<PAGE>
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): December 11 , 1997
-----------------------------
SFX BROADCASTING, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Delaware 0-22486 13-3649750
- ------------------------------ ------------------------ ---------------------
(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
150 East 58th Street, 19th Floor, New York, New York 10155
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 407-9191
----------------------------
N/A
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
Recent Developments
On August 24, 1997, SFX Broadcasting, Inc. (the "Company") entered
into an Agreement and Plan of Merger (the "Merger Agreement") with SBI
Holdings Corporation ("Buyer") and SBI Radio Acquisition corporation pursuant
to which the Company will become a wholly owned subsidiary of Buyer (the
"Merger"). In the Merger, holders of the Company's Class A Common Stock will
receive $75.00 per share and the holders of the Company's Class B Common Stock
will receive $97.50 per share, subject to adjustment under certain
circumstances. Pursuant to the Merger Agreement, the Company intends to
spin-off (the "Spin-Off") its concert promotion and venue operation business
("SFX Entertainment") pro-rata to its stockholders and the holders of certain
warrants prior to the effective time of the Merger. In general, the receipt of
cash by the Company's stockholders pursuant to the Merger and the receipt of
stock in the Spin-Off, will be taxable events for stockholders.
The Company, on behalf of SFX Entertainment, is presently in advanced
negotiations for the acquisitions of several businesses in the live
entertainment and related businesses with an aggregate purchase price of
approximately $500,000,000 (the "Pending Entertainment Acquisitions"). SFX
Entertainment intends to finance a portion of the Pending Entertainment
Acquisitions by issuing rights to receive the common stock of SFX
Entertainment upon the consummation of the Spin-Off. The values ascribed to
the SFX Entertainment common stock in the agreements relating to the Pending
Entertainment Acquisitions will be based upon certain financial projections
developed jointly by the Company and the respective sellers and it is expected
that such values will be greater than the book value of the SFX Entertainment
common stock at the time the Pending Entertainment Acquisitions are
consummated. There is presently no trading market for the SFX Entertainment
common stock and there can be no assurance that the assumptions upon which
such valuations are based will, in fact, be correct and that such valuations
will approximate the actual trading price of the SFX Entertainment common
stock.
SFX Entertainment intends to finance the cash portion of the Pending
Entertainment Acquisitions through a combination of privately-placed debt and
borrowings under a bank credit facility. There can be no assurance that
definitive agreements for these acquisitions will be entered into, financing
to consummate the acquisitions will be available on terms satisfactory or at
all or that the acquisitions will be consummated. While there can be no
assurance, management believes that financing on satisfactory terms will be
available.
The consummation of the Merger and/or the Spin-Off is subject to
certain conditions and the receipt of certain consents including, among other
things, the approval of the Company's common stock voting together as a single
class, the approval of each of the Class A Common Stock and Series D preferred
stock, voting separately as a class, and the consents of the holders of the
Series E preferred stock and certain of the Company's outstanding notes. In
addition, the Merger is subject to the receipt of certain regulatory
approvals.
The Company anticipates that the Merger will be consummated in the
second quarter of 1998 and that the Spin-Off will occur prior thereto. There
can be no assurance that the various approvals or consents will be given or
that the conditions to consummating the Merger will be met or that the
Spin-Off will occur as presently contemplated or at all.
Pro Forma Financial Information
Attached hereto as Annex A are the unaudited pro forma condensed
combined financial statements of the Company as of September 30, 1997 and for
the nine months ended September 30, 1997 and the year ended December 31, 1996.
The Pending Entertainment Acquisitions have not been reflected in the pro
forma financial statements as they would not have a material impact on the
Company.
<PAGE>
ANNEX A
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following financial statements and notes thereto contain
forward-looking statements that involve risks and uncertainties. The actual
results of SFX Broadcasting, Inc. (the "Company") may differ materially from
those discussed herein. The Company undertakes no obligation to publicly
release the result of any revisions to these forward-looking statements that
may be made to reflect any future events or circumstances.
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 incorporated herein by reference. The pro
forma information is based upon tentative allocations of the purchase price
for acquisitions completed within the last year and acquisitions still
pending, and 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. The Company cannot predict
whether the consummation of the Pending Acquisition or Disposition will
conform to the assumptions used in the preparation of the Unaudited Pro
Forma Condensed Combined Financial Statements.
The Unaudited Pro Forma Condensed Combined Balance Sheet at September 30,
1997 is presented as if the Company had completed the Pending Acquisition
and Disposition as of September 30, 1997. No adjustment has been made to the
Unaudited Pro Forma Condensed Combined Balance Sheet for the Chancellor
Exchange, other than the receipt of cash, as it will be recorded at
historical cost.
The Unaudited Pro Forma Condensed Combined Statements of Operations for
the year ended December 31, 1996 and the nine months ended September 30, 1997
are presented as if the Company had completed the Completed Acquisitions and
Dispositions and the Pending Acquisition and Disposition as of
January 1, 1996. The Albany Acquisition and the pending concert promotion
and venue operation acquisitions have not been reflected in the Unaudited
Pro Forma Condensed Combined Financial Statements as they would not have
a material impact.
1
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
SFX
BROADCASTING, PENDING
INC. AS ACQUISITION AND
REPORTED DISPOSITION (I) PRO FORMA
--------------- --------------- ------------
<S> <C> <C> <C>
ASSETS
Current assets ............................. $ 140,689 $ -- $ 140,689
Property and equipment, net ................ 132,707 (610) 132,097
Intangible assets, net ..................... 1,097,751 (8,345) 1,089,406
Other assets ............................... 21,740 (5,444) 16,296
--------------- --------------- ------------
Total assets ............................... $1,392,887 $ 14,399 $1,378,488
=============== =============== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ........................ $ 61,188 $ (914) $ 60,274
Other liabilities .......................... 4,556 -- 4,556
Long-term debt (including current portion):
Credit Agreement .......................... 316,000 (35,921) 280,079
Senior Subordinated Notes ................. 450,000 -- 450,000
Acquired company debt ..................... -- (380) (380)
Other debt ................................. 18,255 -- 18,255
Deferred taxes ............................. 105,497 -- 105,497
Redeemable preferred stock
Series B Preferred Stock .................. 998 -- 998
Series A Preferred Stock .................. 1,703 -- 1,703
Series D Preferred Stock .................. 149,500 -- 149,500
Series E Preferred Stock .................. 215,636 -- 215,636
Stockholders' equity ....................... 69,554 22,816 92,370
--------------- --------------- ------------
Total liabilities and stockholders' equity $1,392,887 $ 14,399 $1,378,488
=============== =============== ============
</TABLE>
2
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(I) Pending Acquisitions and Dispositions
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
--------------------------------------------------------------
PENDING
ACQUISITIONS
CAPSTAR NASHVILLE PRO FORMA AND
DISPOSITION (1) ACQUISITION ADJUSTMENTS (2) DISPOSITIONS
--------------- ------------- --------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
ASSETS
Current assets .............................. $ 59,921 $1,370 $(33,000)(a) $ --
(1,370)(a)
(2,000)(b)
11,000 (c)
(35,921)(d)
Property and equipment, net ................. (4,828) 4,218 (610)
Intangible assets, net ...................... (33,567) 3,303 27,479 (a) (8,345)
2,000 (b)
3,440 (b)
(11,000)(c)
Other assets ................................ (4) 566 (566)(a) (5,444)
(2,000)(a)
(3,440)(b)
--------------- ------------- --------------- --------------
Total assets ............................... $ 21,522 $9,457 $(45,378) $(14,399)
=============== ============= =============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ......................... $ (914) $ 545 $ (545)(a) $ (914)
Long-term debt (including current portion):
Credit Agreement............................ (35,921)(d) (35,921)
Senior Subordinated Notes...................
