1994, station operating
expenses for the first six months of 1995 would have increased by approximately
10%.
Depreciation and amortization expense for the first six months of 1995 was
$24,000,000 as compared to $22,050,000 for the first six months of 1994, an
increase of approximately $1,950,000 or 9%. The increase was due to the
depreciation and amortization expense associated with the above acquisitions.
Operating income for the first six months of 1995 was $42,108,000 as
compared to $28,545,000 for the first six months of 1994, an increase of
approximately 48%. The increase was due principally to improved results at the
Company's radio stations.
Net financing expense (defined as interest expense less interest income)
for the first six months of 1995 was $23,722,000 as compared to $20,817,000
for thefirst six months of 1994, an increase of approximately 14%. The
increase was due principally to additional interest expense associated with
the additional borrowings incurred to finance the above acquisitions.
Net income for the first six months of 1995 was $17,700,000 ($0.26 per
share) as compared to $7,526,000 ($0.11 per share) for the first six months of
1994, an increase of approximately $10,174,000, or 135%.
Year Ended December 31, 1994 Compared to Year Ended December 31, 1993
Net revenues for the year ended December 31, 1994 were $274,120,000 as
compared to $204,522,000 for the year ended December 31, 1993, an increase of
approximately 34%. The increase was due principally to higher advertising
revenues at most of the Company's stations and the acquisitions of radio
stations KRTH-FM, WPGC-AM/FM and WXYT-AM. On a pro forma basis, assuming the
above acquisitions had occurred as of the beginning of 1993, net revenues for
the year ended December 31, 1994 would have increased by approximately 14%.
Station operating expenses (excluding depreciation and amortization) for
the year ended December 31, 1994 were $143,249,000 as compared to $109,601,000
for the year ended December 31, 1993, an increase of approximately 31%. The
increase was due principally to the above acquisitions, expenses associated
with higher revenues and higher programming expenses. On a pro forma basis,
assuming the above acquisitions had occurred as of the beginning of 1993,
station operating expenses in 1994 would have increased by approximately 11%.
26
<PAGE>
Depreciation and amortization expense for the year ended December 31, 1994
was $46,606,000 as compared to $38,853,000 for the year ended December 31, 1993,
an increase of approximately $7,753,000 or 20%. The increase was due to
depreciation and amortization expense associated with the above acquisitions.
Operating income for the year ended December 31, 1994 was $78,632,000, as
compared to $51,232,000 for the year ended December 31, 1993, an increase of
approximately 53%. The increase was due principally to improved results at the
Company's radio stations.
Net financing expense (defined as interest expense less interest income) for
the year ended December 31, 1994 was $44,529,000 as compared to $36,291,000 for
the year ended December 31, 1993, an increase of approximately 23%. The increase
was due principally to additional borrowings in connection with the above
acquisitions as well as higher interest rates during 1994.
Income taxes, principally state and local income taxes, for the year ended
December 31, 1994 were $890,000 as compared to $606,000 for the year ended
December 31, 1993, an increase of $284,000. No federal income taxes have been
provided as a result of available tax loss carry forwards.
Net earnings for the year ended December 31, 1994 was $33,213,000 ($0.49 per
share) as compared to $14,335,000 ($0.23 per share) for the year ended December
31, 1993, an increase of approximately $18,878,000 or 132%.
Year Ended December 31, 1993 Compared to Year Ended December 31, 1992
Net revenues for the year ended December 31, 1993 were $204,522,000 as
compared to $150,230,000 for the year ended December 31, 1992, an increase of
approximately 36%. The increase was due principally to higher advertising
revenues at most of the Company's stations and the acquisitions of radio
stations WIP-AM (Philadelphia) on September 1, 1993 and the WZGC-FM (Atlanta),
WZLX-FM (Boston) and WUSN-FM (Chicago) on February 1, 1993, and the acquisition
of WFAN-AM (New York) effective April 16, 1992. On a pro forma basis, assuming
the above acquisitions had occurred as of the beginning of 1992, net revenues
for the year ended December 31, 1993 would have increased by approximately 14%.
Station operating expenses (excluding depreciation and amortization) for the
year ended December 31, 1993 were $109,601,000 as compared to $81,707,000 for
the year ended December 31, 1992, an increase of approximately 34%. The increase
was due principally to the above acquisitions, expenses associated with higher
revenues and higher programming expenses. On a pro forma basis, assuming the
above acquisitions had occurred as of the beginning of 1992, station operating
expenses in 1993 would have increased by approximately 12%.
Depreciation and amortization expense for the year ended December 31, 1993
was $38,853,000 as compared to $28,926,000 for the year ended December 31, 1992,
an increase of approximately $9,927,000 or 34%. The increase was due to
depreciation and amortization expense associated with the above acquisitions,
partially offset by lower depreciation and amortization expense at the Company's
other radio stations.
Operating income for the year ended December 31, 1993 was $51,232,000, as
compared to $35,415,000 for the year ended December 31, 1992, an increase of
approximately 45%. The increase was due principally to improved results at the
Company's radio stations.
Net financing expense (defined as interest expense less interest income) for
the year ended December 31, 1993 was $36,291,000 as compared to $38,238,000 for
the year ended December 31, 1992, a decrease of approximately 5%. The decrease
was due principally to lower interest rates during 1993.
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<PAGE>
Net earnings before extraordinary items for the year ended December 31, 1993
was $14,335,000 ($0.23 per share) as compared to a net loss of $9,432,000 ($0.20
per share) for the year ended December 31, 1992, an increase of approximately
$23,767,000. As a result of the sale of shares of Class A Common Stock in
February 1992 through an initial public offering, the Company recorded in 1992 a
non-recurring charge of approximately $6,503,000, resulting from the issuance in
1990 of Common Stock to management.
In 1992, the Company recorded extraordinary charges of approximately
$12,318,000, including the write-off of deferred financing costs of
approximately $7,416,000 as a result of (a) the redemption of all of the
remaining approximately $98,000,000 principal amount of the Company's 14.25%
Subordinated Discount Debentures, and (b) the refinancing of the Company's then
existing bank credit agreement.
