SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 8, 1996 (May 31, 1996)
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SFX BROADCASTING, INC.
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(Exact Name of Registrant as Specified in Charter)
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Delaware 0-22486 13-3649750
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(State or Other Jurisdiction (Commission File No.) (IRS Employer Identification No.)
of Incorporation)
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150 East 58th Street, 19th Floor, New York, New York 10155
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212)407-9191
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
AMENDMENT TO MERGER AGREEMENT WITH MULTI-MARKET RADIO, INC.
On July 30, 1996, SFX Broadcasting, Inc. (the "Company") announced that
it had entered into Amendment No. 2 ("Amendment No. 2") to the Amended and
Restated Agreement and Plan of Merger (the "Merger Agreement") among the
Company, SFX Merger Company, a wholly-owned subsidiary of the Company
("Acquisition Sub"), and Multi-Market Radio, Inc. ("MMR"). The Merger
Agreement provides for the merger (the "Merger") of Acquisition Sub with and
into MMR, as a result of which MMR will become a wholly-owned subsidiary of
the Company. Amendment No. 2 increased the value of the shares of the Company
to be issued to the stockholders of MMR in the Merger to $12.00, which value
is subject to adjustment downward in the event that the shares of Class A
Common Stock of the Company trade below $32.00, and adjustment upward in the
event that the shares of Class A Common Stock of the Company trade above
$42.00, during a specified period prior to the consummation of the Merger.
Amendment No. 2 further provides that, in the event that MMR is
unsuccessful in obtaining the exchange of at least 50% of its 1,840,000
outstanding Class B Warrants at a ratio of not more than two-tenths (.2) of a
share of Class A Common Stock of MMR for each such warrant, then the ratio of
shares of the Company to be issued in respect of each outstanding share of
stock of MMR shall be adjusted downward to the extent necessary to reduce the
total dollar value of the shares of the Company that would have otherwise been
received by MMR security holders in the Merger by a dollar amount equal to the
product of $2.50 times the number of Class B Warrants of MMR immediately after
such exchange in excess of such 50% number. The Merger Agreement previously
provided that such dollar amount would be $2.30.
In addition, pursuant to Amendment No. 2 (i) the Company agreed to
negotiate in good faith to enter into an agreement to advance up to $18.0
million to MMR for the acquisition of a specified radio station and $5.0 million
for working capital and other general operating expenses and (ii) MMR agreed to
make available to the Company, until the earlier of the termination of the
Merger Agreement or the consummation of the Merger, the services of Michael G.
Ferrel, the President and Chief Executive Officer of MMR, on a consulting basis
to the extent that such services do not conflict with Mr. Ferrel's obligations
to MMR.
The foregoing description of Amendment No. 2 does not purport to be
complete and is qualified in its entirety by reference to the copy thereof
attached hereto as an exhibit, which is incorporated by reference.
CONSUMMATION OF PRIVATE PLACEMENTS AND EFFECTIVENESS OF RELATED
REGISTRATION STATEMENTS
On May 31, 1996, the Company consummated the private placements of $450.0
million in aggregate principal amount of its 10.75% Senior Subordinated Notes
due 2006 (the "Note Offering") and $149.5 million in aggregate liquidation
preference of its 6.5% Series D Cumulative Convertible Exchangeable Preferred
Stock due May 31, 2007 (the "Preferred Stock Offering"). Pursuant to its
contractual obligations with the original purchasers of the securities offered
in the Note Offering and the Preferred Stock Offering, the Company filed
registration statements with the Securities and Exchange Commission relating
to an exchange offer for the notes (the "Note Exchange Offer") that were the
subject of the Note Offering and a "shelf" offering by the holders of the
shares of preferred stock that were the subject of the Preferred Stock
Offering. Such registration statements were declared effective by the
Commission on July 17, 1996 and July 19, 1996, respectively. The Note Exchange
Offer expires on August 14, 1996, subject to extension to a date not later
than August 27, 1996.
EXERCISE OF OPTION TO ACQUIRE GREENSBORO STATION
On June 28, 1996, the Company exercised its option to acquire
substantially all of the assets of WHSL-FM, which serves the Greensboro, North
Carolina market. On such date the Company also entered into an agreement with
the seller of WHSL-FM to amend the purchase price of WHSL-FM to $6.0 million
in cash. The closing of WHSL-FM is subject to the approval of the Federal
Communications Commission (the "FCC"). On June 28, 1996, the Company entered
into a local marketing agreement with respect to WHSL-FM.
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AGREEMENT TO SWAP LONG ISLAND STATIONS FOR JACKSONVILLE STATIONS
On July 1, 1996, the Company entered into an Exchange Agreement with
Chancellor Radio Broadcasting Company ("Chancellor") pursuant to which it
agreed to exchange four radio stations serving the Long Island, New York market
owned by the Company for two radio stations serving the Jacksonville, Florida
market and $11.0 million in cash. Chancellor has entered into an agreement
with a third party to acquire the Jacksonville stations. Chancellor began
providing services to the Long Island stations pursuant to a local marketing
agreement effective July 1, 1996 and the Company began providing services to
the Jacksonville stations pursuant to a local marketing agreement effective
August 1, 1996.
AGREEMENT TO SELL DALLAS STATION
In July 1996, the company entered into an agreement to sell radio station
KTCK-AM, which serves the Dallas, Texas market, for approximately $14.0
million. The agreement contains customary representations, covenants and
conditions to closing. The agreement may be terminated if the closing has not
occurred on or before March 31, 1997 or, if the consent of the FCC has been
obtained by that date but has not become final, the earlier of May 31, 1997 or
ten days after the consent of the FCC becomes final. Simultaneously with the
execution of the agreement to sell KTCK-AM, the Company entered into a time
brokerage agreement with the purchaser of KTCK-AM with respect to such radio
station.
ACQUISITION OF WJDX-FM, JACKSON, MISSISSIPPI
On July 19, 1996,(the Company acquired radio station WJDX-FM, which
serves the Jackson, Mississippi market, for approximately $3.0 million. The
purchase price was determined by arms-length negotiations between the parties.
The purchase price was financed from the proceeds of the Note Offering and the
Preferred Stock Offering.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
The date by which stockholders of the Company must submit proposals for
inclusion in the proxy statement relating to the 1996 annual meeting of
stockholders has been extended to August 30, 1996. The 1996 annual meeting
of stockholders of the Company is expected to be held in the fourth quarter of
1996.
CERTAIN ADDITIONAL INFORMATION ABOUT THE COMPANY
Certain updated pro forma financial information about the Company is set
forth in Annex A attached hereto, which is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
2.1 Amendment No. 2, dated as of July 30, 1996, to the Amended and
Restated Agreement and Plan of Merger, dated as of April 15, 1996,
among SFX Broadcasting, Inc., SFX Merger Company and Multi- Market
Radio, Inc.
2
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2.2 First Amendment to Asset Purchase Agreement, dated as of June 28,
1996, by and between HMW Communications, Inc. and SFX Broadcasting,
Inc. (incorporated by reference to Exhibit 10.60 of Amendment No. 1
to the Form S-4 of SFX Broadcasting, Inc. (Commission File No.
333-06553) filed with the Securities and Exchange Commission on July
16, 1996).
2.3 Exchange Agreement, dated July 1, 1996, between Chancellor Radio
Broadcasting Company and SFX Broadcasting, Inc. (incorporated by
reference to Exhibit 10.59 of Amendment No. 1 to the Form S-4 of SFX
Broadcasting, Inc. (Commission File No. 333-06553) filed with the
Securities and Exchange Commission on July 16, 1996).
2.4 Asset Purchase Agreement, dated as of _____________, 1996, by and
between SFX Broadcasting of Texas (KTCK) Licensee, Inc., SFX
Broadcasting of Texas (KTCK), Inc. and KRBE Co. (incorporated by
reference to Exhibit 10.58 of Amendment No. 1 to the Form S-4 of SFX
Broadcasting, Inc. (Commission File No. 333-06553) filed with the
Securities and Exchange Commission on July 16, 1996).
2.5 Option Agreement by and between Capstar Communications of
Mississippi, Inc. and SPUR Capital, Inc. dated December 15, 1993
(incorporated by reference to Exhibit 10.1 of the Form 10-Q of SFX
Broadcasting, Inc. (Commission File No. 0-22486) for the three-month
period ended March 31, 1996).
99.1 Press release, dated July 30, 1996, of SFX Broadcasting, Inc.
announcing the execution of Amendment No. 2 to the Amended and
Restated Agreement and Plan of Merger, dated as of April 15, 1996,
among SFX Broadcasting, Inc., SFX Merger Company and Multi- Market
Radio, Inc.
99.2 Press release, dated July 24, 1996, of SFX Broadcasting, Inc.
announcing its acquisition of WJDX-FM.
99.3 Press release, dated July 1, 1996, of SFX Broadcasting, Inc.
announcing, among other things, the exercise of its option to
acquire WHSL-FM (incorporated by reference to Exhibit 99.2 of the
Form 8-K of SFX Broadcasting, Inc. (Commission File No. 0-22486)
filed with the Securities and Exchange Commission on July 10, 1996).
99.4 Press release, dated July 1, 1996, of SFX Broadcasting, Inc.
announcing, among other things, the swap of its Long Island radio
stations for two Jacksonville, Florida radio stations (incorporated
by reference to Exhibit 99.3 of the Form 8-K of SFX Broadcasting,
Inc. (Commission File No. 0-22486) filed with the Securities and
Exchange Commission on July 10, 1996).
3
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99.5 Press release, dated July 31, 1996, of SFX Broadcasting, Inc.
announcing its financial results for the three-month period ended
June 30, 1996.
99.6 Press release, dated August 8, 1996, of SFX Broadcasting, Inc.
announcing that it had begun operating two Jacksonville stations
pursuant to a local marketing agreement and announcing an extension of
the date by which stockholder proposals must be submitted for the 1996
annual meeting of stockholders.
4
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereto duly authorized.
SFX BROADCASTING, INC.
By: /s/ Howard J. Tytel
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Name: Howard J. Tytel
Title: Executive Vice President
Date: August 8, 1996
5
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ANNEX A
UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS OF SFX BROADCASTING, INC.
The Unaudited Pro Forma Condensed Combined Balance Sheet at March 31,
1996 is presented as if the Company had completed (i) the acquisition by the
Company on July 1, 1996 of Liberty Broadcasting Incorporated, which owned and
operated or provided programming to or sold advertising on behalf of 14 FM and
six AM radio stations located in six markets: Washington, DC/Baltimore,
Maryland; Nassau-Suffolk, New York; Providence, Rhode Island; Hartford,
Connecticut; Albany, New York and Richmond, Virginia (the "Liberty
Acquisition"), the acquisition by the Company on July 9, 1996 of substantially
all of the assets of Prism Radio Partners L.P. ("PRISM") used in the operation
of eight FM and five AM radio stations located in four markets: Jacksonville,
Florida; Raleigh, North Carolina; Tucson, Arizona and Wichita, Kansas, and the
pending acquisition from Prism of two FM and one AM station operating in the
Louisville, Kentucky market (collectively, the "Prism Acquisition"), the
acquisition by the Company on June 28, 1996 of substantially all of the assets
used in the operation of radio stations WMFR-AM, WMAG-FM and WTCK-AM, each
operating in the Greensboro, North Carolina market, and WTRG-FM and WRDU-FM,
both operating in the Raleigh, North Carolina market and the pending acquisition
by the Company of WHSL-FM, operating in the Greensboro, North Carolina market
(collectively, the "Raleigh-Greensboro Acquisition"), the acquisition by the
Company on June 25, 1996 of substantially all of the assets used in the
operation of radio station WROQ-FM, operating in the Greenville-Spartanburg,
South Carolina market (the "Greenville Acquisition"), the acquisition by the
Company on July 19, 1996 of WJDX-FM, Jackson, Mississippi and the pending
acquisition by the Company of all of the assets of radio stations WSTZ-FM and
WZRX-AM, each operating in Jackson, Mississippi (collectively, the "Jackson
Acquisitions"), the pending exchange by the Company's of radio station KRLD-AM,
operating in Dallas, Texas, and the Texas State Networks for radio station KKRW-
FM, operating in Houston, Texas (the "Houston Exchange"), and the pending merger
of Multi-Market Radio, Inc. ("MMR") into a wholly-owned subsidiary of the
Company as a result of which MMR will become a wholly-owned subsidiary of the
Company (the "Merger"), after giving effect to (a) the acquisition by MMR of
WKSS-FM, Hartford, Connecticut (the "MMR Hartford Acquisition") and WMYB-FM,
Myrtle Beach, South Carolina (the "MMR Myrtle Beach Acquisition"), (b) the
agreement by MMR to sell KOLL-FM, Little Rock, Arkansas, and the sale by MMR of
WRXR-FM and WKBG-FM, both operating in Augusta, Georgia on July 10, 1996
(collectively, the "MMR Dispositions"), and (c) the exercise by the holders
thereof of all of the Class A Warrants of MMR, each of which is exercisable to
purchase one share of Class A Common Stock of MMR at an initial exercise price
of $7.75 per share, (ii) the sale by the Company, consummated in July 1996, of
three of the stations acquired from Liberty Broadcasting, Incorporated, each
operating in the Washington, DC/Baltimore, Maryland market (the "Washington
Dispositions"), the sale by the Company of three of the stations to be acquired
from Prism Radio Partners L.P., each operating in the Louisville, Kentucky
market (the "Louisville Dispositions") and the sale by the Company of radio
station KTCK-AM, Dallas, Texas (the "Dallas Disposition"), (iii) the exchange of
four of the radio stations acquired in the Liberty Acquisition (the "Long Island
Disposition") for radio stations WAPE-FM and WFYV-FM (the "Jacksonville
Acquisition") operated by Chancellor Radio Broadcasting Company and a payment of
$11.0 million (collectively the "Chancellor Exchange"), (iv) the private
placement, completed in May 1996, by the Company of $450.0 in aggregate
principal amount of its 10.75% Senior Subordinated Notes due 2006 (the "Note
Offering") and the private placement, consummated in May 1996, by the Company of
$149.5 million in aggregate liquidation preference of the its 6.5% Series D
Cumulative Convertible Exchangeable Preferred Stock due 2007 (the "Series D
Preferred Stock") (such private placement being referred to as the "Preferred
Stock Offering"), (v) the tender offer, commenced in May 1996, by the Company
for its 11.375% Senior Subordinated Notes due 2000 (the "Old Notes") in which
the Company purchased approximately $79.4 million in principal amount of the
$80.0 million principal amount of such Notes outstanding (the "Tender Offer"),
(vi) the implementation of the Amended and Restated Agreement, dated June 19,
1996, between the Company and R. Steven Hicks, the Company's former President
and Chief Executive Officer (the "Hicks Agreement"), and the implementation of
Amendment No. 1, effective as of April 15, 1996, to the Amended and Restated
Employment Agreement between the Company and D. Geoffrey Armstrong, the Chief
Operating Officer, Chief Financial Officer,
6
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Treasure and a Director of the Company (the "Armstrong Agreement"), (vii) the
repayment of the Company's $50.0 million senior credit facility (the "Old Credit
Agreement"), and (viii) the implementation of the Termination and Assignment
Agreement, dated as of April 15, 1996, as amended (the "SCMC Termination
Agreement"), between the Company and Sillerman Communications Management
Corporation ("SCMC") as of March 31, 1996. The transactions referred to in the
previous sentence are referred to as the "Transactions." No adjustment has been
made to the Unaudited Pro Forma Condensed Combined Balance Sheet for the Houston
Exchange as it will be recorded at historical cost.
