FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO APPLICATION OF REPORT
FILED PURSUANT TO SECTION 12, 13, OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report: May 15, 1996 Date of Event: March 26, 1996
INFINITY BROADCASTING CORPORATION
---------------------------------
(Exact name of registrant as specified in charter)
DELAWARE 0-14702 13-2766282
- ------------------------------------------------------------------------------
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
600 MADISON AVENUE, NEW YORK, NEW YORK 10022
--------------------------------------------
(Address of principal executive offices)
(212) 750-6400
-------------------------------
(Registrant's telephone number)
This Amendment No. 1 amends the registrant's Current Report on Form 8-K filed on
April 10, 1996 and supplies the financial statements for an acquired business
and pro forma financial information within 60 days of the original due date of
such Report as permitted by Item 7(a)(4) and Item 7(b)(2) of Form 8-K.
<PAGE>
Item 2. ACQUISITION OR DISPOSAL OF ASSETS
---------------------------------
On March 26, 1996, Infinity Broadcasting Corporation (the "Company")
completed the acquisition of all of the outstanding stock of TDI Worldwide,
Inc., a seller of advertising space on buses and transit systems, for a total
purchase price of approximately $300,000,000 (the "TDI Acquisition").
The purchase price of the acquisition was funded by bank borrowings of
approximately $231,000,000 under the Company's Second Amended and Restated
Credit Agreement, dated as of December 22, 1994, as amended, with a syndicated
group of bank lenders and through the issuance of approximately 2.4 million
newly issued shares of the Company's Class A Common Stock (as adjusted for the
Company's three-for-two stock split paid on April 11, 1996).
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
---------------------------------
(a) Financial Statements of Business Acquired.
The information called for by this Item is included on Pages F-1
through F-22 of this filing and is incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma combined balance sheet data at December 31,
1995 is presented as if, at such date, the Company had completed (i) the TDI
Acquisition, (ii) the acquisition of seven radio stations from various entities
affiliated with Alliance Broadcasting, Inc. (the "Alliance Acquisition"), which
acquisition was completed on January 16, 1996 and previously reported on the
Company's Current Report on Form 8-K/A (filed on April 1, 1996), and (iii) the
disposition of radio station KYCW-FM, Seattle, Washington (the "KYCW-FM
Disposition"). The unaudited pro forma combined statements of operations data
for the year ended December 31, 1995 are presented as if, at the beginning of
such period, the Company had completed the TDI Acquisition and had acquired
radio station KLUV-FM, the acquisition of which was completed on April 21, 1995,
and completed the Alliance Acquisition and the KYCW-FM Disposition.
In the opinion of management, all adjustments necessary to present
fairly this pro forma information have been made.
The pro forma combined financial statements that follow should be read
in conjunction with the Company's Consolidated Financial Statements and Notes
thereto, which appear in the Company's Annual Report on Form 10-K for the fiscal
year ending December 31, 1995, and with the Financial Statements and Notes
thereto of (i) TDI Worldwide, Inc. and Subsidiaries appearing elsewhere in this
filing and (ii) Alliance Broadcasting, L.P. filed with the Company's Current
Report on Form 8-K/A (filed on April 1, 1996). The pro forma information is not
necessarily indicative of the results that would have been reported had the TDI
Acquisition, the acquisition
<PAGE>
of radio station KLUV-FM, the Alliance Acquisition or the KYCW-FM Disposition
actually occurred on the dates specified, nor is it indicative of the Company's
future results.
(c) Exhibits
Exhibit
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
2(a) Stock Purchase Agreement, dated as of February 22, 1996, by
and among the Company, William M. Apfelbaum, each of the other
stockholders of TDI Worldwide, Inc. identified on Schedule 4.2
thereto. (This exhibit can be found as Exhibit 2(i) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (File No. 0-14702) and is incorporated
herein by reference.)
23(a) Consent of Coopers & Lybrand L.L.P.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
INFINITY BROADCASTING CORPORATION
By: /S/ FARID SULEMAN
---------------------------------
Farid Suleman
Vice President - Finance
and Chief Financial Officer
Date: May 15, 1996
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC.
AND SUBSIDIARIES)
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995 AND 1994 AND FOR EACH OF
THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1995
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
TDI Worldwide, Inc.:
We have audited the accompanying consolidated balance sheets of TDI WORLDWIDE,
INC. and SUBSIDIARIES (Formerly American Media Network Inc. and Subsidiaries) as
of December 31, 1995 and 1994, and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of TDI Worldwide,
Inc. and Subsidiaries as of December 31, 1995 and 1994 and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1995, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P
New York, New York
April 2, 1996.