LIQUIDITY AND CAPITAL RESOURCES
For the first six months of 1995, net cash flow from operating activities
was approximately $38,068,000, as compared to $32,617,000 for the first six
months of 1994, an increase of approximately $5,451,000. The increase was
principally due to higher net income. The operating cash flow was used
principally to repay debt (approximately $20 million) and purchase approximately
473,000 shares of treasury stock (approximately $13.1 million). During the first
six months of 1995, the Company also borrowed approximately $50 million under
the Credit Agreement to finance the purchase of radio station KLUV-FM in
Dallas/Ft. Worth.
For the year ended December 31, 1994, net cash flow from operating
activities was approximately $73,944,000 as compared to $42,781,000 for the year
ended December 31, 1993, an increase of approximately $31,163,000, or 73%. The
increase was principally due to higher earnings in 1994, partially offset by
higher working capital requirements. During 1994, the Company borrowed
approximately $200 million under its then existing credit agreement to finance
the acquisition and working capital of radio stations KRTH-FM, WPGC-AM/FM and
WXYT-AM. The net cash flow from operating activities of approximately $73.9
million was used principally to repay debt and purchase treasury stock.
The Company's primary needs for capital are to make acquisitions of radio
stations and to cover interest payments on its indebtedness. The Company's radio
stations do not typically require substantial capital expenditures. The Company
expects its operations to generate sufficient cash to meet its capital
expenditure and debt service requirements.
On December 22, 1994, the Company and its subsidiaries amended and restated
the Credit Agreement, which provides for aggregate borrowings of up to $700
million, including an acquisition facility of $250 million and a revolving
credit facility of $150 million (which may be used to finance acquisitions of
radio stations). Approximately $332 million of borrowings under the Credit
Agreement were used to refinance the Company's existing debt. Pursuant to an
amendment to the Credit Agreement dated as of June 23, 1995, the Company's term
loans were converted into a reducing revolving credit facility, under which
amounts may be repaid and reborrowed from time to time for general corporate
purposes, including to finance acquisitions of radio stations. The lenders'
commitments under this reducing revolving credit facility and under the Credit
Agreement's acquisition facility will periodically be permanently reduced
starting in September 1998. As a result of this amendment, all of the amounts
outstanding under the Credit Agreement from time to time may be repaid and
reborrowed to finance acquisitions of radio stations. The Credit Agreement
permits voluntary prepayments in whole or in part at any time, and it requires
mandatory prepayments under specified circumstances. As of June 30, 1995, $138
million was available under the Credit Agreement for general corporate purposes,
including acquisitions of radio stations, investments and repurchases of Class A
Common Stock, and an additional $200 million was available solely for
acquisitions of radio stations.
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<PAGE>
The Credit Agreement contains various covenants and restrictions that impose
certain limitations on the Company and its subsidiaries, including, among
others, limitations on the incurrence of additional indebtedness by the Company
or its subsidiaries, the payment of cash dividends or other distributions, the
redemption or repurchase of the capital stock of the Company, the making of
investments and acquisitions and other similar limitations.
Under the terms of a Security Agreement among the Company, its subsidiaries,
and one of the Company's lenders acting as collateral agent, substantially all
of the assets of the Company and its subsidiaries, as well as the stock of the
Company's subsidiaries, are pledged to secure borrowings under the Credit
Agreement.
The Company has registered with the Commission, pursuant to a shelf
registration statement, $500 million in aggregate principal amount of Debt
Securities. The Company may issue Debt Securities from time to time, subject,
among other things, to compliance with applicable limitations under the Credit
Agreement. See "The Company--Recent Developments--Debt Registration Statement."
The Company expects that the net proceeds from the Offerings will be used to
finance future acquisitions of broadcasting properties, including the Alliance
Acquisition, and for general corporate purposes. Pending such application, the
Company expects to use such net proceeds to reduce borrowings under the
acquisition and revolving credit facilities of the Credit Agreement. The Company
anticipates that the amounts repaid with such net proceeds eventually will be
reborrowed in order to finance such future acquisitions, including the Alliance
Acquisition, subject to the consent of the lenders under the Credit Agreement to
such acquisitions, and for general corporate purposes. See "Use of Proceeds."
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<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the beneficial
ownership of the Common Stock as of September 1, 1995 (as adjusted to give
effect to the sale of shares of Class A Common Stock in the Offerings), by (1)
each person known to the Company to own beneficially more than 5% of any class
of Common Stock, (2) each director of the Company, (3) each executive officer of
the Company and (4) all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
COMMON STOCK COMMON STOCK COMMON STOCK
-------------------------- --------------------------- --------------------------
PERCENT PERCENT PERCENT
NAME SHARES (1) OF CLASS (1) SHARES (1) OF CLASS **(1) SHARES (1) OF CLASS (1)
- ----------------------------------- ---------- ------------ ---------- -------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gerald Carrus (2).................. -- -- 2,749,518 30.8% -- --
Michael A. Wiener (2).............. -- -- 2,389,708(3) 26.7% -- --
Mel Karmazin (2)................... 368,850(4) * 3,797,944(5) 42.5% -- --
Farid Suleman (2).................. 236,462(6) * -- -- --
Steven A. Lerman................... -- -- -- -- -- --
Alan R. Batkin..................... 23,624(7) * -- -- -- --
Jeffrey Sherman.................... 3,000(8) -- -- -- -- --
James L. Singelton................. -- -- -- -- -- --
James A. Stern..................... -- -- -- -- -- --
Lehman Investors (9)............... -- -- -- -- 14,147,460(10) 100%
The Putnam Advisory Company, Inc.
(11)............................. 710,363 1.4% -- -- -- --
Putnam Investment Management, Inc.
(11)............................. 5,294,536 10.7% -- -- -- --
College Retirement Equities Fund
(12)............................. 2,868,975 5.8% -- -- -- --
Nicholas-Applegate Capital
Management (13).................... 2,588,483 5.2%
All directors and executive
officers as a group (9 persons).. 631,936 1.3% 8,937,170 100.0%
<CAPTION>
PERCENT OF
TOTAL
VOTING
NAME POWER (1)
- ----------------------------------- ----------
<S> <C>
Gerald Carrus (2).................. 26.0%
Michael A. Wiener (2).............. 22.6%
Mel Karmazin (2)................... 27.4%
Farid Suleman (2).................. *
Steven A. Lerman................... --
Alan R. Batkin..................... *
Jeffrey Sherman.................... --
James L. Singelton................. --
James A. Stern..................... --
Lehman Investors (9)............... 11.9%
The Putnam Advisory Company, Inc.
(11)............................. *
Putnam Investment Management, Inc.