The Unaudited Pro Forma Condensed Combined Statement of Operations
for the year ended December 31, 1995 and three months ended March 31, 1996 and
1995 are presented as if the Company had completed the Recent Acquisitions (as
such term is defined below) and the Transactions as of January 1, 1995. The
MMR Myrtle Beach Acquisition has not been reflected in the Unaudited Pro Forma
Condensed Combined Statement of Operations as it would not have a material
impact.
"Recent Acquisitions" refers collectively to the Company's
acquisition, consummated in February 1996, of WTDR-FM and WLYT-FM, both
operating in Charlotte, North Carolina, the Company's acquisition, consummated
in September 1995, of KTCK-AM, Dallas, Texas, and the Company's acquisition,
consummated in April 1995, of KYXY-FM, San Diego, California.
As used herein, the term "Additional Acquisitions" refers
collectively to the Greenville Acquisition, the Jackson Acquisitions and the
Raleigh-Greensboro Acquisitions.
In the opinion of management, all adjustments necessary to fairly
present this pro forma information have been made. The Unaudited Pro Forma
Condensed Combined Financial Statements are based upon, and should be read in
conjunction with, the historical financial statements and the respective notes
to such financial statements contained in the Forms 8-K filed with the
Securities and Exchange Commission on May 9, 1996 and May 30, 1996. The pro
forma information does not purport to be 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 if the aforementioned
transactions are completed. The Company cannot predict whether the
consummation of any pending or completed acquisitions or dispositions will
conform to the assumptions used in the preparation of the Unaudited Pro Forma
Condensed Combined Financial Statements.
The Unaudited Pro Forma Statement of Operations data include
adjustments to station operating expenses to reflect anticipated savings that
management believes it will be able to achieve through the implementation of
its strategy. There can be no assurance that the Company will be able to
achieve such savings. Such data also assume that the proceeds of the pending
and completed dispositions will be available to the Company to consummate the
pending acquisitions, although certain of the dispositions are expected to
occur at a later date.
7
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SFX BROADCASTING, INC. UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
MARCH 31, 1996
(IN THOUSANDS)
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LIBERTY
ACQUISITION
INCLUDING PRISM
SFX WASHINGTON ACQUISITION
BROADCASTING, DISPOSITIONS INCLUDING OTHER
INC. AS & CHANCELLOR LOUISVILLE ADDITIONAL ACQUISITIONS/
REPORTED EXCHANGE(1) DISPOSITIONS(2) ACQUISITIONS(3) DISPOSITIONS(4) FINANCING(5)
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ASSETS
Current assets ............. $ 22,750 $ 25,851 $ 7,230 $ 5,817 $10,575 $ 140,817 (a)
450,000 (b)
(18,000)(c)
(107,162)(d)
Property and equipment, net 18,157 14,365 7,797 8,524 (1,228) --
Intangible assets, net .... 154,256 97,799 14,281 27,080 (9,117) 18,000 (c)
(5,705)(d)
Other assets ............... 7,689 -- -- -- -- --
------------- ------------ ------------- ------------- ------------- ------------
Total assets ............... $202,852 $138,015 $29,308 $41,421 $ 230 $ 477,950
============= ============ ============= ============= ============= ============
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities ........ $ 9,549 $ 7,460 $ 5,404 $ 2,846 -- $ (283)(d)
Other liabilities .......... 2,092 1,101 -- -- -- --
Long-term debt:
New Credit Agreement ..... -- -- -- -- -- --
Note Offering ............. -- -- -- -- -- 450,000 (b)
Old Notes and Old Credit
Agreement ................ 98,500 -- -- -- -- (97,906)(d)
Acquired company debt .... -- 70,140 13,319 11,570 -- --
Deferred taxes ............. 7,415 10,318 -- 783 -- --
Redeemable preferred stock
Series B Notes ............ 1,806 -- -- -- -- --
Series C Preferred Stock . 1,550 -- -- -- -- --
Series D Preferred Stock . -- -- -- -- -- 149,500 (a)
Stockholders' equity ....... 81,940 48,996 10,585 26,222 230 (14,678)(d)
(8,683)(a)
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Total liabilities and
stockholders' equity ...... $202,852 $138,015 $29,308 $41,421 $ 230 $ 477,950
============= ============ ============= ============= ============= ============
(RESTUBBED TABLE CONTINUED FROM ABOVE)
PRO FORMA FOR
THE TRANSACTIONS
PRO FORMA OTHER THAN THE PRO FORMA FOR
ADJUSTMENTS(6) MERGER MERGER(7) THE TRANSACTIONS
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ASSETS
Current assets ............. $ (23,500)(a) $142,494 $(39,889) $102,605
(212,500)(b)
(85,750)(c)
(63,300)(d)
(8,334)(e)
(2,000)(g)
Property and equipment, net -- 47,615 3,705 51,320
Intangible assets, net .... 112,112 (b) 495,361 131,086 626,447
56,442 (c)
21,879 (d)
8,334 (e)
Other assets ............... 3,415 (f) 8,854 1,926 10,780
(2,250)(a)
------------ ---------------- --------- ----------------
Total assets ............... $(195,452) $694,324 $ 96,828 $791,152
============ ================ ========= ================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities ........ $ (5,404)(c) $ 16,726 $ 3,155 $ 19,881
(2,846)(d)
Other liabilities .......... -- 3,193 121 3,314
Long-term debt:
New Credit Agreement ..... -- -- -- --
Note Offering ............. -- 450,000 -- 450,000
Old Notes and Old Credit
Agreement ................. -- 594 -- 594
Acquired company debt .... (70,140)(b) -- -- --
(13,319)(c)
(11,570)(d)
Deferred taxes ............. 18,748 (b) 36,481 11,552 48,033
(783)(d)
Redeemable preferred stock
Series B Notes ............ -- 1,806 -- 1,806
Series C Preferred Stock . (1,550)(g) -- -- --
Series D Preferred Stock . -- 149,500 -- 149,500
Stockholders' equity ....... (26,222)(d) 36,024 82,000 118,024
(48,996)(b)
(10,585)(c)
(25,750)(a)
3,415 (f)
(450)(g)
------------ ---------------- --------- ----------------
Total liabilities and
stockholders' equity ...... $(195,452) $694,324 $ 96,828 $791,152
============ ================ ========= ================
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(1) Liberty Acquisition
Reflects the Liberty Acquisition for $237.5 million adjusted for the
Washington Dispositions of $25.0 million and the Chancellor Exchange (the
Company will receive $11.0 million in cash in the Chancellor Exchange). No
gain or loss will be recognized in connection with the Washington Dispositions
or the Chancellor Exchange.
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LIBERTY AS WASHINGTON CHANCELLOR LIBERTY
REPORTED DISPOSITIONS EXCHANGE AS ADJUSTED
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(IN THOUSANDS)
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ASSETS
Current assets ............................ $ 14,851 $ -- $ 11,000 $ 25,851
Property and equipment, net ............... 15,765 (1,400) -- 14,365
Intangible assets, net .................... 132,399 (23,600) (11,000) 97,799
---------- ------------ ---------- -----------
Total assets ..................... $163,015 $(25,000) $ 0 $138,015
========== ============ ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ....................... $ 9,135 $ (1,675) $ -- $ 7,460
Other liabilities ......................... 1,101 -- -- 1,101
Long-term debt ............................ 70,140 -- -- 70,140
Deferred taxes ............................ 10,318 -- -- 10,318
Stockholders' equity ...................... 72,321 (23,325) -- 48,996
---------- ------------ ---------- -----------
Total liabilities and stockholders' equity $163,015 $(25,000) $ 0 $138,015
========== ============ ========== ===========
</TABLE>
(2) Prism Acquisition
Reflects the Prism Acquisition for $105.25 million adjusted for the Louisville
Dispositions of $19.5 million. No gain or loss will be recognized on the
Louisville Dispositions.
<TABLE>
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PRISM AS LOUISVILLE PRISM
REPORTED DISPOSITIONS AS ADJUSTED
-------- ------------ -----------
(IN THOUSANDS)
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ASSETS
Current assets ............................ $ 7,230 $ -- $ 7,230
Property and equipment, net ............... 9,206 (1,409) 7,797
Intangible assets, net .................... 32,372 (18,091) 14,281
-------- ------------ -----------
Total assets ..................... $ 48,808 $(19,500) $ 29,308
======== ============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ....................... $ 5,404 $ -- $ 5,404
Long-term debt ............................ 13,319 -- 13,319
Stockholders' equity ...................... 30,085 (19,500) 10,585
-------- ------------ -----------
Total liabilities and stockholders' equity $ 48,808 $(19,500) $ 29,308
======== ============ ===========
</TABLE>
(3) Additional Acquisitions
Reflects the acquisition of radio stations (i) WRDU-FM, WTRG-FM, WMAG-FM,
WMFR-AM, WTCK-AM and WHSL-FM from HMW Communications, Inc. (the
"Raleigh-Greensboro Acquisitions") for a purchase price of approximately $42.8
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million, (ii) WROQ-FM from ABS Greenville Partners, L.P. (the "Greenville
Acquisition") for a purchase price of approximately $14.0 million and (iii)
WSTZ-FM and WZRX-AM from Lewis Broadcasting, Inc. and WJDX-FM from Spur
Jackson, L.P. (the "Jackson Acquisitions") for a purchase price of $6.5
million. The aggregate purchase price is $63.3 million.
<TABLE>
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THE ADDITIONAL
RALEIGH-GREENSBORO GREENVILLE JACKSON ACQUISITIONS
ACQUISITIONS ACQUISITION ACQUISITIONS COMBINED
------------------ ----------- ------------ ---------------
(IN THOUSANDS)
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ASSETS
Current assets ............................ $ 5,325 $ 146 $ 346 $ 5,817
Property and equipment, net ............... 7,762 350 412 8,524
Intangible assets, net .................... 21,694 1,607 3,779 27,080
---------- ------------ ---------- -----------
Total assets ..................... $ 34,781 $ 2,103 $ 4,537 $ 41,421
========== ============ ========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ....................... $ 2,278 $ 506 $ 62 $ 2,846
Long-term debt ............................ 51 11,519 -- 11,570
Deferred taxes ............................ 783 -- -- 783
Stockholders' equity ...................... 31,669 (9,922) 4,475 26,222
---------- ------------ ---------- -----------
Total liabilities and stockholders' equity $ 34,781 $ 2,103 $ 4,537 $ 41,421
========== ============ ========== ===========
</TABLE>
(4) Other Acquisitions and Dispositions
To reflect the Dallas Disposition for $11.5 million which is net of payment
anticipated to be made to the seller of the station to the Company. No
adjustment has been made to the pro forma balance sheet for the Houston
Exchange as it will be recorded at historical cost. See note 6(g) for the
effect of the related redemption of the Company's Series C Redeemable
Convertible Preferred Stock.
