<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1, 1997
MOBILEMEDIA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-26320 22-3253006
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
65 Challenger Road, Ridgefield Park, New Jersey 07660
(Address of principal executive offices)
(Zip Code)
(201) 440-8400
(Registrant's telephone number, including area code)
--------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of Registrant
Not Applicable.
Item 2. Acquisition or Disposition of Assets.
Not Applicable.
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable.
Item 5. Other Events.
On December 1, 1997, MobileMedia Corporation (the
"Company"), MobileMedia Communications, Inc. ("MobileMedia
Communications") and all of the subsidiaries of MobileMedia
Communications filed with the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court") their monthly operating
report for the month ended October 31, 1997, which is attached hereto
as Exhibit 99.1.
Item 6. Resignations of Registrants Directors.
Not Applicable
Item 7. Financial Statements and Exhibits.
Not Applicable
Item 8. Change in Fiscal Year.
Not Applicable
<PAGE>
Pursuant to the requirements of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly
authorized.
MOBILEMEDIA CORPORATION
a Delaware corporation
Date: December 10, 1997 By: /s/ David R. Gibson
---------------------
David R. Gibson
Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
Exhibit 99.1 -- Monthly Operating Report
<PAGE>
EXHIBIT 99.1
OFFICE OF THE U.S. TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
For the month ended October 31, 1997
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
Required Attachments: Document Previously Explanation
Attached Submitted Attached
1. Tax Receipts ( ) (X) (X)
2. Bank Statements ( ) ( ) (X)
3. Most recently filed Income
Tax Return ( ) (X) ( )
4. Most recent Annual Financial
Statements prepared by
accountant ( ) (X) ( )
IN ACCORDANCE WITH TITLE 28, SECTION 1746, OF THE UNITED STATES CODE, I DECLARE
UNDER PENALTY OF PERJURY THAT I HAVE EXAMINED THE FOLLOWING MONTHLY OPERATING
REPORT AND THE ACCOMPANYING ATTACHMENTS AND, TO THE BEST OF MY KNOWLEDGE, THESE
DOCUMENTS ARE TRUE, CORRECT AND COMPLETE.
RESPONSIBLE PARTY:
/s/ David R. Gibson Senior Vice President/Chief Financial Officer
- ------------------------------ ---------------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
David R. Gibson November 26, 1997
- --------------------------------- ------------------------------------------
PRINTED NAME OF RESPONSIBLE PARTY DATE
Page 1 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
ATTACHMENT
For the month ended October 31, 1997
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
1. Payroll tax filings and payments are made by Automated Data Processing,
Inc. (an outside payroll processing company). Evidence of tax payments are
available upon request. Previously, the Debtors filed copies of such
evidence for the third quarter of 1996 with the US Trustee.
Please see the Status of Post Petition Taxes attached hereto for the
month's activity.
2. The Debtors have 63 bank accounts. In order to minimize costs to the
estate, the Debtors have included a GAAP basis Statement of Cash Flows in
the Monthly Operating Report. The Statement of Cash Flows replaces the
listing of cash receipts and disbursements, copies of the bank statements,
and bank account reconciliations.
Page 2 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
For the month ended October 31, 1997
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
See Statement of Operations for reporting period attached.
Page 3 of 18
<PAGE>
HEADNOTES:
These financial statements have not been prepared in accordance with GAAP
because Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-lived Assets and for Long-lived Assets, to be Disposed
of" ("SFAS 121") has not been applied. Upon the application of SFAS 121, the
Company expects to be required to write down the carrying value of its
long-lived assets to their fair value. The Company believes the amount of the
write-down will be material; however, it is not possible at this time to
determine such amount. There may also be adjustments to certain other
accounts as a result of the Debtors' filing for protection under Chapter 11
of the US Bankruptcy Code on January 30, 1997.
(1) Operating expense and EBITDA for September 1997 includes the favorable
impact of a $2.1 million reversal of previously recorded 1997 telephone
expense accruals.
