<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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, 2000
Citadel Communications Corporation
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(Exact Name of Registrant as Specified in its Charter)
Nevada
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(State or Other Jurisdiction of Incorporation)
000-24515 86-0748219
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(Commission File Number) (IRS Employer Identification No.)
City Center West, Suite 400
7201 West Lake Mead Boulevard
Las Vegas, Nevada 89128
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(Address of Principal Executive Offices) (Zip Code)
(702) 804-5200
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(Registrant's Telephone Number, Including Area Code)
<PAGE> 2
This report includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are based largely on current expectations and projections about future events
and financial trends affecting Citadel Communications Corporation's business.
The words "expects" and "intends" and similar words are intended to identify
forward-looking statements. In addition, any statements that refer to
expectations or other characterizations of future events or circumstances are
forward-looking statements. The forward-looking statements in this report are
subject to risks, uncertainties and assumptions including, among other things:
o the realization of Citadel Communications' business strategy,
o general economic and business conditions, both nationally and in
Citadel Communications' radio markets,
o Citadel Communications' expectations and estimates concerning future
financial performance, financing plans and the impact of competition,
o anticipated trends in Citadel Communications' industry, and
o the impact of current or pending legislation and regulation and
antitrust considerations.
In light of these risks and uncertainties, the forward-looking events and
circumstances discussed in this report might not transpire. Citadel
Communications undertakes no obligation to publicly update or revise any
forward-looking statements because of new information, future events or
otherwise.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 2, 2000, Citadel Communications Corporation's subsidiary, Citadel
Broadcasting Company, completed its acquisition from Dick Broadcasting Company,
Inc. of Tennessee and related entities of (i) three FM radio stations and one AM
radio station serving Knoxville, Tennessee, two FM radio stations serving
Nashville, Tennessee, and three FM and two AM radio stations serving Birmingham,
Alabama, and (ii) related real estate used in connection with the operation of
the stations. The aggregate purchase price was approximately $288.6 million in
cash. The asset purchase agreement governing the acquisition provides for future
purchase price adjustments in favor of Citadel Broadcasting if the stations do
not meet certain financial criteria. The purchase price was paid with amounts
borrowed under Citadel Broadcasting's credit facility with Credit Suisse First
Boston, as Lead Arranger, Administrative Agent and Collateral Agent; FINOVA
Capital Corporation, as Syndication Agent; First Union National Bank and Fleet
National Bank, as Documentation Agents; and
<PAGE> 3
the lenders identified in Exhibit 4.1 to this report. A description of the
credit facility is included in Item 5 of this report.
Citadel Communications began operating the acquired radio stations through
Citadel Broadcasting on October 1, 2000, and intends to continue operating the
stations.
Certain financial information of certain of the selling entities and pro
forma financial information of Citadel Communications Corporation and Subsidiary
is included in Item 7 of this report.
ITEM 5. OTHER EVENTS
Amended and Restated Credit Facility
On October 2, 2000, Citadel Communications and Citadel Broadcasting
entered into a credit facility (the "Credit Facility") provided pursuant to a
Second Amended and Restated Credit Agreement of the same date, by and among
Citadel Broadcasting and Citadel Communications, Credit Suisse First Boston, as
Lead Arranger, Administrative Agent and Collateral Agent, and the lenders named
therein (the "Credit Agreement").
The Credit Agreement provides for the making to Citadel Broadcasting,
by the lenders of (a) term loans (the "Tranche A Term Loans") at any time prior
to December 15, 2000 in an aggregate principal amount not in excess of $325.0
million, (b) a term loan (the "Tranche B Term Loan" and together with the
Tranche A Term Loans, the "Term Loan Facility") in the principal amount of
$200.0 million, and (c) revolving loans at any time and from time to time prior
to March 31, 2006, in an aggregate principal amount at any one time outstanding
not in excess of $225.0 million (the "Revolving Credit Facility"). Of the $225.0
million which is available in the form of revolving loans under the Revolving
Credit Facility, up to $50.0 million of the Revolving Credit Facility may be
made available in the form of letters of credit. In addition, Citadel
Broadcasting may request up to $150.0 million in additional loans, which loans
may be made at the sole discretion of the lenders. Of such additional $150.0
million amount, at the request of Citadel Broadcasting, up to $100.0 million may
be in the form of an increase in the $225.0 million revolving credit commitment.
The lenders are under no obligation whatsoever to make such additional $150.0
million available, whether in the form of term loans, revolving loans or
otherwise. As of October 2, 2000, $249.0 million had been borrowed as Tranche A
Term Loans, $200.0 million had been borrowed as a Tranche B Term Loan and $220.0
million had been borrowed under the Revolving Credit Facility. No letters of
credit were issued and outstanding.
Term Loans. Additional draws may be made under the Tranche A Term Loans
to finance permitted acquisitions and to pay related fees and expenses. The
maturity date for the Tranche A Term Loans is December 31, 2006 (subject to
extension to December 31, 2007). The amount of any Tranche A Term Loans
outstanding on December 17, 2002 must be repaid in varying quarterly
installments ranging from 3.75% of the amount on March 31, 2003 to 6.25% of the
amount on December 31, 2007 (if maturity is extended to such date).
<PAGE> 4
The maturity date of the Tranche B Term Loan is March 31, 2007 (subject
to extension to June 30, 2008). The Tranche B Term Loan must be repaid in
quarterly installments ranging from .25% of the amount from March 31, 2003 to
March 31, 2008 and 94.75% of the amount on June 30, 2008 (if maturity is
extended to such date).
In addition, mandatory prepayments must be made under the Term Loan
Facility upon the happening of certain events. All required prepayments shall be
applied as follows:
o first, pro rata between the then outstanding Tranche A Term
Loans and the Tranche B Term Loan against the remaining
scheduled installments of principal due in respect of such
terms loans until all such principal is paid in full, and
o thereafter, to permanently reduce the revolving credit
commitment and, if necessary, prepay revolving loans and/or
cash collateralize letters of credit to the extent that letter
of credit exposure would exceed the total revolving credit
commitment after giving effect to any such reduction.
However, for so long as the Tranche B Term Loan is outstanding, lenders with any
portion of such outstanding loan may decline to accept any mandatory prepayment
of such loan and cause all or a portion of the prepayment to instead be
allocated to the then-outstanding Tranche A Term Loans to be applied pro rata
against the remaining scheduled installments of principal due in respect
thereof.
Revolving Loans. Additional draws may be made under the Revolving
Credit Facility, subject to the satisfaction of certain conditions, for general
corporate purposes, including for working capital, capital expenditures, and to
finance permitted acquisitions. The Revolving Credit Facility must be paid in
full on or before December 31, 2006 (subject to extension to December 31, 2007).
In addition, the mandatory prepayments must be made under the Revolving Credit
Facility upon the happening of certain events. All required prepayments shall be
applied as discussed above.
Voluntary Prepayments. Voluntary prepayments of the Credit Facility are
permitted without premium or penalty, subject to minimum notice requirements and
minimum prepayment requirements and the payment of any applicable LIBOR breakage
fees. At Citadel Broadcasting's option, any portion of the revolving loans which
has been prepaid or repaid may be reborrowed, and the maximum amount of the
revolving credit commitment may be permanently reduced.
Letter of Credit Facility. The letter of credit facility, which is a
subfacility of the Revolving Credit Facility, provides for the issuance of
letters of credit to be used by Citadel Broadcasting as security for the
obligations of Citadel Broadcasting under agreements entered into in connection
with certain radio station acquisitions and for any other purposes related to
the business of Citadel Broadcasting. The letter of credit facility requires the
payment by Citadel Broadcasting of a fronting fee of 1/8 of 1% on the face
amount of each outstanding letter of credit. Such fronting fee is payable
quarterly in arrears to the bank issuing the letter of credit. Citadel
Broadcasting is also required to pay to each revolving credit lender (through
the Administrative Agent), on the last day of each quarter, a letter of credit
participation fee equal to such lender's pro rata portion of the outstanding
letters of credit multiplied by the then applicable margin for
<PAGE> 5
Adjusted LIBO Rate (as defined below) advances under the Revolving Credit
Facility. Standard issuance and drawing fees are also payable to the bank or
banks issuing the letters of credit.
Interest Rates. The Credit Facility bears interest at a rate equal to
the applicable margin plus either (a) the greater of (i) the per annum rate of
interest publicly announced from time to time by Credit Suisse First Boston in
New York, New York, as its prime rate of interest (the "Prime Rate") and which
may be changed automatically without notice, as the Prime Rate changes, or (ii)
the federal funds effective rate as in effect from time to time plus 1/2 of 1%,
and which may be changed automatically without notice, as the federal funds
effective rate changes (with the greater of (i) or (ii) being referred to herein
as the "Alternate Base Rate"), or (b) at the written election of Citadel
Broadcasting, at a rate determined by the Administrative Agent to be the
Adjusted LIBO Rate for the respective interest period. The LIBO Rate is
determined by reference to the British Bankers' Association Interest Settlement
Rates for deposits in dollars (as set forth by the Bloomberg Information Service
or an appropriate successor) for a period equal to the interest period selected
by Citadel Broadcasting. The Adjusted LIBO Rate is the product of (i) the LIBO
Rate and (ii) a fraction, the numerator of which is 1.00 and the denominator of
which is 1.00 minus the aggregate of the maximum reserve percentages established
by the Federal Reserve Board or other banking authority to which the
Administrative Agent or any lender is subject, in effect from time to time. The
applicable margin for the Tranche B Term Loan is 2.00% or 3.00%, respectively,
for Alternative Base Rate and Adjusted LIBO Rate. The applicable margins for the
Tranche A Term Loans and the revolving loans are expected to range between 0.00%
and 1.75% for the Alternate Base Rate and 0.75% to 2.75% for the Adjusted LIBO
Rate, depending on the consolidated leverage ratio from time to time. Except as
otherwise provided with respect to voluntary and mandatory prepayments, interest
on loans bearing interest at the Alternate Base Rate plus the applicable margin,
will be payable quarterly in arrears on the last business day of each calendar
quarter, and interest on loans bearing interest at the Adjusted LIBO Rate plus
the applicable margin, will be payable on the last day of the interest period
applicable to such loan (unless the interest period is greater than 3 months, in
which event interest shall be payable at the end of each successive 3 month
period during which such interest period is in effect). The interest rate after
a payment default shall, in the case of a default in the payment of principal,
be 2% in excess of the otherwise applicable interest rate, and, in the case of
any other payment default, be 2% in excess of the Alternate Base Rate plus the
applicable margin at such time.
