<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 27, 1998
MOBILEMEDIA COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-68840 22-3379712
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
65 Challenger Road, Ridgefield Park, New Jersey 07660
(Address of principal executive offices)
(Zip Code)
(201) 440-8400
(Registrant's telephone number, including area code)
--------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1. Changes in Control of Registrant
Not Applicable.
Item 2. Acquisition or Disposition of Assets.
Not Applicable.
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable.
Item 5. Other Events.
On January 30, 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
December 31, 1997, which is attached hereto as Exhibit 99.1.
On January 27, 1998, the Companies filed with the
Bankruptcy Court the Companies' joint plan of reorganization (the
"Plan"). On February 2, 1998, the Companies filed with the
Bankruptcy Court the Companies' disclosure statement to the Plan
(the "Statement"). The Plan and the Statement are available for
public review and duplication in the Office of the Clerk of the
Bankruptcy Court.
Item 6. Resignations of Registrants Directors.
Not Applicable
Item 7. Financial Statements and Exhibits.
Not Applicable
Item 8. Change in Fiscal Year.
Not Applicable
<PAGE>
Pursuant to the requirements of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly
authorized.
MOBILEMEDIA COMMUNICATIONS, INC.
a Delaware corporation
Date: February 5, 1998 By: /s/ David R. Gibson
---------------------
David R. Gibson
Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
Exhibit 99.1 -- Monthly Operating Report
<PAGE>
EXHIBIT 99.1
OFFICE OF THE U.S. TRUSTEE - REGION 3
MONTHLY OPERATING REPORT
FOR THE MONTH ENDED DECEMBER 31, 1997
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:
/s/ DAVID R. GIBSON SENIOR VICE PRESIDENT/CHIEF FINANCIAL OFFICER
- ------------------------------ ---------------------------------------------
SIGNATURE OF RESPONSIBLE PARTY TITLE
DAVID R. GIBSON JANUARY 30, 1997
- --------------------------------- ---------------------------------------------
PRINTED NAME OF RESPONSIBLE PARTY DATE
Page 1 of 18
<PAGE>
OFFICE OF THE U.S. TRUSTEE - REGION 3
ATTACHMENT
FOR THE MONTH ENDED DECEMBER 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
1. Payroll tax filings and payments are made by Automated Data Processing,
Inc. (an outside payroll processing company). Evidence of tax payments are
available upon request. Previously, the Debtors filed copies of such
evidence for the third quarter of 1996 with the US Trustee.
Please see the Status of Post Petition Taxes attached hereto for the
month's activity.
2. The Debtors have 57 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 DECEMBER 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
See Statement of Operations for reporting period attached.
Page 3 of 18
<PAGE>
HEADNOTES:
THESE FINANCIAL STATEMENTS HAVE NOT BEEN PREPARED IN ACCORDANCE WITH GAAP
BECAUSE STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 121, "ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS, TO BE DISPOSED OF"
("SFAS 121") HAS NOT BEEN APPLIED. UPON THE APPLICATION OF SFAS 121, THE COMPANY
EXPECTS TO BE REQUIRED TO WRITE DOWN THE CARRYING VALUE OF ITS LONG-LIVED ASSETS
TO THEIR FAIR VALUE. THE COMPANY BELIEVES THE AMOUNT OF THE WRITE-DOWN WILL BE
MATERIAL; HOWEVER, IT IS NOT POSSIBLE AT THIS TIME TO DETERMINE SUCH AMOUNT.
