================================================================================
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): September 2, 1998
MOBILEMEDIA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-26320 22-3253006
(State or other (Commission File No.) (IRS Employer
jurisdication Identification No.)
of incorporation)
Fort Lee Executive Park, One Executive Drive, Suite 500,
Fort Lee, New Jersey 07024
(Address of principal executive offices)
(Zip Code)
(201) 224-9200
(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 August 31, 1998, MobileMedia Corporation (the "Company"), MobileMedia
Communications, Inc. ("MobileMedia Communications") and all of the subsidiaries
of MobileMedia Communications (collectively, the "Companies") filed with the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court") their monthly operating report for the month ended July 31, 1998 which
is attached hereto as Exhibit 99.1.
Item 6. Resignations of Registrant's Directors.
Not Applicable.
Item 7. Financial Statements and Exhibits.
Not Applicable.
Item 8. Change in Fiscal Year.
Not Applicable.
2
<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.
Date: September 2, 1998 MOBILEMEDIA CORPORATION
By: /s/ David R. Gibson
--------------------------------
David R. Gibson
Senior Vice President and
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
Exhibit 99.1--Monthly Operating Report
4
OFFICE OF THE U.S. TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
For the month ended July 31, 1998
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
Document Previously Explanation
Required Attachments: 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 ( ) (X) ( )
prepared by accountant
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:
Vice President-Controller
- --------------------------------------- ---------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
Vito Panzella August 31, 1998
- --------------------------------------- ---------------------------------------
PRINTED NAME OF RESPONSIBLE PARTY DATE
Page 1 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
ATTACHMENT
For the month ended July 31, 1998
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 49 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 July 31, 1998
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 are unaudited and accordingly, there could be year
end audit adjustments and other adjustments as a result of the Debtors' filing
for protection under Chapter 11 of the US Bankruptcy Code on January 30, 1997.
(1) Since the filing of the Monthly Operating Reports for the months ended June
30, 1998 and May 31, 1998, the Debtors recorded an adjustment to reduce
previously reported Amortization Expense as a result of a write-down of the
Debtors' intangible assets, effective December 31, 1996, based upon the Debtors'
determination that an impairment of long-lived assets existed pursuant to
Statement of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of". In
1997, the Debtors determined that an impairment likely existed with respect to
their long-lived assets as of December 31, 1996. In July 1998, in conjunction
with the completion of their 1996 and 1997 year end audits, the Debtors
determined that intangible assets with a net book value of approximately $1.1
billion were impaired and wrote them down by approximately $792.5 million to
their estimated fair value of approximately $307.5 million. Fair value was
determined through the application of generally accepted valuation methods to
the Debtors' projected cash flows.
MobileMedia Corporation and Subsidiaries
Consolidated Statements of Operations
For the Months Ended July 31, 1998, June 30, 1998 and May 31, 1998
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
July June May
1998 1998 1998
-------- -------- --------
<S> <C> <C> <C>
Paging Revenues
Service, Rents & Maintenance $35,204 $34,557 $35,758
Equipment Sales
Product Sales 2,592 2,142 2,208
Cost of Products Sold 2,076 1,604 1,470
------- ------- -------
Equipment Margin 515 537 738
Net Revenue 35,719 35,094 36,496
Operating Expense
Service, Rents & Maintenance 8,926 9,161 8,308
Selling 5,040 4,788 5,378
General & Administrative 11,233 10,620 10,936
------- ------- -------
Operating Expense Before Depr.
& Amort. 25,198 24,569 24,622
EBITDA Before Reorganization Costs 10,520 10,525 11,873
Reorganization Costs 1,514 1,495 1,456
Restructuring Costs 0 248 0
------- ------- -------
EBITDA after Reorganization Costs 9,007 8,782 10,417
Depreciation 6,724 6,822 7,462
Amortization 2,484 2,484(1) 2,487(1)
------- ------- -------
Total Depreciation
and Amortization 9,208 9,306 9,949
Operating Income(Loss) (201) (524) 468
Interest Expense 4,793 4,868 4,868
Other (Income)Expense 9 109 (11)
Taxes 0 0 0
------- ------- -------
Net Loss ($5,003) ($5,501) ($4,389)
======= ======= =======
</TABLE>
See Accompanying Notes.