Certain Other Fees. Citadel Broadcasting is required to pay to each
lender (through the Administrative Agent), on the last business day of each
calendar quarter, a commitment fee equal to the applicable percentage per annum
on the daily unused amount of the commitments of such lender during the
preceding quarter. The applicable percentage will vary from 0.25% to 0.5%
depending on the consolidated leverage ratio.
Security and Guarantee. Subject to permitted liens, the Credit Facility
is secured by:
(a) a first priority pledge on all of Citadel Broadcasting's capital
stock other than Citadel Broadcasting's exchangeable preferred stock,
(b) a first priority security interest in all the existing and
after-acquired property of Citadel Communications and Citadel Broadcasting,
including, without limitation, accounts, machinery, equipment, inventory, real
estate, general intangibles and investment property, and
<PAGE> 6
(c) all proceeds of the foregoing.
The Credit Facility is also guaranteed by Citadel Communications.
Hedging Obligations. The Credit Facility also requires that no less
than 50% of Citadel Broadcasting's long-term indebtedness be subject to fixed
interest rates. If Citadel Broadcasting's total variable debt under the Credit
Facility exceeds this 50% threshold, Citadel Broadcasting is required to enter
into a hedging contract that will convert a portion of the variable rate into a
fixed rate. On June 30, 2000 and August 23, 2000, Citadel Broadcasting entered
into one-year interest rate swap transactions in notional amounts of $25.0
million and $40.0 million, respectively. The Company will pay a fixed rate of
7.055% and 6.855%, respectively, and will receive a variable rate based on
LIBOR. As a result of the borrowings made to complete the acquisition reported
in Item 2 of this report, Citadel Broadcasting expects to enter into one or more
additional interest rate swap transactions in the aggregate notional amount of
approximately $140.0 million.
Change of Control. The Credit Facility provides that a change in
control or ownership will be an event of default under the Credit Facility. A
change in control or ownership shall occur if:
(a) any person or group of persons acting in concert shall own more
than 35% of the common stock of Citadel Communications;
(b) a majority of the seats (other than vacant seats) on the board of
directors of Citadel Communications shall at any time be occupied by persons who
were neither (i) nominated by the board of directors of Citadel Communications
nor (ii) appointed by directors so nominated;
(c) any change in control (or similar event, however denominated) with
respect to Citadel Communications or Citadel Broadcasting shall occur under and
as defined in any indenture or agreement in respect of material indebtedness; or
(d) Citadel Communications shall cease to own, directly or indirectly,
100% of the issuing and outstanding voting equity interests of Citadel
Broadcasting.
Covenants. The Credit Facility contains customary restrictive
covenants, which, among other things, and with exceptions, limit the ability of
Citadel Broadcasting and Citadel Communications to incur additional indebtedness
and liens, enter into transactions with affiliates, make acquisitions other than
permitted acquisitions, pay dividends, redeem or repurchase capital stock, enter
into certain sale and leaseback transactions, consolidate, merge or effect asset
sales, issue additional equity, make capital expenditures, make investments,
loans or prepayments or change the nature of their business. Citadel
Broadcasting and Citadel Communications are also required to satisfy financial
covenants which will require Citadel Communications and Citadel Broadcasting to
maintain specified financial ratios and to comply with financial tests,
including ratios with respect to maximum leverage, minimum interest coverage and
minimum fixed charge coverage.
<PAGE> 7
Permitted Acquisitions. A permitted acquisition under the Credit
Facility is an acquisition of (a) a radio station or radio stations (each a
"Station"), (b) any business which is ancillary to the ownership or operation of
a Station, or (c) any business that is an internet service provider or ancillary
to the business of an internet service provider (provided that the aggregate
consideration for the acquisition of internet service providers does not exceed
$10.0 million). In addition, a permitted acquisition is subject to pro forma
compliance with the leverage, interest coverage and fixed charge coverage ratios
set forth below. All acquired assets will be subject to a security interest in
favor of the Administrative Agent for the benefit of the lenders.
Maximum Leverage Test. The maximum leverage test requires that Citadel
Broadcasting and Citadel Communications not permit the ratio of (a) their total
debt as of the last day of the most recently ended quarter to (b) their
consolidated EBITDA, as adjusted for permitted acquisitions and dispositions,
for the rolling four-fiscal-quarter period ending as of the last day of such
quarter, to be greater than the applicable ratio on that date. The applicable
ratios range from 7.25x through September 30, 2001 to 4.0x after March 31, 2004.
Minimum Interest Coverage Test. The minimum interest coverage test
requires that Citadel Broadcasting and Citadel Communications not permit the
ratio of (a) their consolidated EBITDA for any rolling four-fiscal-quarter
period to (b) their consolidated interest expense for such period, to be less
than the applicable ratio on that date. The applicable ratios range from 1.5x
through June 30, 2002 to 2.5x after December 31, 2003.
Minimum Fixed Charges Coverage Test. The minimum fixed charges coverage
test requires that Citadel Broadcasting and Citadel Communications not permit
the ratio of (a) their consolidated EBITDA for any rolling four-fiscal-quarter
period to (b) their fixed charges for such period to be less than 1.25 to 1.00.
Events of Default. The Credit Facility contains customary events of
default. Upon the occurrence of an event of default, with certain limitations,
Citadel Broadcasting's and Citadel Communications' obligations under the Credit
Facility which are at that time outstanding may become accelerated.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements. The following audited combined financial
statements of Dick Broadcasting Company, Inc. of Tennessee and
Subsidiaries, Dick Broadcasting Company, Inc. of Nashville, and Dick
Radio Alabama, Inc. are included in this report:
Independent Auditors' Report
Combined Balance Sheet as of December 31, 1999
Combined Statement of Income for the year ended December 31, 1999
Combined Statement of Stockholders' Equity for the year ended
December 31, 1999
<PAGE> 8
Combined Statement of Cash Flows for the year ended December 31, 1999
Notes to Combined Financial Statements
The following unaudited consolidated financial statements of Dick
Broadcasting Company, Inc. of Tennessee and Subsidiaries are included
in this report:
Consolidated Balance Sheets as of June 30, 2000 and 1999
Consolidated Statements of Income (Loss) for the six months ended June
30, 2000 and 1999
Consolidated Statements of Stockholders' Equity for the six months
ended June 30, 2000 and 1999
Consolidated Statements of Cash Flows for the six months ended June 30,
2000 and 1999
Notes to Unaudited Consolidated Financial Statements
(b) Pro Forma Financial Information. The following pro forma financial
information of Citadel Communications Corporation and Subsidiary is
included herein:
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30,
2000
Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the six months ended June 30, 2000
Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1999
(c) Exhibits. The following exhibits are filed as part of this report:
2.1 Asset Purchase Agreement effective as of April 30, 2000 among Dick
Broadcasting Company, Inc. of Tennessee, Dick Broadcasting Company,
Inc. of Alabama, Dick Broadcasting Company, Inc. of Nashville, Dick
Radio Alabama, Inc., DFT Realty, DFT Realty II, LLC, James Allen Dick,
Sr., James Allen Dick, Jr., Charles Arthur Dick, Emily Dick McAlister,
Jeannette Dick Hundley and Citadel Broadcasting Company (incorporated
by reference to Exhibit 2.1 to Citadel Communications Corporation's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2000).
2.2 First Amendment to Asset Purchase Agreement dated September 30, 2000
among Dick Broadcasting Company, Inc. of Tennessee, Dick Broadcasting
Company, Inc. of Alabama, DFT Realty, DFT Realty II, LLC, James Allen
Dick, Sr., James Allen Dick, Jr., Charles Arthur Dick, Emily Dick
McAlister, Jeannette Dick Hundley and Citadel Broadcasting Company.
4.1 Second Amended and Restated Credit Agreement dated as of October 2,
2000 among Citadel Broadcasting Company, Citadel Communications
Corporation, Credit Suisse First Boston, as Lead Arranger,
Administrative Agent and Collateral Agent, FINOVA Capital Corporation,
as Syndication
<PAGE> 9
Agent, First Union National Bank and Fleet National Bank, as
Documentation Agents, and the lenders named therein.
23.1 Consent of Hines and Company, P.C.
<PAGE> 10
DICK BROADCASTING COMPANY, INC.
OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC.
OF NASHVILLE
DICK RADIO ALABAMA, INC.
DECEMBER 31, 1999
WITH INDEPENDENT AUDITORS' REPORT
<PAGE> 11
HINES AND COMPANY, P.C.
Certified Public Accountants
405 Agnes Road
Post Office Box 11447
Knoxville, Tennessee 37939
Phone: (865) 584-3300
Fax: (865) 588-5757
Jenny L. Hines, CPA Claudia P. Depew, CPA
Janna S. Hubbs, CPA Karen N. Ellis, CPA
Tracy L. Wright, CPA
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INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
Dick Broadcasting Company, Inc. of Tennessee
Dick Broadcasting Company, Inc. of Nashville
Dick Radio Alabama, Inc.
We have audited the accompanying combined balance sheets of Dick
Broadcasting Company, Inc. of Tennessee and subsidiaries, Dick Broadcasting
Company, Inc. of Nashville, and Dick Radio Alabama, Inc. as of December 31, 1999
and the related combined statements of income, stockholders' equity, and cash
flows for the year then ended. These combined financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these combined financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of Dick
Broadcasting Company, Inc. of Tennessee and subsidiaries, Dick Broadcasting
Company, Inc. of Nashville, and Dick Radio Alabama, Inc. at December 31, 1999
and the results of their operations and their cash flows for the year then
ended, in conformity with generally accepted accounting principles.
/s/ Hines and Company, P.C.