(11)............................. 5.0%
College Retirement Equities Fund
(12)............................. 2.7%
Nicholas-Applegate Capital
Management (13).................... 2.4%
All directors and executive
officers as a group (9 persons).. 64.3%
</TABLE>
- ------------
* Less than 1%
** Assumes the exercise of all options and deferred shares for the purchase of
Class B Common Stock beneficially owned. Such percentages for Messrs. Carrus
and Wiener would be 49.5% and 43.1%, respectively, assuming such options and
deferred shares are not exercised.
(1) The information as to beneficial ownership is based on information filed
with the Commission or furnished to the Company by the beneficial owners.
As used in the Table, "beneficial ownership" means the sole or shared power
to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to a security (i.e., the power to dispose of,
or to direct the disposition of, a security). For purposes of this Table, a
person is deemed to have "beneficial ownership" of any security that such
person has the right to acquire within 60 days after September 1, 1995,
except that "beneficial ownership" does not include the number of shares of
Class A Common Stock issuable upon conversion of Class B Common Stock or
Class C Common Stock, even though shares of Class B Common Stock and Class
C Common Stock are freely convertible into Class A Common Stock.
(2) The address of each person is Infinity Broadcasting Corporation, 600
Madison Avenue, New York, New York 10022.
(3) Includes 2,224,707 shares as to which Mr. Wiener has sole voting and
investment power.
(4) Includes options and warrants exercisable for 132,872 shares of Class A
Common Stock.
(5) Includes options and deferred shares exercisable for 3,387,139 shares of
Class B Common Stock.
(6) Includes options exercisable for 188,250 shares of Class A Common Stock.
(7) Includes options exercisable for 20,250 shares of Class A Common Stock,
1,687 shares as to which Mr. Batkin has sole voting and investment power
and 1,687 shares as to which Mr. Batkin has shared voting and investment
power.
(8) Includes options exercisable for 3,000 shares of Class A Common Stock.
(9) The general partners of the limited partnerships included in the Lehman
Investors are subsidiaries of Lehman Brothers Holdings Inc. The address for
each of the Lehman Investors is Three World Financial Center, New York, New
York 10285.
(10) Includes warrants exercisable for 13,403,289 shares of Class C Common
Stock.
(11) Includes Class A Common Stock beneficially owned by the Putnam Advisory
Company, Inc. ("PAC") and Putnam Investment Management, Inc. ("PIM") as
reported to the Company on January 23, 1995. PAC and PIM are both
wholly-owned subsidiaries of Putnam Investments, Inc. ("PI"), a
wholly-owned subsidiary of Marsh & McLennan Companies, Inc. ("M&MC"). Of
the 710,363 shares of Class A Common Stock beneficially owned by PAC,
552,026 shares are owned with shared voting power and all are owned with
shared dispositive power. Of the 4,584,173 shares of Class A Common Stock
beneficially owned by PIM, all are
(footnotes continued on following page)
30
<PAGE>
(footnotes continued from preceding page)
owned with shared dispositive power. M&MC disclaims beneficial ownership of
all shares of Class A Common Stock beneficially owned by PAC and PIM. The
address of PAC, PIM and PI is One Post Office Square, Boston, Massachusetts
02109 and of M&MC is 1166 Avenue of the Americas, New York, New York 10036.
(12) Includes Class A Common Stock beneficially owned by College Retirement
Equities Fund ("CREF") as reported to the Company in June, 1995. The
address of CREF is 730 Third Avenue, New York, New York 10017.
(13) Of the 2,588,483 shares of Class A Common Stock beneficially owned by
Nicholas-Applegate Capital Management ("Nicholas-Applegate"), all of such
shares are owned with sole dispositive power and 2,052,478 shares are owned
with sole voting power. Nicholas-Applegate does not have any voting power
with respect to 536,005 of such shares. The address of Nicholas-Applegate
is 600 West Broadway, Floor 29, San Diego, California 92101.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 200,000,000 shares of
Class A Common Stock, $.002 par value, 40,998,405 of which were issued and
outstanding at September 1, 1995; 17,500,000 shares of Class B Common Stock,
$.002 par value, 5,550,031 of which were issued and outstanding at September 1,
1995; 30,000,000 shares of Class C Common Stock, $.002 par value, 744,171 of
which were issued and outstanding at September 1, 1995; and 1,000,000 shares of
Preferred Stock, $.01 par value, none of which was issued or outstanding at such
date. Upon completion of the Offerings, the Company will have outstanding
49,498,405 shares of Class A Common Stock, 5,550,031 shares of Class B Common
Stock and 744,171 shares of Class C Common Stock. In addition, the Company will
have reserved for issuance (i) 23,084,630 shares of Class A Common Stock upon
the conversion of Class B or Class C Common Stock, (ii) an aggregate of 48,659
shares of Class A Common Stock upon the exercise of warrants exercisable for
Class A Common Stock, (iii) 6,190,337 shares of Class A Common Stock and
1,181,250 shares of Class B Common Stock under the Company's Stock Option Plan,
(iv) 263,250 shares of Class A Common Stock and 281,253 shares of Class B Common
Stock under the Company's Deferred Share Plan, (v) an aggregate of 2,908,960
shares of Class B Common Stock upon the exercise of options exercisable for
Class B Common Stock and (vi) an aggregate of 13,403,289 shares of Class C
Common Stock upon the exercise of Lehman Warrants. See "Description of Capital
Stock--Warrants and Options."
COMMON STOCK
Dividends. Holders of shares of Common Stock are entitled to receive such
dividends as may be declared by the Company's Board of Directors out of funds
legally available for such purpose. No dividends may be declared or paid in cash
or property on any share of any class of Common Stock, however, unless
simultaneously the same dividend is declared or paid on each share of the other
classes of Common Stock. In the case of any stock dividend, holders of Class A
Common Stock are entitled to receive the same percentage dividend (payable in
shares of Class A Common Stock) as the holders of Class B Common Stock receive
(payable in shares of Class B Common Stock) or the holders of Class C Common
Stock receive (payable in shares of Class C Common Stock). The payment of
dividends is currently restricted by the Credit Agreement and by the
Subordinated Indenture. See "Price Range of Common Stock and Dividends."