THERE MAY ALSO BE YEAR END, DECEMBER 31, 1997 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) OPERATING EXPENSE AND EBITDA FOR DECEMBER 1997 INCLUDES THE FAVORABLE IMPACT
OF ( I ) A $4.0 MILLION REVERSAL OF PREVIOUSLY RECORDED 1997 TELEPHONE EXPENSE
ACCRUALS. THE PRIMARY REASON FOR THE REVERSAL IS DUE TO THE FEDERAL
COMMUNICATION COMMISSION'S RECENT CLARIFICATION OF INTERCONNECTION RULES, ISSUED
IN DECEMBER 1997 AND ( II ) A REDUCTION IN BAD DEBT EXPENSE. BAD DEBT EXPENSE IS
IS $0.8, $3.5 AND $3.7 MILLION, RESPECTIVELY IN DECEMBER, NOVEMBER AND OCTOBER.
THE LOWER DECEMBER BAD DEBT EXPENSE REFLECTS A CHANGE IN THE PROVISION DUE TO
HIGHER CASH COLLECTIONS IN THE FOURTH QUARTER OF 1997 THAN ORIGINALLY FORECAST.
(2) DEPRECIATION EXPENSE FOR OCTOBER 1997 INCLUDES THE UNFAVORABLE IMPACT OF A
$2.5 MILLION ADJUSTMENT TO PAGER DEPRECIATION EXPENSE, EFFECTIVE OCTOBER 1,
1997, FOR THE INITIAL IMPACT OF THE COMPANY SHORTENING THE DEPRECIABLE LIFE OF
ITS PAGERS FROM FOUR TO THREE YEARS TO BETTER REFLECT ESTIMATED USEFUL LIVES.
THE ADJUSTMENT RESULTS FROM ADDITIONAL DEPRECIATION EXPENSE TAKEN TO REDUCE
ESTIMATED USEFUL LIVES.
MOBILEMEDIA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE MONTHS ENDED DECEMBER 31, 1997, NOVEMBER 30, 1997 AND OCTOBER 31, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER NOVEMBER OCTOBER
1997 1997 1997
--------------- -------------- --------------
<S> <C> <C> <C>
PAGING REVENUES
SERVICE, RENTS & MAINTENANCE $35,843 $37,711 $38,697
EQUIPMENT SALES
PRODUCT SALES 1,979 3,229 2,774
COST OF PRODUCTS SOLD 2,214 3,293 2,811
--------------- --------------- ---------------
EQUIPMENT MARGIN (235) (64) (37)
NET REVENUE 35,608 37,647 38,659
OPERATING EXPENSE
SERVICE, RENTS & MAINTENANCE 6,556 11,512 11,119
SELLING 5,499 4,863 5,366
GENERAL & ADMINISTRATIVE 11,998 14,228 15,354
--------------- --------------- ---------------
OPERATING EXPENSE BEFORE DEPR. & AMORT. 24,053 (1) 30,603 31,839
EBITDA BEFORE REORGANIZATION COSTS 11,555 (1) 7,044 6,820
REORGANIZATION COSTS 1,412 1,466 1,355
--------------- --------------- ---------------
EBITDA AFTER REORGANIZATION COSTS 10,143 (1) 5,578 5,465
DEPRECIATION 8,682 8,544 11,162 (2)
AMORTIZATION 9,244 9,244 9,244
--------------- --------------- ---------------
TOTAL DEPRECIATION AND AMORTIZATION 17,926 17,788 20,406
OPERATING LOSS (7,783) (12,210) (14,941)
INTEREST EXPENSE 5,394 5,327 5,359
OTHER EXPENSE 0 0 0
TAXES 324 0 0
--------------- --------------- ---------------
NET LOSS ($13,501) ($17,537) ($20,300)
=============== =============== ===============
</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 DECEMBER 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
See balance sheet attached.
Page 5 of 18
<PAGE>
HEADNOTES:
THESE FINANCIAL STATEMENTS HAVE NOT BEEN PREPARED IN ACCORDANCE WITH GAAP
BECAUSE STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO.121, "ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS, TO BE DISPOSED OF"
("SFAS 121") HAS NOT BEEN APPLIED. UPON THE APPLICATION OF SFAS 121, THE COMPANY
EXPECTS TO BE REQUIRED TO WRITE DOWN THE CARRYING VALUE OF ITS LONG-LIVED ASSETS
TO THEIR FAIR VALUE. THE COMPANY BELIEVES THE AMOUNT OF THE WRITE-DOWN WILL BE
MATERIAL; HOWEVER, IT IS NOT POSSIBLE AT THIS TIME TO DETERMINE SUCH AMOUNT.