March 10, 2000
<PAGE> 12
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
COMBINED BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999
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<S> <C>
ASSETS
Current assets:
Cash $ 802,096
Accounts and notes receivable:
Trade, less allowance for doubtful accounts
Of $215,585 and $243,712 in 1999 7,958,692
Stockholders 124,864
Related party 118,867
Other 127,745
Interest receivable:
Stockholders 23,257
Related party 44,923
Prepaid expenses 1,025,408
Deferred income tax 46,807
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Total current assets 10,272,659
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Cash value of life insurance, net policy loans
of $63,621 in 1999 and 1998 613,344
Note receivable:
Stockholder 20,638,245
Related party 4,342,380
Deferred income tax 698,415
Investments 534,310
Other assets 60,972
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26,887,666
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Property and equipment 26,812,121
Less accumulated depreciation and amortization 13,482,603
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13,329,518
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Intangible assets:
Federal Communications Commission licenses 21,345,818
Other 374,603
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21,720,421
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Total assets $72,210,264
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 13
<TABLE>
<CAPTION>
1999
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<S> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 3,583,671
Current maturities of capitalized lease
Obligations 287,064
Notes payable - stockholders 804,548
Interest payable:
Stockholders 210,580
Other 495,924
Accounts payable 604,846
Accrued expenses 992,388
Income taxes payable 28,333
Deferred income taxes 2,697
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Total current liabilities 7,067,296
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Long-term debt, less current maturities 27,264,335
Capitalized lease obligations, less current
maturities 4,191,846
Notes payable - stockholders 15,382,200
Deferred income taxes 1,449,306
Deferred compensation 1,621,042
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49,908,729
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Stockholders' equity:
Common stock 3,001,592
Additional paid-in capital 183,102
Retained earnings 12,049,545
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Total stockholders' equity 15,234,239
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Total liabilities and stockholders' equity $72,210,264
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 14
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
COMBINED STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
Revenue:
Sales $44,377,263
Other operating revenue 1,404,956
-----------
45,782,219
Direct expenses 4,927,131
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Gross profit 40,855,088
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Operating expenses:
Technical expenses 1,003,689
Program and news expense 13,014,048
Sales expense 9,425,385
Rental and leasing expenses 491,041
-----------
23,934,163
General and administrative expenses 12,548,841
-----------
36,483,004
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Income from operations 4,372,084
-----------
Other income (expense):
Interest income 1,600,007
Interest expense (3,354,015
Rent income 250,420
Gain(loss)on sale of assets (140,617
Loss from partnership (246,322
Income (loss) in joint venture (1,231,808
Other income 30,981
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(3,091,354
-----------
Income before income taxes 1,280,730
Income tax expense 448,326
-----------
Net income $ 832,404
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 15
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
COMMON STOCK
---------------------- ADDITIONAL
STATED PAID-IN RETAINED
SHARES VALUE CAPITAL EARNINGS TOTAL
------ ---------- -------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1998 18,466 3,001,592 183,102 14,658,242 17,842,936
------ ---------- -------- ----------- -----------
Net income, 1999 832,404 832,404
------ ---------- -------- ----------- -----------
Distribution to shareholders (3,441,101) (3,441,101)
------ ---------- -------- ----------- -----------
Balance, December 31, 1999 18,466 $3,001,592 $183,102 $12,049,545 $15,234,239
====== ========== ======== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 16
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999
----------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME $ 832,404
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 3,606,112
Net loss from investments 249,131
(Gain)(Loss) on disposal of fixed assets 141,585
Deferred income taxes (154,178)
Deferred compensation 55,744
Changes in assets and liabilities (Increase) decrease in assets:
Trade receivables 1,111,168
Other receivables (1,196)
Interest receivable (47,903)
Prepaid expenses 128,506
Other assets 94,787
Increase (decrease) in liabilities:
Accounts payable 289,192
Interest payable 532,800
Accrued expenses (113,804)
Income tax payable (47,054)
----------
Net cash provided (used) by operating
Activities 6,677,294
----------
</TABLE>
See accompanying notes to financial statements.
<PAGE> 17
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
COMBINED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in cash value of life insurance (99,494)
Capital expenditures (1,404,144)
Proceeds from sale of assets 62,325
Contributions to investments --
Issuance of stockholder notes receivable (2,492,039)
Stockholder notes repaid 1,554,792
Issuance of related party notes receivable (252,441)
Related party notes repaid 450,704
Principal repayments of capitalized
lease obligations (266,385)
Distributions from investments --
-----------
Net cash provided (used) by investing
activities (2,446,682)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal repayments on long-term debt (3,578,446)
Proceeds from issuance of long term debt 3,500,000
Proceeds from issuance of stockholder
notes payable 3,519,036
Repayment of stockholder notes payable (1,106,178)
Distributions paid to shareholders (3,441,101)
-----------
Net cash provided (used) by financing
activities (4,606,689)
-----------
Net increase (decrease) in cash (376,077)
Cash at beginning of year 1,178,173
-----------
Cash at end of year $ 802,096
===========
Supplemental disclosure of cash flow information: Cash payments for:
Interest $ 2,838,554
===========
Income Taxes $ 586,646
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 18
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity
Dick Broadcasting Company's operations are primarily related to radio
broadcasting. The Company has operations in Tennessee, North Carolina
and Alabama. Credit is extended to customers in the normal course of
business.
Intangible Assets
Federal Communications Commission (FCC) licenses are being amortized
over a range of fifteen (15) to forty (40) years using the
straight-line method. Other intangible assets are amortized over the
life of the underlying agreement using the straight-line method.
Trade-Out Transactions
The Company enters into agreements in which advertising time is traded
for various products or services. Trade-out transactions are valued at
the normal advertising rates in effect. The company records both an
asset and liability at the time of the transaction. Income and expense
are recognized when advertisements are aired or when goods and services
are received.
Income Taxes
Deferred income taxes have been provided under the liability method.
Deferred tax assets and liabilities are determined based upon the
estimated future tax effects of differences between the financial
statement and tax bases of assets and liabilities, as measured by the
current enacted tax rates. Deferred tax expense is the result of
changes in the deferred tax asset and liability.
Dick Broadcasting Company, Inc. of Tennessee and subsidiaries (with the
exception of Dick Broadcasting Company, Inc. of Alabama), Dick
Broadcasting Company, Inc. of Nashville, and Dick Radio Alabama, Inc.
have elected to be taxed under the provisions of subchapter "S" of the
Internal Revenue Code and comparable state regulations. Under these
provisions, the corporations do not pay federal income taxes on their
taxable income (nor are they allowed a net operating loss carryback or
carryover). Instead, the stockholders report their proportionate share
of each companies' taxable income (loss) and tax credits on their
personal income tax returns.
The company has committed to distribute dividends to the shareholders
at least sufficient to reimburse them for income taxes incurred as a
result of the subchapter "S" election.
<PAGE> 19
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred Compensation Plan
The Company previously had a deferred compensation plan. Under this
plan an annual provision, based on pro rata shares of the net increase
in stockholders' investment, was allocated to certain officers of the
Company. Beginning January 1, 1998, there were no additional accruals
of payment obligations under the old plan. Interest of 7% per annum
will be credited on certain deferred balances accumulated prior to
January 1, 1998, by the Company. This interest will either be paid out
within 90 days of the end of each fiscal year or added to the deferred
balance and compounded annually at the option of each officer. In the
event of termination of the officer's employment, the deferred balance,
together with any interest earned but not previously paid out, is to be
paid to the officer, in a lump sum within 90 days. If the termination
is not due to death or disability, the Company may elect to pay the
deferred obligation in monthly installments of principal and interest
over a period not to exceed three years.
Principles of Combination
The accompanying combined financial statements present the combination
of the consolidated financial statements of Dick Broadcasting Company,
Inc. of Tennessee and subsidiaries and the financial statements of its
affiliates, Dick Broadcasting Company, Inc. of Nashville and Dick Radio
Alabama, Inc., all of which are under common control. Material
intercompany transactions and balances have been eliminated in
combination.
Dick Broadcasting Company, Inc. of Tennessee's approximate percentage
of ownership in its subsidiaries are as follows:
<TABLE>
<CAPTION>
1999
----
<S> <C>
DBC of North Carolina, Inc. 100%
DBC of Alabama, Inc. 100%
</TABLE>
<PAGE> 20
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Related Companies
Arthur Dick Construction Company, a related corporation with a common
shareholder, has operations in North Carolina.
Eagle Syndication, a related limited liability company with common
management, has operations in North Carolina.
Dick Family Realty I and II, related limited liability companies with
common directors, have operations in Tennessee, Alabama and North
Carolina.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed
using the straight-line and declining balance methods. When assets are
retired or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts and any resulting gain or
loss is recognized in income for the period. The cost of maintenance
and repairs is charged to income as incurred; significant renewals and
betterments are capitalized.
Cash Equivalents
For purposes of the statements of cash flows, the Company considers all
highly liquid investments with original maturities of three months or
less to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from these estimates.
Advertising Costs
The Company expenses advertising costs as incurred.
<PAGE> 21
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
2. NOTES RECEIVABLE
<TABLE>
<CAPTION>
1999
----------
<S> <C>
Stockholders:
Notes receivable from stockholders consisted of the following at
December 31, 1999:
Unsecured promissory note receivable bearing a variable interest rate
equivalent to a local lending institution. Annual repayment terms
correspond to like amounts required by revolving credit commitment. $3,095,550
Unsecured promissory note receivable bearing a variable interest rate
equivalent to a local lending institution. Annual repayment terms
correspond to like amounts required by revolving credit commitment. 3,095,550
Unsecured promissory note receivable bearing a variable interest rate
equivalent to a local lending institution. Annual repayment terms
correspond to like amounts required by revolving credit commitment. 3,095,550
Unsecured promissory note receivable bearing a variable interest rate
equivalent to a local lending institution. Annual repayment terms
correspond to like amounts required by revolving credit commitment. 3,095,550
7% promissory note requiring forty quarterly payments commencing
3/1/97. All outstanding principal and accrued interest shall be due and
payable on 1/1/07. Secured by stock pledge agreement. 1,285,714
</TABLE>
<PAGE> 22
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
2. NOTES RECEIVABLE (CONTINUED)
<TABLE>
<CAPTION>
1999
---------
<S> <C>
7% promissory note requiring forty quarterly payments commencing 3/1/97.