(2) Depreciation expense for October 1997 includes the unfavorable impact of
a $2.5 million adjustment to pager depreciation expense, effective October 1,
1997, for the initial impact of the Company shortening the depreciable life
of its pagers from four to three years to better reflect estimated useful
lives. The adjustment results from additional depreciation expense taken to
reduce estimated useful lives.
MobileMedia Corporation and Subsidiaries
Consolidated Statements of Operations
For the Months Ended October 31, 1997, September 30, 1997 and August 31, 1997
( Unaudited )
( in thousands )
OCTOBER SEPTEMBER AUGUST
1997 1997 1997
--------- --------- ---------
Paging Revenues
Service, Rents & Maintenance $ 38,697 $ 39,635 $ 40,387
Equipment Sales
Product Sales 2,774 2,743 3,388
Cost of Products Sold 2,811 2,731 3,512
--------- --------- ---------
Equipment Margin (37) 12 (124)
Net Revenue 38,660 39,647 40,262
Operating Expense
Service, Rents & Maintenance 11,119 10,981 12,165
Selling 5,366 5,187 5,409
General & Administrative 15,354 14,608 14,560
--------- --------- ---------
Operating Expense Before Depr. & Amort. 31,839 30,776(1) 32,134
EBITDA Before Reorganization Costs 6,821 8,871(1) 8,128
Reorganization Costs 1,355 1,522 1,320
--------- --------- ---------
EBITDA after Reorganization Costs 5,466 7,350(1) 6,808
Depreciation 11,162(2) 8,617 8,761
Amortization 9,244 9,245 9,245
--------- --------- ---------
Total Depreciation and Amortization 20,406 17,862 18,007
Operating Loss (14,940) (10,513) (11,199)
Interest Expense 5,359 5,219 5,379
Other Expense 0 (0) (2)
--------- --------- ---------
Net Loss ($20,299) ($15,732) ($16,576)
========= ========= =========
See Accompanying Notes.
Page 4 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED BALANCE SHEET
For the month ended October 31, 1997
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
See balance sheet attached.
Page 5 of 18
<PAGE>
HEADNOTES:
These financial statements have not been prepared in accordance with GAAP
because Statement of Financial Accounting Standards No.121, "Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets, to be Disposed of"
("SFAS 121") has not been applied. Upon the application of SFAS 121, the Company
expects to be required to write down the carrying value of its long-lived assets
to their fair value. The Company believes the amount of the write-down will be
material; however, it is not possible at this time to determine such amount.
There may also be adjustments to certain other accounts as a result of the
Debtors' filing for protection under Chapter 11 of the US Bankruptcy Code on
January 30, 1997.
MobileMedia Corporation and Subsidiaries
Consolidated Balance Sheets
As of October 31, 1997, September 30, 1997 and August 31, 1997
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
OCTOBER SEPTEMBER AUGUST
1997 1997 1997
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash $ 8,866 $ 8,388 $ 4,157
Accounts Receivable, Net 48,651 58,001 61,161
Inventory 2,854 4,143 4,658
Prepaid Expenses 1,104 1,150 1,217
Other Current Assets 2,766 2,748 2,778
------------ ------------ ------------
Total Current Assets 64,242 74,431 73,971
NONCURRENT ASSETS:
Property and Equipment, Net 273,038 279,280 286,188
Deferred Financing Fees, Net 24,047 24,600 25,154
Investment In Net Assets Of Equity Affiliate 1,974 1,911 1,949
Intangible Assets, Net 1,026,126 1,035,335 1,045,337
Other Assets 545 750 792
------------ ------------ ------------
TOTAL NONCURRENT ASSETS 1,325,730 1,341,876 1,359,420
TOTAL ASSETS $ 1,389,972 $ 1,416,307 $ 1,433,390
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES NOT SUBJECT TO COMPROMISE:
DIP Credit Facility $ 12,000 $ 17,000 $ 17,000
Accrued Reorganization Costs 4,496 4,702 5,382
Accrued Wages, Benefits and Payroll Taxes 11,111 13,755 12,319
Accounts Payable--Post Petition 4,265 4,155 5,433
Accrued Interest (Chase & DIP Facilities ) 4,542 4,396 4,595
Accrued Expenses and Other Current Liabilities 43,817 41,633 43,427
Advance Billings and Customer Deposits 35,529 35,803 36,210
------------ ------------ ------------
TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE 115,759 121,444 124,366
LIABILITIES SUBJECT TO COMPROMISE:
Accrued Wages, Benefits and Payroll Taxes 3,093 3,093 3,093
Chase Credit Facility 649,000 649,000 649,000
Notes Payable--10 1/2% 174,125 174,125 174,125
Notes Payable--9 3/8% 250,000 250,000 250,000
Notes Payable--Yampol 986 986 986
Notes Payable--Dial Page 12 1/4% 1,570 1,570 1,570
Accrued Interest On Notes Payable 20,719 20,735 20,751
Accounts Payable- Pre Petition 18,226 17,333 17,179
Accrued Expenses and Other Current Liabilities--Pre Petition 13,209 14,400 12,929
Other Liabilities 4,896 4,934 4,973
------------ ------------ ------------
TOTAL LIABILITIES SUBJECT TO COMPROMISE 1,135,824 1,136,176 1,134,606
DEFERRED TAX LIABILITY 72,097 72,097 72,097
STOCKHOLDERS' EQUITY
Class A Common Stock 39 39 39
Class B Common Stock 2 2 2
Additional Paid-In Capital 671,459 671,459 671,459
Accumulated Deficit--Pre Petition (437,127) (437,127) (437,127)
Accumulated Deficit--Post Petition (161,960) (141,661) (125,929)
------------ ------------ ------------
Total Stockholders' Equity 72,414 92,713 108,445
Less:
Treasury Stock (6,123) (6,123) (6,123)
------------ ------------ ------------
Total Stockholders' Equity 66,291 86,590 102,322
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,389,972 $ 1,416,307 $ 1,433,390
============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES
Page 6 of 18
<PAGE>
Footnotes to the Financial Statements:
1. These financial statements have not been prepared in accordance with
GAAP because Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-lived Assets and for Long-lived
Assets, to be Disposed Of" ("SFAS 121") has not been applied. Upon the
application of SFAS 121, the Company expects to be required to write down
the carrying value of its long-lived assets to their fair value. The
Company believes the amount of the write-down will be material; however, it
is not possible at this time to determine such amount. There may also be
adjustments to certain other accounts as a result of the Debtors' filing
for protection under Chapter 11 of the US Bankruptcy Code on January 30,
1997.
In March 1995, the Financial Accounting Standards Board issued SFAS 121,
which is effective for financial statements for fiscal years beginning
after December 15, 1995. Under certain circumstances, SFAS 121 requires
companies to write down the carrying value of long-lived assets recorded in
the financial statements to the fair value of such assets. A significant
amount of the assets of the Company, which were acquired as a result of the
acquisitions of businesses, including the Dial Page and MobileComm
acquisitions, were recorded in accordance with principles of purchase
accounting at acquisition prices and constitute long-lived assets. The
Company has determined, and its independent auditors have concurred, that
SFAS 121 is applicable to the Company, and therefore the Company expects to
be required to write down the carrying value of its long-lived assets to
their fair value. The Company believes the amount of the write down will
be material: however, it is not possible at this time to determine such
amount. Since the Company cannot comply with SFAS 121 at this time, it is
unable to issue audited financial statements in compliance with generally
accepted accounting principles. Consequently, the Company will not file
its Report on Form 10-K or its other periodic reports under the Securities
Exchange Act of 1934, as amended.
Page 7 of 18
<PAGE>
Footnotes to the Financial Statements (continued):
2. On January 30, 1997 (the "Filing Date"), MobileMedia Corporation (the
"Company"), MobileMedia Communications, Inc. ("MobileMedia Communications")
and all seventeen of MobileMedia Communications' subsidiaries (collectively
with the Company and MobileMedia Communications, the "Debtors"), filed for
protection under Chapter 11 of title 11 of the United States Code (the
"Bankruptcy Code"). The Debtors are operating as debtors-in-possession and
are subject to the jurisdiction of the United States Bankruptcy Court for
the District of Delaware (the "Bankruptcy Court").