Page 4 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED BALANCE SHEET
For the month ended July 31, 1998
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
- --------------------------------------------------------------------------------
See balance sheet attached.
Page 5 of 18
<PAGE>
HEADNOTES:
- ----------
These financial statements are unaudited and accordingly, there could be year
end audit adjustments and other adjustments as a result of the Debtors' filing
for protection under Chapter 11 of the US Bankruptcy Code on January 30, 1997.
(1) Since the filing of the Monthly Operating Report for the month ended May 31,
1998, the Company increased its May Accounts Receivable, Net by $3.4 million.
This adjustment resulted from reducing the allowance for doubtful accounts at
December 31, 1997.
(2) Since the filing of the Monthly Operating Reports for the months ended June
30, 1998 and May 31, 1998, the Debtors recorded adjustments to their Intangible
Assets, Net, Deferred Tax Liability, Accumulated Deficit-Pre Petition and
Accumulated Deficit-Post Petition as a result of a write-down of the Debtors'
intangible assets, effective December 31, 1996, based upon the Debtors'
determination that an impairment of long-lived assets existed pursuant to
Statement of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of". In
1997, the Debtors determined that an impairment likely existed with respect to
their long-lived assets as of December 31, 1996. In July 1998, in conjunction
with the completion of their 1996 and 1997 year end audits, the Debtors
determined that intangible assets with a net book value of approximately $1.1
billion were impaired and wrote them down by approximately $792.5 million to
their estimated fair value of approximately $307.5 million. Fair value was
determined through the application of generally accepted valuation methods to
the Debtors' projected cash flows.
MobileMedia Corporation and Subsidiaries
Consolidated Balance Sheets
As of July 31, 1998, June 30, 1998 and May 31, 1998
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
July June May
1998 1998 1998
----------- ----------- -----------
<S> <C> <C> <C>
Assets:
Current Assets:
Cash $ 10,811 $ 11,559 $ 10,779
Accounts Receivable, Net 37,580 39,890 44,778(1)
Inventory 736 916 621
Prepaid Expenses 5,742 5,837 4,449
Other Current Assets 5,113 5,117 5,161
----------- ----------- -----------
Total Current Assets 59,983 63,319 65,788
Noncurrent Assets:
Property and Equipment, Net 228,207 227,699 231,556
Deferred Financing Fees, Net 20,813 21,117 21,421
Investment In Net Assets Of Equity Affiliate 1,734 1,734 1,766
Intangible Assets, Net 278,206 280,666(2) 283,013(2)
Other Assets 353 378 403
----------- ----------- -----------
Total Noncurrent Assets 529,314 531,593 538,158
Total Assets $ 589,297 $ 594,913 $ 603,946
=========== =========== ===========
Liabilities and Stockholders' Equity:
Liabilities Not Subject to Compromise:
DIP Credit Facility $ 0 $ 0 $ 0
Accrued Reorganization Costs 5,275 5,041 5,454
Accrued Wages, Benefits and Payroll Taxes 9,049 7,614 6,859
Accounts Payable - Post Petition 3,966 3,815 2,691
Accrued Interest 5,455 5,435 5,439
Accrued Expenses and Other Current Liabilities 33,469 32,735 34,644
Advance Billings and Customer Deposits 32,659 32,446 32,851
----------- ----------- -----------
Total Liabilities Not Subject To Compromise 89,873 87,086 87,938
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 20,423 20,423 20,423
Accounts Payable- Pre Petition 12,731 16,124 18,794
Accrued Expenses and Other Current Liabilities - Pre Petition 21,515 21,515 21,515
Other Liabilities 4,737 4,744 4,755
----------- ----------- -----------
Total Liabilities Subject To Compromise 1,138,180 1,141,581 1,144,261
Deferred Tax Liability 2,655 2,655(2) 2,655(2)
Stockholders' Equity
Class A Common Stock 50 50 50
Class B Common Stock 2 2 2
Additional Paid-In Capital 689,148 689,148 689,148
Accumulated Deficit - Pre Petition (1,171,108) (1,171,108)(2) (1,171,108)(2)
Accumulated Deficit - Post Petition (153,382) (148,379)(2) (142,878)(2)
----------- ----------- -----------
Total Stockholders' Equity (635,289) (630,286) (624,785)
Less:
Treasury Stock (6,123) (6,123) (6,123)
----------- ----------- -----------
Total Stockholders' Equity (641,412) (636,409) (630,908)
Total Liabilities and Stockholders' Equity $ 589,297 $ 594,913 $ 603,946
=========== =========== ===========
</TABLE>
See Accompanying Notes
Page 6 of 18
<PAGE>
Footnotes to the Financial Statements:
1. These financial statements are unaudited and accordingly, there could be
year end audit adjustments and other adjustments as a result of the
Debtors' filing for protection under Chapter 11 of the US Bankruptcy Code
on January 30, 1997.