<TABLE>
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SALE PROCEEDS KTCK-AM ADJUSTMENT
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(IN THOUSANDS)
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ASSETS
Current assets ........................... $ 11,500 $ 925 $ 10,575
Property and equipment, net .............. -- 1,228 (1,228)
Intangible assets, net ................... -- 9,117 (9,117)
------------- ------- ----------
Total assets .................... $ 11,500 $ 11,270 $ 230
============= ======= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ...................... $ -- $ -- $ --
Long-term debt ........................... -- -- --
Stockholders' equity ..................... 11,500 11,270 230
------------- ------- ----------
Total liabilities and stockholders' equity $ 11,500 $ 11,270 $ 230
============= ======= ==========
</TABLE>
10
<PAGE>
(5) Financing
(a) To reflect the Preferred Stock Offering for $149,500,000 and
the costs related to its issuance of $8,683,000, a net of
$140,817,000.
(b) To reflect the $450,000,000 of gross proceeds from the Note
Offering.
(c) Represents financing costs related to the definitive credit
agreement the Company expects to enter into pursuant to the
firm commitment letter from its lender to increase amounts
available under it senior credit facility from $50.0 million to
$150.0 million (the "New Credit Agreement") and the Note
Offering comprised of estimated (i) fees relating to the Note
Offering of $12,645,000, (ii) fees for the New Credit Agreement
of $3,000,000 and (iii) other fees of $2,355,000.
(d) To repurchase the Old Notes that were tendered for an aggregate
price of $88,379,000 which includes their carrying cost of
$79,406,000 and estimated costs related to the Tender Offer and
the related consent solicitation of $8,973,000. Also reflects
the redemption of $18,500,000 of long-term debt plus accrued
interest of $283,000 associated with the Old Credit Agreement
which was used to finance the acquisition of WTDR-FM and
WLYT-FM, both operating in Charlotte, North Carolina (the
"Charlotte Acquisition") in February 1996. An extraordinary
loss aggregating approximately $14,678,000 will be recognized
at the time these transactions are consummated consisting of
$8,973,000 in costs associated with the Tender Offer and the
related consent solicitation and $5,705,000 related to the
write-off of deferred financing costs.
(6) Pro Forma Adjustments
(a) The Company has allocated approximately $23.5 million of the
proceeds of the Note Offering and the Preferred Stock Offering
(collectively, the "Financing") to make payments to Mr. Hicks
pursuant to the Hicks Agreement and Mr. Armstrong pursuant to
the Armstrong Agreement as follows: (i) $100,000 in
consideration of Mr. Hicks' having agreed to terminate his
employment arrangement with the Company on June 19, 1996, (ii)
approximately $18.4 million to purchase 143,874 of the shares
of Class B Common Stock and 26,318 shares of Class A Common
Stock owned by Mr. Hicks plus his options or rights to acquire
options to purchase an aggregate of 410,000 shares of Class A
Common Stock, (iii) $100,000 in connection with the
non-competition and non-solicitation provision in the Hicks
Agreement, (iv) approximately $300,000 in connection with Mr.
Hicks' existing auto lease and premises leased by Capstar, Inc.
and (v) $4.6 million to Mr. Armstrong in consideration of his
waiver of the "Change of Control" provision in his employment
agreement and to purchase his options or rights to acquire
options to purchase 200,000 shares of Class A Common Stock. In
addition, the Hicks Agreement provides that the Company will
forgive its loan to him in the approximate amount of
$2,250,000, including accrued but unpaid interest, if he
complies with defined elements of the agreement over the next 3
years.
In connection with the Hicks Agreement and the Armstrong
Agreement, the Company recorded a nonrecurring charge to
earnings of approximately $19,400,000 in the second quarter of
1996.
(b) To reflect the Liberty Acquisition for $237,500,000 net of
proceeds to be received from the Washington Dispositions of
$25,000,000, the recording of the related excess of the
purchase price paid over the net book value of the assets
carried on the adjusted balance sheet of $112,112,000 and
deferred taxes of $29,066,000 and the adjustments to remove the
long-term debt of $70,140,000 which is not being assumed, and
the stockholders' equity of $48,996,000 of the Liberty
Acquisition.
(c) To reflect the Prism Acquisition for $105,250,000, net of
proceeds to be received from the Louisville Dispositions of
$19,500,000, the recording of the related excess of the
purchase price paid over the net book value of the assets
carried on the balance sheet of $56,442,000 and the adjustments
to remove the current liabilities of $5,404,000, long-term debt
of $13,319,000 and stockholders' equity of $10,585,000 of
Prism.
(d) To reflect the $63,300,000 aggregate purchase price to be paid
for the Additional Acquisitions, the recording of the related
excess of the purchase price paid over the net book value of
the assets carried on the balance sheets of
11
<PAGE>
$21,879,000 and the adjustments to remove current liabilities
of $2,846,000, long-term debt of $11,570,000, deferred taxes of
$783,000 and stockholders' equity of $26,222,000 of the
Additional Acquisitions.
(e) To reflect acquisition costs related to the Liberty, Prism and
Additional Acquisitions.
(f) To reflect the SCMC Termination Agreement under which warrants
to purchase up to 600,000 shares of Class A Common Stock at
$33.75 per share (fair value of approximately $9,000,000) will
be granted to SCMC and a $2,000,000 loan plus accrued interest
of $171,000 made by the Company to SCMC will be forgiven. One
half of the value of the warrant and loan forgiveness of
$11,171,000 will be charged to earnings during the three month
period ended June 30, 1996, and upon completion of the Merger,
the remainder will be allocated to the Triathlon Broadcasting
Company ("Triathlon") agreement and amortized over the ten year
life of the agreement. The net effect of these transactions on
stockholders' equity is an increase of $3,415,000.
(g) In connection with the Dallas Disposition, the Company expects
to redeem its Series C Redeemable Convertible Preferred Stock
for approximately $2.0 million, which will result in a
corresponding charge of $450,000 to the gain or loss on the
Dallas Disposition.
12
<PAGE>
<TABLE>
<CAPTION>
(7) Merger
MULTI-MARKET RADIO, INC.
----------------------------------------------------------------------------
MMR MMR HARTFORD PRO FORMA
AS REPORTED DISPOSITIONS(A) ACQUISITION(B) ADJUSTMENTS AS ADJUSTED
----------- --------------- -------------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets ............................ $ 7,868 $ 5,446 $ 1,030 $ (18,000)(b) $ (39,889)
13,600 (b)
(47,167)(c)
(2,666)(d)
Property and equipment, net ............... 3,649 (303) 359 -- 3,705
Intangible assets, net .................... 48,949 (3,593) 4,148 60,453 (e) 131,086
12,463 6,000 (c)
2,666 (d)
Other assets .............................. 6,976 (5,050) -- -- 1,926
----------- --------------- -------------- ----------- -----------
Total assets ..................... $ 67,442 $ (3,500) $ 18,000 $ 14,886 $ 96,828
=========== =============== ============== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ....................... $ 3,155 $ -- $ -- $ -- $ 3,155
Other liabilities ......................... 3,621 (3,500) -- -- 121
Debt, including current portion ........... 41,167 -- -- (41,167)(c) --
Deferred taxes ............................ 7,373 -- -- 4,179 (e) 11,552
Stockholders' equity ...................... 12,126 -- 18,000 13,600 (b) 82,000
(18,000)(b)(e)(e)
(13,600)
69,874
----------- --------------- -------------- ----------- -----------
Total liabilities and stockholders' equity $ 67,442 $ (3,500) $ 18,000 $ 14,886 $ 96,828
=========== =============== ============== =========== ===========
</TABLE>
(a) Represents the sale of WRSF-FM which occurred in March 1996 for $950,000,
the sale of WRXR-FM and WKGB-FM which occurred in July 1996 for
$5,000,000 and the pending sale of KOLL-FM for $4,100,000. In the
aggregate, a loss of approximately $1,471,000 has been recognized during
the three months ended March 31, 1996 relating to the sales, principally
relating to WRXR-FM and WKBG-FM. Current assets include $5,650,000 of
proceeds to be received in connection with the dispositions (total sale
proceeds of $10,050,000 less $4,400,000 received in connection with the
KOLL-FM and WRSF-FM dispositions).
(b) To reflect the pending MMR Hartford Acquisition for $18,000,000,
including corresponding excess of purchase price paid, $12,463,000 over
net book value of assets acquired, and the adjustment to remove the
stockholders' equity of $18,000,000. It is assumed that the Company will
loan MMR $23 million for the purposes of financing the MMR Hartford
Acquisition and for working capital. It is also assumed that the MMR
Class A warrants will be exercised for $13,600,000.
(c) Repayment of $41,167,000 of existing MMR indebtedness and approximately
$6,000,000 related to prepayment premiums which will increase the
purchase price of MMR.
(d) Includes acquisition costs associated with the Merger of $1,666,000 and
the $1,000,000 purchase price of the MMR Myrtle Beach Acquisition.
13
<PAGE>
(e) To reflect the Merger, assuming the Company's stock price is between
$33.00 per share and $40.00 per share, at an estimated purchase price of
$82,000,000 including the excess of the purchase price paid over the net
book value of the assets acquired, including deferred taxes, of
$60,453,000.
14
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
LIBERTY
ACQUISITION
INCLUDING PRISM
WASHINGTON ACQUISITION
SFX DISPOSITIONS AND INCLUDING
BROADCASTING, CHANCELLOR LOUISVILLE ADDITIONAL OTHER ACQUISITIONS/
INC. EXCHANGE(1) DISPOSITION(2) ACQUISITIONS(3) DISPOSITIONS(4)
------------- ---------------- ------------ ------------ ------------------
<S> <C> <C> <C> <C> <C>
Net Revenues ................. $19,800 $10,022 $6,068 $2,417 $(2,020)
Station operating expenses .. 14,056 7,485 5,370 1,730 (2,608)
Depreciation, amortization and
acquisition related costs .. 2,299 (**) 2,382 558 716 (93)
Corporate expenses ........... 1,210 517 373 63 30
Other ........................ -- -- -- -- --
------------- ---------------- ------------ ------------ ------------------
Operating Income ............. 2,235 (362) (233) (92) 651
Interest expense, including
amortization of deferred
financing costs ............. 3,384 1,933 357 242 (477)
Other expense (income) ....... (164) -- -- (280) (31)
Income tax expense (benefit) -- (918) -- 93 --
------------- ---------------- ------------ ------------ ------------------
Net income (loss) ............ (985) (1,377) (590) (147) 1,159
Preferred stock dividend
requirement ................. 136 -- -- -- --
------------- ---------------- ------------ ------------ ------------------
Net loss applicable to common
shares ...................... $(1,121) $(1,377) $ (590) $ (147) $ 1,159
============= ================ ============ ============ ==================
Net loss per common share ... $ (0.15)
=============
Average common shares
outstanding ................. 7,458
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRO FORMA FOR
THE TRANSACTIONS
OTHER THAN THE PRO FORMA FOR
FINANCING & MERGER AND THE THE TRANSACTIONS
PRO FORMA RECENT AND THE RECENT
ADJUSTMENTS(5) ACQUISITIONS MERGER(6) ACQUISITIONS
------------ ---------------- ------- ----------------
<S> <C> <C> <C> <C>
Net Revenues ................. $ 2,645 (a) $38,932 (*) $ 5,080 $44,012 (*)
Station operating expenses .. (632)(b) 25,401 2,902 28,303
Depreciation, amortization and
acquisition related costs .. 519 (c) 6,837 897 7,734
(408)(c)
353 (c)
137 (c)
182 (d)
52 (e)
140 (f)
Corporate expenses ........... 549 (g) 1,759 60 1,819
(983)(g)
Other ........................ -- -- 265 265
------------ ---------------- ------- ----------------
Operating Income ............. 2,736 4,935 956 5,891
Interest expense, including
amortization of deferred
financing costs ............. 12,094 (h) 12,561 -- 12,561
(5,422)(h)
450 (h)
Other expense (income) ....... -- (475) -- (475)
Income tax expense (benefit) 825 (i) -- -- --
------------ ---------------- ------- ----------------
Net income (loss) ............ (5,211) (7,151) 956 (6,195)
Preferred stock dividend
requirement ................. 2,429 (j) 2,565 -- 2,565
------------ ---------------- ------- ----------------
Net loss applicable to common
shares ...................... $(7,640) $(9,716) $956 $(8,760)
============ ================ ======= ================
Net loss per common share ... $ (1.30) $ (0.94)
================ ================
Average common shares
outstanding ................. 7,458 9,348
<FN>
- ------------
(*) Includes $2,645,000 of fees from Triathlon; see Note 5(a).