Acquired company debt ...................... (380) (380)
Stockholders' equity ........................ 22,816 8,912 (8,912)(a) 22,816
--------------- ------------- --------------- --------------
Total liabilities and stockholders' equity $ 21,522 $9,457 $(45,378) $(14,399)
=============== ============= =============== ==============
</TABLE>
(1) Capstar Disposition
To reflect the Capstar Disposition for $60,000,000 in cash to the Company.
The Company will record a gain of approximately $23,000,000 on the
disposition.
<TABLE>
<CAPTION>
JACKSON
AND
BILOXI CAPSTAR
SALE PROCEEDS STATIONS DISPOSITION
--------------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets ............................. $60,000 $ (79) $ 59,921
Property and equipment, net ................ (4,828) (4,828)
Intangible assets, net ..................... (33,567) (33,567)
Other assets ............................... (4) (4)
--------------- ----------- -------------
Total assets .............................. $60,000 $(38,478) $ 21,522
=============== =========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ........................ $ (914) $ (914)
Long-term debt ............................. (380) (380)
Stockholders' equity ....................... $60,000 (37,184) 22,816
--------------- ----------- -------------
Total liabilities and stockholders' equity $60,000 $(38,478) $ 21,522
=============== =========== =============
</TABLE>
3
<PAGE>
The Company expects to use the proceeds from the Capstar Disposition to
complete a similar acquisition so that the Capstar Disposition can be
treated as a like-kind exchange which would be substantially tax free.
Should the Company be unable to structure such a transaction, the Company
would utilize its available net operating loss carryforwards and pay
approximately $6,000,000 in additional income taxes. No adjustment has been
made for the potential payment of any additional income taxes.
(2) Pro Forma Adjustments
a. To reflect the Nashville Acquisition for $33,000,000 in cash (net
of a $2,000,000 deposit made in August 1997), the related excess of
the purchase price paid over net book value of $27,479,000, and the
adjustments to remove $1,370,000 of current assets, $566,000 of
other assets, $545,000 of current liabilities, and stockholders'
equity of $8,912,000.
b. To reflect additional acquisition costs of approximately $2,000,000
related to the Nashville Acquisition and Chancellor Exchange,
principally consisting of professional fees and to reclassify
deposits, professional fees and other payments of approximately
$3,440,000 included in other assets as of September 30, 1997.
c. To reflect the $11,000,000 of cash to be received in the Chancellor
Exchange. No gain or loss will be recognized because the fair
market value of the stations received, as adjusted for cash
received or paid, equals the carrying value of the stations
exchanged.
d. To use the net cash proceeds from the Capstar Disposition,
Nashville Acquisition and Chancellor Exchange to reduce debt under
the Company's Credit Agreement.
4
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
COMPLETED PENDING
SFX ACQUISITIONS ACQUISITION
BROADCASTING, AND AND
INC. AS DISPOSITIONS DISPOSITION
REPORTED (I) (II) PRO FORMA
--------------- -------------- -------------- -----------
<S> <C> <C> <C> <C>
Net broadcast revenues.......................... $ 188,984 $38,685 $(4,938) $ 222,731
Concert promotion revenue ...................... 75,740 12,292 -- 88,032
Station and other operating expenses ........... 115,871 28,289 (1,226) 142,934
Concert promotion operating expense ............ 63,394 12,236 75,630
Depreciation, amortization, duopoly integration
costs and acquisition related costs............ 31,429 7,090 (95) 38,424
Corporate expenses.............................. 6,849* 6,849*
Other .......................................... 17,995 17,995
--------------- -------------- -------------- -----------
Operating income (loss) ........................ 29,186 3,362 (3,617) 28,931
Interest expense ............................... 46,438 8,408 54,846
Other expense (income).......................... (2,692) (3) (2,695)
--------------- -------------- -------------- -----------
Income before income tax expense ............... (14,560) (5,046) (3,614) (23,220)
Income tax expense (benefit).................... 845 32 (3) 874
--------------- -------------- -------------- -----------
Net income (loss) .............................. (15,405) (5,078) (3,611) (24,094)
Preferred stock dividend requirement............ 27,723 1,183 28,906
--------------- -------------- -------------- -----------
Net income (loss) applicable to common shares .. $ (43,128) $(6,261) $(3,611) $ (53,000)
=============== ============== ============== ===========
Net loss per common share....................... $ (4.61) $ (5.66)
Average common shares outstanding............... 9,364,089 9,364,089
</TABLE>
- ------------
* Net of $1,700,000 of fees from Triathlon.
5
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
COMPLETED PENDING
SFX ACQUISITIONS ACQUISITION
BROADCASTING, AND AND
INC. AS DISPOSITIONS DISPOSITION
REPORTED (I) (II) PRO FORMA
--------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
Net broadcast revenues.......................... $ 143,061 $131,014 $(1,381) $ 272,694
Concert promotion revenue ...................... 104,784 104,784
Station and other operating expenses............ 92,816 90,243 1,208 184,267
Concert promotion operating expense ............ 97,318 97,318
Depreciation, amortization, duopoly integration
costs and acquisition related costs............ 17,311 35,868 650 53,829
Corporate expenses.............................. 6,313 (313) 6,000*
Other........................................... 28,994 (3,332) 25,662
--------------- -------------- -------------- ------------
Operating income (loss)......................... (2,373) 16,014 (3,239) 10,402
Interest expense ............................... 34,897 38,496 73,393
Other expense (income).......................... (2,117) (467) (538) (3,122)
Equity (income) loss from investments ......... (525) (525)
--------------- -------------- -------------- ------------
Income before income tax expense................ (35,153) (21,490) (2,701) (59,344)
Income tax expense (benefit).................... 480 1,315 1,795
--------------- -------------- -------------- ------------
Net income (loss)............................... (35,633) (22,805) (2,701) (61,139)
Preferred stock dividend requirement............ 6,061 32,063 38,124
--------------- -------------- -------------- ------------
Net income (loss) applicable to common shares .. $ (41,694) $(54,868) $(2,701) $ (99,263)
=============== ============== ============== ============
Net loss per common share ...................... $ (4.57) $ (10.79)
Average common shares outstanding............... 9,127,985 70,796 9,198,781
</TABLE>
- ------------
* Net of $3,000,000 of fees from Triathlon.