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) property taxes; (vii)
customer refunds; and (viii) customer rewards.
On January 27, 1998, the Company filed its Joint Plan of Reorganization
with the Bankruptcy Court. On February 2, 1998, the Company filed its
Disclosure Statement with the Bankruptcy Court. The Debtors, the Steering
Committee for the Debtors' secured creditors and the Official Committee of
Unsecured Creditors have agreed to adjourn a hearing concerning the
adequacy of information contained in the Disclosure Statement that had been
scheduled for April 14, 1998.
On August 20, 1998, Arch Communications Group, Inc. ("Arch") and the
Debtors announced a definitive merger agreement for Arch to acquire the
Debtors. Under the terms of the agreement, Arch will acquire the Debtors
for a combination of cash, the assumption of certain liabilities, and the
issuance of Arch common stock and warrants to acquire Arch common stock.
The transaction will be implemented through a plan of reorganization that
the Debtors filed with the Bankruptcy Court on August 20, 1998 ("the
Amended Plan"). A Disclosure Statement related to the Amended Plan was
filed with the Bankruptcy Court on August 25, 1998. A hearing concerning
the adequacy of information contained in the Disclosure Statement has been
scheduled for September 24, 1998.
Page 7 of 18
<PAGE>
Footnotes to the Financial Statements (continued):
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. Restructuring costs of $0.2 million for the month ended June 30, 1998
include severance expenses primarily related to the relocation of the
Company's retail activation center.
5. Since the filing of the Monthly Operating Report for the month ended May
31, 1998, the Company increased its May 31, 1998 Accounts Receivable, Net
by $3.4 million. This adjustment resulted from reducing the allowance for
doubtful accounts at December 31, 1997.
6. Since the filing of the Operating Reports for the months ended June 30,
1998 and May 31, 1998, the Debtors recorded adjustments to previously
reported Amortization Expense, Intangible Assets, Net, Deferred Tax
Liability, Accumulated Deficit-Pre Petition and Accumulated Deficit-Post
Petition as a result of a write-down of the Debtors' intangible assets,
effective December 31, 1996, based upon the Debtor's determination of the
level of impairment of long-lived assets, pursuant to Statement of
Financial Accounting Standards No. 121 "Accounting for the Impairment of
Long-lived Assets and for Long-lived Assets to be Disposed of".
In 1997, the Debtors determined that an impairment likely existed with
respect to their long-lived assets as of December 31, 1996. In July 1998,
in conjunction with the completion of their 1996 and 1997 year end audits,
the Debtor's determined that intangible assets with a net book value of
approximately $1.1 billion were impaired and wrote them down by
approximately $792.5 million to their estimated fair value of $307.5
million. Fair value was determined through the application of generally
accepted valuation methods to the Debtor's projected cash flows.
7. The Company is one of the largest paging companies in the U.S., with
approximately 3.2 million units in service at July 31, 1998, 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 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.