The Bankruptcy Court has authorized the debtors to pay certain
pre-petition creditors. These permitted pre-petition payments
include: (i) employee salary and wages; (ii) certain employee
benefits and travel expenses; (iii) certain amounts owing to
essential vendors; (iv) trust fund type sales and use taxes; (v)
trust fund payroll taxes; (vi) customer refunds; and (vii) customer
rewards.
3. Since the Filing Date, the Debtors have continued to manage
their business as debtors-in-possession under sections 1107 and
1108 of the Bankruptcy Code. During the pendency of the Chapter 11
cases, the Bankruptcy Court has jurisdiction over the assets and
affairs of the Debtors, and their continued operations are subject
to the Bankruptcy Court's protection and supervision. The Debtors
have sought, obtained, and are in the process of applying for,
various orders from the Bankruptcy Court intended to stabilize and
reorganize their business and minimize any disruption caused by the
Chapter 11 cases.
4. Operating expense and EBITDA for September 1997 include the
favorable impact of a $2.1 million reversal of previously recorded
1997 telephone expense accruals.
5. Depreciation expense for October 1997 includes the unfavorable
impact of a $2.5 million adjustment to pager depreciation expense,
effective October 1, 1997, for the initial impact of the Company
shortening the depreciable life of its pagers from four to three
years to better reflect estimated useful lives. The adjustment
results from additional depreciation expense taken to reduce
estimated useful lives.
6. During the month of February 1997, the Debtors drew down $45
million of borrowings under the debtor-in-possession financing
facility (the "DIP facility") with The Chase Manhattan Bank, as
agent for the lenders thereunder (the "DIP Lenders"). During the
months of March and April 1997, the Debtors repaid $25 million and
$5 million, respectively, of borrowings under the DIP facility.
During the month of August, the Debtors drew down an additional $2
million and during the month of October 1997, the Debtors repaid $5
million of borrowings under the DIP facility.
7. The Company is one of the largest paging companies in the U.S.,
with approximately 3.6 million system reported units in service at
October 31, 1997, and offers local, regional and national paging
services to its subscribers. The consolidated financial statements
include the accounts of the Company and its wholly-owned
subsidiaries. The Company's business is
Page 8 of 18
<PAGE>
Footnotes to the Financial Statements (continued):
conducted primarily through the Company's principal operating
subsidiary, MobileMedia Communications, and its subsidiaries. The
Company markets its services primarily under the "MobileComm" brand
name. All significant intercompany accounts and transactions have
been eliminated.
8. As previously announced in its September 27, 1996 and October
21, 1996 releases, the Company discovered misrepresentations and
other violations which occurred during the licensing process for as
many as 400 to 500, or approximately 6% to 7%, of its approximately
8,000 local transmission one-way paging stations. The Company
caused an investigation to be conducted by its outside counsel, and
a comprehensive report regarding these matters was provided to the
Federal Communications Commission (the "FCC") in the fall of 1996.
In cooperation with the FCC, outside counsel's investigation was
expanded to examine all of the Company's paging licenses, and the
results of that investigation were submitted to the FCC on November
8, 1996. As part of the cooperative process, the Company also
proposed to the FCC that a Consent Order be entered which would
result, among other things, in the return of certain local paging
authorizations then held by the Company, the dismissal of certain
pending applications for paging authorizations, and the voluntary
acceptance of a substantial monetary forfeiture.
On January 13, 1997, the FCC issued a Public Notice relating to the
status of certain FCC authorizations held by the Company. Pursuant
to the Public Notice, the FCC announced that it had (i)
automatically terminated approximately 185 authorizations for
paging facilities that were not constructed by the expiration date
of their construction permits and remained unconstructed, (ii)
dismissed approximately 94 applications for fill-in sites around
existing paging stations (which had been filed under the so-called
"40-mile rule") as defective because they were predicated upon
unconstructed facilities and (iii) automatically terminated
approximately 99 other authorizations for paging facilities that
were constructed after the expiration date of their construction
permits. With respect to the approximately 99 authorizations where
the underlying station was untimely constructed, the FCC granted
the Company interim operating authority subject to further action
by the FCC.