6
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
(I) Completed Acquisitions and Dispositions
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1997 (IN THOUSANDS)
----------------------------------------------------------------
CBS SECRET
TEXAS COAST HARTFORD MEADOWS EXCHANGE COMMUNICATIONS
ACQUISITION ACQUISITION ACQUISITION (6) ACQUISITION
----------- ----------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Net broadcast revenues $652 $638 $ (60) $20,626
Concert promotion revenue $ 600
Station and other
operating expenses 401 664 630 11,230
Concert promotion
operating expense 631
Depreciation,
amortization, duopoly
integration costs and
acquisition related
costs -- -- 221 -- 1,207
Corporate expenses -- -- -- -- --
----------- ----------- ----------- ---------- --------------
Operating income (loss) 251 (26) (252) (690) 8,189
Interest expense -- -- 199 -- 1,459
Other expense (income) -- -- (1) -- 79
----------- ----------- ----------- ---------- --------------
Income (loss) before
income tax expense 251 (26) (450) (690) 6,651
Income tax expense
(benefit) -- -- -- 32 --
----------- ----------- ----------- ---------- --------------
Net income (loss) 251 (26) (450) (722) 6,651
Preferred stock
dividend requirement -- -- -- -- --
----------- ----------- ----------- ---------- --------------
Net income (loss)
applicable to common
shares $251 $(26) $(450) $(722) $ 6,651
=========== =========== =========== ========== ==============
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
COMPLETED
CHARLOTTE PRO FORMA ACQUISITIONS
RICHMOND EXCHANGE SUNSHINE HEARST ADJUSTMENTS AND
ACQUISITION (7) ACQUISITION ACQUISITION (8) DISPOSITIONS
----------- ---------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net broadcast revenues $5,105 $1,564 $10,160 $38,685
Concert promotion revenue $11,692 12,292
Station and other
operating expenses 3,722 1,328 -- 10,314 28,289
Concert promotion
operating expense 11,605 12,236
Depreciation,
amortization, duopoly
integration costs and
acquisition related
costs 456 375 686 -- $ 125 (a) 7,090
2,512 (b)
393 (c)
884 (l)
231 (m)
Corporate expenses -- -- -- -- -- --
----------- ---------- ----------- ----------- ----------- ------------
Operating income (loss) 927 (139) (599) (154) (4,145) 3,362
Interest expense 481 (730) 1,106 -- (47,397)(a) 8,408
16,848 (a)
36,282 (a)
195 (h)
(35)(j)
Other expense (income) -- -- -- -- (78)(i) 0
----------- ---------- ----------- ----------- ----------- ------------
Income (loss) before
income tax expense 446 591 (1,705) (154) (9,960) (5,046)
Income tax expense
(benefit) -- -- -- -- 32
----------- ---------- ----------- ----------- ----------- ------------
Net income (loss) 446 591 (1,705) (154) (9,960) (5,078)
Preferred stock
dividend requirement -- -- -- -- 1,183 (n) 1,183
----------- ---------- ----------- ----------- ----------- ------------
Net income (loss)
applicable to common
shares $ 446 $ 591 $(1,705) $ (154) $(11,143) $(6,261)
=========== ========== =========== =========== =========== ============
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------
LIBERTY PRISM
ACQUISITION ACQUISITION HOUSTON
INCLUDING INCLUDING OTHER EXCHANGE
MMR WASHINGTON LOUISVILLE 1996 AND DALLAS DELSENER/ TEXAS
MERGER DISPOSITIONS DISPOSITIONS ACQUISITIONS DISPOSITION SLATER COAST HARTFORD MEADOWS
(1) (2) (3) (4) (5) ACQUISITION ACQUISITION ACQUISITION ACQUISITIONS
------- ------------ ------------ ------------ ----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net broadcast
revenues............. $20,038 $24,992 $13,511 $ 4,728 $ (8,680) $4,281 $5,742
Concert promotion
revenue.............. $50,361 $10,175
Station and other
operating expenses .. 11,531 17,774 10,897 2,869 (10,307) 2,968 5,607
Concert promotion
operating expense ... 50,686 9,306
Depreciation,
amortization,
duopoly integration
costs and
acquisition related
costs................ 6,081 5,150 1,241 1,492 (284) 747 36 27 1,550
Corporate expenses ... 1,253 1,478 808 111 110 -- -- -- --
Other................. 577 -- -- -- (3,500) -- (48) -- --
------- ------------ ------------ ------------ ----------- ----------- ----------- ----------- -----------
Operating income
(loss)............... 596 590 565 256 5,301 (1,072) 1,325 108 (681)
Interest expense...... -- 3,326 773 382 (1,667) 60 -- 19 1,275
Other expense
(income) ............ -- 5,935 -- (11,948) -- (198) (65) (8) (30)
Equity (income) loss
from investments ... -- -- -- -- -- (525) -- -- --
------- ------------ ------------ ------------ ----------- ----------- ----------- ----------- ---------
Income (loss) before
income tax expense .. 596 (8,671) (208) 11,822 6,968 (409) 1,390 97 (1,926)
Income tax expense
(benefit)............ -- (3,378) -- 45 938 106 22 32 17
------- ------------ ------------ ------------ ----------- ----------- ----------- ----------- ---------
Net income (loss) 1,388 (5,293) (208) 11,777 6,030 (515) 1,368 65 (1,943)
Preferred Stock
Dividend Requirement -- -- -- -- -- -- -- -- --
Net income (loss)
applicable to common
shares............... $ 596 $(5,293) $ (208) $ 11,777 $ 6,030 $ (515) $1,368 $ 65 $(1,943)
======= ============ ============ ============ =========== =========== ========= =========== =========
Average common shares
outstanding .........