Voting Rights. Holders of shares of Common Stock vote as a single class on
all matters submitted to a vote of the stockholders, with each share of Class A
and Class C Common Stock entitled to one vote and each share of Class B Common
Stock entitled to ten votes, except (i) for the election of directors, (ii) with
respect to any proposed "going private" transaction between the Company and any
Principal Stockholder, and (iii) as otherwise provided by law.
In the election of directors, the holders of Class A Common Stock, voting as
a separate class, are entitled to elect two of the Company's nine directors and
holders of the Class C Common Stock, voting as a separate class, are also
entitled to elect two of the Company's nine directors. The holders of
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<PAGE>
Common Stock, voting as a single class with each share of Class A and Class C
Common Stock entitled to one vote and each share of Class B Common Stock
entitled to ten votes, are entitled to elect the remaining five directors.
Holders of Common Stock are not entitled to cumulative votes in the election of
directors.
In the event that all of the issued and outstanding shares of Class C Common
Stock are converted into shares of Class A Common Stock in accordance with the
terms of the Company's Restated Certificate of Incorporation (see "Common
Stock--Other Provisions"), the holders of the remaining shares of the
outstanding classes of Common Stock, voting as a single class, will be entitled
to elect the directors previously elected by the holders of the Class C Common
Stock.
The holders of the Common Stock vote as a single class with respect to any
proposed "going private" transaction with a Principal Stockholder, with each
share of each class of Common Stock entitled to one vote per share.
Under Delaware law, the affirmative vote of the holders of a majority of the
outstanding shares of any class of common stock is required to approve, among
other things, a change in the designations, preferences and limitations of the
shares of such class of common stock.
Liquidation Rights. Upon liquidation, dissolution, or winding-up of the
Company, the holders of Class A Common Stock are entitled to share ratably with
the holders of Class B and Class C Common Stock in all assets available for
distribution after payment in full of creditors.
Other Provisions. Each share of Class B Common Stock is convertible, at the
option of its holder, into one share of Class A Common Stock at any time. One
share of Class B Common Stock converts automatically into one share of Class A
Common Stock upon its sale or other transfer to a party unaffiliated with a
Principal Stockholder or, in the event of a transfer to an affiliated party,
upon the death of the transferor. Each share of Class C Common Stock is
convertible, at the option of its holder, into one share of Class A Common Stock
at any time. One share of Class C Common Stock converts automatically into one
share of Class A Common Stock upon its sale or other transfer to a party
unaffiliated with the Lehman Investors. In addition, all outstanding shares of
Class C Common Stock convert automatically into an equal number of shares of
Class A Common Stock upon the date on which the Lehman Investors no longer own
at least 10% of the shares of all classes of Common Stock on a fully diluted
basis. The holders of Common Stock are not entitled to preemptive or
subscription rights. The shares of Common Stock presently outstanding are, and
the shares of Class A Common Stock offered hereby will be, upon issuance,
validly issued, fully paid and nonassessable. In any merger, consolidation or
business combination, the consideration to be received per share by holders of
Class A Common Stock must be identical to that received by holders of Class B
and Class C Common Stock, except that in any such transaction in which shares of
Common Stock are distributed, such shares may differ as to voting rights to the
extent that voting rights now differ among the classes of Common Stock. No class
of Common Stock may be subdivided, consolidated, reclassified or otherwise
changed unless concurrently the other classes of Common Stock are subdivided,
consolidated, reclassified or otherwise changed in the same proportion and in
the same manner.
PREFERRED STOCK
The 1,000,000 authorized and unissued shares of Preferred Stock may be
issued with such designations, voting powers, preferences, and relative,
participating, optional, or other special rights, and qualifications,
limitations and restrictions of such rights, as the Company's Board of Directors
may authorize, including, but not limited to: (i) the distinctive designation of
each series and the number of shares that will constitute such series; (ii) the
voting rights, if any, of shares of such series; (iii) the dividend rate on the
shares of such series, any restriction, limitation or condition upon the payment
of such dividends, whether dividends shall be cumulative, and the dates on which
dividends are payable; (iv) the prices at which, and the terms and conditions on
which, the shares of such series may be
32
<PAGE>
redeemed, if such shares are redeemable; (v) the purchase or sinking fund
provisions, if any, for the purchase or redemption of shares of such series;
(vi) any preferential amount payable upon shares of such series in the event of
the liquidation, dissolution, or winding-up of the Company or the distribution
of its assets; and (vii) the prices or rates of conversion at which, and the
terms and conditions on which, the shares of such series may be converted into
other securities, if such shares are convertible. Although the Company has no
present intention to issue shares of Preferred Stock, the issuance of Preferred
Stock, or the issuance of rights to purchase such shares, could discourage an
unsolicited acquisition proposal.
WARRANTS AND OPTIONS
In September 1990, the Company issued warrants to purchase shares of Class C
Common Stock to the Lehman Investors for a net purchase price of approximately
$22.2 million, and the Company issued additional warrants to purchase shares of
Class C Common Stock to the Lehman Investors in September 1991 for a purchase
price of approximately $26.1 million (all such warrants issued in these two
transactions, the "Lehman Warrants"). The outstanding Lehman Warrants will
entitle the Lehman Investors to purchase an aggregate of 13,403,289 shares of
Class A Common Stock at an exercise price of $.00178 per share.
In June 1988, the Company issued options to Mr. Karmazin and in September
1991, the Company issued warrants to Mr. Karmazin (such options and warrants,
collectively, the "Karmazin Warrants"). The currently outstanding options
constituting the Karmazin Warrants entitle Mr. Karmazin to purchase an aggregate
of 2,908,960 shares of Class B Common Stock at an exercise price of $.0178 per
share, and the currently outstanding warrants constituting the Karmazin Warrants
entitle Mr. Karmazin to purchase an aggregate of 48,659 shares of Class A Common
Stock at an exercise price of $.0006 per share. In addition, in April 1993,
March 1994 and January 1995, in accordance with Mr. Karmazin's employment
agreement with the Company, the Company issued options and granted rights to
receive deferred shares to Mr. Karmazin under the Company's Stock Option and
Deferred Share Plans. These options and rights to receive deferred shares
entitle Mr. Karmazin to purchase an aggregate of 84,213 shares of Class A Common
Stock at an exercise price of $17.00 per share and 168,750, 112,500, 177,126 and
19,803 shares of Class B Common Stock at an exercise price of $6.17, $17.00,
$21.08 and $.002 per share, respectively.
