================================================================================
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): October 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 October 1, 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 August 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: October 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
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
For the month ended August 31, 1998
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
<TABLE>
<CAPTION>
Document Previously Explanation
Required Attachments: Attached Submitted Attached
<S> <C> <C> <C>
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
</TABLE>
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:
Senior Vice President/Chief Financial Officer
- -------------------------------- ---------------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
David R. Gibson September 30, 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 August 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 August 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 month ended June
30, 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.
(2) General & Administrative expense in August 1998 includes the reversal of a
$0.5 million accrual of telephone expenses recorded in prior months.
MobileMedia Corporation and Subsidiaries
Consolidated Statements of Operations
For the Months Ended August 31, 1998, July 31, 1998 and June 30, 1998
( Unaudited )
( in thousands )
--------------------------------------------------------
<TABLE>
<CAPTION>
August July June
1998 1998 1998
---------------- -------------- -----------------
<S> <C> <C> <C>
Paging Revenues
Service, Rents & Maintenance $35,008 $35,204 $34,557
Equipment Sales
Product Sales 2,020 2,592 2,142
Cost of Products Sold 1,813 2,076 1,604
---------------- -------------- -----------------
Equipment Margin 207 515 538
Net Revenue 35,215 35,719 35,095
Operating Expense
Service, Rents & Maintenance 9,048 8,926 9,161
Selling 4,428 5,040 4,788
% Margin General & Administrative 10,326 (2) 11,233 10,620
---------------- -------------- -----------------
Operating Expense Before Depr. & Amort. 23,802 25,198 24,569
EBITDA Before Reorganization Costs 11,413 10,520 10,526
Reorganization Costs 1,553 1,514 1,495
Restructuring Costs 0 0 248
---------------- -------------- -----------------
EBITDA after Reorganization Costs 9,860 9,007 8,783
Depreciation 6,709 6,724 6,822
Amortization 2,484 2,484 2,484 (1)
---------------- -------------- -----------------
Total Depreciation and Amortization 9,193 9,208 9,306
Operating Income(Loss) 667 -201 -523
Interest Expense 4,868 4,793 4,868
Other (Income)Expense 25 9 109
Taxes 0 0 0
---------------- -------------- -----------------
G & A / Operations
Net Loss ($4,225) ($5,003) ($5,500)
================ ============== =================
</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 August 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 Reports for the month ended
June 30, 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 August 31, 1998, July 31, 1998 and June
30, 1998 (Unaudited) (in thousands)
<TABLE>
<CAPTION>
August July June
1998 1998 1998
------------- ------------- -------------
<S> <C> <C> <C>
Assets:
Current Assets:
Cash $13,165 $10,811 $11,559
Accounts Receivable, Net 37,472 37,580 39,890
Inventory 1,240 736 916
Prepaid Expenses 5,489 5,742 5,837
Other Current Assets 5,145 5,113 5,117
------------- ------------- -------------
Total Current Assets 62,511 59,983 63,319
Noncurrent Assets:
Property and Equipment, Net 225,707 228,207 227,699
Deferred Financing Fees, Net 20,510 20,813 21,117
Investment In Net Assets Of Equity Affiliate 1,734 1,734 1,734
Intangible Assets, Net 275,747 278,206 280,666 (1)
Other Assets 329 353 378
------------- ------------- -------------
Total Noncurrent Assets 524,026 529,314 531,593
Total Assets $586,538 $589,297 $594,913
============= ============= =============
Liabilities and Stockholders' Equity:
Liabilities Not Subject to Compromise:
DIP Credit Facility $0 $0 $0
Accrued Reorganization Costs 6,131 5,275 5,041
Accrued Wages, Benefits and Payroll Taxes 10,907 9,049 7,614
Accounts Payable - Post Petition 4,981 3,966 3,815
Accrued Interest 5,443 5,455 5,435
Accrued Expenses and Other Current Liabilities 32,668 33,469 32,735
Advance Billings and Customer Deposits 31,567 32,659 32,446
------------- ------------- -------------
Total Liabilities Not Subject To Compromise 91,696 89,873 87,086
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 12,833 12,731 16,124
Accrued Expenses and Other Current Liabilities - Pre Petition 21,062 21,515 21,515
Other Liabilities 4,730 4,737 4,744
------------- ------------- -------------
Total Liabilities Subject To Compromise 1,137,823 1,138,180 1,141,581
Deferred Tax Liability 2,655 2,655 2,655 (1)
----------------------
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 -1,171,108 (1)
Accumulated Deficit - Post Petition -157,607 -153,382 -148,379 (1)
------------- ------------- -------------
Total Stockholders' Equity -639,514 -635,289 -630,286
Less:
Treasury Stock -6,123 -6,123 -6,123
------------- ------------- -------------
Total Stockholders' Equity -645,637 -641,412 -636,409
Total Liabilities and Stockholders' Equity $586,538 $589,297 $594,913
============= ============= =============
</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 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 is
scheduled for October 14, 1998.