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
PRO COMPLETED
CBS SECRET CHARLOTTE FORMA ACQUISITIONS
EXCHANGE COMMUNICATIONS RICHMOND EXCHANGE SUNSHINE HEARST ADJUSTMENTS AND
(6) ACQUISITION ACQUISITION (7) ACQUISITION ACQUISITION (8) DISPOSITIONS
-------- -------------- ----------- --------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net broadcast
revenues............. $ 10 $35,532 $ 9,007 $6,222 $15,631 $131,014
Concert promotion
revenue.............. $44,248 104,784
Station and other
operating expenses .. 1,288 20,844 7,757 3,885 15,130 90,243
Concert promotion
operating expense ... 37,326 97,318
Depreciation,
amortization,
duopoly integration
costs and
acquisition related
costs................ -- 3,970 780 500 1,522 293 $ 1,491 (a) 35,868
8,052 (b)
559 (d)
2,354 (l)
308 (m)
Corporate expenses ... -- -- 1,037 -- -- 169 (3,713)(e) (313)
1,434 (e)
(3,000)(f)
Other................. (363) 2 -- -- -- -- (3,332)
-------- -------------- ----------- --------- ----------- ----------- ----------- ------------
Operating income
(loss)............... (915) 10,716 (567) 1,837 5,400 39 (7,484) 16,014
Interest expense...... -- -- 1,210 -- 3,019 -- (5,583)(a) 38,496
22,462 (a)
(35,635)(a)
48,375 (a)
547 (h)
(67)(j)
Other expense
(income) ............ -- 1,175 -- -- (138) -- (5,935)(g) (467)
11,920 (g)
(1,175)(i)
Equity (income) loss
from investments ... -- -- -- -- -- -- (525)
-------- -------------- ----------- --------- ----------- ----------- ----------- ------------
Income (loss) before
income tax expense .. (915) 9,541 (1,777) 1,837 2,519 39 (42,393) (21,490)
Income tax expense
(benefit)............ 783 -- -- -- 1,138 -- 1,612 (g) 1,315
-------- -------------- ----------- --------- ----------- ----------- ----------- ------------
Net income (loss) (1,698) 9,541 (1,777) 1,837 1,381 39 (44,005) (22,805)
Preferred Stock
dividend requirement -- -- -- -- -- -- 32,063 (n) 32,063
Net income (loss)
applicable to common
shares............... $(1,698) $ 9,541 $(1,777) $1,837 $ 1,381 $ 39 $(76,068) $(54,868)
======== ============== =========== ========= =========== =========== =========== ============
Average common shares
outstanding ......... 70,796 (k) 70,796
</TABLE>
8
<PAGE>
(1) MMR Merger
Reflects the net effect of the historical operations of Multi-Market
Radio, Inc. ("MMR") as adjusted for acquisitions and dispositions. The
Company has not included in the pro forma statement of operations cost
savings of $792,000 it believes would have been achieved in connection
with the Hartford Acquisition had the transaction been consummated as of
January 1, 1996, consisting principally of the elimination of certain
duplicative technical sales and general and administrative functions due
to the operation of a cluster of stations in the Hartford market.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------------------
MMR
AS MMR HARTFORD PRO FORMA MMR
REPORTED DISPOSITIONS(a) ACQUISITION ADJUSTMENTS MERGER
---------- --------------- ------------- ------------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net broadcast revenues....... $18,832 $(1,623) $2,829 $20,038
Station operating expenses .. 11,422 (1,931) 2,040 $ 11,531
Depreciation/amortization ... 7,611 (1,833) 277 26 (b) 6,081
Corporate expenses........... 2,517 -- -- 1,253 (c) 1,253
(2,517)(c)
Other........................ 63 -- -- 514 (e) 577
---------- --------------- ------------- ------------- ---------
Operating income (loss) ..... (2,781) 2,141 512 724 596
Interest expense............. 5,265 -- 274 (5,539)(d) --
Other expense (income)....... -- (57) (12) 69 (d) --
Income tax expense
(benefit)................... -- 7 (7)(d) --
---------- --------------- ------------- ------------- ---------
Net income (loss)............ $(8,046) $ 2,198 $ 243 $ 6,201 $ 596
========== =============== ============= ============= =========
</TABLE>
(a) Reflects the elimination of the operations of stations WRSF-FM,
sold in March 1996, WRXR-FM and WKBG-FM, sold in July 1996,
WYAK-FM and WMYB-FM, sold in March 1997, and KOLL-FM, sold in
April 1997.
(b) Reflects $26,000 for the year ended December 31, 1996 in
amortization of intangible assets recorded in connection with the
MMR Merger, Myrtle Beach Acquisition, MMR Hartford Acquisition,
related incremental deferred taxes and change in amortization
periods.
(c) To record incremental corporate overhead charges of $1,253,000
associated with the MMR Merger for the year ended December 31,
1996, and to eliminate MMR's existing corporate overhead of
$2,517,000 for the year ended December 31, 1996.
(d) Elimination of nonrecurring income of $69,000 for the year ended
December 31, 1996, interest expense of $5,539,000 for the year
ended December 31, 1996, and income tax expense of $7,000 for the
year ended December 31, 1996.
(e) Reflects non-cash compensation charge for the issuance of shares
of the Series A and Series B Convertible Preferred Stock of MMR.
The shares of Series A and Series B stock were issued to certain
officers and advisors of MMR in July and November 1996,
respectively, and converted into Class A Common Stock of the
Company upon consummation of the MMR Merger. Certain of the
shares issued pursuant to the Series A and Series B conversions
which were issued to individuals currently employed by the
Company are being held in escrow and are being released in five
equal annual installments ending in April 2001.