The Company has reserved 48,659 shares of Class A Common Stock for issuance
upon the exercise of a portion of the Karmazin Warrants, 2,908,960 shares of
Class B Common Stock for issuance upon the exercise of the other Karmazin
Warrants and 13,403,289 shares of Class A Common Stock for issuance upon
exercise of the Lehman Warrants. All such warrants contain provisions that
prevent dilution of the rights of the holders of such warrants, including
provisions for adjusting the number of shares of common stock covered by such
warrants and the per share price of those shares in the event of the declaration
of any dividend on the Common Stock in shares of Common Stock or any
subdivision, combination or reclassification of the Common Stock. In addition,
the Company has reserved 6,453,587 shares of Class A Common Stock and 1,462,503
shares of Class B Common Stock for issuance under the Company's Stock Option and
Deferred Share Plans.
TRANSFER AGENT
Harris Trust Company of New York is the Transfer Agent and Registrar for the
Class A Common Stock.
FOREIGN OWNERSHIP
The Company's Restated Certificate of Incorporation restricts the ownership,
voting and transfer of the Company's capital stock, including the Common Stock,
in accordance with the Communications
33
<PAGE>
Act and the rules of the FCC, to prohibit ownership of more than 25% of the
Company's outstanding capital stock (or more than 25% of the voting rights it
represents) by or for the account of aliens or corporations otherwise subject to
domination or control by aliens. Such Certificate also prohibits any transfer of
the Company's capital stock that would cause the Company to violate this
prohibition. In addition, the Certificate authorizes the Board of Directors of
the Company to adopt such provisions as it deems necessary to enforce these
prohibitions.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the Offerings, the Company will have outstanding
49,498,405 shares of Class A Common Stock, 5,550,031 shares of Class B Common
Stock and 744,171 shares of Class C Common Stock. Each share of Class B Common
Stock is convertible at the option of its holder into one share of Class A
Common Stock at any time, and each share automatically converts into one share
of Class A Common Stock upon the sale or other transfer to a party unaffiliated
with a Principal Stockholder or, if shares have been transferred to an
affiliated party, upon the death of the transferor of such shares. Each share of
Class C Common Stock is convertible, at the option of its holder, into one share
of Class A Common Stock at any time. One share of Class C Common Stock converts
automatically into one share of Class A Common Stock upon its sale or other
transfer to a party unaffiliated with the Lehman Investors. In addition, all
outstanding shares of Class C Common Stock convert automatically into an equal
number of shares of Class A Common Stock on the date on which the Lehman
Investors no longer own at least 10% of the shares of all classes of Common
Stock of the Company on a fully diluted basis. See "Description of Capital
Stock--Common Stock." The 8,500,000 shares of Class A Common Stock sold in the
Offerings will be freely tradeable without restriction or further registration
under the Securities Act, except by affiliates of the Company.
284,537 shares of Class A Common Stock, 5,550,031 shares of Class B Common
Stock and 14,147,460 shares of Class C Common Stock beneficially owned by the
Principal Stockholders and the Lehman Investors (including 48,659 shares of
Class A Common Stock and 13,403,289 shares of Class C Common Stock issuable upon
exercise of the Lehman Warrants and a portion of the Karmazin Warrants) are
"restricted" shares as defined in Rule 144. All of these "restricted" shares
(other than the shares issuable upon exercise of Lehman Warrants and Karmazin
Warrants to the extent that, under Rule 144, such shares are not deemed to have
been acquired when the Lehman Warrants and Karmazin Warrants were acquired) have
been beneficially owned for at least two years by existing stockholders and may
be sold in the open market pursuant to Rule 144, subject, in the case of the
shares of Class C Common Stock issuable to the Lehman Investors upon the
exercise of Lehman Warrants, to certain conditions which are likely to be
satisfied and, in the case of all such "restricted" shares, to the restrictions
of such Rule with regard to sales by affiliates. In general, under Rule 144, an
affiliate of the Company may sell within any three-month period a number of
shares that does not exceed the greater of 1% of the then outstanding shares of
Class A Common Stock or the average weekly trading volume of the Class A Common
Stock on all national securities exchanges and/or reported through the automated
quotation system of registered securities associations during the four calendar
weeks preceding such sale. In addition, sales under Rule 144 may be made only
through unsolicited "broker's transactions" or directly with a market maker and
are subject to various other conditions, including the availability of certain
public information about the Company for 90 days.
6,502,246 shares of Class A Common Stock and 4,371,463 shares of Class B
Common Stock that have been reserved for issuance under the Company's Stock
Option and Deferred Share Plans and the Karmazin Warrants, including 84,213
shares of Class A Common Stock and 3,387,139 shares of Class B Common Stock
issuable to Mr. Karmazin upon exercise of options and issuance of deferred
shares, have been registered under the Act and will be freely tradeable upon
issuance and, in the case of shares of Class B Common Stock, conversion into
Class A Common Stock, without restriction or further
34
<PAGE>
registration under the Securities Act, except that shares held by affiliates of
the Company must be sold subject to the applicable restrictions of Rule 144
under the Securities Act.
The Company and the Principal Stockholders have each agreed not to sell or
grant any option for the sale of, or otherwise dispose of, any Common Stock, or
any securities convertible into or exchangeable or exercisable for shares of
Common Stock, other than the shares of Common Stock that may be offered by the
Company in the Offerings and certain other limited exceptions, and not to file
or request to be filed, as the case may be, any registration statement with
respect to Common Stock, for a period of 90 days after the date of this
Prospectus without the consent of the Representatives. In addition, the Lehman
Investors have each agreed not to effect any public sale or distribution of any
shares of Common Stock, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, for a period of 90 days after the date
of this Prospectus without the consent of the Representatives.
The Stockholders' Agreement among the Company, the Principal Stockholders
and the Lehman Investors (the "Stockholders' Agreement") provides that each of
the Principal Stockholders has the right to require the Company to prepare and
file one registration statement under the Securities Act with respect to their
shares of Common Stock, and the Company is required to use its best efforts to
effect such registration, subject to certain conditions and limitations. The
Stockholders' Agreement also provides that the Lehman Investors have one
remaining right to require the Company to prepare and file a registration
statement under the Securities Act with respect to their shares of Common Stock,
and the Company is required to use its best efforts to effect such registration,
subject to certain conditions and limitations. The Stockholders' Agreement also
provides that in the event the Company proposes to register any of its
securities under the Securities Act, whether or not for its own account, at any
time or times, each of the Principal Stockholders and the Lehman Investors shall
be entitled, with certain exceptions, to include their shares of Common Stock in
such registration unless the managing underwriters of such offering exclude for
marketing reasons some or all of such shares from such registration.