On September 3, 1998, the Company completed the sale of 166 transmission
towers to Pinnacle Towers, Inc. ("Pinnacle") for $170 million in cash.
Subsequent to the sale, the Company distributed the $170 million in
proceeds to its secured creditors, who have a lien on such assets. Under
the terms of a lease with Pinnacle, the Company will continue to own and
utilize transmitters, antennas and other equipment located on the 166
towers for an initial lease period of 15 years at an aggregate annual
rental of $10.7 million.
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. Since the filing of the Operating Reports for the month ended June 30,
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 Debtors' 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 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 $307.5
million. Fair value was determined through the application of generally
accepted valuation methods to the Debtors' projected cash flows.
5. General & Administrative expense in August 1998 includes the reversal of
a $0.5 million accrual of telephone expenses recorded in prior months.
6. The Company is one of the largest paging companies in the U.S., with
approximately 3.2 million units in service at August 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):
7. 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 August 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 month ended June
30, 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 August 31, 1998, July 31, 1998 and June 30, 1998
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
August July June
1998 1998 1998
-------------- ------------- -------------
<S> <C> <C> <C>
Operating Activities
Net Loss ($4,225) ($5,003) ($5,501)
Adjustments To Reconcile Net Loss To Net Cash
Provided By (Used In) Operating Activities:
Depreciation And Amortization 9,193 9,208 9,306 (1)
Provision For Uncollectible Accounts And Returns 1,133 1,185 999
Undistributed Earnings Of Affiliate 0 0 32
Deferred Financings Fees, Net 304 304 304
Change In Operating Assets and Liabilities:
Accounts Receivable -1,025 1,125 3,889
Inventory -504 179 -294
Prepaid Expenses And Other Assets 221 99 -1,456
Accounts Payable, Accrued Expenses and Other 1,466 -613 -3,533
-------------- ------------- -------------
Net Cash Provided By (Used In) Operating Activities 6,563 6,484 3,745
Investing Activities
Construction And Capital Expenditures,
Including Net Change In Pager Assets -4,209 -7,232 -2,964
Investment In Net Assets Of Equity Affiliate
Other
-------------- ------------- -------------
Net Cash Used In Investing Activities -4,209 -7,232 -2,964
Financing Activities
Capital Contribution by MobileMedia Corporation
Borrowings From Revolving Credit Facility
Payments On Revolving Credit Facility
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 2,354 -748 781
Cash And Cash Equivalents At Beginning Of Period 10,811 11,559 10,779
-------------- ------------- -------------
Cash And Cash Equivalents At End Of Period $13,165 $10,811 $11,559
============== ============= =============
</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 August 31, 1998
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
- -------------------------------------------------------------------------------
<S> <C> <C>
- ---------------- ------------------------ -------------------------------------
$ 23,011,093 0 - 30 days old
------------------------ -------------------------------------
13,187,384 31 - 60 days old
------------------------ -------------------------------------
5,758,772 61 - 90 days old
------------------------ -------------------------------------
12,048,528 91+ days old
------------------------ -------------------------------------
54,005,777 TOTAL TRADE ACCOUNTS RECEIVABLE
------------------------ -------------------------------------
(17,098,000) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
------------------------ -------------------------------------
36,907,777 TRADE ACCOUNTS RECEIVABLE (NET)
------------------------ -------------------------------------
563,971 OTHER NON-TRADE RECEIVABLES
------------------------ -------------------------------------
$ 37,471,748 ACCOUNTS RECEIVABLE, NET
