================================================================================
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): July 1, 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 July 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 May 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: July 1, 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 May 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
prepared by accountant ( ) (X) ( )
</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 June 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 May 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 50 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 May 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 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 could also be additional year end audit adjustments and 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) March 1998 Service, Rents & Maintenance Revenue and General & Administrative
Expense include the favorable impact of quarter end adjustments to the allowance
for doubtful accounts. The adjustments reflect the improvement in the Company's
billing and collection processes. Billing reserves recorded against revenue
included in Service, Rents & Maintenance Revenue, were $1.1, $1.0 and $(0.8)
million, respectively, in May, April and March. Bad debt expense included in
General & Administrative expense was $0.5, $1.1 and $(0.8) million,
respectively, in May, April and March.
MobileMedia Corporation and Subsidiaries
Consolidated Statements of Operations
For the Months Ended May 31, 1998, April 30, 1998 and March 31, 1998
( Unaudited )
( in thousands )
May April March
1998 1998 1998
-------- -------- --------
Paging Revenues
Service, Rents & Maintenance $ 35,758 $ 36,251 $ 37,103(1)
Equipment Sales
Product Sales 2,208 2,823 2,251
Cost of Products Sold 1,470 2,186 1,806
-------- -------- --------
Equipment Margin 738 637 445
Net Revenue 36,496 36,888 37,548
Operating Expense
Service, Rents & Maintenance 8,308 9,660 9,475
Selling 5,378 5,591 5,483
General & Administrative 10,936 12,292 9,979(1)
-------- -------- --------
Operating Expense Before Depr. & Amort 24,622 27,543 24,937
EBITDA Before Reorganization Costs 11,873 9,345 12,612
Reorganization Costs 1,456 1,493 1,518
-------- -------- --------
EBITDA after Reorganization Costs 10,417 7,852 11,093
Depreciation 7,462 7,329 7,897
Amortization 8,240 8,244 8,245
-------- -------- --------
Total Depreciation and Amortization 15,702 15,573 16,142
Operating Loss (5,285) (7,721) (5,049)
Interest Expense 4,868 4,751 4,913
Other (Income)Expense (11) (49) 0
Taxes 0 0 (83)
-------- -------- --------
Net Loss ($10,141) ($12,422) ($ 9,878)
======== ======== ========
See Accompanying Notes.
Page 4 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
CONDENSED CONSOLIDATED BALANCE SHEET
For the month ended May 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 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 could also be additional year end audit adjustments and 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 May 31, 1998, April 30, 1998 and March 31, 1998
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
May April March
1998 1998 1998
---------- ---------- ----------
<S> <C> <C> <C>
Assets:
Current Assets:
Cash $ 10,779 $ 12,435 $ 15,608
Accounts Receivable, Net 41,332 41,019 44,192
Inventory 621 540 461
Prepaid Expenses 4,449 6,155 4,381
Other Current Assets 5,161 5,210 5,198
---------- ---------- ----------
Total Current Assets 62,341 65,359 69,839
Noncurrent Assets:
Property and Equipment, Net 231,556 233,665 238,597
Deferred Financing Fees, Net 21,421 21,724 22,028
Investment In Net Assets Of Equity Affiliate 1,766 1,766 1,766
Intangible Assets, Net 965,728 974,054 982,199
Other Assets 403 430 475
---------- ---------- ----------
Total Noncurrent Assets 1,220,873 1,231,640 1,245,065
Total Assets $1,283,215 $1,296,999 $1,314,904
========== ========== ==========
Liabilities and Stockholders' Equity:
Liabilities Not Subject to Compromise:
DIP Credit Facility $ 0 $ 0 $ 0
Accrued Reorganization Costs 5,454 4,836 5,039
Accrued Wages, Benefits and Payroll Taxes 6,859 9,984 14,974
Accounts Payable - Post Petition 2,691 2,436 2,356
Accrued Interest (Chase & DIP Facilities) 4,632 4,477 4,630
Accrued Expenses and Other Current Liabilities 35,457 34,534 34,557
Advance Billings and Customer Deposits 32,851 34,404 34,600
---------- ---------- ----------
Total Liabilities Not Subject To Compromise 87,944 90,671 96,156
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 20,423 20,423 20,423
Accounts Payable- Pre Petition 18,794 19,701 19,694
Accrued Expenses and Other Current Liabilities - Pre Petition 21,515 21,518 21,518
Other Liabilities 4,755 4,762 4,769
---------- ---------- ----------
Total Liabilities Subject To Compromise 1,144,261 1,145,178 1,145,178
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 (249,339) (239,198) (226,777)
---------- ---------- ----------
Total Stockholders' Equity (14,965) (4,824) 7,596
Less:
Treasury Stock (6,123) (6,123) (6,123)
---------- ---------- ----------
Total Stockholders' Equity (21,088) (10,947) 1,473
Total Liabilities and Stockholders' Equity $1,283,215 $1,296,999 $1,314,904
========== ========== ==========
</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 could also be additional year
end audit adjustments and 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.