The Company can make no prediction as to the effect, if any, that sales of
shares of the Common Stock, or the availability of shares for future sale, will
have on the market price of the Class A Common Stock prevailing from time to
time. Sales of substantial amounts of Common Stock (including shares issued upon
the exercise of warrants or options) in the public market, or the perception
that such sales could occur, could depress the prevailing market price for the
Class A Common Stock. Such sales may also make it more difficult for the Company
to sell equity securities or equity-related securities in the future at a time
and price which it deems appropriate.
35
<PAGE>
CERTAIN U.S. TAX CONSIDERATIONS APPLICABLE TO
NON-U.S. HOLDERS OF THE CLASS A COMMON STOCK
The following is a general discussion of certain U.S. federal income and estate
tax consequences of the ownership and disposition of Class A Common Stock by a
person that, for U.S. federal income tax purposes, is a non-resident alien
individual, a foreign corporation, a foreign partnership or a foreign estate or
trust (a "non-U.S. holder"). The discussion is based upon the U.S. Internal
Revenue Code of 1986, as amended (the "Code"), existing and proposed Treasury
regulations promulgated thereunder, and administrative and judicial
interpretations thereof as of the date hereof, all of which are subject to
change, possibly with retroactive effect. The discussion does not address all
aspects of U.S. federal taxation that may be relevant to a particular non-U.S.
holder's tax position and does not deal with U.S. state and local or non-U.S.
tax consequences.
PROSPECTIVE NON-U.S. HOLDERS OF CLASS A COMMON STOCK ARE ADVISED TO CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES, AS WELL AS ANY NON-U.S. TAX CONSEQUENCES, OF PURCHASING, HOLDING
AND DISPOSING OF CLASS A COMMON STOCK.
Dividends. Dividends paid to a non-U.S. holder of Class A Common Stock
generally will be subject to withholding of U.S. federal income tax at a 30%
rate or such lower rate as may be specified by an applicable income tax treaty.
However, except as may be otherwise provided in an applicable income tax treaty,
dividends that are effectively connected with a non-U.S. holder's conduct of a
trade or business within the United States are subject to U.S. federal income
tax on a net income basis at applicable graduated individual or corporate rates,
and generally are not subject to withholding. Any such effectively connected
dividends received by a foreign corporation may also be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty. Currently certain certification and disclosure
requirements must be complied with in order to be exempt from withholding with
respect to effectively connected dividends.
Under current Treasury regulations, dividends paid to an address in a
foreign country are presumed to be paid to a resident of such country (unless
the payer has knowledge to the contrary) for purposes of determining the
applicability of a tax treaty rate. Under proposed Treasury regulations not
currently in effect, however, a non-U.S. holder of Class A Common Stock who
wishes to claim the benefit of an applicable treaty rate would be required to
satisfy certain certification and other requirements. The procedures for
determining the applicable rate of withholding on dividends under income tax
treaties are under review by the U.S. Treasury and their application to the
Class A Common Stock could be changed by future regulations.
A non-U.S. holder of Class A Common Stock that is eligible for a reduced
rate of U.S. withholding tax pursuant to an income tax treaty may obtain a
refund of any excess amounts withheld by filing an appropriate claim for refund
with the U.S. Internal Revenue Service.
Gain on Disposition of Class A Common Stock. A non-U.S. holder generally
will not be subject to U.S. federal income tax in respect of gain recognized on
a disposition of Class A Common Stock unless (i) the gain is effectively
connected with a trade or business of the non-U.S. holder within the United
States or, if a tax treaty applies, attributable to a U.S. permanent
establishment of the non-U.S. holder (and, if the holder is a foreign
corporation, the branch profits tax described above under "--Dividends" may also
apply), (ii) in the case of a non-U.S. holder who is an individual and holds the
Class A Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year of the disposition and certain
other conditions are met, or (iii) the Company is or has been a "U.S. real
property holding corporation" for U.S. federal income tax purposes and certain
other conditions are met. The Company does not believe that it has been or is
currently, and does not anticipate becoming, a "U.S. real property holding
corporation."
36
<PAGE>
Federal Estate Taxes. Class A Common Stock owned or treated as owned by an
individual non-U.S. holder at the time of death will be included in such
holder's gross estate for U.S. federal estate tax purposes, unless an applicable
estate tax treaty provides otherwise.
U.S. Information Reporting Requirements and Backup Withholding Tax. The
Company must report annually to the U.S. Internal Revenue Service and to each
non-U.S. holder the amount of dividends paid to such holder on the Class A
Common Stock and the tax withheld with respect to such dividends, regardless of
whether withholding was required. Such information may be made available by the
Internal Revenue Service to the tax authorities in the country in which the
non-U.S. holder resides under the provisions of an applicable income tax treaty
or agreement.
Backup withholding (which generally is a withholding tax imposed at the rate
of 31% on certain payments to persons that are not "exempt recipients" and that
fail to furnish certain information under the U.S. information reporting
requirements) and certain related information reporting requirements generally
will not apply to dividends paid on Class A Common Stock to a non-U.S. holder at
an address outside the United States unless the payer has knowledge that the
payee is a U.S. person. In general, backup withholding and information reporting
will not apply to a payment of the proceeds of a sale of Class A Common Stock to
or through a foreign office of a broker. If, however, such broker is, for U.S.
federal income tax purposes, a U.S. person, a controlled foreign corporation, or
a foreign person that derives 50% or more of its gross income for certain
periods from the conduct of a trade or business within the United States, such
payments will not be subject to backup withholding but will be subject to the
related information reporting requirements, unless (1) such broker has
documentary evidence in its records that the beneficial owner is a non-U.S.
holder and certain other conditions are met or (2) the beneficial owner
otherwise establishes an exemption. Payment to or through a U.S. office of a
broker of the proceeds of a sale of Class A Common Stock will be subject to both
backup withholding and information reporting unless the beneficial owner
certifies under penalties of perjury that it is a non-U.S. holder or otherwise
establishes an exemption.
Any amounts withheld under the backup withholding rules from a payment to a
non-U.S. holder may be allowed as a refund or a credit against such holder's
U.S. federal income tax liability if the required information is furnished to
the U.S. Internal Revenue Service.