THERE MAY ALSO BE YEAR END, DECEMBER 31, 1997 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 DECEMBER 31, 1997, NOVEMBER 30, 1997 AND OCTOBER 31, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER NOVEMBER OCTOBER
1997 1997 1997
-------------- ------------- -------------
<S> <C> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash $10,907 $7,199 $8,866
Accounts Receivable, Net 45,481 49,192 48,651
Inventory 868 1,505 2,854
Prepaid Expenses 1,439 1,088 1,104
Other Current Assets 2,782 2,758 2,766
------------- ------------- --------------
TOTAL CURRENT ASSETS 61,477 61,742 64,242
NONCURRENT ASSETS:
Property and Equipment, Net 260,358 265,034 271,848
Deferred Financing Fees, Net 22,939 23,493 24,047
Investment In Net Assets Of Equity Affiliate 1,788 1,965 1,974
Intangible Assets, Net 1,006,835 1,016,044 1,025,254
Other Assets 561 655 545
------------- ------------- --------------
TOTAL NONCURRENT ASSETS 1,292,482 1,307,191 1,323,668
TOTAL ASSETS $1,353,959 $1,368,933 $1,387,909
============= ============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES NOT SUBJECT TO COMPROMISE:
DIP Credit Facility $10,000 $12,000 $12,000
Accrued Reorganization Costs 4,897 4,520 4,496
Accrued Wages, Benefits and Payroll Taxes 13,999 12,240 11,112
Accounts Payable - Post Petition 3,633 5,360 4,265
Accrued Interest (Chase & DIP Facilities ) 4,777 4,566 4,542
Accrued Expenses and Other Current Liabilities 38,381 38,596 41,719
Advance Billings and Customer Deposits 34,252 34,537 35,529
------------- ------------- --------------
TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE 109,940 111,820 113,662
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 20,757 20,757 20,757
Accounts Payable- Pre Petition 19,647 18,593 18,224
Accrued Expenses and Other Current
Liabilities - Pre Petition 12,671 13,280 13,209
Other Liabilities 4,820 4,858 4,896
------------- ------------- --------------
TOTAL LIABILITIES SUBJECT TO COMPROMISE 1,136,670 1,136,263 1,135,860
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 (192,999) (179,497) (161,960)
------------- ------------- --------------
TOTAL STOCKHOLDERS' EQUITY 41,375 54,877 72,414
Less:
Treasury Stock (6,123) (6,123) (6,123)
------------- ------------- --------------
TOTAL STOCKHOLDERS' EQUITY 35,252 48,754 66,291
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,353,959 $1,368,933 $1,387,909
============= ============= ==============
</TABLE>
SEE ACCOMPANYING NOTES
Page 6 of 18
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS:
1. These financial statements have not been prepared in accordance with GAAP
because Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-lived Assets and for Long-lived Assets, to be
Disposed Of" ("SFAS 121") has not been applied. Upon the application of
SFAS 121, the Company expects to be required to write down the carrying
value of its long-lived assets to their fair value. The Company believes
the amount of the write-down will be material; however, it is not possible
at this time to determine such amount. There may also be year end,
December 31, 1997 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) customer
refunds; and (vii) customer rewards.
Page 7 of 18
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
On January 27, 1998, the Company filed it's Plan of Reorganization with
the Bankruptcy Court.