(**) Includes $277,000 of acquisition related costs.
</TABLE>
15
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
LIBERTY
ACQUISITION
INCLUDING PRISM
WASHINGTON ACQUISITION
SFX DISPOSITIONS AND INCLUDING OTHER FINANCING &
BROADCASTING, CHANCELLOR LOUISVILLE ADDITIONAL ACQUISITIONS/ PRO FORMA
INC. EXCHANGE(1) DISPOSITION(2) ACQUISITIONS(3) DISPOSITIONS(4) ADJUSTMENTS(5)
------------- ---------------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues ................. $13,717 $ 9,664 $ 5,726 $3,844 $(1,440) $ 2,780 (a)
Station operating expenses .. 9,676 7,611 5,557 3,250 (1,218) (632)(b)
1,966 (a)
Depreciation and amortization 1,697 1,711 511 580 -- 519 (c)
(408)(c)
353 (c)
137 (c)
182 (d)
52 (e)
140 (f)
1,475 (a)
Corporate expenses ........... 807 614 420 45 30 549 (g)
(1,109)(g)
67 (a)
-- -- -- -- (37) --
------------- ---------------- ------------ ------------ ------------- ------------
Other ........................ 1,537 (272) (762) (31) (215) (511)
Interest expense, including
amortization of deferred
acquisition costs ........... 2,432 1,386 427 191 (454) 12,094 (h)
(3,965)(h)
450 (h)
Other expense (income) ....... 3 52 -- (36) (90) --
Income tax expense (benefit) (377) 6 -- 120 -- 251 (i)
------------- ---------------- ------------ ------------ ------------- ------------
Net income (loss) ............ (521) (1,716) (1,189) (306) 329 (9,341)
Preferred stock dividend
requirement ................. 71 -- -- -- -- 2,429(j)
------------- ---------------- ------------ ------------ ------------- ------------
Net loss applicable to common
shares ...................... $ (592) $(1,716) $(1,189) $ (306) $ 329 $(11,770)
============= ================ ============ ============ ============= ============
Net loss per common share ... $ (0.10)
=============
Average common shares
outstanding ................. 5,916
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRO FORMA FOR
THE TRANSACTIONS
AND THE RECENT PRO FORMA FOR
ACQUISITIONS THE TRANSACTIONS
OTHER THAN THE AND THE RECENT
MERGER MERGER(6) ACQUISITIONS
---------------- ------- ----------------
<S> <C> <C> <C>
Net Revenues ................. $ 34,291(*) $ 4,976 $ 39,267(*)
Station operating expenses .. 26,210 3,125 29,335
Depreciation and amortization 6,949 1,110 8,059
Corporate expenses ........... 1,423 60 1,483
(37) 280 243
---------------- ------- ----------------
Other ........................ (254) 401 147
Interest expense, including
amortization of deferred
acquisition costs ........... 12,561 -- 12,561
Other expense (income) ....... (71) -- (71)
Income tax expense (benefit) -- -- --
---------------- ------- ----------------
Net income (loss) ............ (12,744) 401 (12,343)
Preferred stock dividend
requirement ................. 2,500 -- 2,500
---------------- ------- ----------------
Net loss applicable to common
shares ...................... $(15,244) $401 $(14,843)
================ ======= ================
Net loss per common share ... $ (2.04) $ (1.59)
================ ================
Average common shares
outstanding ................. 7,458 9,348
</TABLE>
- ------------
(*) Includes $625,000 of fees from Triathlon; see Note 5(a).
16
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
LIBERTY
ACQUISITION
INCLUDING PRISM
WASHINGTON ACQUISITION
SFX DISPOSITIONS AND INCLUDING FINANCING &
BROADCASTING, CHANCELLOR LOUISVILLE ADDITIONAL OTHER ACQUISITIONS/ PRO FORMA
INC. EXCHANGE(1) DISPOSITION(2) ACQUISITIONS(3) DISPOSITIONS(4) ADJUSTMENTS(5)
------------- ---------------- ------------ ------------- ------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net Revenues ......... $76,830 $46,636 $26,959 $18,463 $(9,967) $ 5,739 (a)
Station operating 51,039 30,339 22,411 15,570 (9,689) (4,938)(b)
expenses ............ 1,966 (a)
Depreciation, 9,137(*) 8,817 2,232 2,947 (124) 2,076 (c)
amortization and (1,632)(c)
duopoly integration 1,411 (c)
costs ............... 547 (c)
727 (d)
208 (e)
559 (f)
1,474 (a)
Corporate expenses ... 3,797 3,193 2,027 265 120 2,196 (g)
(5,605)(g)
67 (a)
Other ................ 5,000 -- -- -- (5,000) --
------------- ---------------- ------------ ------------- ------------------- ------------
Operating Income ..... 7,857 4,287 289 (319) 4,726 6,683
Interest expense, 12,903 7,258 1,565 948 (1,841) 48,375 (h)
including (20,765)(h)
amortization of 1,800 (h)
deferred financing
costs ...............
Other expense (income) (650) -- (200) (201) 498) --
Income tax expense ... (2,725) -- 562 -- 2,163 (i)
------------- ---------------- ------------ ------------- ------------------- ------------
Net income (loss) .... (4,396) (246) (1,076) (1,628) 7,065 (24,890)
Preferred stock 291 -- -- -- -- 9,718 (j)
dividend requirement
------------- ---------------- ------------ ------------- ------------------- ------------
Net loss applicable to $(4,687) $ (246) $ 1,076) $ 1,628) $ 7,065 $(34,608)
common shares .......
============= ================ ============ ============= =================== ============
Net loss per common $ (0.71)
share ...............
=============
Average common shares 6,596
outstanding .........
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRO FORMA FOR
THE TRANSACTIONS
OTHER THAN THE PRO FORMA FOR
MERGER AND THE THE TRANSACTIONS
RECENT AND THE RECENT
ACQUISITIONS MERGER(6) ACQUISITIONS
---------------- ------- ----------------
<S> <C> <C> <C>
Net Revenues ......... $164,660(*) $22,966 $187,626(*)
Station operating 106,698 12,892 119,590
expenses ............
Depreciation, 28,379 4,009 32,388
amortization and
duopoly integration
costs ...............
Corporate expenses ... 6,060 240 6,300
Other ................ -- 1,081 1,081
---------------- ------- ----------------
Operating Income ..... 23,523 4,744 28,267
Interest expense, 50,243 -- 50,243
including
amortization of
deferred financing
costs ...............
Other expense (income) (1,549) -- (1,549)
Income tax expense ... -- -- --
---------------- ------- ----------------
Net income (loss) .... (25,171) 4,744 (20,427)
Preferred stock 10,009 -- 10,009
dividend requirement
---------------- ------- ----------------
Net loss applicable to $ 35,180) $ 4,744 $(30,436)
common shares .......
================ ======= ================
Net loss per common $ (4.72) $ (3.26)
share ...............
================ ================
Average common shares 7,458 9,348
outstanding .........
</TABLE>
- ------------
(*) Includes $3,548,000 of fees from Triathlon; see Note 5(a).
(ii) Includes $1,400,000 of duopoly integration costs.
17
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
(1) Liberty Acquisition
Reflects the net effect of the historical operations of the Liberty
Stations adjusted for the Washington Dispositions and the Chancellor
Exchange.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1996
----------------------------------------------------------------------------------
LIBERTY AS WASHINGTON LONG ISLAND JACKSONVILLE ADJUSTMENTS LIBERTY AS
REPORTED DISPOSITIONS DISPOSITION ACQUISITION * ADJUSTED
------------ ------------ ------------ ------------ ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenues ............... $ 10,563 $ (441) $ (1,891) $ 1,791 $ -- $ 10,022
Station operating expenses . 8,802 (817) (1,564) 1,064 -- 7,485
Depreciation & amortization 2,839 (388) (676) 376 231 2,382
Corporate expenses ......... 649 (44) (88) -- -- 517
------------ ------------ ------------ ------------ ----------- -----------
Operating income (loss) .... (1,727) 808 437 351 (231) (362)
Interest expense, net ...... 2,210 (270) (7) -- -- 1,933
Income tax expense (benefit) (916) -- (2) -- -- (918)
------------ ------------ ------------ ------------ ----------- -----------
Net income (loss) .......... $ (3,021) $ 1,078 $ 446 $ 351 $ 231) $ (1,377)
============ ============ ============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1995
---------------------------------------------------------------------------------------
LIBERTY AS BECK ROSS WASHINGTON LONG ISLAND JACKSONVILLE ADJUSTMENTS LIBERTY AS
REPORTED ACQUISITION DISPOSITIONS DISPOSITION ACQUISITION * ADJUSTED
----------- ----------- ------------ ------------ ------------- ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenues................ $ 8,722 $ 2,486 $ (694) $(2,510) $ 1,610 $ -- $ 9,664
Station operating expenses . 7,513 2,121 (1,047) (2,034) 1,058 -- 7,611
Depreciation & amortization 2,043 40 (303) (464) 372 23 1,711
Corporate expenses ......... 654 -- -- (40) -- -- 614
----------- ----------- ------------ ------------ ------------- ------------ ----------
Operating income (loss) .... (1,438) 325 656 28 180 (23) (272)
Interest expense, net ...... 1,405 -- -- (19) -- -- 1,386
Other expense .............. -- -- 52 -- -- -- 52
Income tax expense (benefit) 6 -- -- -- -- -- 6
----------- ----------- ------------ ------------ ------------- ------------ ----------
Net income (loss) .......... $(2,849) $ 325 $ 604 $ 47 $ 180 $ (23) (1,716)
=========== =========== ============ ============ ============= ============ ==========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1995
---------------------------------------------------------------------------------------
LIBERTY AS BECK ROSS WASHINGTON LONG ISLAND JACKSONVILLE ADJUSTMENTS LIBERTY AS
REPORTED ACQUISITION DISPOSITIONS DISPOSITION ACQUISITION * ADJUSTED
----------- ----------- ------------ ------------ ------------- ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenues .............. $ 51,407 $ 2,486 $ (3,375) $(11,511) $ 7,629 $ -- $ 46,636
Station operating expenses 34,725 2,121 (4,065) (7,282) 4,840 -- 30,339
Depreciation & amortization 10,429 40 (1,377) (2,682) 1,491 916 8,817
Corporate expenses ........ 4,653 -- -- (1,460) -- -- 3,193
----------- ----------- ------------ ------------ ------------- ------------ ----------
Operating income (loss) ... 1,600 325 2,067 (87) 1,298 (916) 4,287
Interest expense, net ..... 7,373 -- (98) (17) -- -- 7,258
Income tax expense ........ (2,725) -- -- -- -- -- (2,725)
----------- ----------- ------------ ------------ ------------- ------------ ----------
Net income (loss) ......... $ (3,048) $ 325 $ 2,165 $ (70) $ 1,298 $ (916) $ (246)
=========== =========== ============ ============ ============= ============ ==========
</TABLE>
- -------------------------
* To reflect historic depreciation of the stations that are the subject of
the Long Island Disposition net of decrease in amortization due to the
exchange allocation.