F-1
<PAGE>
<TABLE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
CONSOLIDATED BALANCE SHEETS
<CAPTION>
DECEMBER 31, December 31,
1995 1994
----------------------- -----------------------
(In thousands, except per share amounts)
<S> <C> <C>
Current assets:
Cash $ 13,329 $ 7,303
Accounts receivable (less allowance for doubtful
accounts of approximately $1,520 and $1,679) 37,966 30,754
Prepaid expenses and other current assets 6,559 3,127
Deferred tax asset 1,842 1,579
------------------- -------------------
Total current assets 59,696 42,763
Property, equipment and improvements, net 5,586 7,648
Deferred tax asset 5,025 9,086
Intangible assets 16,891 -
Other assets 4,987 3,096
------------------- -------------------
Total assets $ 92,185 $ 62,593
=================== ===================
Current liabilities:
Current maturities of long-term debt $ 6,851 $ 2,843
Current maturities of capitalized lease obligations 382 387
Transit franchise payable 10,712 9,792
Accounts payable and other current liabilities 17,486 12,193
Accrued interest payable 2,146 569
Accrued insurance 2,000 1,687
------------------- -------------------
Total current liabilities 39,577 27,471
------------------- -------------------
Long-term debt, net of current maturities 35,547 11,649
Capitalized lease obligations 438 372
Subordinated notes - 5,000
Minority interest - 3,063
Deferred tax liability 4,407 -
------------------- -------------------
Commitments and contingent liabilities
Stockholders' equity:
Common stock - Class A: par value $0.01 per share;
authorized, 1,053 shares; issued and outstanding
633 shares and 530 shares, respectively 7 5
Common stock - Class B: par value $0.01 per share;
authorized 420 shares; issued and outstanding 420 4 4
shares
Additional paid-in capital 6,999 26,965
Foreign currency translation adjustment (237) 43
Retained earnings (accumulated deficit) 5,443 (11,979)
------------------- -------------------
Total stockholders' equity 12,216 15,038
------------------- -------------------
Total liabilities and stockholders'
equity $ 92,185 $ 62,593
=================== ===================
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
F-2
<PAGE>
<TABLE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1995 1994 1993
-------------- -------------- ---------------
(in thousands)
<S> <C> <C> <C>
Gross revenue $ 268,949 $ 193,521 $ 160,616
Less: Agency commissions (31,986) (22,249) (16,921)
-------------- -------------- ---------------
Net revenue 236,963 171,272 143,695
Costs and expenses:
Operating expenses 155,955 116,274 99,646
Selling, general and administrative expenses 43,037 36,240 34,856
Depreciation and amortization 4,244 4,666 5,752
-------------- -------------- ---------------
Income from operations 33,727 14,092 3,441
Interest expense, net 4,721 2,968 9,045
Minority interest 1,183 326 -
Other (income) expenses (943) 514 -
-------------- -------------- ---------------
Income (loss) before provision for
income taxes and extraordinary item 28,766 10,284 (5,604)
Provision for income taxes:
Current 3,970 1,193 135
Deferred (benefit) 3,886 3,547 (14,199)
-------------- -------------- ---------------
Income before extraordinary item 20,910 5,544 8,460
Extraordinary item - (loss) gain due
to extinguishment of debt, net of tax (453) - 92,201
-------------- -------------- ---------------
Net income $ 20,457 $ 5,544 $ 100,661
============== ============== ===============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
F-3
<PAGE>
<TABLE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
<CAPTION>
YEARS ENDED DECEMBER 31, 1995 , 1994 AND 1993
(IN THOUSANDS)
CUMULATIVE
RETAINED FOREIGN
ADDITIONAL EARNINGS CURRENCY
COMMON STOCK PAID IN (ACCUMULATED TRANSLATION
----------------------------------------------
SHARES CLASS A SHARES CLASS B CAPITAL DEFICIT) ADJUSTMENTS TOTAL
--------- ---------- --------- ---------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1993 530 $ 5 420 $ 4 $ 26,965 $ (118,184) $ - $ (91,210)
Net income
for the year - - - - - 100,661 - 100,661
--------- ---------- --------- ---------- ------------- -------------- -------------- -------------
Balance at
December 31,
1993 530 5 420 4 26,965 (17,523) - 9,451
Foreign currency
translation
adjustment - - - - - - 43 43
Net income
for the year - - - - - 5,544 - 5,544
--------- ---------- --------- ---------- ------------- -------------- -------------- -------------
Balance at
December 31,
1994 530 5 420 4 26,965 (11,979) 43 15,038
Exercise of common
stock warrants 50 1 - - - - - 1
Distribution to
stockholders - - - - (26,965) (3,035) - (30,000)
Foreign currency
translation
adjustment - - - - - - (280) (280)
Purchase of
minority interest
in subsidiary 53 1 - - 6,999 7,000
Net income
for the year - - - - 20,457 - 20,457
--------- ---------- --------- ---------- ------------- -------------- -------------- -------------
Balance at
December 31,
1995 633 $ 7 420 $ 4 $ 6,999 $ 5,443 $ (237) $ 12,216
========= ========== ========= ========== ============= ============== ============== =============
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
F-4
<PAGE>
<TABLE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1995 1994 1993
--------- --------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 20,457 $ 5,544 $100,661
Adjustments to reconcile net income to
net cash provided by operating
activities , net of effects from
acquisitions:
Depreciation and Amortization 4,244 4,666 5,752
Accrued interest added to
long-term debt - - 6,939
Write-Off of Deferred Loan Fees 270 355 1,019
Deferred Tax Provision (Benefit) 3,886 3,547 (14,199)
Amortization of interest discount
on debt - - 185
Minority Interest in Subsidiary
Earnings 1,183 326 -
Loss (gain) due to extinguishment of
debt, Net of tax 453 - (92,201)
Gain on Asset Sales (943) (256) -
Increase in accounts and sundry
receivables (5,812) (5,632) (1,902)
Increase (decrease) in Accounts
Payable, Accrued Liabilities
and accrued interest 7,222 2,975 (1,320)
(Increase) decrease in all other
current assets and liabilities (2,511) (1,543) 815
Decrease (increase) in other assets 507 (402) 565
--------- --------- --------
Total adjustments 8,499 4,036 (94,347)
--------- --------- --------
Net cash provided by operating activities 28,956 9,580 6,314
--------- --------- --------
Cash flows from investing activities:
Proceeds from sale of assets 1,032 358 -
Acquisitions, net of cash acquired (5,541) (533) -
Purchase of minority interest in LDI (6,500)
Purchase of investment (1,907) - -
Sale of minority interest in LDI - 2,694 -
Purchase of fixed assets, net (493) (1,311) (812)
Cash collateral (deposits) withdrawals (130) 377 275
--------- --------- --------
Net cash (used in) provided by
investing activities (13,539) 1,585 (537)
--------- --------- --------
Cash flows from financing activities:
Proceeds from borrowings 48,000 1,500 19,000
Distribution to stockholders (30,000) - -
Payments for deferred charges (1,496) - (1,210)
Principal payments on bank and
other debt (25,617) (6,818) (23,385)
Exercise of warrants 1 - -
--------- --------- --------
Net cash used in financing
activities (9,112) (5,318) (5,595)
--------- --------- --------
Effects of exchange rates on cash (279) 85 -
--------- --------- --------
Net increase in cash 6,026 5,932 182
Cash at beginning of period 7,303 1,371 1,189
--------- --------- --------
Cash at end of period $ 13,329 $ 7,303 $ 1,371
========= ========= ========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 2,942 $ 2,076 $ 913
Taxes $ 1,843 $ 452 $ 82
Details of the acquisitions:
Assigned value of assets acquired $ 7,059 $ 6,872 -
Less, Liabilities assumed and (1,447) (5,729) -
deferred taxes
--------- ---------
Cash paid 5,612 1,143 -
Less, Cash acquired (71) (610) -
--------- ---------
Net cash paid $ 5,541 $ 533 -
========= =========
<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
F-5
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
1. DESCRIPTION OF THE BUSINESS:
TDI Worldwide, Inc. (formerly American Media Network Inc.) and its
subsidiaries (the "Company") are engaged in the out-of-home media
advertising business, primarily in connection with providing display space
for advertising on buses, in subway stations, commuter railroad terminals
and cars, and on outdoor billboards, telephone kiosks and bus shelters.