3. Since the Filing Date, the Debtors have continued to manage their business
as debtors-in-possession under sections 1107 and 1108 of the Bankruptcy
Code. During the pendency of the Chapter 11 cases, the Bankruptcy Court
has jurisdiction over the assets and affairs of the Debtors, and their
continued operations are subject to the Bankruptcy Court's protection and
supervision. The Debtors have sought, obtained, and are in the process of
applying for, various orders from the Bankruptcy Court intended to
stabilize and reorganize their business and minimize any disruption caused
by the Chapter 11 cases.
4. Operating expense and EBITDA for December 1997 include the favorable
impact of a $4.0 million reversal of previously recorded 1997 telephone
expense accruals. The primary reason for the reversal is due to the
Federal Communication Commission's ("FCC") recent clarification of
interconnection rules. The FCC issued a letter of clarification dated
December 30, 1997 by the FCC's Common Carrier Bureau which concluded that
the FCC's interconnection rules prohibit local exchange carriers from
assessing charges on paging carriers for the cost of dedicated facilities
used to deliver local telecommunications traffic to paging networks. This
letter, however, also noted that requests for reconsideration by the FCC
of its interconnection rules are still pending.
Bad debt expense is $0.8, $3.5 and $3.7 million, respectively in December,
November and October. The lower December bad debt expense reflects a
change in the provision due to higher cash collections in the fourth
quarter of 1997 than originally forecast.
5. Depreciation expense for October 1997 includes the unfavorable impact of a
$2.5 million adjustment to pager depreciation expense, effective October
1, 1997, for the initial impact of the Company shortening the depreciable
life of its pagers from four to three years to better reflect estimated
useful lives. The adjustment results from additional depreciation expense
taken to reduce estimated useful lives.
6. The Company is one of the largest paging companies in the U.S., with
approximately 3.4 million system reported units in service at December 31,
1997, and offers local, regional and national paging services to its
subscribers. The consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries. The Company's business is
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
for ten months in order to allow the Company to develop and consummate a
plan of reorganization that provides for a change of control of the
Company and a permissible transfer of the Company's FCC licenses. The
order, which is based on an FCC doctrine known as SECOND THURSDAY,
provides that if there is a change of control that meets the conditions of
SECOND THURSDAY, the Company's FCC issues will be resolved by the transfer
of the Company's FCC licenses to the new owners of the Company and the
hearing will not proceed. The Company believes that a reorganization plan
that provides for either a conversion of certain existing debt to equity,
in which case existing MobileMedia shares will be substantially diluted or
eliminated,
Page 9 of 18
<PAGE>
FOOTNOTES TO THE FINANCIAL STATEMENTS (CONTINUED):
or a sale of the Company will result in a change of control. The Company
filed its Joint Plan of Reorganization with the Bankruptcy Court on
January 27, 1998, which provides for such a change of control. The Company
believes that the Joint Plan of Reorganization will meet the conditions of
SECOND THURSDAY if consummated, but there can be no assurance that the
Joint Plan of Reorganization will be consummated. 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 DECEMBER 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- -------------------------------------------------------------------------------
The Debtors have 57 bank accounts. In order to minimize costs to the estate, the
Debtors have included a GAAP basis Statement of Cash Flows for the reporting
period which is attached. The Statement of Cash Flows replaces the listing of
cash receipts and disbursements, copies of the bank statements, and bank account
reconciliations.
Page 11 of 18
<PAGE>
HEADNOTES:
THESE FINANCIAL STATEMENTS HAVE NOT BEEN PREPARED IN ACCORDANCE WITH GAAP
BECAUSE STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 121, "ACCOUNTING FOR THE
IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS, TO BE DISPOSED OF"
("SFAS 121") HAS NOT BEEN APPLIED. UPON THE APPLICATION OF SFAS 121, THE COMPANY
EXPECTS TO BE REQUIRED TO WRITE DOWN THE CARRYING VALUE OF ITS LONG-LIVED ASSETS
TO THEIR FAIR VALUE. THE COMPANY BELIEVES THE AMOUNT OF THE WRITE-DOWN WILL BE
MATERIAL; HOWEVER, IT IS NOT POSSIBLE AT THIS TIME TO DETERMINE SUCH AMOUNT.