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.
Page 7 of 18
<PAGE>
Footnotes to the Financial Statements (continued):
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 agreed to adjourn a hearing concerning the adequacy of
information contained in the Disclosure Statement that had been scheduled
for April 14, 1998. The Debtors and such Committees are considering
certain possible business combinations and standalone scenarios involving
the Debtors under a plan of reorganization. There can be no assurance that
the parties will reach agreement on a plan of reorganization or that any
business combination will be effected.
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. March 1998 Service, Rents & Maintenance Revenue and General &
Administrative Expense include the favorable impact of quarter end
adjustments to the allowance for doubtful accounts. The adjustments
reflect the improvement in the Company's billing and collection processes.
Billing reserves recorded against revenue included in Service, Rents &
Maintenance Revenue, were $1.1, $1.0 and $(0.8) million, respectively, in
May, April and March. Bad debt expense included in General &
Administrative Expense was $0.5, $1.1 and $(0.8) million, respectively, in
May, April and March.
5. The Company is one of the largest paging companies in the U.S., with
approximately 3.3 million units in service at May 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):
6. 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 will result in a change of control. In the event
that the Company were unable to consummate a 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 May 31, 1998
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
- --------------------------------------------------------------------------------
The Debtors have 50 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 could also be additional year end audit adjustments and 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 May 31, 1998, April 30, 1998 and March 31, 1998
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
May April March
1998 1998 1998
-------- -------- --------
<S> <C> <C> <C>
Operating Activities
Net Loss ($10,141) ($12,422) ($ 9,878)
Adjustments To Reconcile Net Loss To Net Cash
Provided By (Used In) Operating Activities:
Depreciation And Amortization 15,702 15,573 16,142
Provision For Uncollectible Accounts And Returns 1,563 2,128 (1,619)
Undistributed Earnings Of Affiliate 0 0 0
Deferred Financings Fees, Net 304 304 304
Change In Operating Assets and Liabilities:
Accounts Receivable (1,876) 1,045 4,688
Inventory (82) (79) 149
Prepaid Expenses And Other Assets 1,869 (1,842) 662
Accounts Payable, Accrued Expenses and Other (3,643) (5,483) 1,569
-------- -------- --------
Net Cash Provided By (Used In) Operating Activities 3,696 (776) 12,017
Investing Activities
Construction And Capital Expenditures,
Including Net Change In Pager Assets (5,353) (2,397) (1,110)
-------- -------- --------
Net Cash Used In Investing Activities (5,353) (2,397) (1,110)
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 (1,657) (3,173) 10,907
Cash And Cash Equivalents At Beginning Of Period 12,435 15,608 4,701
-------- -------- --------
Cash And Cash Equivalents At End Of Period $ 10,779 $ 12,435 $ 15,608
======== ======== ========
</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 May 31, 1998
Debtor Name: MobileMedia Corporation et al.