18
<PAGE>
(2) Prism Acquisition
Reflects the net effect of the historical operations of the Prism
Acquisition adjusted for the Louisville Dispositions.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1996
---------------------------------------------
PRISM AS LOUISVILLE PRISM AS
REPORTED DISPOSITIONS ADJUSTED
------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net revenues ................ $ 7,051 $ (983) $ 6,068
Station operation expenses .. 6,161 (791) 5,370
Depreciation and amortization 737 (179) 558
Corporate expenses .......... 373 -- 373
------------- ------------ --------------
Operating income/(loss) ..... (220) (13) (233)
Interest expense ............ 357 -- 357
------------- ------------ --------------
Net loss .................... $ (577) $ (13) $ (590)
============= ============ ==============
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1995
---------------------------------------------
PRISM AS LOUISVILLE PRISM AS
REPORTED DISPOSITIONS ADJUSTED
------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net revenues ................ $ 6,795 $ (1,069) $ 5,726
Station operation expenses .. 6,669 (1,112) 5,557
Depreciation and amortization 673 (162) 511
Corporate expenses .......... 420 -- 420
------------- ------------ --------------
Operating income/(loss) ..... (967) 205 (762)
Interest expense ............ 427 -- 427
------------- ------------ --------------
Net loss .................... $ (1,394) $ 205 $ (1,189)
============= ============ ==============
</TABLE>
<TABLE>
YEAR ENDED DECEMBER 31, 1995
---------------------------------------------
PRISM AS LOUISVILLE PRISM AS
REPORTED DISPOSITIONS ADJUSTED
------------- ------------ --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net revenues ................ $ 32,572 $ (5,613) $ 26,959
Station operation expenses .. 26,979 (4,568) 22,411
Depreciation and amortization 2,946 (714) 2,232
Corporate expenses .......... 2,027 -- 2,027
------------- ------------ --------------
Operating income/(loss) ..... 620 (331) 289
Interest expense ............ 1,565 -- 1,565
Other income/(loss) ......... (200) -- (200)
------------- ------------ --------------
Net loss .................... $ (745) $ (331) $ (1,076)
============= ============ ==============
</TABLE>
19
<PAGE>
(3) Additional Acquisitions
Reflects the net effect of the combined historical operations of the
Raleigh-Greensboro Acquisitions, the Greenville Acquisition and the
Jackson Acquisitions.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1996
----------------------------------------------------
RALEIGH- ADDITIONAL
GREENSBORO GREENVILLE JACKSON ACQUISITIONS
ACQUISITIONS ACQUISITION ACQUISITIONS COMBINED
------------ ----------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues .............. $ 1,938 $ 360 $ 119 $ 2,417
Station operating expenses 1,374 250 106 1,730
Depreciation & amortization 584 123 9 716
Corporate expenses ........ - 63 63 -
------------ ----------- ------------ ------------
Operating income (loss) ... (20) (76) 4 (92)
Interest expense, net ..... 58 184 -- 242
Other expense (income) .... (280) -- -- (280)
Income tax expense ........ 93 -- -- 93
------------ ----------- ------------ ------------
Net income (loss) ......... $ 109 $ (260) $ 4 $ (147)
============ =========== ============ ============
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1995
----------------------------------------------------
RALEIGH- ADDITIONAL
GREENSBORO GREENVILLE JACKSON ACQUISITIONS
ACQUISITIONS ACQUISITION ACQUISITIONS COMBINED
------------ ----------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues .............. $ 2,784 $ 773 $ 287 $ 3,844
Station operating expenses 2,330 635 285 3,250
Depreciation & amortization 426 127 27 580
Corporate expenses ........ -- 45 -- 45
------------ ----------- ------------ ------------
Operating income (loss) ... 28 (34) (25) (31)
Interest expense, net ..... 2 189 -- 191
Other expense (income) .... (36) -- -- (36)
Income tax expense benefit 120 -- -- 120
------------ ----------- ------------ ------------
Net income (loss) ......... $ (58) $ (223) $ (25) $ (306)
============ =========== ============ ============
</TABLE>
<TABLE>
YEAR ENDED DECEMBER 31, 1995
----------------------------------------------------
RALEIGH- ADDITIONAL
GREENSBORO GREENVILLE JACKSON ACQUISITIONS
ACQUISITIONS ACQUISITION ACQUISITIONS COMBINED
------------ ----------- ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues .............. $12,688 $ 4,074 $ 1,701 $18,463
Station operating expenses 10,982 3,238 1,350 15,570
Depreciation & amortization 2,325 514 108 2,947
Corporate expenses ........ -- 195 70 265
------------ ----------- ------------ ------------
Operating income (loss) ... (619) 127 173 (319)
Interest expense, net ..... 156 792 -- 948
Other expense (income) .... (203) 2 -- (201)
Income tax expense ........ 562 -- -- 562
------------ ----------- ------------ ------------
Net income (loss) ......... $(1,134) $ (667) $ 173 $(1,628)
============ =========== ============ ============
</TABLE>
20
<PAGE>
(4) Other Acquisitions/Dispositions
To reflect the exchange of KRLD-AM and the Texas State Networks for
KKRW-FM in the Houston Exchange, and the sale of KTCK-AM in the Dallas
Disposition.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1996
--------------------------------------------------------------------------
DISPOSITIONS ACQUISITION ADJUSTMENTS(*) NET
--------------------------------- ----------- -------------- ---------
KRLD-AM TSN KTCK-AM KKRW-FM
--------- -------- ------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenues ................ $(2,109) $ (515) $(1,022) $ 1,626 $ -- $(2,020)
Station operating expenses .. (1,991) (532) (1,241) 1,156 -- (2,608)
Depreciation and amortization (341) (63) (93) 152 252 (93)
Corporate expenses .......... -- -- -- 30 -- 30
-------- ------- -------- ------- ------- --------
Operating income (loss) ..... 223 80 312 288 (252) 651
Interest expense ............ (369) (106) (2) -- -- (477)
Other income ................ -- -- -- (31) -- (31)
-------- ------- -------- ------- ------- --------
Net loss (income) ........... $ 592 $ 186 $ 314 $ 319 $ (252) $ 1,159
======== ======= ======== ======= ======== ========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1995
--------------------------------------------------------------------------
DISPOSITIONS ACQUISITION ADJUSTMENTS(*) NET
--------------------------------- ----------- -------------- ---------
KRLD-AM TSN KTCK-AM KKRW-FM
--------- -------- ------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenues ................ $(1,758) $ (684) $ (426) $ 1,428 $ -- $(1,440)
Station operating expenses .. (1,805) (541) (295) 1,423 -- (1,218)
Depreciation and amortization (305) (199) -- 84 420 0
Corporate expenses .......... -- -- -- 30 -- 30
Other income (expense) ...... -- -- (37) -- -- (37)
-------- ------- -------- ------- ------- --------
Operating income (loss) ..... 352 56 (94) (109) (420) (215)
Interest expense ............ (359) (95) -- -- -- (454)
Other income ................ -- -- (50) (40) -- (90)
-------- ------- -------- ------- ------- --------
Net loss (income) ........... $ 711 $ 151 $ (44) $ (69) $ (420) $ 329
======== ======= ======== ======= ======== ========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
--------------------------------------------------------------------------
DISPOSITIONS ACQUISITION ADJUSTMENTS(*) NET
--------------------------------- ----------- -------------- ---------
KRLD-AM TSN KTCK-AM KKRW-FM
--------- -------- ------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net revenues ................ $(9,792) $(3,196) $(4,096) $ 7,117 $ -- $(9,967)
Station operating expenses .. (8,881) (2,261) (3,714) 5,167 -- (9,689)
Depreciation and amortization (1,350) (725) (124) 371 1,704 (124)
Corporate expenses .......... -- -- -- 120 -- 120
Write-down of broadcast rights (5,000) -- -- -- -- (5,000)
-------- ------- -------- ------- ------- --------
Operating income (loss) ..... 5,439 (210) (258) 1,459 (1,704) 4,726
Interest expense ............ (1,433) (403) (5) -- -- (1,841)
Other income ................ -- -- (323) (175) -- (498)
-------- ------- -------- ------- ------- --------
Net loss .................... $ 6,872 $ 193 $ 70 $ 1,634 $(1,704) $ 7,065
======== ======= ======== ======= ======== ========
</TABLE>
- ---------------
(*) To reflect historical depreciation of KRLD-AM and TSN and disposition of
KTCK-AM.
21
(5) Financing and Pro Forma Adjustments
(a) Reflects the results of radio stations (located in San Diego,
Charlotte and Dallas) acquired in the Recent Acquisitions during the year
ended December 31, 1995 and fees of $3,584,000 and $2,645,000 incurred by
Triathlon and payable to SCMC for the year ended December 31, 1995 and
the three months ended March 31, 1996, respectively of which $2,584,000
and $2,020,000, respectively, represent fees based upon acquisition and
financing activities in the respective periods. Future fees may be lesser
or greater based upon future acquisition and financing activity by
Triathlon. Minimum annual fees will be $1,000,000 per year commencing at
such time as Triathlon spends an amount equal to the net proceeds of its
last public offering, of which $625,000 is due in the first calendar
quarter. For purposes of the pro forma statement of operations for the
three months ended March 31, 1995, the fees relating to Triathlon of
$625,000 noted above were assumed to be earned during the quarter ended
March 31, 1995.
(b) Reflects anticipated cost savings expected to be realized
following the Liberty Acquisition, the Prism Acquisition and the
Additional Acquisitions, consisting principally of the elimination of
certain duplicative technical, sales and general and administrative
functions due to operating a cluster of stations in each of its principal
markets, a reduction of employee benefit costs and commission rates and
the elimination of programming personnel due to automation and
simulcasting.
In addition to the cost savings identified above which are reflected
in the pro forma adjustments, the Company has identified certain
additional expenses of approximately $936,000 which are not expected to
recur or are expected to recur in reduced amounts. These expenses consist
primarily of (i) non-recurring marketing costs of approximately $471,000
related to the Company's stations operating in San Diego, California,
Charlotte, North Carolina and Greenville-Spartanburg, South Carolina,
incurred by the prior owners of such stations, (ii) costs associated with
barter arrangements of approximately $98,000 related to the Company's
stations operatingin Raleigh, North Carolina, (iii) costs of third party
service providers of approximately $272,000 related to the radio stations
acquired in the Prism Acquisition and retained by the Company, and (iv)
employee relocation expenses of approximately $95,000 incurred by the
prior owners of Prism.
While management believes that such cost savings and the elimination
of non-recurring expenses are reasonably achievable, the Company's
ability to achieve such cost savings and to eliminate the non-recurring
expenses is subject to numerous factors, many of which are beyond the
Company's control. There can be no assurance that the Company will
realize such cost savings.
The Company believes that if KYXY-FM and KPLN-FM (formerly KMKX-FM),
each operating in San Diego, California, had been owned and operated by
the Company during all of fiscal 1995 and had such stations achieved the
same audience share during fiscal 1995 as they had during the three
months ended March 31, 1996, revenues would have been increased by
approximately $1.8 million. There can be no assurance that the stations
will continue to achieve the current audience share or that they will
achieve the related revenue increases.
(c) Reflects increased amortization of intangible assets resulting
from the purchase price allocation: Liberty ($519,000), ($519,000) and
($2,076,000) for the three months ended March 31, 1996 and 1995 and year
ended December 31, 1995, respectively; Prism ($353,000), ($353,000) and
($1,411,000) for the three months ended March 31, 1996 and 1995 and year
ended December 31, 1995, respectively; Additional Acquisitions
($137,000), ($137,000) and ($547,000) for the three months ended March
31, 1996 and 1995 and year ended December 31, 1995, respectively and an
adjustment to decrease the amortization of intangible assets resulting
from changes in the amortization period at Liberty ($408,000), ($408,000)
and ($1,632,000) for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively.
(d) Reflects $182,000, $182,000 and $727,000 in amortization of
goodwill arising from the deferred tax recorded in connection with the
Liberty Acquisition for the three months ended March 31, 1996 and 1995
and year ended December 31, 1995, respectively.
22
<PAGE>
(e) Amortization of $52,000, $52,000 and $208,000 for acquisition
costs associated with the Acquisitions for the three months ended March
31, 1996 and 1995 and year ended December 31, 1995, respectively.
(f) To reflect $140,000, $140,000 and $559,000 in amortization
relating to the present value of the Triathlon consulting fees assigned
to the Company under its agreement with SCMC for the three months ended
March 31, 1996 and 1995 and year ended December 31, 1995, respectively.
(g) To record incremental corporate overhead charges of $549,000,
$549,000 and $2,196,000 for the three months ended March 31, 1996 and
1995 and year ended December 31, 1995, respectively, relating to
increases in personnel, professional fees and administrative expenses
associated with the increased size of the Company due to the Acquisitions
and the elimination of $983,000, $1,109,000 and $5,605,000 for the three
months ended March 31, 1996 and 1995 and year ended December 31, 1995,
respectively of the corporate overhead of the sellers.
(h) To reflect interest expense of $12,094,000, $12,094,000 and
$48,375,000 for the three months ended March 31, 1996 and 1995 and year
ended December 31, 1995, respectively, related to the $450,000,000 Note
Offering at 10.75%, amortization of deferred financing costs of $450,000,
$450,000 and $1,800,000 for the three months ended March 31, 1996 and
1995 and year ended December 31, 1995, respectively, and the elimination
of existing interest expense of $5,422,000, $3,965,000 and $20,765,000
related to the Company and the sellers for the three months ended March
31, 1996 and 1995 and year ended December 31, 1995, respectively.
(i) Elimination of $825,000, $251,000 and $2,163,000 in tax benefits
associated with the sellers for the three months ended March 31, 1996 and
1995 and year ended December 31, 1995, respectively.
(j) To record the Series D Preferred Stock dividend at a rate of
6.5%.
(6) Merger
Reflects the net effect of the historical operations of MMR as adjusted
for acquisitions and dispositions.
<TABLE>
<CAPTION>
MULTI-MARKET RADIO, INC.