The backup withholding and information reporting rules are currently under
review by the U.S. Treasury and their application to the Class A Common Stock
could be changed by future regulations.
37
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"International Purchase Agreement"), the Company has agreed to sell to each of
the underwriters named below (the "International Underwriters"), and each of the
International Underwriters, for whom Merrill Lynch International Limited,
Goldman Sachs International, Alex. Brown & Sons Incorporated, Donaldson, Lufkin
& Jenrette Securities Corporation and Smith Barney Inc. are acting as
representatives (the "International Representatives"), severally has agreed to
purchase, the aggregate number of shares of Class A Common Stock set forth
opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL UNDERWRITERS SHARES
-------------------------- ---------
<S> <C>
Merrill Lynch International Limited.............................................. 298,000
Goldman Sachs International...................................................... 298,000
Alex. Brown & Sons Incorporated.................................................. 298,000
Donaldson, Lufkin & Jenrette Securities Corporation.............................. 298,000
Smith Barney Inc................................................................. 298,000
Banque Paribas................................................................... 70,000
Swiss Bank Corporation........................................................... 70,000
UBS Limited...................................................................... 70,000
---------
Total................................................................ 1,700,000
---------
---------
</TABLE>
The Company has also entered into a purchase agreement (the "U.S. Purchase
Agreement" and, together with the International Purchase Agreement, the
"Purchase Agreements") with Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Goldman, Sachs & Co., Alex. Brown & Sons Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation and Smith Barney Inc., acting as representatives
(the "U.S. Representatives" and, together with the International
Representatives, the "Representatives"), and certain other underwriters in the
United States and Canada (collectively, the "U.S. Underwriters" and, together
with the International Underwriters, the "Underwriters"). Subject to the terms
and conditions set forth in the International Purchase Agreement, the Company
has agreed to sell to the U.S. Underwriters, and the U.S. Underwriters severally
have agreed to purchase, an aggregate of 6,800,000 shares of Class A Common
Stock.
In each Purchase Agreement, the Underwriters named therein have agreed,
subject to the terms and conditions set forth in such Purchase Agreement, to
purchase all of the shares of Class A Common Stock being sold pursuant to such
Purchase Agreement if any of the shares of Class A Common Stock being sold
pursuant to such Purchase Agreement are purchased. Under certain circumstances,
under the Purchase Agreements, the commitments of non-defaulting Underwriters
may be increased. Each Purchase Agreement provides that the Company is not
obligated to sell, and the Underwriters named therein are not obligated to
purchase, the shares of Class A Common Stock under the terms of the Purchase
Agreement unless all of the shares of Class A Common Stock to be sold pursuant
to the Purchase Agreements are contemporaneously sold.
The International Representatives have advised the Company that the
International Underwriters propose to offer the shares of Class A Common Stock
offered hereby to the public initially at the public offering price set forth on
the cover page of this Prospectus and to certain dealers at such price less a
concession not in excess of $.68 per share of Class A Common Stock, and that the
International Underwriters may allow, and such dealers may reallow, a discount
not in excess of $.10 per share of Class A Common Stock on sales to certain
other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.
The public offering price per share of Class A Common Stock and the
underwriting discount per share of Class A Common Stock are identical for both
Offerings.
38
<PAGE>
The Company has granted to the International Underwriters and the U.S.
Underwriters options to purchase up to an aggregate of 255,000 and 1,020,000
shares of Class A Common Stock, respectively, at the initial public offering
price, less the underwriting discount. Such options, which will expire 30 days
after the date of this Prospectus, may be exercised solely to cover
over-allotments. To the extent that the Underwriters exercise such options, each
of the Underwriters will have a firm commitment, subject to certain conditions,
to purchase approximately the same percentage of the option shares that the
number of shares to be purchased initially by that Underwriter is of the
8,500,000 shares of Class A Common Stock initially purchased by the
Underwriters.
The Company has been informed that the Underwriters have entered into an
agreement (the "Intersyndicate Agreement") providing for the coordination of
their activities. Pursuant to the Intersyndicate Agreement, the International
Underwriters and the U.S. Underwriters are permitted to sell shares of Class A
Common Stock to each other.
The Company and the Principal Stockholders have each agreed not to sell or
grant any option for the sale of, or otherwise dispose of, any Common Stock, or
any securities convertible into or exchangeable or exercisable for shares of
Common Stock, other than the shares of Common Stock that may be offered by the
Company in the Offerings and certain other limited exceptions, and not to file
or request to be filed, as the case may be, any registration statement with
respect to Common Stock, for a period of 90 days after the date of this
Prospectus without the consent of the Representatives. In addition, the Lehman
Investors have each agreed not to effect any public sale or distribution of any
shares of Common Stock, or any securities convertible into or exchangeable or
exercisable for shares of Common Stock, for a period of 90 days after the date
of this Prospectus without the consent of the Representatives.
The Company has been informed that, under the terms of the Intersyndicate
Agreement, the U.S. Underwriters and any dealer to whom they sell shares of
Class A Common Stock will not offer to sell or resell shares of Class A Common
Stock to persons who are non-U.S. or non-Canadian persons or to persons they
believe intend to resell to persons who are non-U.S. or non-Canadian persons,
and the International Underwriters and any bank, broker or dealer to whom they
sell shares of Class A Common Stock will not offer to resell shares of Class A
Common Stock to U.S. persons or to Canadian persons or to persons they believe
intend to resell to U.S. persons or to Canadian persons, except in the case of
transactions pursuant to the Intersyndicate Agreement which, among other things,
permits the Underwriters to purchase from each other and to offer to resell such
number of shares of Class A Common Stock as the selling Underwriter or
Underwriters and the purchasing Underwriter or Underwriters may agree.
Each Underwriter has represented and agreed that it has not offered or sold
and will not offer or sell any shares of Class A Common Stock to persons in the
United Kingdom prior to admission of the shares of Class A Common Stock to
listing in accordance with Part IV of the Financial Services Act 1986 (the
"Act") except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995 or the
Act; it has complied and will comply with all applicable provisions of the Act
with respect to anything done by it in relation to the shares of Class A Common
Stock in, from or otherwise involving the United Kingdom; and it has only issued
or passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue of the shares of Class A Common
Stock, other than any document which consists of or any part of listing
particulars, supplementary listing particulars or any other document required or
permitted to be published by listing rules under Part IV of the Act, to a person
who is of a kind described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995 or is a person to whom such
document may otherwise lawfully be issued or passed on.