Page 8 of 18
<PAGE>
Footnotes to the Financial Statements (continued):
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 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 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 FCC licenses. The order was
originally granted for ten months and was extended by the FCC through
October 6, 1998. 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,
Page 9 of 18
<PAGE>
Footnotes to the Financial Statements (continued):
or a sale of the Company, as reflected in the Amended Plan, will result in
a change of control. In the event that the Company were unable to
consummate the Amended Plan or any other plan of reorganization that
satisfies the conditions of Second Thursday, 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 July 31, 1998
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
- --------------------------------------------------------------------------------
The Debtors have 49 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 are unaudited and accordingly, there could be year
end audit adjustments and other adjustments as a result of the Debtors' filing
for protection under Chapter 11 of the US Bankruptcy Code on January 30, 1997.
(1) Since the filing of the Monthly Operating Reports for the months ended June
30, 1998 and May 31, 1998, the Debtors recorded an adjustment to reduce
previously reported Amortization Expense as a result of a write-down of the
Debtors' intangible assets, effective December 31, 1996, based upon the Debtors'
determination that an impairment of long-lived assets existed pursuant to
Statement of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of". In
1997, the Debtors determined that an impairment likely existed with respect to
their long-lived assets as of December 31, 1996. In July 1998, in conjunction
with the completion of their 1996 and 1997 year end audits, the Debtors
determined that intangible assets with a net book value of approximately $1.1
billion were impaired and wrote them down by approximately $792.5 million to
their estimated fair value of approximately $307.5 million. Fair value was
determined through the application of generally accepted valuation methods to
the Debtors' projected cash flows.
MobileMedia Corporation and Subsidiaries
Consolidated Statements Of Cash Flows
For The Months Ended July 31, 1998, June 30, 1998 and May 31, 1998
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
July 1998 June 1998 May 1998
--------- --------- --------
<S> <C> <C> <C>
Operating Activities
Net Loss ($5,003) ($5,501) ($4,389)
Adjustments To Reconcile Net Loss To Net Cash
Provided By (Used In) Operating Activities:
Depreciation And Amortization 9,208 9,306(1) 9,949(1)
Provision For Uncollectible Accounts And Returns 1,185 999 1,563
Undistributed Earnings Of Affiliate 0 32 0
Deferred Financings Fees, Net 304 304 304
Change In Operating Assets and Liabilities:
Accounts Receivable 1,125 3,889 (1,876)
Inventory 179 (294) (82)
Prepaid Expenses And Other Assets 99 (1,456) 1,869
Accounts Payable, Accrued Expenses and Other (613) (3,533) (3,643)
------- ------- -------
Net Cash Provided By (Used In) Operating Activities 6,484 3,745 3,696
Investing Activities
Construction And Capital Expenditures,
Including Net Change In Pager Assets (7,232) (2,964) (5,353)
------- ------- -------
Net Cash Used In Investing Activities (7,232) (2,964) (5,353)
Financing Activities
Borrowings (Repayments) of DIP Credit Facility 0 0 0
------- ------- -------
Net Cash Provided By (Used In) Financing Activities 0 0 0
Net Increase (Decrease) In Cash And Cash Equivalents (748) 781 (1,657)
Cash And Cash Equivalents At Beginning Of Period 11,559 10,779 12,435
------- ------- -------
Cash And Cash Equivalents At End Of Period $10,811 $11,559 $10,779
======= ======= =======
</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 July 31, 1998
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
- --------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
- --------------------------------------------------------------------------------
$23,765,956 0 - 30 days old
-----------------------------------------------------------------
12,563,817 31 - 60 days old
-----------------------------------------------------------------
5,348,290 61 - 90 days old
-----------------------------------------------------------------
13,394,720 91+ days old
-----------------------------------------------------------------
55,072,783 TOTAL TRADE ACCOUNTS RECEIVABLE
-----------------------------------------------------------------
(18,031,000) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
-----------------------------------------------------------------