9
<PAGE>
(2) Liberty Acquisition
Reflects the net effect of the historical operations of the Liberty
Acquisition adjusted for the Washington Dispositions.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-------------------------------------------
LIBERTY AS WASHINGTON LIBERTY
REPORTED DISPOSITIONS ACQUISITION
------------ -------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net broadcast revenues .... $25,966 $ (974) $24,992
Station operating
expenses.................. 19,337 (1,563) 17,774
Depreciation/amortization . 5,926 (776) 5,150
Corporate expenses......... 1,566 (88) 1,478
------------ -------------- -------------
Operating income........... (863) 1,453 590
Interest expense........... 3,467 (141) 3,326
Other expense (income) ... 5,935 -- 5,935
Income tax benefit......... (3,378) -- (3,378)
------------ -------------- -------------
Net income (loss).......... $(6,887) $ 1,594 $(5,293)
============ ============== =============
</TABLE>
(3) Prism Acquisition
Reflects the net effect of the historical operations of the Prism
Acquisition adjusted for the Louisville Dispositions.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------------
PRISM AS LOUISVILLE PRISM
REPORTED DISPOSITIONS ACQUISITION
---------- -------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net broadcast revenues .... $16,859 $(3,348) $13,511
Station operating
expenses.................. 13,373 (2,476) 10,897
Depreciation/amortization . 1,599 (358) 1,241
Corporate expenses......... 808 -- 808
---------- -------------- -------------
Operating income (loss) ... 1,079 (514) 565
Interest expense........... 773 -- 773
---------- -------------- -------------
Net loss................... $ 306 $ (514) $ (208)
========== ============== =============
</TABLE>
10
<PAGE>
(4) Other 1996 Acquisitions
Reflects the net effect of the combined historical operations of the
Greensboro Acquisition, the Raleigh-Greensboro Acquisitions, the
Greenville Acquisition and the Jackson Acquisitions.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
--------------------------------------------------------
RALEIGH-
GREENSBORO AND
GREENSBORO GREENVILLE JACKSON
ACQUISITIONS ACQUISITION ACQUISITIONS TOTAL
-------------- ------------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net broadcast revenues .... $3,619 $ 639 $470 $ 4,728
Station operating expenses 2,264 271 334 2,869
Depreciation/amortization . 1,168 244 80 1,492
Corporate expenses ......... 4 107 -- 111
-------------- ------------- -------------- ----------
Operating income (loss) .... 183 17 56 256
Interest expense............ 59 323 -- 382
Other expense (income) ..... (51) (11,897) -- (11,948)
Income tax expense.......... 45 -- -- 45
-------------- ------------- -------------- ----------
Net income (loss)........... $ 130 $ 11,591 $ 56 $ 11,777
============== ============= ============== ==========
</TABLE>
(5) Houston Exchange and Dallas Disposition
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>
YEAR ENDED DECEMBER 31, 1996
----------------------------------------------------------------------------------------
HOUSTON EXCHANGE
DISPOSITIONS ACQUISITION ADJUSTMENTS* AND DALLAS DISPOSITION
------------------------------------------------ -------------- ----------------------
KRLD-AM TSN KTCK-AM KKRW-FM
----------- ---------- ---------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net broadcast revenues .... $(10,711) $(2,843) $(2,136) $7,010 $ -- $ (8,680)
Station operating expenses (9,316) (2,222) (2,490) 3,721 -- (10,307)
Depreciation/amortization . (1,157) (226) (284) 81 1,302 (284)
Corporate expenses ......... -- -- -- 110 -- 110
Other....................... (1,600) -- (1,900) -- -- (3,500)
----------- ---------- ---------- ------------- -------------- ----------------------
Operating income (loss) ... 1,362 (395) 2,538 3,098 (1,302) 5,301
Interest expense ........... (1,482) (373) 188 -- -- (1,667)
Other expense (income) .... -- -- -- 938 -- 938
----------- ---------- ---------- ------------- -------------- ----------------------
Net income (loss) .......... $ 2,844 $ (22) $ 2,350 $2,160 $(1,302) $ 6,030
=========== ========== ========== ============= ============== ======================
</TABLE>
(*) To reflect historical depreciation and amortization of KRLD-AM
and the Texas State Networks and the disposition of KTCK-AM.
11
<PAGE>
(6) CBS Exchange
To reflect the net effect of the exchange of WHFS-FM for KTXQ-FM and
KRRW-FM in the CBS Exchange.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1997
------------------------------------------------
KTXQ-FM WHFS-FM CBS
KRRW-FM DISPOSAL ADJUSTMENTS* EXCHANGE
--------- ---------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net broadcast revenues .... $1,628 $1,688 $ -- $ (60)
Station operating
expenses.................. 1,655 1,025 -- 630
Depreciation/amortization . 54 783 729 --
--------- ---------- -------------- ----------
Operating income (loss) ... (81) (120) (729) (690)
Income tax expense......... 32 -- -- 32
--------- ---------- -------------- ----------
Net income (loss).......... $ (113) $ (120) $(729) $(722)
========= ========== ============== ==========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
------------------------------------------------
KTXQ-FM WHFS-FM CBS
KRRW-FM DISPOSAL ADJUSTMENTS* EXCHANGE
--------- ---------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net broadcast revenues........ $9,572 $9,562 $ -- $ 10
Station operating expenses ... 7,116 5,828 -- 1,288
Depreciation/amortization .... 218 1,548 1,330 --
Other ........................ -- 363 -- (363)
--------- ---------- -------------- ----------
Operating income.............. 2,238 1,823 (1,330) (915)
Income tax expense (benefit) 783 -- -- 783
--------- ---------- -------------- ----------
Net income (loss)............. $1,455 $1,823 $(1,330) $(1,698)
========= ========== ============== ==========
</TABLE>
* To eliminate depreciation of KTXQ-FM and KRRW-FM and reflect
depreciation of WHFS-FM.
(7) Charlotte Exchange
Reflects the transfer of WDSY-FM and $20,000,000 in exchange for WRFX-FM
in the Charlotte Exchange.
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1997
-------------------------------------------------------
WDSY-FM WRFX-FM CHARLOTTE
DISPOSITION ACQUISITION ADJUSTMENTS EXCHANGE
------------- ------------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues................... $(4,367) $5,931 $1,564
Station operating expenses .... (1,794) 3,122 1,328
Depreciation, amortization and
acquisition related costs .... (183) -- $ 558 375
------------- ------------- ------------- -----------
Operating income............... (2,390) 2,809 (558) (139)
------------- ------------- ------------- -----------
Interest expense............... (730) -- -- (730)
Net income (loss).............. $(1,660) $2,809 $(558) $ 591
============= ============= ============= ===========
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------
WDSY-FM WRFX-FM CHARLOTTE
DISPOSITION ACQUISITION ADJUSTMENTS EXCHANGE
------------- ------------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues................... $(3,697) $9,919 $6,222
Station operating expenses .... (1,593) 5,478 3,885
Depreciation, amortization and
acquisition related costs .... -- 2,907 $(2,407)* 500
------------- ------------- ------------- -----------
Operating income............... (2,104) 1,534 2,407 1,837
------------- ------------- ------------- -----------
Net income (loss).............. $(2,104) $1,534 $ 2,407 $1,837
============= ============= ============= ===========
</TABLE>
* To reflect historical depreciation of WDSY-FM net of decrease in
amortization due to the exchange allocation.
(8) Pro Forma Adjustments
The Company has not included in the pro forma adjustments certain cost
savings totalling $11,559,000 it believes would have been realized for the
year ended December 31, 1996 following the Liberty Acquisition, the Prism
Acquisition, the Houston Exchange, the Jackson Acquisitions, the Hearst
Acquisition, the Charlotte Exchange, the Richmond Acquisition, the Texas Coast
Acquisition and Hartford Acquisition and $2,881,000 for the nine months ended
September 30, 1997 following Richmond Acquisition, the Hearst Acquisition,
the Charlotte Exchange, Hartford Acquisition, and Texas Coast Acquisition,
had these transactions been consummated as of January 1, 1996. The cost
savings consist principally of the elimination of certain duplicative
technical, sales and general and administrative functions due to the operation
of 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.
Also not reflected are the elimination of $6,078,000 non-recurring losses
of Delsener/Slater and the elimination of certain salaries and expenses of
employee-shareholders in connection with the Hartford Acquisition.