Substantially all of the Company's business activity is conducted with
customers located within the United States, the United Kingdom ("U.K."), and
Ireland.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A summary of the significant accounting policies applied in the preparation
of the accompanying financial statements is as follows:
(a) BASIS OF PRESENTATION:
The consolidated financial statements of the Company include the
accounts of the Company, its wholly owned subsidiaries and LDI, which
was a 50% owned subsidiary until August 11, 1995 (Note 3). All
significant intercompany balances and transactions have been eliminated.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the dates of the
financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.
(b) FOREIGN CURRENCY TRANSLATION:
The assets and liabilities of the Company's Foreign subsidiaries have
been translated at current rates and related revenues and expenses have
been translated at average rates of exchange in effect during the year.
Resulting cumulative translation adjustments have been recorded as a
separate component of Stockholders' Equity.
(c) PROPERTY, EQUIPMENT AND IMPROVEMENTS:
Property, equipment and improvements are stated at cost. Depreciation on
property and equipment is provided on the straight-line basis.
Amortization of leasehold improvements is provided over the shorter of
the term of the lease or the estimated useful life of the assets (7
years). The estimated useful lives for all other assets are as follows:
continued
F-6
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
automobiles and trucks - 4 years; equipment, furniture and fixtures - 7
years; poster frames - 8 years; billboards - 9 years; buildings and
improvements - 33 years.
Expenditures for maintenance and repairs are charged to expense as
incurred. When depreciable assets are retired or sold, the cost and
related allowances for depreciation are removed from the accounts and
the resulting gain or loss is included in income.
(d) INCOME TAXES:
Effective January 1, 1993, the Company implemented Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
("SFAS 109") which requires the use of the asset and liability method of
financial accounting and reporting for income taxes. Deferred income
taxes reflect the future tax effects of differences between the
financial statement and tax bases of assets and liabilities at enacted
rates in effect in the years in which the differences are expected to
reverse.
(e) DEFERRED CHARGES:
Loan acquisition costs paid in connection with the Company's debt
agreements (Notes 6 and 7) have been capitalized and are amortized over
the life of the debt agreements. Amounts paid for interest rate
protection agreements (Note 6) are capitalized and amortized as interest
expense over the lives of these agreements.
(f) INTANGIBLE ASSETS:
A portion of the cost of acquisitions (Note 3) has been assigned to
franchise agreements and is amortized using the straight-line method
over the lives of the agreements - five years. Goodwill resulting from
these acquisitions is amortized using the straight-line method over 20
years. The Company evaluates intangible assets for potential impairment
by comparing the unamortized balance to the undiscounted cash flows they
are projected to generate. Amortization expense and accumulated
amortization as of and for the year ended December 31, 1995 was $1,033.
(g) CASH AND CASH EQUIVALENTS:
The Company considers all highly liquid instruments purchased with
original maturity of three months or less to be cash equivalents.
3. ACQUISITIONS:
(a) In August 1994, the Company and Hambro Group Investments
("HGI"), a U.K. based investment bank, each invested
approximately $2,700 and each acquired a 50% interest in
LDI, a newly formed company in the U.K. LDI purchased the
assets (including cash of
continued
F-7
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
approximately $610) and assumed the liabilities of LTA, a U.K.
enterprise, for approximately $1,144 in cash (LDI and LTA (now known as
TDI U.K.), together, are hereinafter referred to as "LDI").
The resulting purchase price allocation to assets and liabilities is
summarized as follows:
Accounts receivable $ 5,731
Other current assets, including cash acquired 792
of $610
Property, equipment and improvements 350
Transit franchise payable (2,374)
Accounts payable and other current liabilities (3,355)
-------
Total purchase price allocated $ 1,144
=======
On August 11, 1995, the Company acquired the 50% interest in LDI owned
by HGI. The purchase price of approximately $13,500 consisted of
approximately $6,500 of cash and approximately 52,600 shares of the
Company's common stock. As a result of this transaction, the Company
increased its ownership in LDI to 100%. The excess of the purchase price
over the Company's interest in the net book value of LDI of $4,305 was
assigned to franchise agreements. In addition, the Company recorded
goodwill and a deferred tax liability of approximately $3,200 related to
this purchase.
Pursuant to the terms of the purchase agreement between LDI and HGI, LDI
is required to pay HGI an additional $1,500 if a certain advertising
franchise agreement held by LDI is renewed.
(b) On November 14, 1995, the Company acquired all of the issued and
outstanding capital stock of British Transport Advertising Limited for
$5,612 in cash.
The resulting price allocation to assets and liabilities is summarized
as follows:
Franchise agreements $ 4,082
Goodwill 1,429
Accounts receivable 1,317
Cash 70
Fixed assets 161
Deferred tax liability (1,429)
Accounts payable and other current liabilities (18)
-------
Total purchase price allocated $ 5,612
=======
continued
F-8
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
Each of the acquisitions described above has been accounted for as a
purchase transaction in accordance with Accounting Principles Board
Opinion No. 16, and the results of operations from the date of each
acquisition through December 31, 1995 are included in the consolidated
financial statements.
The unaudited pro forma data below for the years ended December 31, 1995
and 1994 is presented as if these acquisitions had been made as of
January 1, 1995 and 1994, respectively. The unaudited pro forma
financial information is based on management's estimates and assumptions
and does not purport to represent the results that actually would have
occurred if the acquisitions had, in fact, been completed on the dates
assumed, or which may result in the future.
1995 1994
---------- ---------
Net revenue $ 247,572 $ 205,107
Income before extraordinary item $ 21,938 $ 6,527
Net income $ 21,485 $ 6,527
4. PROPERTY, EQUIPMENT AND IMPROVEMENTS:
Property, equipment and improvements consist of the following at
December 31, 1995 and 1994:
1995 1994
-------- --------
Billboards $ 21,263 $ 21,889
Poster frames 11,071 11,093
Building and leasehold improvements 1,524 2,446
Furniture, equipment, auto & trucks 4,409 4,364
Land 546 570
-------- --------
38,813 40,362
Less: Accumulated depreciation (33,227) (32,714)
-------- --------
$ 5,586 $ 7,648
======== ========
continued
F-9
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
Automobiles and trucks of $848 and $655, net of accumulated depreciation
of $1,132 and $1,011 as of December 31, 1995 and 1994, respectively,
represent assets recorded pursuant to capital leases. Additions to
capital leases were $583 and $323 for the years ended December 31, 1995
and 1994, respectively. Depreciation expense was $3,211, $4,657 and
$5,693 for the years ended December 31, 1995, 1994 and 1993,
respectively.