All outstanding principal and accrued interest shall be due and payable
1/1/07. Secured by stock pledge agreement. 364,981
7% promissory note requiring forty quarterly payments commencing
3/1/97. All outstanding principal and accrued interest shall be due and
payable on 1/1/07. Secured by stock pledge agreement. 1,342,761
7% promissory note requiring forty quarterly payments commencing
3/1/97. All outstanding principal and accrued interest shall be due and
payable on 1/1/07. Secured by stock pledge agreement. 1,337,241
Unsecured variable rate demand note receivable. Interest rate based on
prime plus .25%. Interest only due annually. Principal is due on demand. 237,643
Unsecured variable rate demand note receivable. Interest rate based on
prime plus .25%. Interest only due annually. Principal is due on demand. 351,120
Unsecured variable rate demand note receivable. Interest rate based on
prime plus .25%. Interest only due annually. Principal is due on demand. 321,733
Unsecured variable rate demand note receivable. Interest rate based on
prime plus .25%. Interest only due annually. Principal is due on demand. 262,960
Unsecured variable rate demand note Receivable. Interest due quarterly. 108,330
Unsecured variable rate demand note Receivable. Interest due quarterly. 146,865
Unsecured variable rate demand note Receivable. Interest due quarterly. 268,613
</TABLE>
<PAGE> 23
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
2. NOTES RECEIVABLE (CONTINUED)
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
Unsecured variable rate demand note
receivable. Interest due quarterly. 764,922
Unsecured variable rate demand note
receivable. Interest due quarterly. 292,853
Unsecured variable rate demand note
receivable. Interest due quarterly. 292,853
Unsecured variable rate demand note
receivable. Interest due quarterly. 292,853
Unsecured variable rate demand note
receivable. Interest due quarterly. 292,853
Variable rate promissory note with interest
due annually. Principal is due on March 31,
2001. Secured by deed of trust. 291,750
Loans to stockholders 124,864
-----------
$20,763,109
===========
Current $ 124,864
Long-term 20,638,245
-----------
$20,763,109
===========
Other related parties:
Notes receivable from other related parties consisted of the following at
December 31, 1999:
Unsecured variable rate demand note receivable. Interest due quarterly. $ 164,991
Unsecured variable rate demand note requiring forty quarterly payments
Interest due quarterly. 2,536,409
</TABLE>
<PAGE> 24
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
2. NOTES RECEIVABLE (CONTINUED)
<TABLE>
<CAPTION>
1999
----------
<S> <C>
Variable rate promissory note requiring twenty-seven quarterly payments
commencing 12/1/97. Secured by aircraft. 623,701
Unsecured variable rate demand note receivable. Interest rate based on
prime plus .25%. Interest due quarterly. Principal is due on demand. 1,017,279
Loans to related parties. Interest rate based on prime rate. 118,867
----------
$4,461,247
==========
Current $ 118,867
Long-term 4,342,380
----------
$4,461,247
==========
</TABLE>
3. INVESTMENTS
Investments held by the Company as of December 31, 1999 consist of a 50%
interest in one partnership and a joint venture The Company's investments
are accounted for on the equity method
<TABLE>
<CAPTION>
1999
--------
<S> <C>
DBC of North Carolina/Ellison Company 238,433
DBC of Nashville/Capitol Sports 295,877
--------
$534,310
========
</TABLE>
<PAGE> 25
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
3. INVESTMENTS (CONTINUED)
A summary of the changes in the recorded amount of each investment for
the year ended December 31, 1999 follows:
<TABLE>
<CAPTION>
DBC OF NORTH CAROLINA/ELLISON COMPANY
-------------------------------------
<S> <C>
Contributions $ 484,755
Pro rata share of net loss (246,322)
---------
Carrying value of investment $ 238,433
=========
Assets $ 489,861
=========
Liabilities $ 12,994
Partners' capital 476,867
---------
$ 489,861
=========
Net loss $(492,644)
=========
</TABLE>
<PAGE> 26
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
3. INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
DBC OF NASHVILLE/CAPITOL SPORTS 1999
------------------------------- -----------
<S> <C>
Contributions $ 1,527,685
Pro rata share of net income (loss) (1,231,808)
-----------
Carrying value of investment $ 295,877
===========
Assets $ 1,584,407
===========
Liabilities $ 992,654
Partners' capital 591,753
-----------
$ 1,584,407
===========
Net income (loss) $(1,231,808)
===========
</TABLE>
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, ESTIMATED
1999 USEFUL LIVES
----------- --------------
<S> <C> <C>
Land $ 2,580,872
Buildings 4,654,094 5 - 31.5 years
Equipment and fixtures 13,496,622 3 - 15 years
Transportation equipment 533,315 4 - 10 years
Capital lease - buildings 5,547,218 15 years
-----------
$26,812,121
===========
</TABLE>
Depreciation expense amounted to $1,610,348 and $1,940,864 in 1999.
Amortization expense for the capital leases amounted to $369,815 in
1999.
<PAGE> 27
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
5. DEBT
Long-term Debt:
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
Revolving credit commitment with local lending institution with
predetermined maximum annual outstanding balances. The loan bears a
variable interest rate of Libor plus 1.0%. Commitment is required to be
paid in annual installments through 1/1/2004. The loan is secured by
the Company's closely held stock and all company assets. $30,000,000
Installment note requiring a quarterly payment of $34,377 beginning
March 1, 1998. The note bears a 6.5% interest rate. The loan is secured
by a letter of credit. 848,006
-----------
30,848,006
Less current portion 3,583,671
-----------
$27,264,335
===========
</TABLE>
Maturities of long-term debt in each of the next five years are as
follows:
<TABLE>
<S> <C>
2000 $ 3,583,671
2001 3,589,243
2002 3,595,187
2003 19,601,527
2004 108,288
Thereafter 370,090
------------
$30,848,006
===========
</TABLE>
<PAGE> 28
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
5. DEBT (CONTINUED)
Notes payable - stockholders:
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
Promissory note payable bearing a variable interest rate equivalent to
a local lending institution. $ 3,095,550
Promissory note payable bearing a variable interest rate equivalent to
a local lending institution. 3,095,550
Promissory note payable bearing a variable interest rate equivalent to
a local lending institution. 3,095,550
Promissory note payable bearing a variable interest rate equivalent to
a local lending institution. 3,095,550
Promissory note payable bearing a variable interest rate equivalent to
a local lending institution. 750,000
Promissory note payable bearing a variable interest rate equivalent to
a local lending institution. 750,000
Promissory note payable bearing a variable interest rate equivalent to
a local lending institution. 750,000
Promissory note payable bearing a variable interest rate equivalent to
a local lending institution. 750,000
Promissory notes payable bearing a variable interest rate equivalent to
a local lending institution. 804,548
-----------
16,186,748
Less current portion 804,548
-----------
$15,382,200
===========
</TABLE>
<PAGE> 29
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
6. CAPITAL LEASE OBLIGATIONS
Long term leases for operations have been contracted with related
parties. Those leases have been capitalized as follows:
<TABLE>
<CAPTION>
DECEMBER 31
1999
-----------
<S> <C>
Capitalized lease obligation at 7.5%
interest beginning September 1, 1995
through August 31, 2010. The obligation
requires monthly payments of $24,167. $ 3,093,376
Capitalized lease obligation at 7.5%
interest beginning June 28, 1995
through June 30, 2010. The obligation
requires monthly payments of $18,750. 2,343,750
Capitalized lease obligation at 7.5%
interest beginning December 31, 1995
through December 31, 2010. The obligation
requires monthly payments of $8,187. 1,072,497
-----------
6,509,623
Less amount representing interest (2,030,713)
-----------
Present value of minimum lease payments 4,478,910
Less current portion (287,064)
-----------
Total $ 4,191,846
===========
</TABLE>
The present value of future minimum lease payments under the capital
leases mature as follows:
<TABLE>
<S> <C>
2000 $ 287,064
2001 309,350
2002 333,366
2003 359,245
2004 387,135
Thereafter 2,802,750
----------
$4,478,910
==========
</TABLE>
<PAGE> 30
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
7. LINE OF CREDIT
The Company has a revolving line of credit with a bank that is
available until January 1, 2004 in the amount of $1,000,000. No draw
exists on this note at December 31, 1999.
8. COMMON STOCK
A summary of common stock follows:
<TABLE>
<CAPTION>
Dick Dick
Broadcasting Broadcasting
Co., Inc. of Co., Inc. of Dick Radio
Tennessee Nashville Alabama, Inc. Combined
------------ ------------ ------------- ----------
<S> <C> <C> <C> <C>
Total value $2,881,592 $100,000 $20,000 $3,001,592
========== ======== ======= ==========
Authorized shares 80,000 2,000 2,000
Shares issued and outstanding 15,466 1,000 2,000
</TABLE>
Common stock has no par value. One half of Dick Broadcasting Co., Inc.
of Tennessee's stock authorized, issued and outstanding, is nonvoting.
9. PENSION PLAN
The Company has established a qualified contributory profit sharing
plan which covers all full-time employees. On May 1, 1991 the Company
amended the plan to allow 401(K) contributions. The contributions are
at the discretion of the Board of Directors and were $126,111 for 1999.