Case Number: 97-174 (PJW)
- --------------------------------------------------------------------------------
- ----------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
- ----------------------------------------------------------
$26,131,767 0 - 30 days old
----------------------------------------------------
14,311,004 31 - 60 days old
----------------------------------------------------
7,276,454 61 - 90 days old
----------------------------------------------------
17,706,889 91+ days old
----------------------------------------------------
65,426,114 TOTAL TRADE ACCOUNTS RECEIVABLE
----------------------------------------------------
(24,740,251) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
----------------------------------------------------
40,685,863 TRADE ACCOUNTS RECEIVABLE (NET)
----------------------------------------------------
645,976 OTHER NON-TRADE RECEIVABLES
----------------------------------------------------
$41,331,839 ACCOUNTS RECEIVABLE, NET
- ----------------------------------------------------------
- --------------------------------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
- --------------------------------------------------------------------------------
0-30 31-60 61-90 91+
Days Days Days Days Total
- --------------------------------------------------------------------------------
ACCOUNTS PAYABLE $ 2,230,692 460,447 0 0 $2,691,139
- --------------------------------------------------------------------------------
Page 13 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
STATEMENT OF OPERATIONS, TAXES,
INSURANCE AND PERSONNEL
For the month ended May 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 $ 10,187 $ 1,330,168 $ 1,340,355 $ 0 $ 0
- ---------------------------------------------------------------------------------------------------------------------
FICA-EMPLOYEE 0 4,956,057 4,956,057 0 0
- ---------------------------------------------------------------------------------------------------------------------
FICA-EMPLOYER 471,227 1,286,859 1,758,086 0 0
- ---------------------------------------------------------------------------------------------------------------------
UNEMPLOYMENT 10,720 1,689 12,409 0 0
- ---------------------------------------------------------------------------------------------------------------------
INCOME 0 0 0 0 0
=====================================================================================================================
TOTAL FEDERAL TAXES 492,134 7,574,773 8,066,907 0 0
=====================================================================================================================
STATE AND LOCAL
=====================================================================================================================
WITHHOLDING 73,259 174,128 247,387 0 0
- ---------------------------------------------------------------------------------------------------------------------
SALES 665,484 1,146,587 1,154,682 657,389 0
- ---------------------------------------------------------------------------------------------------------------------
UNEMPLOYMENT 37,114 69,128 106,242 0 0
- ---------------------------------------------------------------------------------------------------------------------
REAL PROPERTY 5,546,092 383,695 5,577 5,924,210 0
- ---------------------------------------------------------------------------------------------------------------------
OTHER 694,380 846,224 614,290 926,314 0
=====================================================================================================================
TOTAL STATE AND LOCAL 7,016,329 2,619,762 2,128,178 7,507,913 0
=====================================================================================================================
TOTAL TAXES $ 7,508,463 $ 10,194,535 $ 10,195,085 $ 7,507,913 $ 0
=====================================================================================================================
</TABLE>
Page 14 of 18
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================================
PAYMENTS TO INSIDERS AND PROFESSIONALS
For the month ended May 31, 1998
=====================================================================================================================
=====================================================================================================================
INSIDERS
=====================================================================================================================
Payee Name Position Salary/Bonus/ Reimbursable
Auto Allowance Expenses Total
=====================================================================================================================
<S> <C> <C> <C> <C>
Alvarez & Marsal Inc. - Chairman - Restructuring $ 54,167 $ 6,531 $ 60,698
Joseph A. Bondi
- ---------------------------------------------------------------------------------------------------------------------
Boykin, Roberta Assistant Corporate Counsel 14,366 -- 14,366
- ---------------------------------------------------------------------------------------------------------------------
Burdette, H. Stephen Senior VP Corporate 22,500 135 22,635
Development and Senior
VP Operations
- ---------------------------------------------------------------------------------------------------------------------
Cross, Andrew Executive VP Sales and 10,096 70 10,166
Marketing
- ---------------------------------------------------------------------------------------------------------------------
Grawert, Ron Chief Executive Officer 46,154 6,525 52,679
- ---------------------------------------------------------------------------------------------------------------------
Gray, Patricia Secretary/Acting General 20,758 -- 20,758
Counsel
- ---------------------------------------------------------------------------------------------------------------------
Gross, Steven Acting Executive VP Sales & 22,298 892 23,190
Marketing
- ---------------------------------------------------------------------------------------------------------------------
Hilson, Debra Assistant Secretary 6,992 -- 6,992
- ---------------------------------------------------------------------------------------------------------------------
Hughes, Curtis VP Management 14,784 1,784 16,568
Information Systems
- ---------------------------------------------------------------------------------------------------------------------
Pascucci, James Treasurer 12,704 3,557 16,261