On April 8, 1997, the FCC adopted an order commencing an
administrative hearing into the qualification of the Company to
remain a licensee. The order directed an Administrative Law Judge
to take evidence and develop a full factual record on directed
issues concerning the Company's filing of false forms and
applications. The Company was permitted to operate its licensed
facilities and provide service to the public during the pendency of
the hearing.
On June 6, 1997, the FCC issued an order staying the hearing
proceeding for ten months in order to allow the Company to develop
and consummate a plan of reorganization that provides for a change
of control of the Company and a permissible transfer of the
Company's
Page 9 of 18
<PAGE>
Footnotes to the Financial Statements (continued):
FCC licenses. The order, which is based on an FCC doctrine known as
Second Thursday, provides that if there is a change of control that
meets the conditions of Second Thursday, the Company's FCC issues
will be resolved by the transfer of the Company's FCC licenses to
the new owners of the Company and the hearing will not proceed.
The Company believes that a reorganization plan that provides for
either a conversion of certain existing debt to equity, in which
case existing MobileMedia shares will be substantially diluted or
eliminated, or a sale of the Company will result in a change of
control. There can be no assurance that the Company will be
successful in consummating a plan of reorganization meeting the
requirements of the order. In the event that the Company were
unable to do so, the Company would be required to proceed with the
hearing, which, if adversely determined, could result in the loss
of the Company's licenses or substantial monetary fines, or both.
Such an outcome would have a material adverse effect on the
Company's financial condition and results of operations.
Page 10 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONSOLIDATED STATEMENT OF CASH
RECEIPTS AND DISBURSEMENTS
For the month ended October 31, 1997
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
The Debtors have 63 bank accounts. In order to minimize costs to
the estate, the Debtors have included a GAAP basis Statement of
Cash Flows for the reporting period which is attached. The
Statement of Cash Flows replaces the listing of cash receipts and
disbursements, copies of the bank statements, and bank account
reconciliations.
Page 11 of 18
<PAGE>
HEADNOTES:
These financial statements have not been prepared in accordance with GAAP
because Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-lived Assets and for Long-lived Assets, to be Disposed
of" ("SFAS 121") has not been applied. Upon the application of SFAS 121, the
Company expects to be required to write down the carrying value of its
long-lived assets to their fair value. The Company believes the amount of the
write-down will be material; however, it is not possible at this time to
determine such amount. There may also be adjustments to certain other
accounts as a result of the Debtors' filing for protection under Chapter 11
of the US Bankruptcy Code on January 30, 1997.
MobileMedia Corporation and Subsidiaries
Consolidated Statements Of Cash Flows
For The Months Ended October 31, 1997, September 30, 1997 and August 31, 1997
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
OCTOBER SEPTEMBER AUGUST
1997 1997 1997
---------- --------- ----------
<S> <C> <C> <C>
Operating Activities
Net Loss ($20,299) ($15,731) ($16,575)
Adjustments To Reconcile Net Loss To Net Cash
Provided By (Used In) Operating Activities:
Depreciation And Amortization 20,406 17,862 18,007
Provision For Uncollectible Accounts And Returns 6,342 6,373 5,508
Undistributed Earnings Of Affiliate 63 38 75
Deferred Financings Fees, Net 554 554 554
Change In Operating Assets and Liabilities:
Accounts Receivable 3,008 (3,213) (6,606)
Inventory 1,289 515 737
Prepaid Expenses And Other Assets 71 139 131
Accounts Payable, Accrued Expenses and Other (1,036) (595) (1,386)
---------- --------- ----------
Net Cash Provided By (Used In) Operating Activities 10,398 5,941 445
Investing Activities
Construction And Capital Expenditures,
Including Net Change In Pager Assets (4,920) (1,709) (1,756)
---------- --------- ----------
Net Cash Used In Investing Activities (4,920) (1,709) (1,756)
Financing Activities
Borrowings (Repayments) of DIP Credit Facility (5,000) 0 2,000