<PAGE> 31
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
10. INCOME TAXES
Effective January 1, 1997, the Company has elected under subchapter S
regulations whereby all income is taxed to the shareholders with the
exception of Dick Broadcasting Company, Inc. of Alabama which remained
a C corporation
The provision for income taxes for Dick Broadcasting, Inc. of Tennessee
and its subsidiaries consists of the following:
<TABLE>
<CAPTION>
DECEMBER 31
1999
-----------
<S> <C>
Current tax expense:
Federal $ 489,867
State 112,637
---------
Total current 602,504
---------
Deferred tax expense (benefit):
Federal 220,060
State (326,692)
---------
Total deferred (106,632)
---------
Net benefits of state operating carry
forward (expires 2003 through 2012) (47,546)
---------
Total provision for income taxes $ 448,326
=========
</TABLE>
<PAGE> 32
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
10. INCOME TAXES (CONTINUED)
The components of the deferred tax assets and liabilities are as
follows:
<TABLE>
<CAPTION>
1999
----------
<S> <C>
Deferred tax assets:
Allowance for doubtful accounts $ 30,762
Accrued shareholder bonuses 10,163
Deferred compensation 97,263
Net operating loss carryforwards
- State 482,581
Amortization of favorable lease 111,818
Accrued related party interest 12,635
----------
Total deferred tax assets 745,222
Deferred tax liabilities:
Excess (deficiency) of tax over book
depreciation 6,278
Accrued related party interest 8,592
Amortization of FCC licenses 1,494,378
Allowance for doubtful accounts --
Deferred compensation --
----------
Total deferred tax liabilities 1,509,248
----------
Net deferred tax asset (liability) $ (764,026)
==========
</TABLE>
<PAGE> 33
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
11. RELATED PARTY TRANSACTIONS
In the ordinary course of conducting business, the Company has
financial transactions with related parties. Balances or transaction
amounts for such parties are presented in the numerous statements under
the following captions:
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
BALANCE SHEET
-------------
Notes receivable:
Stockholders $20,763,109
Related parties 4,461,247
Interest receivable:
Stockholder 23,257
Related parties 44,923
Notes payable:
Stockholders 16,186,748
Interest payable:
Stockholder 210,580
INCOME STATEMENT
----------------
Interest income:
Stockholders 1,150,167
Related parties 277,893
Interest expense:
Stockholders 855,931
Reduction of lease obligations and related interest:
Related parties $ 613,248
</TABLE>
<PAGE> 34
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
DICK BROADCASTING COMPANY, INC. OF NASHVILLE
DICK RADIO ALABAMA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
12. CONCENTRATION OF CREDIT RISK
Cash
The company maintains its cash in several banking institutions. The
amount on deposit with the institutions exceeds the $100,000 federally
insured limit.
The carrying amount and bank balance are categorized as follows:
<TABLE>
<CAPTION>
Carrying Bank
Amount Balance
-------- ----------
<S> <C> <C>
Amount insured
by FDIC $429,400 $ 442,442
Uninsured 370,796 1,941,216
Petty cash 1,900 --
-------- ----------
Total $802,096 $2,383,658
======== ==========
</TABLE>
Accounts & Notes Receivable
There are significant related party notes receivable and payable. The
Company's ability to collect the outstanding notes is dependent on
distributions of income to the stockholders. See note 11.
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has a number of financial instruments, none of which are
held for trading purposes. The Company estimates that the fair value of
all financial instruments at December 31, 1999, does not differ
materially from the aggregate carrying values of its financial
instruments recorded in the accompanying balance sheet.
14. SUBSEQUENT EVENT
On May 9, 2000 the Company signed an asset purchase agreement with The
Citadel Communications Corporation to sell Dick Broadcasting of
Tennessee Inc., Dick Broadcasting of Nashville Inc., Dick Broadcasting
of Alabama Inc. and Dick Radio of Alabama Inc. The projected sale date
is October 1, 2000.
15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM
OPERATIONS
The Asset Purchase Agreement (described in Note 16) specifically
excludes: (1) all cash, cash equivalents, or similar type investments,
(2) accounts receivable, (3) assets not used in connection with the
operations of the stations, (4) any and all claims with respect to
transactions occurring or arising prior to the closing date, including,
without limitation, notes receivable, intercompany debt, debts or other
obligations due from stockholders and claims for refund of taxes for
periods prior to the closing date, and (5) the assets of Dick
Broadcasting Company, Inc. of North Carolina. Income and expense
specifically related to the lease management arrangement with WOKI in
Knoxville have been excluded from the Schedule of Income from
Operations.
<TABLE>
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------------------
EXCLUDED ASSETS AND
LIABILITIES
--------------------------------
COMBINED PRO FORMA
BALANCE NORTH ASSETS
SHEET CAROLINA OTHER TO BE SOLD
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Assets:
Current assets $10,272,659 $ 1,604,418 $ 7,712,031 $ 956,210
Other assets 26,887,666 238,617 26,353,172 295,877
Property and equipment 13,329,518 1,381,700 -- 11,947,818
Intangible assets 21,720,421 1,786,390 -- 19,934,031
Other assets eliminated in
Consolidation -- 8,089,061 (8,089,061) --
----------- ----------- ----------- -----------
Total assets $72,210,264 $13,100,186 $25,976,142 $33,133,936
=========== =========== =========== ===========
Liabilities and stockholders' equity:
Current liabilities $ 7,067,296 $ 267,538 $ 6,799,758 $ --
Long-term liabilities 49,908,729 685,835 49,222,894 --
Other liabilities eliminated in
Consolidation -- 5,817,880 (5,817,880) --
Stockholders' equity 15,234,239 6,328,933 8,905,306
----------- ----------- ----------- -----------
Total Liabilities and
stockholders' equity $72,210,264 $13,100,186 $59,110,078 $ --
=========== =========== =========== ===========
</TABLE>
<PAGE> 35
17. UNAUDITED PRO FORMA CONDENSED BALANCE SHEET AND SCHEDULE OF INCOME FROM
OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
PRO FORMA SCHEDULE OF INCOME FROM OPERATIONS YEAR ENDED DECEMBER 31, 1999
----------------------------------------------------------- ------------------------------------------------------
COMBINED PRO FORMA
INCOME FROM EXCLUDED INCOME FROM
OPERATIONS OPERATIONS OPERATIONS
----------- ---------- -----------
<S> <C> <C> <C>
Revenue $45,782,219 $9,623,423 $36,158,796
Direct expenses 4,927,131 932,293 3,994,838
----------- ---------- -----------
Gross profit 40,855,088 8,691,130 32,163,958
----------- ---------- -----------
Operating expenses 23,934,163 5,612,375 18,321,788
General and administrative expenses 12,548,841 2,466,003 10,082,838
----------- ---------- -----------
36,483,004 8,078,378 28,404,626
----------- ---------- -----------
Income from operations $ 4,372,084 $ 612,752 $ 3,759,332
=========== ========== ===========
</TABLE>
<PAGE> 36
DICK BROADCASTING COMPANY, INC.
OF TENNESSEE AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<PAGE> 37
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 1,110,017 $ 1,967,455
Accounts and notes receivable:
Trade, less allowance for doubtful accounts
of $196,610 8,242,782 7,564,928
Stockholders 124,864 108,916
Related party 118,867 125,989
Other 1,849 31,848
Interest receivable:
Stockholders 514,927 311,521
Related party 59,230 33,637
Other 12,894 0
Prepaid expenses 935,525 915,298
Deferred income tax 83,000 43,357
----------- -----------
Total current assets 11,203,955 11,102,949
----------- -----------
Cash value of life insurance, net policy loans
Of $63,621 613,344 563,599
Note receivable:
Stockholder 20,663,245 19,339,770
Related party 4,230,002 4,464,389
Deferred income tax 550,000 630,632
Investments 429,540 555,309
Other assets 109,692 122,846
----------- -----------
26,595,823 25,676,545
Property and equipment 26,916,521 26,607,199
Less accumulated depreciation and amortization 14,340,070 12,519,301
----------- -----------
12,576,451 14,087,898
----------- -----------
Intangible assets:
Federal Communications Commission licenses 20,592,489 22,099,147
Other 345,505 434,249
----------- -----------
20,937,994 22,533,396
----------- -----------
Total assets $71,314,223 $73,400,788
=========== ===========
</TABLE>
See accompanying notes.
<PAGE> 38
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 3,586,412 $ 3,581,016
Current maturities of capitalized lease
obligations 297,999 276,531
Notes payable - stockholders 595,756 471,004
Interest payable - stockholders 600,654 389,151
Accounts payable 510,880 617,827
Accrued expenses 883,388 1,023,182
Income taxes payable 216,305 31,772
Deferred income taxes 28,000 4,326
----------- -----------
Total current liabilities 6,719,394 6,394,809
----------- -----------
Long-term debt, less current maturities 27,220,433 30,306,845
Capitalized lease obligations, less current
maturities 4,040,062 4,338,061
Notes payable - stockholders 15,382,200 13,196,355
Deferred income taxes 1,221,000 1,424,535
Deferred compensation 1,583,707 1,592,963
----------- -----------
49,447,402 50,858,759
----------- -----------
Stockholders' equity:
Common stock 3,184,694 3,184,694
Retained earnings 11,962,733 12,962,526
----------- -----------
Total stockholders' equity 15,147,427 16,147,220
----------- -----------
Total liabilities and stockholders' equity $71,314,223 $73,400,788
=========== ===========
</TABLE>
See accompanying notes.
<PAGE> 39
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Revenue:
Sales $22,013,949 $21,490,598
Other operating revenue 208,241 228,433
----------- -----------
22,222,190 21,719,031
Direct expenses 2,443,023 2,328,296
----------- -----------
Gross profit 19,779,167 19,390,735
----------- -----------
Operating expenses:
Technical expenses 494,920 490,272
Program and news expense 6,783,951 6,526,538
Sales expense 5,065,806 4,794,033
Rental and leasing expenses 131,518 363,841
----------- -----------
12,476,195 12,174,684
General and administrative expenses 5,512,119 6,926,682
----------- -----------
17,988,314 19,101,366
----------- -----------
Income from operations 1,790,853 289,369
----------- -----------
Other income (expense):
Interest income 933,127 794,810
Interest expense (2,006,688) (1,682,982)
Rent income 117,876 131,935
Gain(loss)on sale of assets 146 (188,804)
Loss from partnership (74,617) (13,671)
Loss in joint venture (57,153) (214,461)
Other income 247 18,422
----------- -----------
(1,087,062) (1,154,751)
----------- -----------
Income (loss) before income taxes 703,791 (865,382)
Income tax expense (333,499) 34,208
----------- -----------
Net income (loss) $ 370,292 $ (831,174)
=========== ===========
</TABLE>
See accompanying notes.