39
<PAGE>
Purchasers of the shares of Class A Common Stock offered hereby may be
required to pay stamp taxes and other charges in accordance with the laws and
practices of the country of purchase in addition to the offering price set forth
on the cover page hereof.
Alliance is an affiliate of Goldman, Sachs & Co. Upon consummation of the
Alliance Acquisition, Goldman, Sachs & Co. may be deemed to have received more
than 10% of the net proceeds of the Offerings. See "Use of Proceeds." The
Offerings are being made pursuant to the provisions of paragraph (8) of Article
III, Section 44 of the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. (the "NASD") regarding participation by an NASD member
in a public offering of an issuer's securities where more than 10% of the net
offering proceeds are intended to be paid to members participating in the
distribution or associated or affiliated persons of such members.
The Lehman Investors, who hold 100% of the Class C Common Stock and,
therefore, are entitled to elect two of the Company's nine directors, are
certain merchant banking partnerships affiliated with Lehman Brothers. See
"Principal Stockholders." Lehman Brothers is an NASD member which is
participating in the distribution of the Class A Common Stock. Accordingly, the
underwriting arrangements for the Offerings will comply with the requirements of
Schedule E to the By-laws of the NASD regarding an NASD member firm's
participation in distributing its affiliate's securities. As of the date of
filing of the Registration Statement (as defined in "Available Information") of
which this Prospectus is a part and as of the effective date of the Registration
Statement, there existed a bona fide independent market (within the meaning of
Schedule E to the By-laws of the NASD) with respect to the Class A Common Stock.
LEGAL MATTERS
The validity of the shares of Class A Common Stock being offered by this
Prospectus will be passed upon for the Company by Debevoise & Plimpton, 875
Third Avenue, New York, New York 10022. Certain legal matters will be passed
upon for the Underwriters by Simpson Thacher & Bartlett (a partnership which
includes professional corporations), 425 Lexington Avenue, New York, New York
10017.
EXPERTS
The consolidated financial statements and consolidated financial statement
schedule of Infinity Broadcasting Corporation and subsidiaries as of December
31, 1994 and 1993, and for each of the years in the three-year period ended
December 31, 1994, have been incorporated by reference herein and in the
registration statement in reliance on the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
To the extent that KPMG Peat Marwick LLP audits and reports on financial
statements of Infinity Broadcasting Corporation and subsidiaries issued at
future dates, and consents to the use of their report thereon, such financial
statements also will be incorporated by reference in the Registration Statement
in reliance upon their report and said authority.
The consolidated financial statements of Alliance Broadcasting, L.P. as of
December 31, 1993 and 1994 and for each of the three years in the period ended
December 31, 1994, incorporated herein and elsewhere in the Registration
Statement by reference to the Form 8-K, have been so incorporated in reliance on
the report of Price Waterhouse LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
40
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of the Commission at
Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and
at the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, Suite 1300, New York, New York 10048 and Citicorp Center, 14th Floor,
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. In addition, such reports, proxy statements and other
information can be inspected at the offices of The New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments thereto, the "Registration Statement") under
the Securities Act with respect to the shares of Class A Common Stock offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
omits certain information contained in the Registration Statement as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company and the shares of Class A Common Stock offered hereby,
reference is made to the Registration Statement and the exhibits and the
financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.
This Prospectus does not constitute an offer to sell or the solicitation of
an offer to buy the shares of Class A Common Stock offered hereby in any
jurisdiction in which such offer or solicitation is unlawful. There are
restrictions on the offer and sale of the shares of Class A Common Stock offered
hereby in the United Kingdom. All applicable provisions of the Act, the Public
Offers of Securities Regulations 1995, the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1995, the Companies Act 1985 and
any other applicable law, rule, regulation or order with respect to anything
done by any person in relation to the shares of Class A Common Stock offered
hereby in, from, or otherwise involving the United Kingdom must be compiled
with. See "Underwriting."
In this Prospectus, reference to "dollars," "U.S.$" and "$" are to United
States dollars.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference:
1. the Company's Annual Report on Form 10-K for the year ended December
31, 1994 (filed March 31, 1995);
2. the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995 (filed May 12, 1995);
3. the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1995 (filed August 14, 1995), as amended on August 15, 1995;
41
<PAGE>
4. the Company's Current Report on Form 8-K (filed September 27, 1995);
and
5. the description of the Class A Common Stock in the Company's
Registration Statement on Form 8-A (filed January 24, 1992), as amended by
Amendment No. 1 thereto (filed January 29, 1992).
All documents or reports filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the Offerings described herein shall be deemed to be incorporated
by reference into this Prospectus and to be a part of this Prospectus from the
date of filing of such document. Any statement contained herein, or in a
document all or a portion of which is incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference (other than
exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: Infinity
Broadcasting Corporation, 600 Madison Avenue, New York, New York 10022,
Attention: Secretary's Office (telephone: (212) 750-6400).
42
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE CLASS A
COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
-------------------
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.................... 3
Risk Factors.......................... 7
The Company........................... 10
Use of Proceeds....................... 14
Price Range of Common Stock and
Dividend Policy..................... 15
Capitalization........................ 16
Pro Forma Combined Financial
Statements.......................... 17
Summary Consolidated Financial
Information......................... 23
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 26
Principal Stockholders................ 30
Description of Capital Stock.......... 31
Shares Eligible for Future Sale....... 34
Certain U.S. Tax Considerations
Applicable to Non-U.S. Holders of
the Class A Common Stock............ 36
Underwriting.......................... 38
Legal Matters......................... 40
Experts............................... 40
Available Information................. 41
Incorporation of Certain Documents by
Reference........................... 41
8,500,000 SHARES
[INFINITY LOGO]
BROADCASTING
CORPORATION
CLASS A COMMON STOCK
-------------------
PROSPECTUS
-------------------
MERRILL LYNCH
INTERNATIONAL LIMITED
GOLDMAN SACHS
INTERNATIONAL
ALEX. BROWN & SONS
INCORPORATED
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SMITH BARNEY INC.
PARIBAS CAPITAL MARKETS
SBC WARBURG
A DIVISION OF SWISS BANK CORPORATION
UBS LIMITED
OCTOBER 18, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