---------- --------- ----------
Net Cash Provided By (Used In) Financing Activities (5,000) 0 2,000
Net Increase (Decrease) In Cash And Cash Equivalents 478 4,231 689
Cash And Cash Equivalents At Beginning Of Period 8,388 4,157 3,468
---------- --------- ----------
Cash And Cash Equivalents At End Of Period $ 8,866 $ 8,388 $ 4,157
========== ========= ==========
</TABLE>
SEE ACCOMPANYING NOTES
Page 12 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE--REGION 3
STATEMENT OF ACCOUNTS RECEIVABLE AGING AND
AGING OF POSTPETITION ACCOUNTS PAYABLE
For the month ended October 31, 1997
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
--------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
- --------------------------------------------------------------------------------
$ 22,446,440 0--30 days old
-------------- ---------------------------------------------------------
17,822,886 31--60 days old
-------------- ---------------------------------------------------------
10,662,039 61--90 days old
-------------- ---------------------------------------------------------
53,365,037 91+ days old
-------------- ---------------------------------------------------------
104,296,402 TOTAL TRADE ACCOUNTS RECEIVABLE
-------------- ---------------------------------------------------------
(57,307,271) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
-------------- ---------------------------------------------------------
46,989,131 TRADE ACCOUNTS RECEIVABLE (NET)
-------------- ---------------------------------------------------------
1,662,355 OTHER NON-TRADE RECEIVABLES
-------------- ---------------------------------------------------------
$ 48,651,486 ACCOUNTS RECEIVABLE, NET
-------------- ---------------------------------------------------------
- --------------------------------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
- --------------------------------------------------------------------------------
0-30 31-60 61-90 91+
DAYS DAYS DAYS DAYS TOTAL
- ----------------- -------------- ---------- -------- -------- ------------
ACCOUNTS PAYABLE $ 3,135,994 797,881 57,429 273,475 $ 4,264,778
- ----------------- -------------- ---------- -------- -------- ------------
Page 13 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE--REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
For the month ended October 31, 1997
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
STATUS OF POSTPETITION TAXES
- ------------------------------------------------------------------------------------
BEGINNING AMOUNT ENDING
TAX WITHHELD AMOUNT TAX DELINQUENT
LIABILITY OR ACCRUED PAID LIABILITY TAXES
==================== =========== ============= ============= =========== ===========
<S> <C> <C> <C> <C> <C>
FEDERAL
- ------------------------------------------------------------------------------------
WITHHOLDING $ 0 $ 1,844,756 $ 1,844,756 $ 0 $ 0
- -------------------- ----------- ------------- ------------- ----------- -----------
FICA-EMPLOYEE 0 918,134 918,134 0 0
- -------------------- ----------- ------------- ------------- ----------- -----------
FICA-EMPLOYER 213,636 1,934,180 2,147,816 0 0
- -------------------- ----------- ------------- ------------- ----------- -----------
UNEMPLOYMENT 2,947 21,003 23,950 0 0
- -------------------- ----------- ------------- ------------- ----------- -----------
INCOME 0 0 0 0 0
- -------------------- ----------- ------------- ------------- ----------- -----------
TOTAL FEDERAL TAXES 216,583 4,718,073 4,934,656 0 0
- -------------------- ----------- ------------- ------------- ----------- -----------
STATE AND LOCAL
- ------------------------------------------------------------------------------------
WITHHOLDING 0 304,964 304,964 0 0
- -------------------- ----------- ------------- ------------- ----------- -----------
SALES 1,116,421 2,062,654 2,265,530 913,545 0
- -------------------- ----------- ------------- ------------- ----------- -----------
UNEMPLOYMENT 13,436 92,595 106,031 0 0
- -------------------- ----------- ------------- ------------- ----------- -----------
REAL PROPERTY 2,431,405 317,057 20 2,748,442 0
- -------------------- ----------- ------------- ------------- ----------- -----------
OTHER 539,454 672,664 433,370 778,748 0
- -------------------- ----------- ------------- ------------- ----------- -----------
TOTAL STATE AND LOCAL 4,100,716 3,449,934 3,109,915 4,440,735 0