THREE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS)
------------------------------------------------------------------
MMR MMR
AS DISPOSITIONS HARTFORD PRO FORMA PRO FORMA
REPORTED (A) ACQUISITION ADJUSTMENTS AS ADJUSTED
-------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net revenues .......................... $ 4,826 $ (589) $ 843 $ -- $ 5,080
Station operating expenses ............ 3,093 (638) 704 (257)(b) 2,902
Depreciation & amortization ........... 423 (73) 122 378 (c) 897
47 (d)
Corporate expenses .................... 622 -- -- (622)(e) 60
60 (e)
Non-cash compensation charge .......... 65 -- -- 200 (g) 265
-------- ------------ ----------- ----------- -----------
Operating income (loss) ................ 623 122 17 194 956
Interest expense, net ................. 1,339 -- 98 (1,437)(f) --
Other expense (income) ................ 2,042 -- -- (2,042)(f) --
Income tax expense .................... -- -- 2 (2)(f)
-------- ------------ ----------- ----------- -----------
Income (loss) before extraordinary item $(2,758) $ 122 $ (83) $ 3,675 $ 956
======== ============ =========== =========== ===========
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
MULTI-MARKET RADIO, INC.
THREE MONTHS ENDED MARCH 31, 1995
(IN THOUSANDS)
------------------------------------------------------------------------------
SOUTHERN
MMR MMR STARR - 1ST
AS DISPOSITIONS HARTFORD QUARTER PRO FORMA PRO FORMA
REPORTED (A) ACQUISITION 1995 ADJUSTMENTS AS ADJUSTED
-------- ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues ................ $ 1,796 $ (401) $ 889 $ 2,692 $ -- $ 4,976
Station operating expenses .. 1,255 (365) 629 1,863 (257)(b) 3,125
Depreciation & amortization . 299 (62) 121 327 378 (c) 1,110
47 (d)
Corporate expenses .......... 220 -- -- -- (220)(e) 60
60 (e)
Non-cash compensation charge 80 -- -- -- 200 (g) 280
------- ------- ------- ------ ----------- --------
Operating income (loss) ..... (58) 26 139 502 (208) 401
Interest expense, net ....... 311 -- 131 -- (442)(f) --
Other expense (income) (1) -- -- -- 1(f) --
Income tax expense .......... 6 -- -- -- (6)(f)
------- ------- ------- ------ ----------- --------
Income (loss) before
extraordinary item ........ $ (374) $ 26 $ 8 $ 502 $ 239 $ 401
======= ======= ======= ====== =========== ========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
MULTI-MARKET RADIO, INC.
(IN THOUSANDS)
------------------------------------------------------------------------------
SOUTHERN
MMR MMR STARR - 1ST
AS DISPOSITIONS HARTFORD QUARTER PRO FORMA PRO FORMA
REPORTED (A) ACQUISITION 1995 ADJUSTMENTS AS ADJUSTED
-------- ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues ................ $18,288 $(2,422) $ 4,408 $ 2,692 $ -- $ 22,966
Station operating expenses .. 11,026 (2,247) 3,276 1,863 (1,026)(b) 12,892
Depreciation & amortization . 1,750 (304) 538 327 1,512 (c) 4,009
186 (d)
Corporate expenses .......... 1,666 -- -- -- 240 (e) 240
(1,666)(e)
Non-cash compensation charge 281 -- -- -- 800 (g) 1,081
Operating income (loss) ..... 3,565 129 594 502 (46) 4,744
Interest expense, net ....... 4,966 -- -- -- (4,966)(f) --
Other expense (income) ...... (11) -- -- -- 11 (f) --
Income tax expense (benefit) (59) -- -- -- 59 (f) --
------- ------- ------- ------ ----------- --------
Income (loss) before
extraordinary item ........ $(1,331) $ 129 $ 594 $ 502 $ 4,850 $ 4,744
======= ======= ======= ====== =========== ========
- -------------------
(a) Reflects the elimination of the operations of stations
WRSF-FM, sold in March 1996, WRXR-FM and WKBG-FM, sold in July 1996, and the
pending sale of KOLL-FM.
(b) Reflects cost savings of $257,000, $257,000 and $1,026,000 for
the three months ended March 31, 1996 and 1995 and year ended December 31,
1995, respectively, anticipated with the MMR Hartford Acquisition, consisting
principally of the elimination of certain duplicative technical sales and
general and administrative functions due to operating a cluster of stations in
the Company's markets and the elimination of programming personnel due to
automation and simulcasting.
24
<PAGE>
(c) Reflects 378,000, $378,000 and $1,512,000 for the three months
ended March 31, 1996 and 1995 and year ended December 31, 1995, respectively,
in amortization of intangible assets recorded in connection with the Merger.
(d) Amortization of $47,000, $47,000 and $186,000 for acquisition
costs associated with the Merger for the three months ended March 31, 1996 and
1995 and year ended December 31, 1995, respectively.
(e) To record incremental corporate overhead charges of $60,000,
$60,000 and $240,000 associated with the Merger for the three months ended
March 31, 1996 and 1995 and year ended December 31, 1995, respectively and to
eliminate MMR's existing corporate overhead of $622,000, $220,000 and
$1,666,000 for the three months ended March 31, 1996 and 1995 and year ended
December 31, 1995, respectively.
(f) Elimination of a nonrecurring loss (income) of $2,042,000,
($1,000) and $11,000 for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively, interest expense of $1,437,000,
$442,000 and $4,966,000 for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively, tax expense (benefit) of $2,000,
$6,000 and ($59,000) for the three months ended March 31, 1996 and 1995 and
year ended December 31, 1995, respectively.
(g) Reflects non-cash compensation charge for the issuance of
shares of the Series A and Series B Convertible Preferred Stock of MMR. These
shares were issued in July 1996.
25
<PAGE>
EXHIBIT INDEX
NO. DESCRIPTION
2.1 Amendment No. 2, dated as of July 30, 1996, to the Amended and Restated
Agreement and Plan of Merger, dated as of April 15, 1996, among SFX
Broadcasting, Inc., SFX Merger Company and Multi- Market Radio, Inc.
2.2 First Amendment to Asset Purchase Agreement, dated as of June 28, 1996,
by and between HMW Communications, Inc. and SFX Broadcasting, Inc.
(incorporated by reference to Exhibit 10.60 of Amendment No. 1 to the
Form S-4 of SFX Broadcasting, Inc. (Commission File No. 333-06553) filed
with the Securities and Exchange Commission on July 16, 1996).
2.3 Exchange Agreement, dated July 1, 1996, between Chancellor Radio
Broadcasting Company and SFX Broadcasting, Inc. (incorporated by
reference to Exhibit 10.59 of Amendment No. 1 to the Form S-4 of SFX
Broadcasting, Inc. (Commission File No. 333-06553) filed with the
Securities and Exchange Commission on July 16, 1996).
2.4 Asset Purchase Agreement, dated as of _____________, 1996, by and between
SFX Broadcasting of Texas (KTCK) Licensee, Inc., SFX Broadcasting of
Texas (KTCK), Inc. and KRBE Co. (incorporated by reference to Exhibit
10.58 of Amendment No. 1 to the Form S-4 of SFX Broadcasting, Inc.
(Commission File No. 333-06553) filed with the Securities and Exchange
Commission on July 16, 1996).
2.5 Option Agreement by and between Capstar Communications of Mississippi,
Inc. and SPUR Capital, Inc. dated December 15, 1993 (incorporated by
reference to Exhibit 10.1 of the Form 10-Q of SFX Broadcasting, Inc.
(Commission File No. 0-22486) for the three-month period ended March 31,
1996).
99.1 Press release, dated July 30, 1996, of SFX Broadcasting, Inc. announcing
the execution of Amendment No. 2 to the Amended and Restated Agreement
and Plan of Merger, dated as of April 15, 1996, among SFX Broadcasting,
Inc., SFX Merger Company and Multi- Market Radio, Inc.
99.2 Press release, dated July 24, 1996, of SFX Broadcasting, Inc. announcing
its acquisition of WJDX-FM.
99.3 Press release, dated July 1, 1996, of SFX Broadcasting, Inc. announcing,
among other things, the exercise of its option to acquire WHSL-FM
(incorporated by reference to Exhibit 99.2 of the Form 8-K of SFX
Broadcasting, Inc. (Commission File No. 0-22486) filed with the
Securities and Exchange Commission on July 10, 1996).
99.4 Press release, dated July 1, 1996, of SFX Broadcasting, Inc. announcing,
among other things, the swap of its Long Island radio stations for two
Jacksonville, Florida radio stations (incorporated by reference to
Exhibit 99.3 of the Form 8-K of SFX Broadcasting, Inc. (Commission File
No. 0-22486) filed with the Securities and Exchange Commission on July
10, 1996).
99.5 Press release, dated July 31, 1996, of SFX Broadcasting, Inc.
announcing its financial results for the three-month period ended
June 30, 1996.
99.6 Press release, dated August 8, 1996, of SFX Broadcasting, Inc.
announcing that it had begun operating two Jacksonville stations
pursuant to a local marketing agreement and announcing an extension of
the date by which stockholder proposals must be submitted for the 1996
annual meeting of stockholders.
26
</TABLE>
AMENDMENT NO. 2
TO THE
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
AMENDMENT NO. 2, dated as of July 30, 1996 ("Amendment No. 2") to
the Amended and Restated Agreement and Plan of Merger, dated as of April 15,
1996 (the "Agreement" and, as amended by Amendment No. 1 dated as of May 6,
1996 and Amendment No. 2, the "Amended Agreement"), by and among SFX
BROADCASTING, INC., a Delaware corporation ("SFX"), SFX MERGER COMPANY, a
Delaware corporation and a direct wholly-owned subsidiary of SFX ("Acquisition
Sub"), and MULTI-MARKET RADIO, INC., a Delaware corporation ("MMR").
W I T N E S S E T H:
WHEREAS, Acquisition Sub, upon the terms and subject to the
conditions of this Agreement and in accordance with the General Corporation
Law of the State of Delaware ("Delaware Law"), intends to merge with and into
MMR (the "Merger");
WHEREAS, the Board of Directors of MMR (a) has determined that it
is in the best interests of MMR and its stockholders to amend the Agreement
and has approved and adopted this Amendment No. 2 and (b) has recommended the
approval and adoption of the Amended Agreement and the approval of the Merger
by, and directed that the Amended Agreement and the Merger be submitted to a
vote of, the stockholders of MMR;
WHEREAS, the Board of Directors of SFX (a) has determined that it
is in the best interests of SFX and its stockholders to amend the Agreement
and has approved and adopted this Amendment No. 2 and (b) has recommended the
approval and adoption of the Amended Agreement and the approval of the Merger
by, and directed that the Amended Agreement and the Merger be submitted to a
vote of, the stockholders of SFX;
WHEREAS, the Board of Directors of Acquisition Sub has determined
that it is in the best interests of Acquisition Sub and its stockholder, to
amend the Agreement and has approved and adopted the Amended Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, SFX, Acquisition Sub and MMR hereby agree as follows:
ARTICLE I -- AMENDMENTS
SECTION 1.01. EXCHANGE RATIO. Section 2.01(b) of the Agreement is
hereby amended to read, in its entirety, as follows:
"(b) For purposes of this Agreement, subject to adjustments
required by Section 6.16, "Exchange Ratio" shall mean the number of
shares of SFX Class A Common Stock or SFX Class B Common Stock, as the
case may be, equal to the
<PAGE>
quotient obtained by dividing $12.00 by the average of the Reported
Price (as defined hereafter) for the twenty (20) consecutive trading
days ending on the fifth trading day prior to the Effective Time (such
average Reported Price being the "SFX Class A Common Stock Price") (the
fifth trading day prior to the Effective Time being referred to as the
"Determination Date"), on the primary exchange on which the SFX Class A
Common Stock is traded, including the Nasdaq National Market; provided,
however, that (1) in the event that the SFX Class A Common Stock Price
exceeds $42.00 but is equal to or less than $44.00, then the Exchange
Ratio shall be the quotient obtained by dividing (i) the sum of (A)
$12.00, plus (B) the product of (I) twenty-five percent (25%),
multiplied by (II) the difference between the SFX Class A Common Stock
Price and $42.00 by (ii) the SFX Class A Common Stock Price; (2) in the
event that the SFX Class A Common Stock Price exceeds $44.00, then the
Exchange Ratio shall be the quotient obtained by dividing (i) the sum of
(A) $12.50, plus (B) the product of (I) thirty percent (30%), multiplied
by (II) the difference between the SFX Class A Common Stock Price and
$44.00 by (ii) the SFX Class A Common Stock Price; or (3) in the event
that the SFX Class A Common Stock Price is less than $32.00 then the
Exchange Ratio shall be .3750. All arithmetic calculations pursuant to
this paragraph shall be made through the fourth decimal place (i.e., to
the closest ten-thousandth). For purposes of this Agreement, "Reported
Price" shall mean, with respect to each trading day, the average of the
last reported bid and asked prices of the SFX Class A Common Stock on
such trading day."
SECTION 1.02. WARRANTS. Section 2.05(a) of the Agreement is hereby
amended by deleting the word "whole" in the second sentence thereof and adding
the following sentence at the end of the Section 2.05(a):
"Notwithstanding anything to the contrary, nothing herein
shall prohibit SFX from issuing fractional shares of SFX Class A
Common Stock upon the exercise of any Warrant."