- ---------------- ------------------------ -------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ------------------- ------------ --------- ------- ------- ----------------
0-30 31-60 61-90 91+
Days Days Days Days Total
- ------------------- ------------ --------- ------- ------- ----------------
ACCOUNTS PAYABLE $ 4,469,083 512,141 0 0 $4,981,224
- ------------------- ------------ --------- ------- ------- ----------------
</TABLE>
Page 13 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
For the month ended August 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 $ 1,058,739 $ 1,058,739 $ 0 $ 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
FICA-EMPLOYEE 0 612,099 612,099 0 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
FICA-EMPLOYER 159,565 1,219,964 1,199,575 179,954 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
UNEMPLOYMENT 939 4,065 3,849 1,155 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
INCOME 0 0 0 0 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
TOTAL FEDERAL TAXES 160,504 2,894,867 2,874,262 181,109 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
STATE AND LOCAL
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
WITHHOLDING 9,915 189,986 176,696 23,205 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
SALES 562,005 1,101,233 1,154,524 508,714 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
UNEMPLOYMENT 8,091 30,321 29,828 8,584 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
REAL PROPERTY 6,658,707 382,730 498,498 6,542,939 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
OTHER 1,335,167 1,759,677 516,430 2,578,414 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
TOTAL STATE AND LOCAL 8,573,885 3,463,947 2,375,976 9,661,856 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
TOTAL TAXES $ 8,734,389 $ 6,358,814 $ 5,250,238 $ 9,842,965 $ 0
- ------------------------------ ----------------- ------------------ ------------------ ----------------- ------------------
</TABLE>
Page 14 of 18
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS
For the month ended August 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
INSIDERS (1)
- ----------------------------------------------------------------------------------------------------------------------------------
Payee Name Position Salary/Bonus/ Reimbursable
Auto Allowance Expenses Total
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Alvarez & Marsal Inc. - Joseph Chairman - Restructuring $ 54,167 $ 3,414 $ 57,581
A. Bondi
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Burdette, H. Stephen Senior VP Corporate Development 15,000 3,278 18,278
and Senior VP Operations
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Grawert, Ron Chief Executive Officer 30,769 6,034 36,803
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Gray, Patricia Secretary/VP and General Counsel 13,846 0 13,846
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Gross, Steven Executive VP Sales & Marketing 17,769 4,813 22,582
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Hilson, Debra Assistant Secretary 4,662 0 4,662
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Hughes, Curtis VP Management Information 10,385 941 11,325
Systems
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Pascucci, James Treasurer 8,077 1,126 9,204
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Panzella, Vito VP / Controller 8,846 0 8,846
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
Witsaman, Mark Senior VP and Chief Technology 14,808 3,567 18,375
Officer
- ---------------------------------- --------------------------------- ---------------------- ------------------ -------------------
TOTAL PAYMENTS TO INSIDERS $ 201,502
- -------------------------------------------------------------------------------------------------------------- -------------------
</TABLE>
(1) Excludes 19 non-executive officers of subsidiaries who were paid salaries
and reimbursable expenses in the aggregate of $206,566.
Other
During June 1998, Joseph A. Bondi and Ron Grawert received 1997 bonuses of
$420,000 and $240,000, respectively, in accordance with contracts approved
by the Bankruptcy Court. Disclosure of these bonuses was erroneously
omitted from the Monthly Operating Report for the month ended June 30,
1998.