While management believes that such cost savings and the elimination of
non-recurring expenses are reasonably achievable, and many of which have been
achieved, the Company's ability to fully 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. These factors may include difficulties
in integrating the acquired stations and the incurrence of unanticipated
severance, promotional or other costs and expenses. There can be no assurance
that the Company will realize all such cost savings.
a. To reflect interest expense of $36,282,000 and $48,375,000 for the
nine months ended September 30, 1997 and the year ended December 31,
1996, respectively, related to the $450,000,000 of Senior
Subordinated Notes at 10.75% issued in 1996, amortization of deferred
financing costs of $125,000 and $1,491,000 for the nine months ended
September 30, 1997 and the year ended December 31, 1996,
respectively, interest expense of $16,848,000 and $22,462,000
relating to the borrowings from the Credit Agreement at 8% for the
nine months ended September 30, 1997 and the year ended December 31,
1996, respectively, and elimination of existing interest expense (net
of interest on other debt) of $47,397,000 and $41,218,000 related to
the Company and the sellers for the nine months ended September 30,
1997 and the year ended December 31, 1996, respectively.
13
<PAGE>
b. Reflects increase (decrease) in amortization of intangible assets
resulting from the purchase price allocation, deferred taxes recorded
and change in amortization period:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996 NINE MONTHS ENDED SEPTEMBER 30, 1997
--------------------------------------------------------------------------------------------
INCREASE DUE DECREASE DUE INCREASE DUE DECREASE DUE
TO PURCHASE TO CHANGE IN TO PURCHASE TO CHANGE IN
PRICE AMORTIZATION NET INCREASE PRICE AMORTIZATION NET INCREASE
ALLOCATION PERIODS (DECREASE) ALLOCATION PERIODS (DECREASE)
-------------- -------------- -------------- -------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Liberty Acquisition .. $1,699 $(2,399) $ (700)
Prism Acquisition .... 1,010 (642) 368
Charlotte WTDR/WLYT
Acquisition ......... 490 490
Jackson Acquisitions . 73 35 108
Greenville and
Greensboro
Acquisitions......... 597 (623) (26)
Albany Acquisition .. 23 23 $ 2 $ 2
Hartford Acquisition 910 910 152 152
Texas Coast
Acquisition.......... 1,067 1,067 89 89
Richmond Acquisition . 1,053 (164) 889 527 (82) 445
Hearst Acquisition ... 733 733 428 428
Secret Communications
Acquisition ......... 6,207 (2,018) 4,189 2,069 (673) 1,396
-------------- --------------
Total Pro Forma
adjustments........ $8,052 $2,512
============== ==============
</TABLE>
c. To reflect depreciation expense for fixed assets associated with the
Texas Coast, Hartford and Richmond Acquisitions as per the Company's
depreciation policy.
d. To reflect $559,000 in amortization relating to the present value of
the Triathlon consulting fees assigned to the Company under the SCMC
Termination Agreement for the year ended December 31, 1996.
e. To record incremental corporate overhead charges of $1,434,000 for
the year ended December 31, 1996, relating to increases in personnel,
professional fees and administrative expenses associated with the
increased size of the Company due to the Completed and Pending
Acquisitions and the elimination of $3,713,000 for the year ended
December 31, 1996, of the corporate overhead of the sellers.
f. Reflects fees of $3,000,000 incurred by Triathlon and would have been
payable to SFX under the revised SCMC Agreement for the year ended
December 31, 1996. 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.
g. Elimination of acquisition related costs of $5,935,000 recorded on
the income statement of Liberty for the year ended December 31, 1996,
a gain on the sale of assets of $11,920,000 recorded on the books of
ABS Greenville Partners, L.P. for the year ended December 31, 1996
and net income tax benefit of $1,612,000 for the year ended December
31, 1996.
h. To record interest expense of $195,000 and $547,000 for the nine
months ended September 30, 1997 and the year ended December 31, 1996,
respectively, in connection with the long-term payments due for the
Delsener/Slater Acquisition, the Texas Coast Acquisition and the
Sunshine Acquisition.
i. Elimination of LMA fees paid by Secret Communications for WJJJ-FM
and WDSY-FM.
j. Elimination of interest expense on Jackson note payable to third
party acquired by Capstar.
k. Reflects the issuance of 70,796 shares of Class A common stock in
connection with the Sunshine Acquisition for a total value of
$2,000,000.
l. To reflect the depreciation and amortization expense adjustment of
$2,354,000 and $884,000 associated with the Delsener/Slater, Meadows,
and Sunshine concert acquisitions for the year ended December 31,
1996 and the nine months ended September 30, 1997, respectively.
m. To reflect the amortization of $231,000 and $308,000 associated with
the John Boy and Billy Network contract payments for the nine months
ended September 30, 1997 and the year ended December 31, 1996,
respectively.
14
<PAGE>
n. To record the incremental Series D Preferred Stock and the Series E
Preferred Stock dividends issued to finance a portion of the Pending
Acquisitions and Dispositions at a rate of 6.5% and 12 5/8%,
respectively.
(II) Pending Acquisitions & Dispositions
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1997 (IN THOUSANDS)
--------------------------------------------------------------
PENDING
CAPSTAR NASHVILLE PRO FORMA ACQUISITION AND
DISPOSITION ACQUISITION ADJUSTMENTS (1) DISPOSITION
------------- ------------- --------------- ----------------
<S> <C> <C> <C> <C>
Net broadcast revenues ................ $(9,831) $4,893 $ (4,938)
Concert promotion revenue .............
Station and other operating expenses . (5,489) 4,263 (1,226)
Concert promotion operating expense ..
Depreciation, amortization, duopoly
integration costs and acquisition
related costs ........................ (1,201) 467 39 (c) (95)
207 (e)
393 (b)
------------- ------------- --------------- ----------------
Operating income (loss) ............... (3,141) 163 (639) (3,617)
Interest expense ...................... (36) -- 36 (a)
Other expense (income) ................ -- (3) (3)
------------- ------------- --------------- ----------------
Income (loss) before income tax
expense .............................. (3,105) 166 (675) (3,614)
Income tax expense (benefit) .......... -- (3) (3)
------------- ------------- --------------- ----------------
Net income (loss) ..................... (3,105) 169 (675) (3,611)
------------- ------------- --------------- ----------------
Net income (loss) applicable to common
shares ............................... $(3,105) $ 169 $ (675) $(3,611)
============= ============= =============== ================
YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS)
--------------------------------------------------------------
PENDING
CAPSTAR NASHVILLE PRO FORMA ACQUISITION AND
DISPOSITION ACQUISITION ADJUSTMENTS (1) DISPOSITION
------------- ------------- --------------- ----------------
Net broadcast revenues................. $(9,012) $8,081 $ (450)(d) $ (1,381)
Concert promotion revenue .............