THERE MAY ALSO BE YEAR END, DECEMBER 31, 1997 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 DECEMBER 31, 1997, NOVEMBER 30, 1997 AND OCTOBER 31, 1997
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER NOVEMBER OCTOBER
1997 1997 1997
--------- ---------- ---------
<S> <C> <C> <C>
OPERATING ACTIVITIES
NET LOSS ($13,501) ($17,537) ($20,299)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Depreciation And Amortization 17,926 17,788 20,406
Provision For Uncollectible Accounts And Returns 2,532 5,985 6,342
Undistributed Earnings Of Affiliate 176 9 63
Deferred Financings Fees, Net 554 554 554
Change In Operating Assets and Liabilities:
Accounts Receivable 1,180 (6,526) 3,008
Inventory 637 1,349 1,289
Prepaid Expenses And Other Assets (315) (120) 71
Accounts Payable, Accrued Expenses and Other 527 (1,439) (1,036)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 9,715 63 10,398
INVESTING ACTIVITIES
Construction And Capital Expenditures,
Including Net Change In Pager Assets (4,006) (1,730) (4,920)
------------ ------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (4,006) (1,730) (4,920)
FINANCING ACTIVITIES
Borrowings (Repayments) of DIP Credit Facility (2,000) 0 (5,000)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (2,000) 0 (5,000)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,709 (1,667) 478
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 7,199 8,866 8,388
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $10,907 $7,199 $8,866
============ ============ ============
</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 DECEMBER 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ACCOUNTS RECEIVABLE AGING
- --------------------------------------------------------------------------------
$ 20,756,606 0 - 30 days old
------------------------ --------------------------------------
18,912,880 31 - 60 days old
------------------------ --------------------------------------
8,261,916 61 - 90 days old
------------------------ --------------------------------------
25,921,132 91+ days old
------------------------ --------------------------------------
73,852,534 TOTAL TRADE ACCOUNTS RECEIVABLE
------------------------ --------------------------------------
( 29,943,531) ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS
------------------------ --------------------------------------
43,909,003 TRADE ACCOUNTS RECEIVABLE (NET)
------------------------ --------------------------------------
1,572,196 OTHER NON-TRADE RECEIVABLES
------------------------ --------------------------------------
$ 45,481,199 ACCOUNTS RECEIVABLE, NET
- ---------------- ------------------------ --------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AGING OF POSTPETITION ACCOUNTS PAYABLE
- ---------------------- -------------------- ----------------- -------------- ---------------- -------------------
0-30 31-60 61-90 91+
Days Days Days Days Total
- ---------------------- -------------------- ----------------- -------------- ---------------- -------------------
<S> <C> <C> <C> <C> <C>
ACCOUNTS PAYABLE $ 3,571,257 39,391 11,653 10,909 $ 3,633,209
- ---------------------- -------------------- ----------------- -------------- ---------------- -------------------
</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 DECEMBER 31, 1997
DEBTOR NAME: MOBILEMEDIA CORPORATION ET AL.