- ---------------------------------------------------------------------------------------------------------------------
Panzella, Vito VP / Controller 13,269 2,094 15,363
- ---------------------------------------------------------------------------------------------------------------------
Witsaman, Mark Senior VP and Chief 22,904 2,572 25,476
Technology Officer
- ---------------------------------------------------------------------------------------------------------------------
TOTAL PAYMENTS TO INSIDERS $ 285,152
=====================================================================================================================
</TABLE>
Page 15 of 18
<PAGE>
<TABLE>
<CAPTION>
=====================================================================================================================
PAYMENTS TO INSIDERS AND PROFESSIONALS (Continued)
For the month ended May 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 $ 356,903 $ -- $ 626,754
Consultants to Debtor
- ---------------------------------------------------------------------------------------------------------------------
2. Latham & Watkins - Counsel to Debtor 1/30/97 21,904 46,308 51,888
- ---------------------------------------------------------------------------------------------------------------------
3. Alvarez & Marsal Inc.- Restructuring 1/30/97 -- 175,096 433,157
Consultant to Debtor (2)
- ---------------------------------------------------------------------------------------------------------------------
4. Sidley & Austin - Bankruptcy Counsel to 1/30/97 262,207 -- 783,258
Debtor
- ---------------------------------------------------------------------------------------------------------------------
5. Young, Conway, Stargate & Taylor - Delaware 1/30/97 20,219 32,631 25,495
Counsel to Debtor
- ---------------------------------------------------------------------------------------------------------------------
6. Wiley, Rein & Fielding - FCC Counsel to 1/30/97 21,612 26,361 71,038
Debtor
- ---------------------------------------------------------------------------------------------------------------------
7. Koteen & Naftalin - FCC Counsel to Debtor 6/11/97 -- -- 3,945
- ---------------------------------------------------------------------------------------------------------------------
8. Houlihan, Lokey, Howard & Zukin - Advisors 6/04/97 230,869 -- 260,869
to the Creditors' Committee
- ---------------------------------------------------------------------------------------------------------------------
9. Jones, Day, Reavis & Pogue - Counsel to the 4/03/97 87,821 28,055 110,771
Creditors' Committee
- ---------------------------------------------------------------------------------------------------------------------
10. Morris, Nichols, Arsht & Tunnell - Delaware 4/03/97 555 3,041 2,073
Counsel to the Creditors' Committee
- ---------------------------------------------------------------------------------------------------------------------
11. Paul, Weiss, Rifkind, Wharton & Garrison - 4/25/97 -- 2,571 964
FCC Counsel to the Creditors' Committee
- ---------------------------------------------------------------------------------------------------------------------
12. The Blackstone Group LP - Financial 7/10/97 -- -- 100,000
Advisors to Debtor
- ---------------------------------------------------------------------------------------------------------------------
13. Gerry, Friend & Sapronov, LLP. - Counsel to 10/27/97 13,265 -- 129,945
Debtor
=================================================================----------------------------------------------------
TOTAL $ 1,015,355 $ 314,063 $ 2,600,158
=====================================================================================================================
</TABLE>
(1) Excludes invoices for fees and expenses through May 31, 1998 that were
received by the Debtors subsequent to May 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 May 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) $ 4,610,528 $ 4,610,528* $ 0
=====================================================================================================================
</TABLE>
* Payment made on 6/1/98.
<TABLE>
<CAPTION>
=====================================================================================================================
QUESTIONNAIRE
For the month ended May 31, 1998 YES NO
=====================================================================================================================
<S> <C> <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? 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 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. During 1997, the Debtors drew down $47 million of borrowings
and repaid $37 million under the DIP facility with The Chase
Manhattan Bank, as agent for the lenders thereunder. During
January and February, 1998 the Debtors repaid an additional
$10 million. As of May 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>
<TABLE>
<CAPTION>
=====================================================================================================================
INSURANCE
For the month ended May 31, 1998
=====================================================================================================================
There were no changes in insurance coverage for the reporting period.
=====================================================================================================================
=====================================================================================================================
PERSONNEL
For the month ended May 31, 1998
=====================================================================================================================
Full Time Part Time
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Total number of employees at beginning of period 3,297 90
- ---------------------------------------------------------------------------------------------------------------------
2. Number of employees hired during the period 13 14
- ---------------------------------------------------------------------------------------------------------------------
3. Number of employees terminated or resigned during the period 118 69
- ---------------------------------------------------------------------------------------------------------------------
4. Total number of employees on payroll at end of period 3,192 35
=====================================================================================================================
</TABLE>