SECTION 1.03. MINIMUM PER SHARE. Section 6.16 of the Agreement is
hereby amended to read, in its entirety, as follows:
SECTION 6.16. WARRANTS; MAKE WHOLE ADJUSTMENT.
"(a) Subject to applicable laws, MMR shall, at the request of
SFX, use all commercially reasonable efforts to (a) commence an
offer to exchange MMR Class A Common Stock for all outstanding
Class B Warrants, which offer shall not be greater than 0.2
(two-tenths) shares of MMR Class A Common Stock for each such Class
B Warrant and (b) cooperate with SFX in connection with the
solicitation of the purchase of all of the outstanding Unit
Purchase Options and IPO Warrants. Any documents prepared by MMR to
effectuate such offer to exchange and solicitations shall be in
form and substance reasonably satisfactory to SFX and its counsel.
2
<PAGE>
In the event that MMR is unsuccessful in obtaining the exchange of
at least 50% of the outstanding Class B Warrants at the ratio set forth
above on or prior to the Determination Date, the Exchange Ratio set
forth in Section 2.01(b) above shall be adjusted downward to the extent
necessary to reduce the total dollar value of the SFX Class A Common
Stock and SFX Class B Common Stock that would have otherwise been
received by MMR security holders on the Effective Date (in each case
calculated with reference to the SFX Class A Common Stock Price) by a
dollar amount equal to the product of $2.50 times the number of Class B
Warrants outstanding immediately after such exchange in excess of such
50% number. In calculating the total value of SFX Class A Common Stock
and SFX Class B Common Stock received by MMR security holders, each
share of SFX Class B Common Stock shall be deemed to have the same value
as a share of SFX Class A Common Stock.
(b) In the event that SFX delivers the Make Whole Notice (as
defined in and subject to the conditions of Section 8.01(l)) to MMR and
does not deliver a Make Whole Rescission Notice (as defined in Section
8.01(l)), the Exchange Ratio (x) shall be determined pursuant to Section
2.01(b) if the SFX Class A Common Stock Price equals or exceeds $27.33
and (y) if the SFX Class A Common Stock Price is less than $27.33, shall
be increased such that, on the Determination Date, the product of the
(a) Exchange Ratio as so adjusted, multiplied by (b) SFX Class A Common
Stock Price shall be an amount equal to $10.25 (such amount being
referred to as the "Minimum Per Share Amount")."
SECTION 1.04. ADVANCE. The Agreement is hereby amended to add the
following at the end of Section 6.17:
"If requested by MMR, SFX shall negotiate in good faith to enter
into an agreement to advance up to $18 million to MMR to enable MMR to
acquire WKSS-FM, Hartford, Connecticut and up to $5 million to MMR for
working capital and other general operating purposes."
SECTION 1.05. CONSULTING ARRANGEMENT. The Agreement is hereby
amended to add a new SECTION 6.20 which shall read, in its entirety, as
follows:
"SECTION 6.20. CONSULTING ARRANGEMENT. Commencing July 30, 1996 and
continuing until the earlier of (x) the termination of this Agreement and
(y) the Effective Time, MMR will make available to SFX the services of
Michael G. Ferrel, the President and Chief Executive Officer of MMR, on a
consulting basis to the extent that such services do not conflict with
Mr. Ferrel's obligations to MMR. Neither Mr. Ferrel nor MMR shall receive
any compensation for such services."
SECTION 1.06. TERMINATION. The first sentence of Section 8.01(l)(A)
of the Agreement is hereby amended by substituting "$27.33" for "$28.52" in
the two (2) places in which such figure appears in such sentence.
3
<PAGE>
ARTICLE II -- GENERAL PROVISIONS
SECTION 2.01. CERTAIN DEFINITIONS. Capitalized terms used in this
Amendment No. 2 but not defined herein shall have the meanings set forth in
the Agreement.
SECTION 2.02. SEVERABILITY. If any term or other provision of this
Amendment No. 2 is invalid, illegal or incapable of being enforced by any rule
of Law, or public policy, all other conditions and provisions of this
Amendment No. 2 and the Amended Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the
Transactions is not affected in any manner materially adverse to any party.
Upon such determination that any term or other provision is invalid, illegal
or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify the Amended Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in order
that the Transactions be consummated as originally contemplated to the fullest
extent possible.
SECTION 2.03. GOVERNING LAW. EXCEPT TO THE EXTENT THAT DELAWARE LAW
IS MANDATORILY APPLICABLE TO THE MERGER AND THE RIGHTS OF THE STOCKHOLDERS OF
MMR AND ACQUISITION SUB, THIS AMENDMENT NO. 2 SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO THE RULES OF CONFLICTS OF LAW THEREOF. ALL ACTIONS AND PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS AMENDMENT NO. 2 SHALL BE HEARD AND DETERMINED IN
ANY COURT SITTING IN THE CITY OF NEW YORK, STATE OF NEW YORK.
SECTION 2.04. NO OTHER CHANGE/HEADINGS. All other terms and
conditions of the Agreement shall remain unchanged. The descriptive headings
contained in this Amendment No. 2 are included for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Amendment No. 2.
SECTION 2.05. COUNTERPARTS. This Amendment No. 2 may be executed
and delivered (including by facsimile transmission) in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed and delivered shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
4
<PAGE>
IN WITNESS WHEREOF, SFX, Acquisition Sub and MMR have caused this
Amendment No. 2 to be executed as of the date first written above by their
respective officers thereunto duly authorized.
SFX BROADCASTING, INC.
By \s\ Robert F.X. Sillerman
-------------------------------------------------
Robert F.X. Sillerman, Chief Executive Officer
SFX MERGER COMPANY
By \s\ Robert F.X. Sillerman
-------------------------------------------------
Robert F.X. Sillerman, President
MULTI-MARKET RADIO, INC.
By \s\ Michael G. Ferrel
-------------------------------------------------
Michael G. Ferrel, Chief Executive Officer
5
[LETTERHEAD]
FOR IMMEDIATE RELEASE For further information:
Cynthia A. Bond
Director, Investor Relations
(212) 407-9126
SFX BROADCASTING INCREASES CONSIDERATION FOR
MULTI-MARKET RADIO MERGER
NEW YORK, July 30, 1996 -- SFX Broadcasting, Inc. (NASDAQ: SFXBA) today
announced that it had increased the consideration to be paid in connection
with its acquisition through merger of Multi-Market Radio, Inc. (NASDAQ:
RDIOA) to $12.00 per share payable in SFX common stock in a tax-free
transaction. In all other material respects, the merger agreement remains
unchanged. In particular, MMR shareholders will continue to receive increased
consideration in the event and to the extent that the price of common shares
of SFX should increase above $42.00 per share prior to the effective date of
the transaction.
Robert F. X. Sillerman, Executive Chairman of the Board of SFX, indicated that
the decision to increase the consideration payable to MMR shareholders was
reached following a series of discussions with certain shareholders of MMR.
The shareholders have agreed to vote these shares in favor of the transaction.
Management believes this brings to over fifty percent the shares to be voted
in favor of the merger. The increase in the merger consideration has been
approved by the special committees of both SFX and MMR as well as by each
company's full Board of Directors.
Mr. Sillerman said, "While we at SFX believe the offer of $11.50 in a tax-free
reorganization to have been an exceedingly fair offer to the MMR shareholders,
the strong performance of SFX's stock and the fact that the increase in
consideration insures the willing participation of several of the largest
institutional shareholders of MMR, mitigated in favor of the increase. The
increase in consideration and the related enthusiasm for the transaction
expressed by the major shareholders is an important step in ensuring
consummation of the transaction, which is important for the long-term benefit
of all MMR's shareholders."
# # #
[LETTERHEAD]
FOR IMMEDIATE RELEASE For further information:
Cynthia A. Bond
Director, Investor Relations
SFX Broadcasting, Inc.
(212) 407-9126
SFX BROADCASTING ACQUIRES THIRD FM IN JACKSON
NEW YORK, July 24, 1996 -- SFX Broadcasting, Inc. (NASDAQ: SFXBA) today
announced that it has acquired radio station WJDX(FM) serving the Jackson,
Mississippi market from Austin, Texas-based Spur Capital, Inc. for $3.0
million.
SFX owns and operates three other Jackson stations: WMSI(FM), WKTF(FM) and
WJDS-AM, and is expected to close its pending acquisition of WSTZ(FM) and
WZRX-AM in the near future.
Commenting on the transaction, Robert F. X. Sillerman, Executive Chairman of
SFX Broadcasting, Inc., said, "Though Jackson is somewhat smaller than our
typical market, it has been highly productive in that it has contributed
significant cash flow to the company. We know the market exceedingly well and
look forward to maximizing our market potential by adding WJDX and shortly,
WSTZ and WZRX, to the three stations, including number one ranking WMSI, which
we already own in Jackson. The diverse formats offered by these stations
should help us further penetrate this market and we anticipate excellent
returns across the board."
Jackson is the one hundred and seventeenth largest market. WJDX(FM) ranks
third in terms of revenues and fifth in terms of audience share. The station
has a "hot AC" format.
With the anticipated consummation of all previously announced transactions,
SFX will own and operate or provide services to the following radio stations.
- list of stations follows -
Houston, TX Jacksonville, FL Tuscon, AZ
----------- ---------------- ----------
KKRW(FM) WFYV(FM)*** KWFM(FM)
KODA(FM) WAPE(FM)*** KRQQ(FM)
KQUE(FM) WKQL(FM) KNST-AM
KNUZ-AM WIVY(FM) KCEE-AM
WOKV-AM
WPDQ-AM
Wash., DC/Balt., MD Springfield/North, MA
------------------- ---------------------
WHFS(FM) Charlotte, NC WHMP(FM)
------------- WPKX(FM)
WYLT(FM) WHMP-AM
San Diego, CA WTRD(FM)
-------------
KPLN(FM)
KYXY(FM) Raleigh, NC New Haven, CT
----------- -------------
WZZU(FM) WPLR(FM)
Providence, RI WTRG(FM) WYBC(FM)*
-------------- WDCG(FM)
WSNE(FM) WRDU(FM)
WHYJ(FM)
WHJJ(FM)
Daytona Beach, FL
-----------------
WGNE(FM)
Hartford, CT Richmond, VA
------------ ------------
WHCN(FM) WMXB(FM) Augusta, GA
WMRQ(FM) -----------
WKSS(FM) WCHZ(FM)*
WPOP-AM Albany, NY WAEG(FM)***
------- ---------- WAEJ(FM)***
WGNA(FM)
WPYX(FM)
Greensboro, NC WYSR(FM)* Jackson, MS
-------------- WGNA-AM -----------
WMAG(FM) WTRY-AM WKTF(FM)
WHSL(FM)*** WMSI(FM)
WTCK-AM WSTZ(FM)*
WMFR-AM Greenville-Spartanburg, SC WJDX(FM)
-------------------------- WJDS-AM
WMYI(FM) WZRX-AM
Nashville, TN WSSL(FM)
------------- WROQ(FM)
WSIX(FM) WGVL-AM Biloxi, MS
WRVW(FM) ----------
WKNN(FM)
WMJY(FM)
Witchita, KS
------------
KRZZ(FM) Myrtle Beach, SC
KKRD(FM) ----------------
KNSS-AM WVCO(FM)***
WYAK(FM)
WMYB(FM)
* Joint Selling Agreement (JSA)
** JSA with option to buy
*** Local Marketing Agreement (LMA)
Under contract to be sold or swapped by SFX are the Texas State Networks,
a group of regional radio networks; KRLD-AM and KTCK-AM in Dallas;
WHFM(FM), WBAB(FM) WBLI(FM) and WGBB-AM in Long Island, NY; WVEZ(FM),
WTFX(FM) WWKY-AM in Louisville, KY; and KOLL (FM) in Little Rock, AR.
###
(BW)(SFX-BDCSTNG)(SFXBA) SFX Broadcasting reports record second quarter; pro
forma revenues up 15% and broadcast cash flow up 28%
NEW YORK -- (BUSINESS WIRE) -- July 31, 1996 -- SFX Broadcasting Inc.
(NASDAQ: SFXBA) today announced record revenues and broadcast cash flow for the
second quarter ended June 30, 1996.
The company noted that its second quarter broadcast cash flow was the
highest quarterly result in the company's history.
Net revenues for the second quarter increased 34% to $27,754,000 from
$20,724,000 in the second quarter of 1995. Broadcast cash flow (defined as net
revenues less station operating expenses) grew 23% to $8,633,000 from
$7,019,000. Operating income (loss) for the second quarter which includes
previously disclosed non-recurring charges of ($27,489,000) primarily related to
payments made in conjunction with recent refinancings was ($22,785,000) compared
to ($940,000) in the comparable period in 1995.
Net income (loss) before extraordinary item in the second quarter was
($26,855,000), or ($3.72) per common share, compared to ($2,550,000), or ($0.44)
per common share for the 1995 period. The extraordinary item of ($15,219,000) in
the second quarter reflects a loss on the early retirement of debt. The weighted
average equivalent number of common shares outstanding for the quarter was
7,437,642 compared to 5,976,058 for the second quarter of 1995.