- -------------------- ----------- ------------- ------------- ----------- -----------
TOTAL TAXES 4,317,299 8,168,007 8,044,571 4,440,735 0
- ------------------------------------------------------------------------------------
</TABLE>
Page 14 of 18
<PAGE>
PAYMENTS TO INSIDERS AND PROFESSIONALS
For the month ended October 31, 1997
INSIDERS
<TABLE>
<CAPTION>
SALARY/BONUS/
AUTO REIMBURSABLE
PAYEE NAME POSITION ALLOWANCE EXPENSES TOTAL
- -------------------------------------- -------------------------------------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Alvarez & Marsal Inc. -Joseph A. Bondi Chairman -Restructuring $ 54,167 $ 8,603 $ 62,769
Boykin, Roberta Assistant Corporate Counsel 13,031 -- 13,031
Burdette, H. Stephen Senior VP Corporate Development
and Senior VP Operations 23,300 3,240 26,540
Cross, Andrew Executive VP Sales and Marketing 26,250 5,456 31,706
Grawert, Ron Chief Executive Officer 46,154 8,721 54,875
Gray, Patricia Secretary/Acting General Counsel 19,627 1,058 20,685
Gross, Steven Senior VP Strategic Planning 21,827 4,387 26,214
Hilson, Debra Assistant Secretary 6,969 0 6,969
Hughes, Curtis Assistant VP Mgmt. Information Systems 14,423 2,780 17,203
Pascucci, James Assistant Treasurer 11,319 9,341 20,660
Pittsman, Santo Senior VP of Administration and
Business Planning 23,769 1,941 25,710
Shea, Kevin Treasurer 16,167 0 16,167
Witsaman, Mark Senior VP and Chief Technology Officer 22,904 5,386 28,290
TOTAL PAYMENTS TO INSIDERS $350,819
</TABLE>
Page 15 of 18
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS (Continued)
For the month ended October 31, 1997
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
PROFESSIONALS
- --------------------------------------------------------------------------------------
HOLDBACK
AND
DATE OF INVOICE
COURT INVOICES INVOICES BALANCES
NAME AND RELATIONSHIP APPROVAL RECEIVED(1) PAID DUE
- -------------------------------------- ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
1. Ernst & Young--Auditor, Tax and
Financial Consultants to Debtor 1/30/97 $ 409,660 $ -- $ 540,948
- -------------------------------------- ---------- ------------ ------------ ----------
2. Latham & Watkins - Counsel to
Debtor 1/30/97 13,420 32,599 52,415
- -------------------------------------- ---------- ------------ ------------ ----------
3. Alvarez & Marsal Inc.--
Restructuring Consultant to
Debtor (2) 1/30/97 318,629 229,014 396,738
- -------------------------------------- ---------- ------------ ------------ ----------
4. Sidley & Austin - Bankruptcy
Counsel to Debtor 1/30/97 138,891 -- 321,027
- -------------------------------------- ---------- ------------ ------------ ----------
5. Young, Conway, Stargate &
Taylor--Delaware Counsel to Debtor 1/30/97 -- 8,432 4,184
- -------------------------------------- ---------- ------------ ------------ ----------
6. Wiley, Rein & Fielding - FCC
Counsel to Debtor 1/30/97 53,111 -- 181,634
- -------------------------------------- ---------- ------------ ------------ ----------
7. Koteen & Naftalin--FCC Counsel
to Debtor 6/11/97 217 565 4,124
- -------------------------------------- ---------- ------------ ------------ ----------
8. Houlihan, Lokey, Howard &
Zukin--Advisors to the Creditors'
Committee 6/04/97 -- 66,278 159,577
- -------------------------------------- ---------- ------------ ------------ ----------
9. Jones, Day, Reavis &
Pogue--Counsel to the Creditors'
Committee 4/03/97 9,695 -- 13,041
- -------------------------------------- ---------- ------------ ------------ ----------
10. Morris, Nichols, Arsht &
Tunnell--Delaware Counsel to the
Creditors' Committee 4/03/97 -- 960 979
- -------------------------------------- ---------- ------------ ------------ ----------
11. Paul, Weiss, Rifkind, Wharton
& Garrison--FCC Counsel to the
Creditors' Committee 4/25/97 3,150 1,551 23,391
- -------------------------------------- ---------- ------------ ------------ ----------
12. The Blackstone Group LP
--Financial Advisors to Debtor 7/10/97 125,000 100,000 200,000
- ------------------------------------------------- ------------ ------------ ----------
TOTAL $1,071,774 $439,398 $1,898,057
- --------------------------------------------------------------------------------------
</TABLE>
(1) Excludes invoices for fees and expenses through October 31, 1997 that were
received by the Debtors subsequent to October 31, 1997.