5. INCOME TAXES:
At December 31, 1995, the Company had gross deferred tax assets of
$6,867 and gross deferred tax liabilities of $4,407 representing the
expected future tax consequences of temporary differences between the
book and tax bases of its assets and liabilities and the future tax
benefit expected to be realized through utilization of the net operating
loss carryforwards. At the time it adopted SFAS 109 in 1993, the Company
recorded a valuation allowance of $4,251, representing the amount of
such benefit that may not be realized in future periods. At December 31,
1995, the Company has reassessed the valuation allowance and expects to
realize the deferred tax asset in full. Accordingly, at December 31,
1995, the Company reversed the valuation allowance and credited such
amount to deferred tax expense.
For income tax purposes, the Company has approximately $10 million of
net operating loss carryforwards at December 31,1995 which expire from
2003 to 2007.
Income (loss) before income taxes and extraordinary item is as follows:
YEARS ENDED DECEMBER 31,
1995 1994 1993
-------- ------ -------
Domestic $ 22,971 $9,180 $(5,604)
Foreign 5,795 1,104 -
-------- ------ -------
$ 28,766 $10,284 $(5,604)
======== ====== =======
continued
F-10
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
The provision (net benefit) for income taxes is as follows:
YEARS ENDED DECEMBER 31,
-----------------------------------
1995 1994 1993
Current:
U.S. Federal $ 494 $ 212 $ 39
U.S. State and local 690 529 96
Foreign 2,786 452 -
--------- ----------- ------------
3,970 1,193 135
--------- ----------- ------------
Deferred:
U.S. Federal 2,968 2,434 (10,543)
U.S. State and local 918 1,113 (3,656)
--------- ----------- ------------
3,886 3,547 (14,199)
--------- ----------- ------------
Provision (net benefit) for income
taxes 7,856 4,740 (14,064)
Less, Benefit allocable to
extraordinary item (329) - -
--------- ----------- ------------
Provision (net benefit) for income
taxes $ 7,527 $ 4,740 $ (14,064)
========= =========== ============
Reconciliations of the provision (benefit) for income taxes to the amount
computed using the federal statutory rate are as follows:
YEARS ENDED DECEMBER 31,
1995 1994 1993
(in thousands)
Expected U.S. federal income tax
provision at statutory rate $10,068 $ 3,496 $ 29,579
Reversal of valuation allowance (4,251) - -
Non-taxable income - - (30,173)
Adoption of SFAS 109 - - (13,399)
Foreign income taxed at higher rates - 188 -
State and local income tax, net of
federal benefit 1,488 1,084 (142)
Non-deductible expenses 357 84 71
Other 194 (112) -
--------- ----------- ------------
Income tax provision (benefit) $ 7,856 $ 4,740 $(14,064)
========= =========== ============
F-11
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
The major components of the net deferred tax asset as of December 31,
1995 and 1994 are as follows:
1995 1994
------------- -------------
Deferred tax asset:
Net operating loss carryforwards
expiring between 2003 to 2007 $ 3,622 $ 11,938
Reserve for doubtful accounts 607 630
Depreciation 631 905
Accrued expenses 1,235 949
Other 772 494
------------ -------------
Deferred tax asset 6,867 14,916
Deferred tax liability:
Intangible assets (4,407) -
Valuation allowance - (4,251)
------------ -------------
Deferred tax asset, net $ 2,460 $ 10,665
============ =============
Realization of the net deferred tax asset is contingent upon the
generation of sufficient future taxable income. Forecasted taxable
income from operations is expected to be sufficient to realize the
entire amount of the deferred tax asset.
However, failure to achieve forecasted results or implement effective
tax planning strategies may affect the Company's ability to ultimately
realize the deferred tax assets. For this reason, the Company will
evaluate annually whether the realization of the deferred tax asset is
more likely than not.
F-12
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
6. LONG-TERM DEBT:
Long-term debt consists of the following at December 31, 1995 and 1994:
1995 1994
------- ------
Bank Term Loan- U.S. $41,999 $13,000
Senior Unsecured 8% Note due December 31,1995 (Note 7) - 1,000
Promissory notes payable - 50
Mortgage note payable in equal monthly
installments with interest at 12% through 2001 399 442
------- ------
42,398 14,492
Less Current Maturities (6,851) (2,843)
------- ------
$35,547 $11,649
======= ======
Aggregate future annual maturities for all long-term debt are as follows:
$6,851 in 1996, $7,557 in 1997, $7,564 in 1998, $7,768 in 1999, $8,579 in
2000 and $4,079 thereafter.
BANK TERM LOAN - U.S.:
On March 16, 1995, the Company entered into an amended and restated credit
agreement (the "Amended Credit Agreement") with its banks (the "Banks").
The Amended Credit Agreement provides for term loan, working capital
revolver and letter of credit facilities. The Company borrowed $48 million
under the term loan facility of the Amended Credit Agreement, of which $30
million was distributed to its stockholders based upon their proportionate
ownership interests in the Company's common stock and of which $13 million
was used to refinance amounts outstanding under the previous credit
agreement (the "Credit Agreement"). In addition, as a condition to
obtaining the Amended Credit Agreement, the Company repaid its $5 million
Long-Term subordinated Note and its $1 million Senior Unsecured Note (Note
7). The terms, conditions and covenants of the Amended Credit Agreement are
substantially the same as those of the Credit Agreement and the Amended
Credit Agreement replaces that agreement in its entirety. In connection
with this refinancing, the unamortized balance of loan acquisition costs,
aggregating $782, was written off and recorded as an extraordinary item,
net of related tax benefit of $329.
Borrowings under the Amended Credit Agreement bear interest at the
Applicable Rate, as defined. The Amended Credit Agreement provides for
interest options at either the Eurodollar Rate, as defined, plus 2% to 2.5%
or the Base Rate, as defined, plus .5% to 1.0%. At December 31, 1995
substantially all borrowings accrued interest under the Eurodollar Rate
option, at 8%.