<PAGE> 40
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK
------------------------
STATED RETAINED
SHARES VALUE EARNINGS TOTAL
-------- ---------- ------------ -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1999, as previously
reported 15,466 $2,881,592 $ 13,301,366 $16,182,958
Adjustments, retroactive to December 31, 1999,
for merger with Dick Broadcasting Company,
Inc. of Nashville and Dick Radio Alabama, Inc. 5,180 303,102 (1,251,821) (948,719)
-------- ---------- ------------ -----------
Balance, December 31, 1999, as restated 20,646 3,184,694 12,049,545 15,234,239
Net income 370,292 370,292
Distribution to shareholders (457,104) (457,104)
-------- ---------- ------------ -----------
Balance, June 30, 2000 20,646 $3,184,694 $ 11,962,733 $15,147,427
======== ========== ============ ===========
Balance, December 31, 1998, or previously reported 15,466 $2,881,592 $ 15,910,063 $18,791,655
Adjustments, retroactive to December 31, 1998,
for merger with Dick Broadcasting Company, Inc. of Nashville
and Dick Radio Alabama, Inc. 5,180 303,102 (1,251,821) (948,719)
-------- ---------- ------------ -----------
Balance, December 31, 1998, as restated 20,646 3,184,694 (14,658,242) 17,842,936
Net Loss (831,174) (831,174)
Distribution to shareholders (864,542) (864,542)
-------- ---------- ------------ -----------
Balance, June 30, 1999 20,646 $3,184,694 $ 12,962,526 $16,147,220
======== ========== ============ ===========
</TABLE>
See accompanying notes.
<PAGE> 41
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
---------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 370,292 $ (831,174)
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 1,665,114 1,821,650
Net loss from investments 104,770 228,132
(Gain) on disposal of fixed assets (146) 188,804
Deferred income taxes (148,026) (163,332)
Deferred compensation (37,335) 27,665
Changes in assets and liabilities (Increase) decrease in assets:
Trade receivables (284,088) 1,504,932
Other receivables 125,896 94,701
Interest receivable (518,871) (324,881)
Prepaid expenses 89,883 238,616
Other assets (48,722) 32,913
Increase (decrease) in liabilities:
Accounts payable (93,966) 302,173
Interest payable (105,850) 215,447
Accrued expenses (109,000) (83,011)
Income tax payable 187,972 (43,615)
---------- -----------
Net cash provided by operating activities
1,197,923 3,209,020
========== ===========
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (293,361) (1,238,224)
Proceeds from sale of assets 3,887 62,293
Increase in cash surrender value of life --
insurance 0 (49,749)
---------- -----------
Net cash used by investing activities (289,474) (1,225,680)
========== ===========
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of stockholder notes receivable (25,000) 0
Related party notes repaid 112,378 0
Proceeds from restated party notes receivable 0 69,133
Proceeds from stockholders notes receivable 0 377,176
Principal repayments of capitalized
lease obligations (140,849) (130,703)
Principal repayments on long-term debt (41,161) (538,591)
Repayment of stockholder notes payable (48,792) (106,531)
Distributions paid to shareholders (457,104) (864,542)
---------- -----------
Net cash used by financing activities (600,528) (1,194,058)
========== ===========
</TABLE>
See accompanying notes.
<PAGE> 42
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Net increase in cash 307,921 789,282
Cash at beginning of year 802,096 1,178,173
---------- ----------
Cash at end of year $1,110,017 $1,967,455
========== ==========
Supplemental disclosure of cash flow information: Cash payments for:
Interest $2,099,645 $1,784,018
========== ==========
Income taxes $ 116,000 $ 176,259
========== ==========
</TABLE>
NONCASH INVESTING AND FINANCING ACTIVITIES:
During 2000, the Company sold a parcel of land by exchanging title to the land
for a stockholder note payable in the amount of $160,000.
<PAGE> 43
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations
Dick Broadcasting Company's operations are primarily related to radio
broadcasting in Tennessee, North Carolina, and Alabama. The Company has
two wholly-owned subsidiaries: Dick Broadcasting Company, Inc. of North
Carolina and Dick Broadcasting Company, Inc. of Alabama.
Effective May 1, 2000, Dick Broadcasting Company, Inc. of Tennessee
merged with Dick Broadcasting Company, Inc. of Nashville and Dick Radio
Alabama, Inc., with Dick Broadcasting Company, Inc. of Tennessee being
the surviving company. The historical costs of the separate companies
assets and liabilities were combined in the merger. The Company has
reported its operations for the six months ended June 30, 2000 and the
six months ended June 30, 1999 as if the merger occurred as of December
31, 1999.
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, after elimination of all
intercompany accounts and transactions.
Intangible Assets
Federal Communications Commission (FCC) licenses are being amortized
over a range of fifteen (15) to forty (40) years using the
straight-line method. Other intangible assets are amortized over the
life of the underlying agreement using the straight-line method.
Trade-Out Transactions
The Company enters into agreements in which advertising time is traded
for various products or services. Trade-out transactions are valued at
the normal advertising rates in effect. The company records both an
asset and liability at the time of the transaction. Income and expense
are recognized when advertisements are aired or when goods and services
are received.
Income Taxes
Deferred income taxes have been provided under the liability method.
Deferred tax assets and liabilities are determined based upon the
estimated future tax effects of differences between the financial
statement and tax bases of assets and liabilities, as measured by the
current enacted tax rates. Deferred tax expense is the result of
changes in the deferred tax asset and liability.
<PAGE> 44
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Income Taxes (continued)
Dick Broadcasting Company, Inc. of Tennessee and subsidiaries (with the
exception of Dick Broadcasting Company, Inc. of Alabama), Dick
Broadcasting Company, Inc. of Nashville, and Dick Radio Alabama, Inc.
have elected to be taxed under the provisions of subchapter "S" of the
Internal Revenue Code and comparable state regulations. Under these
provisions, the corporations do not pay federal income taxes on their
taxable income (nor are they allowed a net operating loss carryback or
carryover). Instead, the stockholders report their proportionate share
of each companies' taxable income (loss) and tax credits on their
personal income tax returns.
The company has committed to distribute dividends to the shareholders
at least sufficient to reimburse them for income taxes incurred as a
result of the subchapter "S" election.
Deferred Compensation Plan
The Company previously had a deferred compensation plan. Under this
plan an annual provision, based on pro rata shares of the net increase
in stockholders' investment, was allocated to certain officers of the
Company. Beginning January 1, 1998, there are to be no additional
accruals of payment obligations under the old plan. Interest of 7% per
annum will be credited on certain deferred balances accumulated prior
to January 1, 1998, by the Company. This interest will either be paid
out within 90 days of the end of each fiscal year or added to the
deferred balance and compounded annually at the option of each officer.
In the event of termination of the officer's employment, the deferred
balance, together with any interest earned but not previously paid out,
is to be paid to the officer, in a lump sum within 90 days. If the
termination is not due to death or disability, the Company may elect to
pay the deferred obligation in monthly installments of principal and
interest over a period not to exceed three years.
Related Companies
Arthur Dick Construction Company, a related corporation with a common
shareholder, has operations in North Carolina.
Eagle Syndication, a related limited liability company with common
management, has operations in North Carolina.
Dick Family Realty I and II, related limited liability companies with
common directors, have operations in Tennessee, Alabama and North
Carolina.
<PAGE> 45
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed
using the straight-line and declining balance methods. When assets are
retired or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts and any resulting gain or
loss is recognized in income for the period. The cost of maintenance
and repairs is charged to income as incurred; significant renewals and
betterments are capitalized.
Cash Equivalents
For purposes of the statements of cash flows, the Company considers all
highly liquid investments with original maturities of three months or
less to be cash equivalents.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from these estimates.
Advertising Costs
The Company expenses advertising costs as incurred.
2. NOTES RECEIVABLE
Stockholders:
Notes receivable from stockholders consisted of the following at June
30, 2000 and June 30, 1999:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Unsecured promissory notes receivable (4) bearing a variable interest
rate equivalent to a local lending institution. Annual repayment terms
correspond to like amounts required by revolving credit commitment. $12,382,200 $13,196,355
7% promissory notes (4) requiring forty quarterly payments commencing
3/1/97. All outstanding principal and accrued interest shall be due and
payable on 1/1/07. Secured by stock pledge agreement. 4,330,697 4,652,363
</TABLE>
<PAGE> 46
DICK BROADCASTING COMPANY, INC. OF TENNESSEE SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
2. NOTES RECEIVABLE - (CONTINUED)
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Unsecured variable rate demand notes receivable (4). Interest rate
based on prime plus .25%. Interest only due annually. Principal is
due on demand. 1,198,456 1,199,302
Unsecured variable rate demand notes receivable (8).
Interest due quarterly. 2,460,142 0
Variable rate promissory note with interest due annually. Principal
is due on March 31, 2001. Secured by deed of trust.
291,750 291,750
Loans to stockholders 124,864 108,916
----------- -----------
$20,788,109 $19,448,686
=========== ===========
Current $ 124,864 108,916
Long-term 20,663,245 19,339,770
----------- -----------
$20,788,109 $19,448,686
=========== ===========
Other related parties:
----------------------
Notes receivable from other related parties consisted of the following
at June 30, 2000 and 1999:
Unsecured variable rate demand note receivable. Interest due quarterly. $ 92,744 $ 12,173
Unsecured variable rate demand note requiring forty quarterly
payments. Interest due quarterly. 2,536,509 2,744,348
Variable rate promissory note requiring twenty-seven quarterly
payments commencing 12/1/97. Secured by aircraft.
583,462 663,939
Unsecured variable rate demand note receivable. Interest rate
based on prime plus .25%. Interest due quarterly. Principal is
due on demand. 1,017,287 1,043,929
Loans to related parties. Interest rate based on prime rate. 118,867 125,989
----------- -----------
$ 4,348,869 $ 4,590,378
=========== ===========
Current $ 118,867 $ 125,989
Long-term 4,230,002 4,464,389
----------- -----------
$ 4,348,869 $ 4,590,378
=========== ===========
</TABLE>
<PAGE> 47
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
3. INVESTMENTS
Investments held by the Company as of June 30, 2000 and 1999 consist of
a 50% interest in one partnership and a joint venture. The Company's
investments are accounted for on the equity method.