Station and other operating expenses .. (5,265) 6,473 1,208
Concert promotion operating expense ..
Depreciation, amortization, duopoly
integration costs and acquisition
related costs ........................ (852) 652 275 (d) 650
50 (c)
525 (b)
------------- ------------- --------------- ----------------
Operating income (loss)................ (2,895) 956 (1,300) (3,239)
Interest expense....................... (2,108) -- 2,108 (a)
Other expense (income)................. (538) -- (538)
------------- ------------- --------------- ----------------
Income (loss) before income tax
expense............................... (249) 956 (3,408) (2,701)
Income tax expense (benefit)........... -- --
------------- ------------- --------------- ----------------
Net income (loss)...................... (249) 956 (3,408) (2,701)
------------- ------------- --------------- ----------------
Net income (loss) applicable to common
shares................................ $ (249) $ 956 $(3,408) $(2,701)
============= ============= =============== ================
</TABLE>
15
<PAGE>
(1) Pro Forma Adjustments
The Company has not included in the pro forma adjustments certain cost
savings totalling $539,000 it believes would have been realized for the year
ended December 31, 1996 following the Nashville Acquisition and the Chancellor
Exchange and $375,000 for the nine months ended September 30, 1997 following
the Nashville Acquisition and the Chancellor Exchange, had these transactions
been consummated as of January 1, 1996. The cost savings consist principally
of the elimination of certain duplicative technical, sales and general and
administrative functions due to the operation of 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.
While management believes that such cost savings and the elimination of
non-recurring expenses are reasonably achievable, the Company's ability to
fully 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. These factors may include difficulties in integrating the acquired
stations and the incurrence of unanticipated severance, promotional or other
costs and expenses. There can be no assurance that the Company will realize
all such cost savings.
a. To reflect the elimination of existing interest expense of $36,000
and $2,108,000 related to the Capstar Disposition for the nine months
ended September 30, 1997 and the year ended December 31, 1996,
respectively.
b. Reflects increase in amortization of intangible assets of $393,000
and $525,000 for the nine months ended September 30, 1997 and the
year ended December 31, 1996, respectively, resulting from the
purchase price allocation and change in amortization period related
to the Nashville Acquisition.
c. Amortization of $39,000 and $50,000 for acquisition costs associated
with the Pending Acquisitions for the nine months ended September 30,
1997 and the year ended December 31, 1996, respectively.
d. To reflect the reduced amortization of goodwill and elimination of
LMA fees of the Chancellor Exchange.
16
<PAGE>
GLOSSARY TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS
"Albany Acquisition" means the acquisition, consummated in January 1997,
of substantially all of the assets used in the operation of WYSR-FM,
operating in Albany, New York.
"Capstar Disposition" means the pending sale of the Jackson stations and
the Biloxi station.
"CBS Exchange" means the exchange by the Company, consummated in March
1997 of radio station WHFS-FM, operating in Washington, D.C./Baltimore,
Maryland, for KTXQ-FM and KRRW-FM, both operating in Dallas, Texas, and owned
by CBS, Inc. As such, historical operating results for WHFS-FM, KTXQ-FM and
KRRW-FM have been added to SFX Broadcasting, Inc., as reported amounts for the
twelve months ending December 31, 1996 and from January 1, 1997 through
March 31, 1997.
"Chancellor Exchange" means the pending exchange of the Company's radio
stations WBAB-FM, WHFM-FM, WBLI-FM and WGBB-AM, each operating on Long
Island, New York, for WFYV-FM and WAPE-FM, both operating in Jacksonville,
Florida, and a payment to the Company of $11.0 million in cash.
"Charlotte Acquisition" means the acquisition, consummated in February
1996, of WTDR-FM and WLYT-FM, both operating in Charlotte, North Carolina. As
such, historical operating results for WTDR-FM and WLYT-FM have been added
to SFX Broadcasting, Inc., as reported amounts from January 1, 1996 through
February 1, 1996.
"Charlotte Exchange" means the exchange, consummated in August 1997 of
WDSY-FM in Pittsburgh, Pennsylvania and $20 million in cash for WRFX-FM in
Charlotte, North Carolina. As such, historical operating results for WRFX-FM
have been added to SFX Broadcasting, Inc., as reported amounts for the year
ending December 31, 1996 and from January 1, 1997 through August 1, 1997.
"Completed Transactions" means, collectively, the MMR Merger, the
Greensboro Acquisition, the Liberty Acquisition, the Prism Acquisition, the
Jackson Acquisitions, the Greenville Acquisition, the CBS Exchange, the
Louisville Acquisition, the Raleigh-Greensboro Acquisitions, the Houston
Exchange, the Albany Acquisition, the Delsener/Slater Acquisition, the
Meadows Acquisition, the Secret Communications Acquisition, the Sunshine
Acquisition, the Richmond Acquisition, the Hearst Acquisition, the
"Credit Agreement" means the definitive credit agreement the Company
entered into on June 23, 1997, which increases amounts available under its
senior credit facility to $400.million.
"Dallas Disposition" means the sale, consummated in October 1996, of radio
station KTCK-AM, operating in Dallas, Texas. As such, historical operating
results for KTCK-AM have been added to SFX Broadcasting, Inc., as reported
amounts from January 1, 1996 through October 17, 1996.
"Delsener/Slater Acquisition" means the acquisition, consummated in
January 1997, of Delsener/ Slater Enterprises, Ltd., a concert promotion
company, and certain affiliated entities (collectively, "Delsener/Slater").
As such, historical the operating results for Delsener/Slater have been added
to SFX Broadcasting, Inc., as reported amounts for the 12 months ending
December 31, 1996.
"Greensboro Acquisition" means the acquisition, consummated in December
1996, of substantially all of the assets of WHSL-FM, operating in Greensboro,
North Carolina. As such, the historical operating results for WHSL-FM have
been added to SFX Broadcasting, Inc., as reported amounts from January 1, 1996
through December 6, 1996.
"Greenville Acquisition" means the acquisition, consummated in June 1996,
of substantially all of the assets of WROQ-FM, operating in
Greenville-Spartanburg, South Carolina. As such, the historical operating
results for WROQ-FM have been added to SFX Broadcasting, Inc., as reported
amounts from January 1, 1996 through June 25, 1996.
17
<PAGE>
"Hartford Acquisition" means the acquisition by the Company, consummated
in February 1997, of WWYZ-FM, which operates in Hartford, Connecticut. As
such, the historical operating results for WWYZ-FM have been added to SFX
Broadcasting, Inc., as reported amounts for the year ending December 31, 1996
and from January 1, 1997 through February 28, 1997.