F-13
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
Future minimum annual scheduled maturities on the term loan are as follows:
DECEMBER 31
1996 $ 6,802
1997 7,502
1998 7,502
1999 7,699
2000 8,501
Thereafter 3,993
-------
$ 41,999
=======
In addition, the Amended Credit Agreement requires early principal payments
of the term loan based upon available excess cash flow, as defined. Amounts
outstanding under the working capital revolver may be repaid and reborrowed
in accordance with the terms of the Amended Credit Agreement, with all
amounts outstanding due no later than September 30, 2001. At December 31,
1995 this $500 facility was unused and available for borrowing.
The Amended Credit Agreement also provides for a deferred fee payment to
the Banks based upon a multiple of the Company's income before interest,
taxes, depreciation and amortization ("EBITDA"). At December 31, 1995 the
Company estimates that such deferred fee would approximate $2,000 and has
recorded approximately $940, $477 and $40 of such amount as additional
interest expense for the years ended December 31, 1995, and 1994 and 1993,
respectively. In March 1996, the deferred fee was paid to the Banks in
connection with the repayment of the term loan (Note 12).
Amounts outstanding under the Amended Credit Agreement are collateralized
by substantially all the assets of the Company, a pledge of 100% of the
Company's common stock and an assignment of the Company's keyman life
insurance policy on the Company's President and Chief Executive Officer.
At December 31, 1995 the Company had an interest rate protection agreement
with a bank. The differential to be paid or received was accrued as
interest rates changed and was recognized as interest expense over the life
of the agreement, which was scheduled to expire in November 1998. In 1996,
the Company terminated this agreement at a cost of $246.
The Amended Credit Agreement provides for a $19,000 letter of credit
facility. Such letters of credit are used to collateralize certain of the
Company's obligations under its franchise agreements (Note 9b). Letter of
credit fees range from 1% to 1.25%. At December 31, 1995 there were
approximately $17,656 in letters of credit outstanding.
F-14
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
The Amended Credit Agreement and the Restructuring Agreement (Note 7)
contain certain restrictive covenants which, among other things, limit the
assumption of additional indebtedness, capital expenditures, investments
and distributions, and require the maintenance of certain minimum financial
ratios. In the event the Company repays the term loan in full at any time
prior to September 30, 1996 it will pay to the Banks a termination fee not
to exceed $225. In March 1996, the amount outstanding under the term loan
was paid in full (Note 12) and a termination fee of $113 was paid to the
Banks.
On October 22, 1993, the Company completed a refinancing of its then
existing senior bank indebtedness. The Company had entered into the Credit
Agreement with the Banks which provided for term loan, working capital
revolver and letter of credit facilities. In connection with this
transaction, the Company retired, in full, all previously existing senior
bank indebtedness and related accrued interest aggregating approximately
$49,600, with $19,000 of new term loan proceeds and $1,000 in cash. As a
result of this refinancing, the write-off of related loan acquisition costs
and the refinancing described in Note 7, the Company realized a net gain
on extinguishment of debt amounting to $92,201. Such amount has been
reflected as an extraordinary item in the consolidated statement of
operations for the year ended December 31, 1993.
BANK LOAN - LDI:
In August 1994, LDI entered into a revolving credit agreement with a bank
(the "LDI Credit Agreement") that provides for a maximum commitment of
3,000 pounds sterling (in thousands) ($4,658 at December 31, 1995).
Borrowings bear interest at LIBOR plus 2.5%. There were no amounts
outstanding under this facility at December 31, 1995.
The LDI Credit Agreement requires that LDI pay a deferred fee to the bank
based upon a multiple of LDI's EBITDA. At December 31, 1995, the Company
estimates that such deferred fee would approximate $446 and has recorded
approximately $157 and $28 of such amount as additional interest expense
for the years ended December 31, 1995 and 1994, respectively. In March
1996, the LDI Credit Agreement was terminated and the aforementioned
deferred fee was paid in connection with the sale of the Company's stock
(Note 12). Substantially all of LDI's assets (which approximate $36,000 at
December 31, 1995) have been pledged to collateralize amounts outstanding
under the LDI Credit Agreement. In addition, at December 31, 1995 a 1,000
pounds sterling (in thousands) ($1,553) letter of credit was issued in
connection with LDI's major advertising franchise. Letter of credit fees
are 1.25% per annum.
F-15
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
CONTINUED
7. SUBORDINATED NOTES PAYABLE:
Subordinated notes payable were subordinate to the term loan and working
capital revolver under the Amended Credit Agreement (Note 6). On October
22, 1993, the Company entered into a new agreement (the "Restructuring
Agreement") with its Subordinated Lender. Such lender is also a stockholder
of the Company. At December 31, 1994 these notes aggregated $6,000
consisting of a $1,000 Senior Unsecured Note (Note 6) and a $5,000
Long-Term Subordinated Note due December 31, 1999. Such notes accrued
interest at 8% per annum, payable quarterly. These notes were repaid in
full concurrent with the refinancing of the Credit Agreement (Note 6).
Under the terms of the Restructuring Agreement, the Company paid $280 in
cash and issued new notes aggregating $7,000 ($1,000 of which was paid on
December 31, 1993 and $6,000 of which was paid as described above) to this
lender in full and final payment of all the then outstanding subordinated
principal and related accrued interest aggregating approximately $73,000.
This transaction is a component of the gain on extinguishment of debt
described in Note 6.
8. EMPLOYEE BENEFIT, MULTI-EMPLOYER PENSION PLANS AND SAVINGS PLAN:
(a)EMPLOYEE BENEFIT PLAN:
The Company has a contributory, defined benefit pension plan covering
approximately 100 hourly union employees. Benefits paid to union
retirees are based, among other things, upon age of retirement, years of
credited service and average earnings.