<TABLE>
<CAPTION>
2000 1999
--------- ---------
<S> <C> <C>
DBC of North Carolina/Ellison Company $ 190,816 $ 138,224
DBC of Nashville/Capitol Sports 238,724 444,084
--------- ---------
$ 429,540 $ 582,308
========= =========
</TABLE>
A summary of the changes in the recorded amount of each investment for
the six months ended June 30, 2000 and 1999 follows:
<TABLE>
<CAPTION>
DBC OF NORTH CAROLINA/ELLISON COMPANY
2000 1999
--------- ---------
<S> <C> <C>
Contributions $ 265,433 430,756
Pro rata share of net loss (74,617) (13,671)
--------- ---------
Carrying value of investment $ 190,816 417,085
--------- ---------
Assets $ 407,037 $ 670,300
--------- ---------
Liabilities $ 25,403 31,640
Partners' capital 381,634 638,660
--------- ---------
$ 407,037 $ 670,300
--------- ---------
Net loss $(149,234) $ (27,343)
========= =========
</TABLE>
<TABLE>
<CAPTION>
DBC OF NASHVILLE/CAPITOL SPORTS 2000 1999
--------- ---------
<S> <C> <C>
Contributions $ 295,877 $ 352,685
Pro rata share of net income (loss) (57,153) (214,461)
--------- ---------
Carrying value of investment $ 238,724 $ 138,224
--------- ---------
Assets $ 629,097 $ 280,278
--------- ---------
Liabilities $ 151,650 $ 3,830
Partners' capital 477,447 276,448
--------- ---------
$ 629,097 $ 280,278
--------- ---------
Net loss $(114,307) $(428,922)
========= =========
</TABLE>
<PAGE> 48
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at June 30, 2000 and
1999:
<TABLE>
<CAPTION>
ESTIMATED
2000 1999 USEFUL LIVES
----------- ----------- --------------
<S> <C> <C> <C>
Land $ 2,420,872 $ 2,580,872
Buildings 4,689,100 4,609,603 5 - 31.5 years
Equipment and fixtures 13,661,749 13,336,191 3 - 15 years
Transportation equipment 597,582 533,315 4 - 10 years
Capital lease - buildings 5,547,218 5,547,218 15 years
----------- -----------
$26,916,521 $26,607,199
=========== ===========
</TABLE>
For the six months ending June 30, 2000 and 1999, the provision for
depreciation amounted to $882,687 and $823,768, respectively, and the
amortization provision for capital leases amounted $184,908 and
$184,906,respectively.
5. DEBT
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Revolving credit commitment with local lending institution
with predetermined maximum annual outstanding balances. The
loan bears a variable interest rate of Libor plus 1.0%
Commitment is required to e paid in annual installments
through 1/1/2004. The loan is secured by the Company's closely
held stock and all company assets. $30,000,000 $33,000,000
Installment note requiring a quarterly payment of $34,377
beginning March 1, 1998. the note bears a 6.5% interest
rate. The loan is secured by a letter of credit. 806,845 887,861
----------- -----------
30,806,845 33,887,861
Less current portion 3,586,412 3,581,016
----------- -----------
$27,220,433 $30,306,845
=========== ===========
</TABLE>
Maturities of long-term debt in each of the next five years are as
follows:
<TABLE>
<CAPTION>
June 30,
--------
<S> <C>
2001 $ 3,586,412
2002 3,592,167
2003 3,598,306
2004 19,604,853
2005 111,836
Thereafter 313,271
-----------
$30,806,845
===========
</TABLE>
<PAGE> 49
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
5. DEBT - (CONTINUED)
Notes payable - stockholders:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Promissory notes payable (4) bearing variable interests rate equivalent
to a local lending institution. $12,382,200 $13,196,355
Promissory notes payable (5) bearing variable interests rate equivalent
to a local lending institution. 3,595,756 471,004
----------- -----------
15,977,956 13,667,359
Less current portion 595,756 471,004
----------- -----------
$15,382,200 $13,196,355
=========== ===========
</TABLE>
6. CAPITAL LEASE OBLIGATIONS
Long term leases for operations have been contracted with related
parties. Those leases have been capitalized as follows:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Capitalized lease obligation at 7.5% interest beginning September 1,
1995 through August 31, 2010. The obligation requires monthly payments
of $24,167. $ 2,948,374 $ 3,238,378
Capitalized lease obligation at 7.5% interest beginning June 28, 1995
through June 30, 2010. The obligation requires monthly payments of
$18,750. 2,231,250 2,456,250
Capitalized lease obligation at 7.5% interest beginning December 31,
1995 through December 31, 2010. The obligation requires monthly
payments of $8,187. 1,023,375 1,121,619
----------- -----------
6,202,999 6,816,247
Less amount representing interest (1,864,938) (2,201,655)
----------- -----------
Present value of minimum lease payments 4,338,061 4,614,592
Less current portion (276,531) (276,531)
----------- -----------
Total $ 4,040,062 $ 4,338,061
=========== ===========
</TABLE>
<PAGE> 50
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
6. CAPITAL LEASE OBLIGATIONS (CONTINUED)
At June 30, 2000, the present value of future minimum lease payments
under the capital leases mature as follows:
<TABLE>
<CAPTION>
June 30,
--------
<S> <C>
2001 $ 297,999
2002 321,133
2003 346,063
2004 372,930
2005 401,881
Thereafter 2,598,055
----------
$4,338,061
==========
</TABLE>
7. LINE OF CREDIT
The Company has a revolving line of credit with a bank that is
available until January 1, 2004 in the amount of $1,000,000. No draw
exists on this note at June 30, 2000.
8. COMMON STOCK
Details of the Company's common stock follow:
<TABLE>
<S> <C>
Total value $3,184,694
Authorized shares, no par value 80,000
Shares issued and outstanding 20,646
</TABLE>
9. PENSION PLAN
The Company has established a qualified contributory profit sharing
plan which covers all full-time employees. On May 1, 1991, the Company
amended the plan to allow 401(K) contributions. The contributions are
at the discretion of the Board of Directors and are made at the end of
the year.
10. INCOME TAXES
Effective January 1, 1997, the Company has elected under subchapter S
regulations whereby all income is taxed to the shareholders with the
exception of Dick Broadcasting Company, Inc. of Alabama which remained
a C corporation
The provision for income taxes for Dick Broadcasting, Inc. of Tennessee
and its subsidiaries consists of the following:
<PAGE> 51
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
10. INCOME TAXES - (CONTINUED)
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Current tax expense (benefit):
Federal $ 339,158 $ 57,677
State 142,368 71,447
---------- ----------
Total current 481,526 129,124
---------- ----------
Deferred tax expense (benefit):
Federal (186,748) (33,318)
State 66,302 (35,140)
---------- ----------
Total deferred (120,446) (68,458)
---------- ----------
Net benefits of state operating carry
forward (expires 2003 through 2012) (27,581) (94,874)
---------- ----------
Total provision for income taxes(benefit) $ 333,499 $ (34,208)
========== ==========
</TABLE>
The components of the deferred tax assets and liabilities are as
follows:
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts $ 68,000 $ 32,279
Deferred compensation 95,000 105,741
Net operating loss carryforwards
- State 455,000 524,891
Accrued related party interest 15,000 11,078
---------- ----------
Total deferred tax assets 633,000 673,989
---------- ----------
Deferred tax liabilities:
Excess (deficiency) of tax over book
Depreciation 18,000 6,112
Accrued related party interest 28,000 4,326
Amortization of FCC licenses and favorable leases 1,203,000 1,418,423
---------- ----------
Total deferred tax liabilities 1,249,000 1,428,861
---------- ----------
Net deferred tax asset (liability) $ (616,000) $ (754,872)
========== ==========
</TABLE>
11. RELATED PARTY TRANSACTIONS
In the ordinary course of conducting business, the Company has
financial transactions with related parties. Balances or transaction
amounts for such parties are included in the numerous statements under
the following captions:
<PAGE> 52
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
11. RELATED PARTY TRANSACTIONS - (CONTINUED)
<TABLE>
<CAPTION>
2000 1999
----------- -----------
BALANCE SHEET
-------------
<S> <C> <C>
Notes receivable:
Stockholders $20,788,109 $19,448,686
Related parties 4,348,869 4,590,378
Interest receivable:
Stockholder 514,927 311,521
Related parties 59,230 33,637
Notes payable:
Stockholders 15,977,956 13,667,359
Interest payable:
Stockholder 600,654 389,151
INCOME STATEMENT
----------------
Interest income:
Stockholders 575,083
Related parties 23,967
Interest expense:
Stockholders 427,965
BALANCE SHEET AND INCOME STATEMENT
----------------------------------
Reduction of capital lease obligations and
related interest: 306,624 306,624
Related parties
</TABLE>
12. CONCENTRATION OF CREDIT RISK
At June 30, 2000, cash deposits in excess of federally insured limits
approximate $293,920.
The Company extends credit to customers in the normal course of
business in the amount of its trade accounts receivable amounting to
$8,622,519 at June 30, 2000.
There are significant related party notes receivable and payable. The
Company's ability to collect the outstanding notes is dependent on
distributions of income to the stockholders (see note 11).
13. FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company has a number of financial instruments, none of which are
held for trading purposes. The Company estimates that the fair value of
all financial instruments at June 30, 2000 and 1999, does not differ
materially from the aggregate carrying values of its financial
instruments recorded in the accompanying balance sheet.
<PAGE> 53
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
14. ASSET PURCHASE AGREEMENT
On May 9, 2000 the Company signed an asset purchase agreement with The
Citadel Communications Corporation to sell Dick Broadcasting of
Tennessee Inc., Dick Broadcasting of Nashville Inc., Dick Broadcasting
of Alabama Inc. and Dick Radio of Alabama Inc. for approximately
$300,000,000, subject to adjustments provided in the agreement. The
sale date was September 30, 2000.
15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM
OPERATIONS
The Asset Purchase Agreement (described in Note 14) specifically
excludes: (1) all cash, cash equivalents, or similar type investments,
(2) accounts receivable, (3) assets not used in connection with the
operations of the stations, (4) any and all claims with respect to
transactions occurring or arising prior to the closing date, including,
without limitation, notes receivable, intercompany debt, debts or other
obligations due from stockholders and claims for refund of taxes for
periods prior to the closing date, and (5) the assets of Dick
Broadcasting Company, Inc. of North Carolina. Income and expense
specifically related to the lease management arrangement with WOKI in
Knoxville have been excluded from the Schedule of Income from
Operations.