"Hearst Acquisition" means the acquisition, consummated in August 1997, of
two radio stations operating in Pittsburgh, Pennsylvania and two stations in
Milwaukee, Wisconsin for cash. As such, historical operating results for the
Pittsburgh and Milwaukee Stations have been added to SFX Broadcasting, Inc.,
as reported amounts for the year ending December 31, 1996 and from
January 1, 1997 through August 1, 1997.
"Houston Exchange" means the exchange, consummated in December 1996, of
the Company's radio station KRLD-AM, operating in Dallas, Texas, and the
Company's Texas State Networks for radio station KKRW-FM, operating in
Houston, Texas. As such, the historical operating results for KRLD-FM and
KKRW-FM have been added to SFX Broadcasting, Inc., as reported amounts from
January 1, 1996 through December 1, 1996.
"Jackson Acquisitions" means, collectively, the acquisitions, consummated
in the third quarter of 1996, of substantially all of the assets of WJDX-FM,
WSTZ-FM and WZRX-AM, each operating in Jackson, Mississippi. As such, the
historical operating results for WJDX-FM have been added to SFX Broadcasting,
Inc., as reported amounts from January 1, 1996 through July 19, 1996, while
the historical operating results for WSTZ-FM and WZRX-AM have been added to
SFX Broadcasting, Inc., as reported amounts from January 1, 1996 through
August 29, 1996.
"Liberty Acquisition" means the acquisition, consummated in July 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. As such, the historical operating
results for the 14 FM and six AM stations have been added to SFX Broadcasting,
Inc., as reported amounts from January 1, 1996 through July 1, 1996.
"Louisville Acquisition" means the acquisition, consummated in September
1996, from Prism of substantially all of the assets of WVEZ-FM, WTFX-FM and
WWKY-AM, each operating in Louisville, Kentucky. As such, the historical
operating results for the three stations have been added to SFX Broadcasting,
Inc., as reported amounts from January 1, 1996 through September 17, 1996.
"Louisville Dispositions" means the sale, consummated in October 1996, of
the three stations acquired in the Louisville Acquisition. As such, historical
operating results for the three stations have been added to SFX Broadcasting,
Inc., as reported amounts from January 1, 1996 through October 1, 1996.
"Meadows Acquisition" means the acquisition, consummated in March 1997, of
the Meadows Music Theater in Hartford, Connecticut. As such, historical
operating results for Meadows Music Theater have been added to SFX Broadcasting,
Inc., as reported amounts for the year ending December 31, 1996 and from
January 1, 1997 through March 19, 1997.
"MMR Hartford Acquisition" means MMR's acquisition, consummated in
September 1996, of WKSS-FM, operating in Hartford, Connecticut. As such,
historical operating results for WKSS-FM have been added to SFX Broadcasting,
Inc., as reported amounts from January 1, 1996 through September 4, 1996.
"MMR Merger" means the merger, consummated in November 1996, of a
wholly-owned subsidiary of the Company with and into MMR, as a result of
which MMR became a wholly-owned subsidiary of the Company. As such, historical
operating results for MMR have been added to SFX Broadcasting, Inc., as
reported amounts from January 1, 1996 through November 22, 1996.
"Myrtle Beach Acquisition" means MMR's acquisition of WMYB-FM, operating
in Myrtle Beach, South Carolina.
18
<PAGE>
"Nashville Acquisition" means the pending acquisition of WJZC-FM, WLAC-FM
and WLAC-AM, each operating in Nashville, Tennessee, from Sinclair
Broadcasting Group.
"Pending Transactions" means, collectively, the Capstar Disposition and
the Nashville Acquisition.
"Prism Acquisition" means the acquisition, consummated in the third
quarter of 1996, of substantially all of the assets of Prism used in the
operation of ten FM and six AM radio stations located in five markets:
Louisville, Kentucky; Jacksonville, Florida; Raleigh, North Carolina; Tucson,
Arizona; and Wichita, Kansas. As such, historical operating results for the
Prism stations have been added to SFX Broadcasting, Inc., as reported amounts
from January 1, 1996 through July 8, 1996.
"Raleigh-Greensboro Acquisitions" means the acquisition, consummated in
June 1996, of substantially all of the assets of WMFR-AM, WMAG-FM and
WTCK-AM, each operating in Greensboro, North Carolina, and WTRG-FM and
WRDU-FM, both operating in Raleigh, North Carolina. As such, historical
operating results for the Raleigh-Greensboro stations have been added to
SFX Broadcasting, Inc., as reported amounts from January 1, 1996 through
June 28, 1996.
"Richmond Acquisition" means the acquisition, consummated in July 1997, of
ABS Communications L.L.C., which owns or will acquire WVGO-FM, WLEE-FM,
WKHK-FM and WBZU-FM, each operating in Richmond, Virginia, net of the pending
disposition of WVGO for $4.5 million. As such, historical operating results for
the four stations have been added to SFX Broadcasting, Inc., as reported
amounts for the year ending December 31, 1996 and from January 1, 1997
through July 2, 1997.
"Secret Communications Acquisition" means the acquisition of WFBQ-FM,
WRZX-FM and WNDE-AM, each operating in Indianapolis, Indiana, consummated in
April 1997, and WDVE-FM, WXDX-FM, and WJJJ-FM, each operating in Pittsburgh,
Pennsylvania, consummated in June 1997. As such, historical operating results
for the Indianapolis stations have been added to SFX Broadcasting, Inc., as
reported amounts for the year ending December 31, 1996 and from January 1, 1997
through April 1, 1997, while the operating results for the Pittsburgh stations
have been added to SFX Broadcasting, Inc., as reported amounts for the year
ending December 31, 1996 and from January 1, 1997 through June 1, 1997.
"Sunshine Acquisition" means the acquisition, consummated in June 1997, of
Sunshine Promotions, Inc. a concert promotion company, and certain affiliated
entities (collectively "Sunshine"). As such, historical operating results for
Sunshine Promotions have been added to SFX Broadcasting, Inc., as reported
amounts for the year ending December 31, 1996 and from January 1, 1997
through June 1, 1997.
"Texas Coast Acquisition" means the acquisition, consummated in February
1997, of radio stations KQUE-FM and KNUZ-AM in Houston, Texas. As such,
historical operating results for KQUE-FM and KNUZ-AM have been added to
SFX Broadcasting, Inc., as reported amounts for the year ending
December 31, 1996 and from January 1, 1997 through February 28, 1997.
"Washington Dispositions" means the sale, consummated in July 1996, of
three of the stations acquired from Liberty Broadcasting, each operating in
the Washington, D.C./Baltimore, Maryland market. As such, the historical
operating results for the three stations have been added to SFX Broadcasting,
Inc., as reported amounts from January 1, 1996 through July 1, 1996.
19
<PAGE>
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/ Thomas Benson
------------------------------
Name: Thomas Benson
Title: Chief Financial Officer
Date: December 11, 1997