The components of net periodic pension cost are as follows:
YEARS ENDED DECEMBER 31,
------------------------
1995 1994 1993
------ --------- -----
Service cost on benefits earned
during the year $ 22 $ 31 $ 24
Interest cost on projected
benefit obligation 50 45 43
Actual return on plan assets (93) (23) (32)
Net amortization and deferral 43 (31) (20)
------ --------- -----
Net periodic pension cost $ 22 $ 22 $ 15
====== ========= =====
F-16
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
The actuarial present value of benefit obligations and funded status for
the Company's pension plan were as follows:
AT DECEMBER 31,
---------------
1995 1994
----- -----
Benefit obligations:
Vested benefits $ (718) $ (563)
Nonvested benefits (8) (8)
----- -----
Accumulated benefit obligation (726) (571)
Projected compensation increases (17) (28)
----- -----
Projected benefit obligation (743) (599)
Plan assets at fair value 617 563
----- -----
Projected benefit obligation in
excess of plan assets (126) (36)
Unrecognized net loss (gain) 46 (22)
Unrecognized net transition obligation (asset) (4) (4)
Unrecognized prior service cost 7 7
----- -----
Net pension liability $ (77) $ (55)
===== =====
At December 31, 1995 and 1994, the assumed discount rates (the estimated
rate at which the retirement plan could have settled its liabilities)
were 7.25%, and 8.25%, respectively. The expected long-term rate of
return on plan assets was estimated to be 9% and future salary increases
were estimated to be 5.5%.
(b)MULTI-EMPLOYER PENSION PLAN:
The Company contributes to various multi-employer pension plans for
approximately 80 union employees covered by collective bargaining
agreements. These plans are not administered by the Company and
contributions are determined in accordance with provisions of negotiated
labor contracts. Information with respect to the Company's proportionate
share of the excess, if any, of the actuarially computed value of vested
benefits over the total of the pension plans net assets is not available
from the plan administrators. Pension expense for these multi-employer
plans was $322, $296 and $298 for the years ended December 31, 1995,
1994 and 1993, respectively.
The Multi-Employer Pension Plan Amendments Act of 1980 (the "Act")
significantly increased the pension responsibilities of participating
employers. Under the provisions of the Act, if the plans terminate or
the Company withdraws, the Company could be subject to a substantial
"withdrawal liability" (Note 9c).
F-17
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
(c)PENSION PLAN - LDI:
LDI's employees were participants in the London Regional Transport
("LRT") Pension Fund until February 1995, when the LTA Pension Plan, a
defined contribution plan, was established. For the year ended December
31, 1995 and for the period from the Acquisition Date to December 31,
1994 LDI incurred approximately $700 and $268, respectively, of pension
expense.
(d)SAVINGS INVESTMENT PLAN:
The Company has a 401(K) Savings Investment Plan (the "Plan") to provide
retirement benefits for the eligible employees. All employees who are at
least 21 years of age and have completed one year of service and are not
covered by a collective bargaining agreement are eligible to participate
in the Plan. Participants may elect to make salary deferral
contributions, as defined, up to $9,240 annually, adjusted annually in
accordance with the provisions of the Plan. The Company makes annual
contributions in accordance with the provisions of the Plan and may also
make, at its sole discretion, additional contributions. The Plan
contribution expense incurred by the Company was approximately $100 for
the year ended December 31, 1995 and $80 for each of the years ended
December 31, 1994 and 1993.
9. COMMITMENTS AND CONTINGENT LIABILITIES:
(a)LEASE OBLIGATIONS:
The Company leases its executive and sales offices, various work shops,
billboard sites and vehicles. Rent expense was approximately $6,700,
$5,900 and $6,000 for the years ended December 31, 1995, 1994 and 1993,
respectively.
F-18
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
Future minimum lease payments under noncancellable leases are
approximately as follows:
CAPITALIZED
YEAR ENDING DECEMBER 31, OPERATING LEASES TOTAL
------------------------ --------- ----------- ------
1996 $ 5,750 $ 428 $ 6,178
1997 3,859 319 4,178
1998 3,154 135 3,289
1999 2,446 17 2,463
2000 1,190 - 1,190
2001 and thereafter 3,131 - 3,131
------- --- ------
Total minimum lease payments $19,530 $899 $20,429
=======
Less: Interest 79 79
--- ------
Present value of minimum
lease payments $820 $20,350
=== ======
Rentals under certain leases are subject to escalation clauses.
(b)GUARANTEED FRANCHISE PAYMENTS:
The Company's transit advertising business has franchise rights,
obtained predominantly through competitive bidding, entitling it to
display advertisements in or on buses, taxis, trains, bus shelters,
terminals and phone kiosks.
Under most of these franchise agreements, the franchiser is entitled to
receive the greater of a percentage of the Company's advertising
revenues, net of advertising agency fees, or specified guaranteed
minimum annual payment.
The approximate minimum guaranteed payments on existing franchises for
the Company in the United States ("U.S."), the U.K. and Ireland and in
total are as follows: (U.K. and Ireland amounts are translated using the
exchange rate in effect at December 31, 1995).
F-19
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
YEAR ENDING DECEMBER 31, U.S. U.K. IRELAND TOTAL
-------- ------- -------- -------
1996 $ 60,031 $ 32,489 $ 2,164 $ 94,684
1997 57,858 34,451 2,284 94,593
1998 41,114 35,536 2,444 79,094
1999 28,517 37,415 2,607 68,539
2000 12,946 19,620 - 32,566
Thereafter 5,370 109 - 5,479
-------- ------- -------- -------
franchise payments $205,836 $159,620 $ 9,499 $374,955
======== ======= ======== =======
(c)LITIGATION
The Company has withdrawn from participation in one of the
multi-employer pension plans (the "Plan") described in NOTE 8 B. The
Plan declared that a mass withdrawal, as defined by the Act, of the
contributing employees has occurred, and such action will result in the
assessment of "withdrawal liability" by the Plan against the Company. In
the opinion of management and its legal counsel, such liability will not
exceed $1,000. No provision for any liability has been made in the
accompanying consolidated financial statements.
In addition, the Company is potentially liable for a proportionate share
of the shortfall between the Plan's contributions and the federal
minimum funding standards, plus excise taxes on the amount of the
deficiency for each plan year in violation. The Company alleges, among
other things, fraud and breach of fiduciary duty of the plan
administrator, denies all liability in this matter and intends to defend
all such claims. The Company and legal counsel are not able to evaluate
with certainty the ultimate outcome of this matter. Accordingly, no
provision for any liability has been made in the accompanying
consolidated financial statements.
The Company and its subsidiaries are defendants in various zoning and
other regulatory proceedings involving outdoor advertising operations
and other matters incidental to its business. In the opinion of
management and its legal counsel, the outcome of such proceedings will
not have a material adverse effect on the Company's consolidated
financial position, results of operations and cash flows.