CASE NUMBER: 97-174 (PJW)
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<TABLE>
<CAPTION>
STATUS OF POSTPETITION TAXES
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BEGINNING AMOUNT ENDING
TAX WITHHELD AMOUNT TAX DELINQUENT
LIABILITY OR ACCRUED PAID LIABILITY TAXES
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FEDERAL
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<S> <C> <C> <C> <C> <C>
WITHHOLDING $ 0 $ 1,729,254 $ 1,729,254 $ 0 $ 0
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FICA-EMPLOYEE 0 776,090 776,090 0 0
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FICA-EMPLOYER 0 1,508,556 1,417,212 91,344 0
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UNEMPLOYMENT 0 17,272 16,221 1,051 0
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INCOME 0 0 0 0 0
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TOTAL FEDERAL TAXES 0 4,031,172 3,938,777 92,395 0
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STATE AND LOCAL
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WITHHOLDING 0 258,561 258,561 0 0
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SALES 834,104 1,141,069 1,066,610 908,563 0
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UNEMPLOYMENT 0 74,132 68,746 5,386 0
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REAL PROPERTY 3,065,378 1,091,057 0 4,156,435 0
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OTHER 1,018,512 535,376 768,352 785,536 0
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TOTAL STATE AND LOCAL 4,917,994 3,100,195 2,162,269 5,855,920 0
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TOTAL TAXES $ 4,917,994 $ 7,131,367 $ 6,101,046 $ 5,948,315 $ 0
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</TABLE>
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<TABLE>
<CAPTION>
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PAYMENTS TO INSIDERS AND PROFESSIONALS
FOR THE MONTH ENDED DECEMBER 31, 1997
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INSIDERS
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Payee Name Position Salary/Bonus/ Reimbursable
Auto Allowance Expenses Total
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<S> <C> <C> <C> <C>
Alvarez & Marsal Chairman - Restructuring $ 54,167 $ 0 $ 54,167
Inc. - Joseph
A. Bondi
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Boykin, Roberta Assistant Corporate Counsel 8,800 - 8,800
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Burdette, H. Stephen Senior VP Corporate Development 15,000 3,175 18,175
and Senior VP Operations
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Cross, Andrew Executive VP Sales and Marketing 17,500 8,590 26,090
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Grawert, Ron Chief Executive Officer 30,769 6,777 37,546
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Gray, Patricia Secretary/Acting General Counsel 13,085 0 13,085
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Gross, Steven Senior VP Strategic Planning 14,865 5,355 20,220
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Hilson, Debra Assistant Secretary 4,662 3,098 7,760
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Hughes, Curtis Assistant VP Mgmt. Information 9,615 1,853 11,468
Systems
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Pascucci, James Assistant Treasurer 8,054 423 8,477
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Pittsman, Santo Senior VP of Administration and 15,615 0 15,615
Business Planning
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Shea, Kevin Treasurer 10,778 141 10,919
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Witsaman, Mark Senior VP and Chief Technology 15,269 14,664 29,933
Officer
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TOTAL PAYMENTS TO INSIDERS $ 262,255
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</TABLE>
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<TABLE>
<CAPTION>
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PAYMENTS TO INSIDERS AND PROFESSIONALS (CONTINUED)
FOR THE MONTH ENDED DECEMBER 31, 1997
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PROFESSIONALS
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Date of Holdback and
Name and Relationship Court Invoices Invoices Invoice Balances
Approval Received (1) Paid Due
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<S> <C> <C> <C> <C>
1. Ernst & Young - Auditor, Tax and Financial 1/30/97 $ 305,554 $ - $ 517,341
Consultants to Debtor
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2. Latham & Watkins - Counsel to Debtor 1/30/97 64,571 63,695 117,349
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3. Alvarez & Marsal Inc.- Restructuring Consultant to 1/30/97 215,590 54,167 455,658
Debtor (2)
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4. Sidley & Austin - Bankruptcy Counsel to Debtor 1/30/97 255,046 276,310 407,479
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5. Young, Conway, Stargate & Taylor - Delaware Counsel 1/30/97 20,135 - 24,319
to Debtor
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6. Wiley, Rein & Fielding - FCC Counsel to Debtor 1/30/97 46,571 76,407 134,755
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7. Koteen & Naftalin - FCC Counsel to Debtor 6/11/97 - 179 3,945
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8. Houlihan, Lokey, Howard & Zukin - Advisors to the 6/04/97 - - 125,000
Creditors' Committee
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9. Jones, Day, Reavis & Pogue - Counsel to the 4/03/97 - - 11,817
Creditors' Committee
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10. Morris, Nichols, Arsht & Tunnell - Delaware Counsel 4/03/97 1,787 - 3,390
to the Creditors' Committee
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11. Paul, Weiss, Rifkind, Wharton & Garrison - FCC 4/25/97 1,252 - 22,692
Counsel to the Creditors' Committee
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12. The Blackstone Group LP - Financial Advisors to 7/10/97 - - 100,000
Debtor
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13. Gerry, Friend & Sapronov, LLP. - Counsel to Debtor 10/27/97 99,495 42,688 188,443
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TOTAL $ 1,010,001 $ 513,446 $ 2,112,188
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</TABLE>
(1) Excludes invoices for fees and expenses through December 31, 1997 that were
received by the Debtors subsequent to December 31, 1997.