Page 15 of 18
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
PAYMENTS TO INSIDERS AND PROFESSIONALS (Continued)
For the month ended August 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PROFESSIONALS
- ----------------------------------------------------------------------------------------------------------------------------------
Date of Holdback and
Name and Relationship Court Invoices Invoices Invoice Balances
Approval Received (1) Paid Due
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
1. Ernst & Young - Auditor, Tax and Financial 1/30/97 $ 716,248 $ 221,479 $ 1,024,725
Consultants to Debtor
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
2. Latham & Watkins - Counsel to Debtor 1/30/97 135,846 111,185 204,348
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
3. Alvarez & Marsal Inc.- Restructuring Consultant to 1/30/97 171,093 - 508,398
Debtor (2)
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
4. Sidley & Austin - Bankruptcy Counsel to Debtor 1/30/97 835,473 - 1,280,507
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
5. Young, Conway, Stargate & Taylor - Delaware Counsel 1/30/97 13,914 8,487 24,865
to Debtor
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
6. Wiley, Rein & Fielding - FCC Counsel to Debtor 1/30/97 90,959 44,153 161,631
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
7. Koteen & Naftalin - FCC Counsel to Debtor 6/11/97 - - 3,945
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
8. Houlihan, Lokey, Howard & Zukin - Advisors to the 6/04/97 - - 75,000
Creditors' Committee
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
9. Jones, Day, Reavis & Pogue - Counsel to the 4/03/97 72,951 - 162,569
Creditors' Committee
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
10. Morris, Nichols, Arsht & Tunnell - Delaware Counsel 4/03/97 1,842 - 3,591
to the Creditors' Committee
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
11. Paul, Weiss, Rifkind, Wharton & Garrison - FCC 4/25/97 1,322 1,091 1,543
Counsel to the Creditors' Committee
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
12. The Blackstone Group LP - Financial Advisors to 7/10/97 125,000 - 473,091
Debtor
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
13. Gerry, Friend & Sapronov, LLP. - Counsel to Debtor 10/27/97 33,532 - 130,371
- --------------------------------------------------------- ----------- -------------------- ------------------- -------------------
TOTAL $ 2,198,180 $ 386,395 $ 4,054,584
- --------------------------------------------------------------------- -------------------- ------------------- -------------------
</TABLE>
(1) Excludes invoices for fees and expenses through August 31, 1998 that were
received by the Debtors subsequent to August 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 August 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) $ 4,636,274 $ 4,636,274* $ 0
- -------------------------------------------------------- ------------------------ --------------------- -------------------------
</TABLE>
* Payment made on 9/1/98.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------- -------- ---------
QUESTIONNAIRE
For the month ended August 31, 1998 YES NO
- ---------------------------------------------------------------------------------------------------------- -------- ---------
<S> <C> <C>
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 closed on
September 3, 1998 (see Footnote 2).
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 August 31, 1998 there were no funded borrowings
under the DIP facility.
Page 17 of 18
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
INSURANCE
For the month ended August 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
There were no changes in insurance coverage for the reporting period.
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PERSONNEL
For the month ended August 31, 1998
- ----------------------------------------------------------------------------------------------------------------------------------
Full Time Part Time
- --------------------------------------------------------------------------------------------- ------------------ -----------------
<S> <C> <C>
1. Total number of employees at beginning of period 3,002 43
- --------------------------------------------------------------------------------------------- ------------------ -----------------
2. Number of employees hired during the period 40 4
- --------------------------------------------------------------------------------------------- ------------------ -----------------
3. Number of employees terminated or resigned during the period 8 9
- --------------------------------------------------------------------------------------------- ------------------ -----------------
4. Total number of employees on payroll at end of period 3,034 38
- --------------------------------------------------------------------------------------------- ------------------ -----------------
</TABLE>
Page 18 of 18