F-20
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
10. CREDIT RISK:
Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of cash and trade
receivables. Substantially all of the Company's cash, at December 31, 1995
and 1994 was held by one financial institution. Concentration of credit
risk with respect to trade receivables is limited due to the Company's
dispersion of customers. At December 31 1995 and 1994, trade receivable
from customers in the New York metropolitan region aggregated approximately
16% and 18% respectively, of consolidated total assets. In addition, at
December 31, 1995 and 1994 trade receivables from customers in London
aggregated approximately 15% and 13% of consolidated total assets. The
Company generally does not require collateral or other security to support
these financial instruments with credit risk.
11. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION:
The Company operates in one principal industry segment: provider of
out-of-home media advertising. Summarized information relating to domestic
and international operations is as follows:
YEARS ENDED DECEMBER 31,
---------------------------
1995 1994 1993
------- ------- -------
Net sales to unaffiliated customers:
United States $ 180,373 $ 153,626 $ 143,695
United Kingdom 56,352 17,646 -
Ireland 238 - -
------- ------- -------
$ 236,963 $ 171,272 $ 143,695
======= ======= =======
Income (loss) from Operations:
United States $ 27,040 $ 12,249 $ 3,441
United Kingdom 6,744 1,843 -
Ireland (57) - -
------- ------- -------
$ 33,727 $ 14,092 $ 3,441
======= ======= =======
F-21
<PAGE>
TDI WORLDWIDE, INC. AND SUBSIDIARIES
(FORMERLY AMERICAN MEDIA NETWORK INC. AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(DOLLARS IN THOUSANDS)
There were no material amounts of sales or transfers among geographic areas.
Identifiable assets are as follows:
DECEMBER 31,
1995 1994
------ ------
Identifiable assets:
United States $ 53,125 $ 50,388
United Kingdom 36,309 12,205
Ireland 2,751 -
------ ------
$ 92,185 $ 62,593
====== ======
12. SUBSEQUENT EVENTS:
In March 1996, the Company's stockholders sold all of the outstanding stock
of the Company to Infinity Broadcasting Corporation ("Infinity") for an
aggregate purchase price of $300,000. In connection with this sale, the
Company incurred legal and advisory fees and certain other costs aggregating
approximately $4,877.
In March 1996, the Company prepaid $16,999 of amounts outstanding under its
bank term loan and Infinity, on behalf of the Company, paid in full all
remaining amounts outstanding under the bank term loan, related accrued
interest, deferred fees and early termination fees aggregating approximately
$28,200 (Note 6).
F-22
<PAGE>
<TABLE>
<CAPTION>
Infinity Broadcasting Corporation
Pro Forma Combined Balance Sheet
December 31, 1995
(In thousands)
(unaudited)
Company
Company as Acquisition of Disposition of Acquisition Pro Forma
reported Alliance (1) KYCW-FM (2) of TDI (3) Combined
---------- -------------- -------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Assets:
Current assets 108,365 10,000 10,000 128,365
Property and equipment, net 20,561 3,834 5,586 29,981
Intangible assets, net 451,220 194,861 279,389 925,470
Goodwill arising from deferred
taxes on acquisitions 111,756 111,756
Radio properties held for sale 66,680 (26,000) 40,680
Other assets 14,310 5,025 19,335
----------- -------------- ---------------- ----------- ------------
594,456 275,375 (26,000) 411,756 1,255,587
=========== ============== ================ =========== ============
Liabilities:
Current liabilities 53,080 375 53,455
Long-term debt 267,384 275,000 (26,000) 231,031 747,415
Other liabilities 1,785 1,785
Deferred tax liability 111,756 111,756
Stockholders' equity 273,992 67,184 341,176
----------- -------------- ---------------- ----------- ------------
594,456 275,375 (26,000) 411,756 1,255,587
=========== ============== ================ =========== ============
<FN>
(1) To reflect the acquisition of Alliance, financed from borrowings under the
Credit Agreement, and the preliminary allocation of the purchase price of
$275 million as follows:
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Carrying Value
Reported by Allocation of
Alliance Adjustments Purchase Price
-------------- ------------ --------------
<S> <C> <C> <C>
Assets:
Current assets 10,972 (972)(a) 10,000
Property and equipment, net 6,025 (2,191) 3,834
Intangible assets, net 66,219 128,642 194,861
Radio properties held for sale 66,680 66,680
-------------- ------------ --------------
Total assets 83,216 192,159 275,375
============== ============
Liabilities:
Current liabilities 11,709 (11,709)(a)
Long term debt 50,000 (50,000)(a)
Other liabilities 433 (433)(a)
-------------- ------------
Total liabilities 62,142 (62,142)
-------------- ------------
-------------- ------------
Partners' capital 21,074 (21,074)(a)
-------------- ------------
Total liabilities and
partners' capital 83,216 (83,216)
============== ============ --------------
Purchase Price Allocated 275,375
==============
<FN>
(a) Adjustments to eliminate assets not being acquired and liabilities not
being assumed in the Alliance acquisition.
The preliminary allocation of the purchase price may change upon final
appraisal of the fair values of the net assets acquired.
(2) To reflect the sale of radio station KYCW-FM for $26 million and the use of
proceeds to reduce borrowings under the Credit Agreement.
(3) To reflect the acquisition of TDI, financed from $231 million borrowings
under the Credit Agreement together with the issuance of 2.4 million shares
of the Company's unregistered Class A common stock at a price of
approximately $28.35 and $1.8 million of liabilities assumed, and the
preliminary allocation of the purchase price of $300 million as follows:
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Carrying Value
Reported by Allocation of
TDI Adjustments Purchase Price
-------------- ------------ ---------------
<S> <C> <C> <C>
Assets:
Current assets 59,696 (49,696)(a) 10,000
Property and equipment, net 5,586 5,586
Intangible assets, net 16,891 262,498 279,389
Goodwill arising from deferred
taxes on acquisitions 111,756 111,756
Other Assets 10,012 (4,987)(a) 5,025
-------------- ------------ ---------------
Total assets 92,185 319,571 411,756
============== ============
Liabilities:
Current liabilities 39,577 (39,577)(a) 0
Long term debt 35,547 (35,547)(a) 0
Deferred income tax liability 4,407 107,349 111,756
Other liabilities 438 (438)(a) 0
-------------- ------------ ---------------
Total liabilities 79,969 31,787 111,756
-------------- ------------
-------------- ------------
Stockholders equity 12,216 (12,216)(a)
-------------- ------------
Total liabilities and -------------- ------------
stockholders equity 92,185 19,571
============== ============ ----------------
Purchase Price Allocated 300,000
================
<FN>
(a) Adjustments to eliminate assets not being acquired and liabilities not
being assumed in the TDI acquisition.