(2) Includes fees and expenses for David R. Gibson, Senior Vice President and
Chief Financial Officer (effective June 24, 1997).
Page 16 of 18
<PAGE>
ADEQUATE PROTECTION PAYMENTS
For the month ended October 31, 1997
<TABLE>
<CAPTION>
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
- -------------------------------------------------------------------- ------------- ------------ -------------------
<S> <C> <C> <C>
The Chase Manhattan Bank -(Interest)................................ $ 4,653,174 $ 4,653,174* $ 0
</TABLE>
- ------------------------
* Payment made on 11/1/97.
<TABLE>
<CAPTION>
QUESTIONNAIRE
FOR THE MONTH ENDED OCTOBER 31, 1997 YES NO
- -------------------------------------------------------- --- ---
<C> <S> <C>
1. Have any assets been sold or transferred outside the
normal course of business this reporting period? No
2. Have any funds been disbursed from any account other
than a debtor in possession account? No
3. Are any postpetition receivables (accounts, notes, or
loans) due from related parties? No
4. Have any payments been made of prepetition
liabilities this reporting period? Yes
5. Have any postpetition loans been received by the
debtor from any party? Yes
6. Are any postpetition payroll taxes past due? No
7. Are any postpetition state or federal income taxes
past due? No
8. Are any postpetition real estate taxes past due? No
9. Are any postpetition taxes past due? No
10. Are any amounts owed to postpetition creditors past
due? No
11. Have any prepetition taxes been paid during the
reporting period? Yes
12. Are any wage payments past due? No
</TABLE>
If the answer to any of the above questions is "YES", provide a detailed
explanation of each item.
Item 4 & 11. The Court has authorized the Debtors to pay certain pre-petition
creditors. These permitted pre-petition payments include (i)
employee salary and wages; (ii) certain employee benefits and
travel expenses; (iii) certain amounts owing to essential vendors;
(iv) trust fund type sales and use taxes; (v) trust fund payroll
taxes; (vi) customer refunds; and (vii) customer rewards.
Item 5. During the month of February 1997, the Debtors drew down
$45 million of borrowings under the DIP facility with The Chase
Manhattan Bank, as agent for the lenders thereunder. During the
months of March and April 1997, the Debtors repaid $25 million and
$5 million, respectively, of borrowings under the DIP facility.
The Debtors drew down an additional $2 million under the DIP
facility during the month of August and repaid $5 million of
borrowings under the DIP facility during the month of
October, 1997.
Page 17 of 18
<PAGE>
INSURANCE
For the month ended October 31, 1997
There were no changes in insurance coverage for the reporting period.
PERSONNEL
For the month ended October 31, 1997
<TABLE>
<CAPTION>
FULL PART
TIME TIME
----- ----
<S> <C> <C>
1. Total number of employees at beginning of period 3,406 57
2. Number of employees hired during the period 82 5
3. Number of employees terminated or resigned during the period 49 11
4. Total number of employees on payroll at end of period 3,439 51
</TABLE>
Page 18 of 18