Net revenues for the first six months of 1996 increased 38% to
$47,554,000 from $34,441,000 during the first six months of 1995, and broadcast
cash flow increased 30% to $14,377,000 from $11,060,000. In the first six months
of 1996 the company reported operating income (loss) of ($20,550,000) which
includes the previously disclosed non-recurring charges of ($27,489,000)
compared with operating income of $597,000 in the first six months of 1995.
Net income (loss) before the loss on the extraordinary item in the first
six months was ($27,840,000) or ($3.87) per common share compared to
($3,071,000), or ($0.54) per common share for the 1995 period. The weighted
average equivalent number of common shares outstanding for the six months was
7,447,929 compared to 5,946,251 for the comparable period in 1995.
On a pro forma basis, assuming all stations were owned for all periods
reported and completion of the pending Dallas transactions, net revenues for the
second quarter of 1996 would have increased 15% to $26,121,000 and during the
first six months of 1996 would have increased 14% to $46,296,000 over the
comparable periods in 1995.
In addition, on a pro forma basis, broadcast cash flow for the second
quarter of 1996 would have increased 28% reaching $9,556,000 and during the
first six months of 1996 would have increased 36% reaching $16,552,000 over the
comparable periods in 1995.
Commenting on the second quarter results, Robert F.X. Sillerman,
executive chairman, said, "Though only midway through 1996 the year is
developing as the most exciting in our company's history. We have closed a
number of significant acquisitions and are moving forward with our planned
merger with Multi-Market Radio.
<PAGE>
"We are extremely pleased with the results posted by our stations, both
collectively and on a station-to-station comparison. We are now benefiting from
our history of prudent acquisitions, as well as improved ratings and better
pricing at the station level. Our strategy of owning multiple stations within a
market is paying off as the financial results confirm.
"At this point we continue to see excellent opportunities for expanded
ownership and higher concentration within our markets. We are pleased to have
recently promoted five regional managers who each have much to contribute to the
success of SFX. The radio broadcasting industry continues to hold excitement and
financial opportunity and we look forward to the opportunities the remainder of
1996 will bring. We intend to be very active."
With the anticipated consummation of the merger of Multi-Market Radio
Inc. (NASDAQ:RDIOA) and all previously announced acquisitions, SFX will own and
operate or provide services to the following radio stations. There can be no
assurance that any of such acquisitions will be consummated.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
KKRW (FM) Houston, TX WGNA (FM) Albany, NY
KODA (FM) Houston, TX WPYX (FM) Albany, NY
KQUE (FM) Houston, TX WYSR (FM) Albany, NY (a)
KNUZ-AM Houston, TX WGNA-AM Albany, NY
WHFS (FM) Wash. DC/Baltimore, MD WTRY-AM Albany, NY
KPLN (FM) San Diego, CA WMYI (FM) Greenville-Spartanburg, SC
KYXY (FM) San Diego, CA WSSL (FM) Greenville-Spartanburg, SC
WSNE (FM) Providence, RI WROQ (FM) Greenville-Spartanburg, SC
WHJY (FM) Providence, RI WGVL-AM Greenville-Spartanburg, SC
WHJJ (FM) Providence, RI KWFM (FM) Tucson, AZ
WHCN (FM) Hartford, CT KRQQ (FM) Tucson, AZ
WMRQ (FM) Hartford, CT KNST-AM Tucson, AZ
WKSS (FM) Hartford, CT KCEE-AM Tucson, AZ
WPOP-AM Hartford, CT WHMP (FM) Springfield/Northampton, MA
WMAG (FM) Greensboro, NC WPKX (FM) Springfield/Northampton, MA
WHSL (FM) Greensboro, NC (c) WHMP-AM Springfield/Northampton, MA
WTCK-AM Greensboro, NC KRZZ (FM) Wichita, KS
WMFR-AM Greensboro, NC KKRD (FM) Wichita, KS
WSIX (FM) Nashville, TN KNSS-AM Wichita, KS
WRVW (FM) Nashville, TN WPLR (FM) New Haven, CT
WFYV (FM) Jacksonville, FL (c) WYBC (FM) New Haven, CT (a)
WAPE (FM) Jacksonville, FL (c) WGNE (FM) Daytona Beach, FL
WKQL (FM) Jacksonville, FL WCHZ (FM) Augusta, GA (a)
WIVY (FM) Jacksonville, FL WKTF (FM) Jackson, MS
WOKV-AM Jacksonville, FL WMSI (FM) Jackson, MS
WPDQ-AM Jacksonville, FL WSTZ (FM) Jackson, MS (a)
WLYT (FM) Charlotte, NC WJDX (FM) Jackson, MS
WTRD (FM) Charlotte, NC WJDS-AM Jackson, MS
WZZU (FM) Raleigh, NC WZRX-AM Jackson, MS
WTRG (FM) Raleigh, NC WKNN (FM) Biloxi, MS
WDCG (FM) Raleigh, NC WMJY (FM) Biloxi, MS
WRDU (FM) Raleigh, NC WVCO (FM) Myrtle Beach, SC (c)
WMXB (FM) Richmond, VA WYAK (FM) Myrtle Beach, SC
WMYB (FM) Myrtle Beach, SC (c)
</TABLE>
- --------------------
(a) Joint Selling Agreement (JSA)
(b) JSA with option to buy
(c) Local Marketing Agreement (LMA)
Under contract to be sold or swapped by SFX are the Texas State Networks, a
group of regional radio networks; KRLD-AM and KTCK-AM in Dallas; WHFM (FM), WBAB
(FM), WBLI (FM) and WGBB-AM in Long Island, NY; WVEZ (FM), WTFX (FM) and WWKY-AM
in Louisville, KY and KOLL (FM) in Little Rock, AR.
SFX BROADCASTING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------
6/30/96 6/30/95
------- -------
<S> <C> <C> <C>
Net revenues................... $ 27,754 $ 20,724 34%
Station operating expenses..... 19,121 13,705 40%
Broadcast cashflow............. 8,633 7,019 23%
Depreciation, amortization and
duopoly integration costs.... 2,349 1,987 18%
Corporate expenses............. 1,580 972 63%
Non-recurring charges.......... 27,489 5,000 450%
Operating (loss) income........ (22,785) (940) 2324%
Interest expense, net.......... 4,070 3,533 15%
Loss before income taxes and
extraordinary item........... (26,855) (4,473) 500%
Income tax benefit............. 0 (1,923) -100%
Loss before extraordinary item (26,855) (2,550) 953%
Extraordinary loss on debt
retirement................... 15,219 0 N/A
Net loss....................... (42,074) (2,550) 1550%
Preferred stock dividends and
accretion.................... 831 73 1038%
Net loss applicable to
common stock................. $ (42,905) $ (2,623) 1536%
Net loss per common share
before extraordinary item.... $ (3.72) $ (0.44)
Extraordinary loss on debt
retirement per common share.. (2.05) --
Net loss per common share...... $ (5.77) $ (0.44) 1211%
Weighted average common shares
outstanding.................. 7,437,642 5,976,058
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------
6/30/96 6/30/95
------- -------
<S> <C> <C> <C>
Net revenues.................. $ 47,554 $ 34,441 38%
Station operating expenses.... 33,177 23,381 42%
Broadcast cash flow........... 14,377 11,060 30%
Depreciation, amortization and
duopoly integration costs... 4,648 3,684 26%
Corporate expenses............ 2,790 1,779 57%
Non-recurring charges......... 27,489 5,000 450%
Operating (loss) income....... (20,550) 597 -3542%
Interest expense, net......... 7,290 5,968 22%
Loss before income taxes and
extraordinary item.......... (27,840) (5,371) 418%
Income tax benefit............ 0 (2,300) -100%
Loss before extraordinary item (27,840) (3,071) 807%
Extraordinary loss on debt
retirement.................. 15,219 0 N/A
Net loss...................... (43,059) (3,071) 1302%
Preferred stock dividends and
accretion................... 967 144 572%
Net loss applicable to
common stock................ $ (44,026) $ (3,215) 1269%
Net loss per common share
before extraordinary item... $ (3.87) $ (0.54)
Extraordinary loss on debt
retirement per common share (2.04) 0
Net loss per common share..... $ (5.91) $ (0.54) 994%
Weighted average common shares
outstanding................. 7,447,929 5,946,251
</TABLE>
CONTACT: SFX Broadcasting Inc., New York
Cynthia A. Bond, 212/407-9126
FOR IMMEDIATE RELEASE For further information:
Cynthia A. Bond
Director, Investor Relations
SFX Broadcasting, Inc.
(212) 407-9126
SFX BROADCASTING COMMENCES JACKSONVILLE LMA
Company Immediately Takes Over WFYV(FM) and WAPE(FM)
NEW YORK, August 8, 1996 -- SFX Broadcasting, Inc. (NASDAQ: SFXBA) today
announced that on August 1 it began operating two Jacksonville, Florida radio
stations, WFYV(FM) and WAPE(FM), pursuant to a Local Marketing Agreement
(LMA). As previously announced, SFX is exchanging with Chancellor Broadcasting
Company SFX' three Long Island properties for the two Jacksonville stations
and $11.0 million. Chancellor, which began operating SFX' three Long Island
stations on July 1, is in the process of acquiring the two Jacksonville
properties from Los Angeles-based OmniAmerica Communications.
SFX also owns and operates four additional Jacksonville stations: WKQL(FM),
WIVY(FM), WOKV-AM and WPDG-AM.
Commenting on the new LMA, Robert F. X. Sillerman, Executive Chairman of SFX,
said, "We are extremely pleased to have taken this recent step in our plan to
build a very strong station group in the Jacksonville market. With four FMs
and two AMs we will command the major share of the revenues in this market,
while still providing a variety of programming choices. This move is
consistent with our overall strategy of buying or swapping stations in order
to create a cluster of stations capable of making economically significant
contributions to our company's revenues and broadcast cash flow."
WFYV(FM) and WAPE(FM) rank number one and three, respectively, in the all
important 25-54 demographic group. Both stations have album oriented rock
formats. Jacksonville is the fiftieth largest metro market.
In addition, SFX today announced the extension of the date by which
stockholders of the Company may submit proposals for inclusion in the proxy
statement relating to the 1996 annual meeting of shareholders to August 30,
1996.
With the anticipated consummation of all previously announced transactions, SFX
will own and operate or provide services to the following radio stations.
- list of stations follows -
<TABLE>
<CAPTION>
<S> <C> <C>
Houston, TX Jacksonville, FL Tucson, AZ
KKRW(FM) WFYV(FM)*** KWFM(FM)
KODA(FM) WAPE(FM)*** KRQQ(FM)
KQUE(FM) WKQL(FM) KNST-AM
KNUZ-AM WIVY(FM) KCEE-AM
WOKV-AM
Wash., DC/ Balt., MD WPDQ-AM Springfield/North, MA
WHFS(FM) WHMP(FM)
Charlotte, NC WPKX(FM)
San Diego, CA WLYT(FM) WHMP-AM
KPLN(FM) WTRD(FM)
KYXY(FM) New Haven, CT
Raleigh, NC WPLR(FM)
Providence, RI WZZU(FM) WYBC(FM)*
WSNE(FM) WTRG(FM)
WHJY(FM) WDCG(FM) Daytona Beach, FL
WHJJ(FM) WRDU(FM) WGNE(FM)
Hartford, CT Richmond, VA Augusta, GA
WHCN(FM) WMXB(FM) WCHZ(FM)*
WMRQ(FM)
WKSS(FM) Albany, NY Jackson, MS
WPOP-AM WGNA(FM) WKTF(FM)
WPYX(FM) WMSI(FM)
Greensboro, NC WYSR(FM)* WSTZ(FM)*
WMAG(FM) WGNA-AM WJDX(FM)
WHSL(FM)*** WTRY-AM WJDS-AM
WTCK-AM WZRX-AM
WMFR-AM Greenville-Spartanburg,SC
WMYI(FM) Biloxi, MS
Nashville, TN WSSL(FM) WKNN(FM)
WSIX(FM) WROQ(FM) WMJY(FM)
WRVW(FM) WGVL-AM
Myrtle Beach, SC
Witchita, KS WVCO(FM)***
KRZZ(FM) WYAK(FM)
KKRD(FM) WMYB(FM)***
KNSS-AM
</TABLE>
* Joint Selling Agreement (JSA)
** JSA with option to buy
*** Local Marketing Agreement (LMA)
Under contract to be sold or swapped by SFX are the Texas State Networks, a
group of regional radio networks; KRLD-AM and KTCK-AM in Dallas; WHFM(FM),
WBAB(FM), WBLI(FM) and WGBB-AM in Long Island, NY; WVEZ(FM), WTFX(FM) and
WWKY-AM in Louisville, KY; and KOLL(FM) in Little Rock, AR.
# # #