The preliminary allocation of the purchase price may change upon final
appraisal of the fair values of the net assets acquired.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Infinity Broadcasting Corporation
Pro Forma Combined Statement of Operations
Year ended December 31, 1995
(In thousands, except per share data)
(unaudited)
Acquisition of Company
Company as KLUV-FM and Acquisition Pro Forma
reported (1) Alliance of TDI Combined
---------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Total revenues 372,429 41,897 (2) 268,949 (3) 683,275
Less agency commissions 46,723 6,857 (2) 31,986 (3) 85,566
---------- -------------- ------------ -----------
Net revenues 325,706 35,040 236,963 597,709
Operating expenses
excluding depreciation and
amortization 167,285 19,674 (2) 198,992 (3) 385,951
---------- -------------- ------------ -----------
Operating income
excluding depreciation and
amortization 158,421 15,366 37,971 211,758
Depreciation and amortization 50,482 15,154 (4) 10,896 (5) 76,532
Corporate general and
administrative 6,135 0 6,135
---------- -------------- ------------ -----------
Operating income(loss) 101,804 212 27,075 129,091
Interest expense (44,385) (15,030) (6) (16,172) (6) (75,587)
Interest income 387 0 387
Other expense (1,715) (1,715)
Income taxes (1,588) (1,588)
---------- -------------- ------------ -----------
Net earnings (loss) 54,503 (14,818) 10,903 50,588
========== ============== ============ ===========
Net earnings per share $0.53 $0.48
Weighted average shares(7) 102,903 2,370 105,273
<FN>
(1) The Company's historical consolidated results of operations for the year
ended December 31, 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 and to reflect the historical operating
results of Alliance as follows:
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Adjusted
Historical
Reported by Results of
Alliance Adjustments Alliance
------------- ---------------- ---------------
<S> <C> <C> <C>
Total revenues 46,332 (7,527)(a) 39,435
630 (b)
Less agency commissions 7,597 (1,260)(a) 6,337
------------- ---------------- ---------------
Net revenues 38,735 (5,637) 33,098
Operating expenses (8,485)(a)
excluding depreciation and
amortization 26,540 811 (b) 18,866
------------- ---------------- ---------------
Operating income
excluding depreciation and
amortization 12,195 2,037 14,232
Depreciation and amortization 6,422 (1,747)(a) 4,675
Corporate general and
administrative expenses 2,230 (2,230)(a)(c) 0
------------- ---------------- ---------------
Operating income 3,543 6,014 9,557
Interest and other expense (7,837) 7,837 (a)(b)(c) 0
Interest and other income 1,293 (1,293)(a)(b)(c) 0
Provision for income taxes (146) 146 (a)(c) 0
------------- ---------------- ---------------
Income (loss) before
extraordinary item (3,147) 12,704 9,557
============= ================ ===============
<FN>
(a) To exclude the operating results of radio stations held for sale.
(b) To reclassify miscellaneous broadcasting revenues and expenses to conform
with the Company's presentation.
(c) Assumes these items would not have been incurred by the Company during this
period. Such items consist primarily of corporate and interest expenses and
the provision for income taxes.
(3) To reflect the historical operating results of TDI as follows:
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Adjusted
Historical
Reported by Results of
TDI Adjustments TDI
------------- ------------ -------------
<S> <C> <C>
Total revenues 268,949 268,949
Less agency commissions 31,986 31,986
------------- ------------ -------------
Net revenues 236,963 0 236,963
Operating expenses
excluding depreciation and
amortization 198,992 198,992
------------- ------------ -------------
Operating income
excluding depreciation and
amortization 37,971 0 37,971
Depreciation and amortization 4,244 4,244
Corporate general and
administrative 0 0
Operating income 33,727 0 33,727
Interest expense, net (4,721) 4,721 (a) 0
Minority interest (1,183) 1,183 (a) 0
Other income 943 (943)(a) 0
Provision for income taxes (7,856) 7,856 (a) 0
------------- ------------ -------------
Income before extraordinary item 20,910 12,817 33,727
============= ============ =============
<FN>
(a) Assumes these items would not have been incurred by the Company during this
period. Such items consist primarily of interest expense, net, minority
interest, other income and the provision for income taxes.
(4) To reflect (i)the pro forma depreciation and amortization expense from the
allocation of the purchase price of KLUV-FM based upon the following:
franchise and other intangible assets of approximately $52.8 million over a
period of 15 years and property and equipment of $200,000 over a period of
5 years, and (ii) the pro forma depreciation and amortization expense from
the preliminary allocation of the purchase price of Alliance based on the
following: franchise and other intangible assets of approximately $195
million (excludes estimated allocation of purchase price to stations held
for sale) over a period of 15 years, property and equipment of $3.8 million
over a period of 5 years and a non compete agreement of $375K over a period
of 18 months.
(5) To reflect the pro forma depreciation and amortization expense from the
preliminary allocation of the purchase price of TDI based on the following:
franchise and other intangible assets, including goodwill arising from
deferred taxes, on the TDI acquisition of approximately $391.1 million over
a period of 40 years and property and equipment of approximately $5.6
million over a period of 5 years.
(6) To reflect additional interest expense on bank borrowings, at an interest
rate of approximately 7% to finance the acquisitions of KLUV-FM, Alliance
and TDI.
(7) Adjusted to give effect to a three-for-two stock split effected by the
Company on April 11, 1995 and the issuance of 2.4 million shares in the TDI
acquisition.
</FN>
</TABLE>
Exhibit 23A
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Infinity Broadcasting Corporation on Form S-3 (File No. 33-61081) and Form S-8
(File Nos. 33-45977, 33-55477, 33-55577, 33-56938) of our report dated April 2,
1996, on our audits of the consolidated financial statements of TDI Worldwide,
Inc. and Subsidiaries as of December 31, 1995 and 1994 and for each of the three
years in the period ended December 31, 1995, which report is included in this
Form 8-K/A of Infinity Broadcasting Corporation.
Coopers & Lybrand L.L.P
New York, New York
May 7, 1996