37,041,783 TRADE ACCOUNTS RECEIVABLE (NET)
-----------------------------------------------------------------
538,027 OTHER NON-TRADE RECEIVABLES
-----------------------------------------------------------------
$37,579,810 ACCOUNTS RECEIVABLE, NET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
- --------------------------------------------------------------------------------
0-30 31-60 61-90 91+
Days Days Days Days Total
- --------------------------------------------------------------------------------
ACCOUNTS PAYABLE $3,733,745 232,180 0 0 $3,965,925
- --------------------------------------------------------------------------------
Page 13 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
For the month ended July 31, 1998
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 $1,264,187 $1,264,187 $ 0 $0
- --------------------------------------------------------------------------------
FICA-EMPLOYEE 0 639,176 639,176 0 0
- --------------------------------------------------------------------------------
FICA-EMPLOYER 60,094 1,375,934 1,276,463 159,565 0
- --------------------------------------------------------------------------------
UNEMPLOYMENT 394 4,301 3,756 939 0
- --------------------------------------------------------------------------------
INCOME 0 0 0 0 0
- --------------------------------------------------------------------------------
TOTAL FEDERAL TAXES 60,488 3,283,598 3,183,582 160,504 0
- --------------------------------------------------------------------------------
STATE AND LOCAL
- --------------------------------------------------------------------------------
WITHHOLDING 0 212,172 202,257 9,915 0
- --------------------------------------------------------------------------------
SALES 640,317 1,138,439 1,216,751 562,005 0
- --------------------------------------------------------------------------------
UNEMPLOYMENT 3,629 40,722 36,260 8,091 0
- --------------------------------------------------------------------------------
REAL PROPERTY 6,282,583 399,924 23,800 6,658,707 0
- --------------------------------------------------------------------------------
OTHER 1,023,811 911,409 600,053 1,335,167 0
- --------------------------------------------------------------------------------
TOTAL STATE AND LOCAL 7,950,340 2,702,666 2,079,121 8,573,885 0
- --------------------------------------------------------------------------------
TOTAL TAXES $8,010,828 $5,986,264 $5,262,703 $8,734,389 $0
- --------------------------------------------------------------------------------
</TABLE>
Page 14 of 18
<PAGE>
- --------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS
For the month ended July 31, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INSIDERS (1)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Salary/
Bonus/
Auto Reimbursable
Payee Name Position Allowance Expenses Total
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alvarez & Marsal Inc. - Chairman - $54,167 $1,814 $55,981
Joseph A. Bondi Restructuring
- --------------------------------------------------------------------------------
Burdette, H. Stephen Senior VP Corporate 15,000 0 15,000
Development and
Senior VP Operations
- --------------------------------------------------------------------------------
Grawert, Ron Chief Executive Officer 30,769 4,899 35,668
- --------------------------------------------------------------------------------
Gray, Patricia Secretary/VP and 13,846 759 14,605
General Counsel
- --------------------------------------------------------------------------------
Gross, Steven Executive VP Sales & 16,317 8,468 24,785
Marketing
- --------------------------------------------------------------------------------
Hilson, Debra Assistant Secretary 4,662 2,591 7,253
- --------------------------------------------------------------------------------
Hughes, Curtis VP Management 10,120 154 10,274
Information Systems
- --------------------------------------------------------------------------------
Pascucci, James Treasurer 8,273 938 9,211
- --------------------------------------------------------------------------------
Panzella, Vito VP / Controller 8,846 0 8,846
- --------------------------------------------------------------------------------
Witsaman, Mark Senior VP and Chief 15,269 4,618 19,887
Technology Officer
- --------------------------------------------------------------------------------
TOTAL PAYMENTS TO INSIDERS $201,510
- --------------------------------------------------------------------------------
</TABLE>
(1) Excludes 19 non-executive officers of subsidiaries who were paid salaries
and reimbursable expenses in the aggregate of $194,846.