(2) Includes fees and expenses for David R. Gibson, Senior Vice President and
Chief Financial Officer (effective June 24, 1997).
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<TABLE>
<CAPTION>
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ADEQUATE PROTECTION PAYMENTS
FOR THE MONTH ENDED DECEMBER 31, 1997
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SCHEDULED AMOUNTS
MONTHLY PAID TOTAL
PAYMENTS DURING UNPAID
NAME OF CREDITOR DUE MONTH POSTPETITION
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<S> <C> <C> <C>
The Chase Manhattan Bank - (Interest) $ 4,738,972 $ 4,738,972* $ 0
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</TABLE>
* Payment made on 1/2/98.
<TABLE>
<CAPTION>
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QUESTIONNAIRE
FOR THE MONTH ENDED DECEMBER 31, 1997 YES NO
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<S> <C> <C>
1. Have any assets been sold or transferred outside the normal course of business this reporting period? NO
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2. Have any funds been disbursed from any account other than a debtor in possession account? NO
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3. Are any postpetition receivables (accounts, notes, or loans) due from related parties? NO
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4. Have any payments been made of prepetition liabilities this reporting period? YES
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5. Have any postpetition loans been received by the debtor from any party? YES
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6. Are any postpetition payroll taxes past due? NO
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7. Are any postpetition state or federal income taxes past due? NO
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8. Are any postpetition real estate taxes past due? NO
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9. Are any postpetition taxes past due? NO
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10. Are any amounts owed to postpetition creditors past due? NO
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11. Have any prepetition taxes been paid during the reporting period? YES
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12. Are any wage payments past due? NO
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</TABLE>
If the answer to any of the above questions is "YES", provide a detailed
explanation of each item.
Item 4 & 11. The Court has authorized the Debtors to pay certain
pre-petition creditors. These permitted pre-petition
payments include (i) employee salary and wages; (ii)
certain employee benefits and travel expenses; (iii)
certain amounts owing to essential vendors; (iv) trust fund
type sales and use taxes; (v) trust fund payroll taxes;
(vi) customer refunds; and (vii) customer rewards.
Item 5. During the month of February 1997, the Debtors drew down
$45 million of borrowings under the DIP facility with The
Chase Manhattan Bank, as agent for the lenders thereunder.
During the months of March and April 1997, the Debtors
repaid $25 million and $5 million, respectively, of
borrowings under the DIP facility. The Debtors drew down an
additional $2 million under the DIP facility during the
month of August and repaid $5 million and $2 million of
borrowings under the DIP facility during the months of
October and December 1997, respectively.
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INSURANCE
FOR THE MONTH ENDED DECEMBER 31, 1997
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THERE WERE NO CHANGES IN INSURANCE COVERAGE FOR THE REPORTING PERIOD.
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PERSONNEL
FOR THE MONTH ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
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Full Time Part Time
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<S> <C> <C>
1. Total number of employees at beginning of period 3,448 48
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2. Number of employees hired during the period 15 7
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3. Number of employees terminated or resigned during the period 8 12
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4. Total number of employees on payroll at end of period 3,455 43
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</TABLE>
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