Page 15 of 18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS (Continued)
For the month ended July 31, 1998
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
PROFESSIONALS
- ---------------------------------------------------------------------------------------------------------------------
Holdback
and
Date of Invoice
Name and Relationship Court Invoices Invoices Balances
Approval Received (1) Paid Due
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Ernst & Young - Auditor, Tax and Financial 1/30/97 $506,974 $ 409,092 $ 529,957
Consultants to Debtor
- ---------------------------------------------------------------------------------------------------------------------
2. Latham & Watkins - Counsel to Debtor 1/30/97 134,864 47,305 179,688
- ---------------------------------------------------------------------------------------------------------------------
3. Alvarez & Marsal Inc.- Restructuring 1/30/97 -- 313,271 337,305
Consultant to Debtor (2)
- ---------------------------------------------------------------------------------------------------------------------
4. Sidley & Austin - Bankruptcy Counsel to 1/30/97 -- 259,159 445,035
Debtor
- ---------------------------------------------------------------------------------------------------------------------
5. Young, Conway, Stargate & Taylor - Delaware 1/30/97 -- 23,066 19,438
Counsel to Debtor
- ---------------------------------------------------------------------------------------------------------------------
6. Wiley, Rein & Fielding - FCC Counsel to 1/30/97 54,606 28,166 114,826
Debtor
- ---------------------------------------------------------------------------------------------------------------------
7. Koteen & Naftalin - FCC Counsel to Debtor 6/11/97 -- -- 3,945
- ---------------------------------------------------------------------------------------------------------------------
8. Houlihan, Lokey, Howard & Zukin - Advisors 6/04/97 -- -- 75,000
to the Creditors' Committee
- ---------------------------------------------------------------------------------------------------------------------
9. Jones, Day, Reavis & Pogue - Counsel to the 4/03/97 51,513 -- 89,618
Creditors' Committee
- ---------------------------------------------------------------------------------------------------------------------
10. Morris, Nichols, Arsht & Tunnell - Delaware 4/03/97 -- 523 1,749
Counsel to the Creditors' Committee
- ---------------------------------------------------------------------------------------------------------------------
11. Paul, Weiss, Rifkind, Wharton & Garrison - 4/25/97 -- 1,754 1,312
FCC Counsel to the Creditors' Committee
- ---------------------------------------------------------------------------------------------------------------------
12. The Blackstone Group LP - Financial 7/10/97 148,091 200,000 348,091
Advisors to Debtor
- ---------------------------------------------------------------------------------------------------------------------
13. Gerry, Friend & Sapronov, LLP. - Counsel to 10/27/97 16,136 20,958 96,839
Debtor
- ---------------------------------------------------------------------------------------------------------------------
TOTAL $912,184 $1,303,294 $2,242,803
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes invoices for fees and expenses through July 31, 1998 that were
received by the Debtors subsequent to July 31, 1998.
(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>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
ADEQUATE PROTECTION PAYMENTS
For the month ended July 31, 1998
- ---------------------------------------------------------------------------------------------------------------------
SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Chase Manhattan Bank - (Interest) $4,636,278 $4,636,278* $ 0
- ---------------------------------------------------------------------------------------------------------------------
* Payment made on 8/1/98.
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
QUESTIONNAIRE
For the month ended July 31, 1998 YES NO
- ---------------------------------------------------------------------------------------------------------------------
1. Have any assets been sold or transferred outside the normal course of
business this reporting period? Yes
- ---------------------------------------------------------------------------------------------------------------------
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? No
- ---------------------------------------------------------------------------------------------------------------------
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 1. On July 7, 1998, the Debtors entered into a purchase agreement
with Pinnacle Towers Inc. for the sale of their towers and
certain related assets. The sale is expected to close in
September 1998.
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) property taxes; (vii) customer refunds; and
(viii) customer rewards.
Item 5. As of July 31, 1998 there were no funded borrowings under the DIP
facility and a $0.5 million letter of credit issued in 1997
remained a contingent obligation of the Debtors under the DIP
facility.
Page 17 of 18
<PAGE>
- --------------------------------------------------------------------------------
INSURANCE
For the month ended July 31, 1998
- --------------------------------------------------------------------------------
There were no changes in insurance coverage for the reporting period.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PERSONNEL
For the month ended July 31, 1998
- --------------------------------------------------------------------------------
Full Time Part Time
- --------------------------------------------------------------------------------
1. Total number of employees at beginning of period 3,075 32
- --------------------------------------------------------------------------------
2. Number of employees hired during the period 29 17
- --------------------------------------------------------------------------------
3. Number of employees terminated or resigned
during the period 102 6
- --------------------------------------------------------------------------------
4. Total number of employees on payroll
at end of period 3,002 43
- --------------------------------------------------------------------------------
Page 18 of 18