<PAGE> 54
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM
OPERATIONS - (CONTINUED)
<TABLE>
<CAPTION>
PRO FORMA BALANCE SHEET
-----------------------
JUNE 30, 2000
-------------------------------------------------------------------
EXCLUDED ASSETS AND
LIABILITIES
-----------------------------
PRO FORMA
CONSOLIDATED NORTH ASSETS
BALANCE SHEET CAROLINA OTHER TO BE SOLD
------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
CASH $ 1,110,017 $ 270,905 $ 839,112 $ --
ACCOUNTS/NOTES RECEIVABLES:
TRADE LESS ALLOWANCE 8,242,782 1,465,493 6,777,289 --
STOCKHOLDERS 124,864 124,864 -- --
RELATED PARTY 118,867 108,497 10,370 --
OTHER 1,849 1,849 -- --
INTEREST RECEIVABLE:
STOCKHOLDERS 514,927 -- 514,927 --
RELATED PARTY 59,230 -- 59,230 --
OTHER 12,894 -- 12,894 --
PREPAID EXPENSES 935,525 62,178 -- 873,347
DEFERRED INCOME TAX 83,000 -- 83,000 --
----------- ---------- ----------- -----------
TOTAL CURRENT ASSETS 11,203,955 2,033,786 8,296,822 873,347
CASH VALUE OF LIFE INSURANCE
NET LOANS 613,344 -- 613,344 --
NOTE RECEIVABLE: --
STOCKHOLDER 20,663,245 -- 20,663,245 --
RELATED PARTY 4,230,002 -- 4,230,002 --
DEFERRED INCOME TAX 550,000 -- 550,000 --
INVESTMENTS 429,540 190,817 -- 238,723
OTHER ASSETS 109,692 184 109,508 --
PROPERTY AND EQUIPMENT LESS
ACCUMULATED DEPRECIATION 12,576,451 1,340,045 -- 11,236,406
INTANGIBLE ASSETS 20,937,994 1,745,242 -- 19,192,752
OTHER ASSETS ELIMINATED IN
CONSOLIDATION -- 3,385,966 (3,385,966) --
----------- ---------- ----------- -----------
TOTAL ASSETS $71,314,223 $8,696,040 $31,076,955 $31,541,228
=========== ========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT MATURITIES OF LONG-TERM DEBT $ 3,586,412 $ -- $ 3,586,412 $ --
CURRENT MATURITIES OF CAPITAL LEASE
OBLIGATIONS 297,999 46,672 251,327 --
NOTES PAYABLE- STOCKHOLDERS 595,756 -- 595,756 --
INTEREST PAYABLE- STOCKHOLDERS 600,654 -- 600,654 --
ACCOUNTANTS PAYABLE 510,880 150,792 360,088 --
ACCRUED EXPENSES 883,388 113,593 769,795 --
INCOME TAXES PAYABLE 216,305 (27,725) 244,030 --
DEFERRED INCOME TAXES 28,000 -- 28,000 --
----------- ---------- ----------- -----------
TOTAL CURRENT LIABILITIES 6,719,394 283,332 6,436,062 --
LONG-TERM DEBT, LESS CURRENT
MATURITIES 27,220,433 -- 27,220,433 --
CAPITALIZED LEASE OBLIGATIONS, LESS
CURRENT MATURITIES 4,040,062 662,063 3,377,999 --
NOTES PAYABLE - STOCKHOLDERS 15,382,200 -- 15,382,200 --
DEFERRED INCOME TAXES 1,221,000 -- 1,221,000 --
DEFERRED COMPENSATION 1,583,707 -- 1,583,707 --
OTHER LIABILITIES ELIMINATED IN
CONSOLIDATION -- 1,049,677 (1,049,677) --
----------- ---------- ----------- -----------
TOTAL LIABILITIES 56,166,796 1,995,072 54,171,724 --
STOCKHOLDERS' EQUITY 15,147,427 6,700,968 8,446,459 --
----------- ---------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $71,314,223 $8,696,040 $62,618,183 $ --
=========== ========== =========== ===========
</TABLE>
<PAGE> 55
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM
OPERATIONS - (CONTINUED)
<TABLE>
<CAPTION>
PRO FORMA BALANCE SHEET
JUNE 30, 1999
--------------------------------------------------------------------
EXCLUDED ASSETS AND
LIABILITIES
------------------------------
PRO FORMA
CONSOLIDATED NORTH ASSETS
BALANCE SHEET CAROLINA OTHER TO BE SOLD
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
CASH $ 1,967,455 $ 355,090 $ 1,612,365 $ --
ACCOUNTS/NOTES RECEIVABLES:
TRADE LESS ALLOWANCE 7,564,928 1,385,712 6,179,216 --
STOCKHOLDERS 108,916 108,916 -- --
RELATED PARTY 125,989 115,619 10,370 --
OTHER 31,848 16,044 15,804 --
INTEREST RECEIVABLE:
STOCKHOLDERS 311,521 -- 311,521 --
RELATED PARTY 33,637 -- 33,637 --
OTHER -- -- -- --
PREPAID EXPENSES 915,298 46,612 -- 868,686
DEFERRED INCOME TAX 43,357 -- 43,357 --
----------- ----------- ----------- -----------
TOTAL CURRENT ASSETS 11,102,949 2,027,993 8,206,270 868,686
CASH VALUE OF LIFE INSURANCE
NET LOANS 563,599 -- 563,599 --
NOTE RECEIVABLE: --
STOCKHOLDER 19,339,770 -- 19,339,770 --
RELATED PARTY 4,464,389 -- 4,464,389 --
DEFERRED INCOME TAX 630,632 -- 630,632 --
INVESTMENTS 555,309 417,085 -- 138,224
OTHER ASSETS 122,846 184 122,662 --
PROPERTY AND EQUIPMENT LESS
ACCUMULATED DEPRECIATION 14,087,898 1,455,311 -- 12,632,587
INTANGIBLE ASSETS 22,099,147 1,827,538 -- 20,271,609
OTHER ASSETS ELIMINATED IN
CONSOLIDATION 434,249 7,171,441 (6,737,192) --
----------- ----------- ----------- -----------
TOTAL ASSETS $73,400,788 $12,899,552 $25,590,130 $33,911,106
=========== =========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT MATURITIES OF LONG-TERM DEBT $ 3,581,016 $ -- $ 3,581,016 $ --
CURRENT MATURITIES OF CAPITAL LEASE
OBLIGATIONS 276,531 43,309 233,222 --
NOTES PAYABLE- STOCKHOLDERS 471,004 -- 471,004 --
INTEREST PAYABLE- STOCKHOLDERS 389,151 -- 389,151 --
ACCOUNTANTS PAYABLE 617,827 97,185 520,642 --
ACCRUED EXPENSES 1,023,182 127,996 865,186 --
INCOME TAXES PAYABLE 31,772 (29,099) 60,871 --
DEFERRED INCOME TAXES 4,326 -- 4,326 --
----------- ----------- ----------- -----------
TOTAL CURRENT LIABILITIES 6,394,809 239,391 6,155,418 --
LONG-TERM DEBT, LESS CURRENT
MATURITIES 30,306,845 -- 30,306,845 --
CAPITALIZED LEASE OBLIGATIONS, LESS
CURRENT MATURITIES 4,338,061 708,735 3,629,326 --
NOTES PAYABLE - STOCKHOLDERS 13,196,355 -- 13,196,355 --
DEFERRED INCOME TAXES 1,424,535 -- 1,424,535 --
DEFERRED COMPENSATION 1,592,963 -- 1,592,963 --
OTHER LIABILITIES ELIMINATED IN
CONSOLIDATION -- 6,003,651 (6,003,651) --
----------- ----------- ----------- -----------
TOTAL LIABILITIES 57,253,568 6,951,777 50,301,791 --
STOCKHOLDERS' EQUITY 16,147,220 5,947,776 10,199,444 --
----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $73,400,788 $12,899,553 $60,501,235 $ --
=========== =========== =========== ===========
</TABLE>
<PAGE> 56
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM
OPERATIONS - (CONTINUED)
<TABLE>
<CAPTION>
PRO FORMA SCHEDULE OF INCOME FROM OPERATIONS
--------------------------------------------
JUNE 30, 2000
-----------------------------------------------
Consolidated Pro Forma
Income Excluded Income
Statement Operations Statement
------------ ---------- -----------
<S> <C> <C> <C>
REVENUE:
SALES $22,013,949 $ 4,421,070 $17,592,879
OTHER OPERATING REVENUE 208,241 90,247 117,994
----------- ----------- -----------
22,222,190 4,511,317 17,710,873
DIRECT EXPENSES 2,443,023 434,466 2,008,557
----------- ----------- -----------
GROSS PROFIT 19,779,167 4,076,851 15,702,316
----------- ----------- -----------
OPERATING EXPENSES 12,476,195 2,740,603 9,735,592
GENERAL AND ADMINISTRATIVE EXPENSES 5,512,119 1,258,724 4,253,395
----------- ----------- -----------
17,988,314 3,999,327 13,988,987
----------- ----------- -----------
INCOME FROM OPERATIONS $ 1,790,853 $ 77,524 $ 1,713,329
=========== =========== ===========
</TABLE>
<PAGE> 57
DICK BROADCASTING COMPANY, INC. OF TENNESSEE AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
15. UNREVIEWED PRO FORMA BALANCE SHEET AND SCHEDULE OF INCOME FROM
OPERATIONS - (CONTINUED)
<TABLE>
<CAPTION>
PRO FORMA SCHEDULE OF INCOME FROM OPERATIONS
--------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30, 1999
------------------------------------------------
Consolidated Pro Forma
Income Excluded Income
Statement Operations Statement
------------ ---------- -----------
<S> <C> <C> <C>
REVENUE:
SALES $21,490,598 $4,734,626 $16,755,972
OTHER OPERATING REVENUE 228,433 105,986 122,447
----------- ---------- -----------
21,719,031 4,840,612 16,878,419
DIRECT EXPENSES 2,328,296 476,583 1,851,713
----------- ---------- -----------
GROSS PROFIT 19,390,735 4,364,029 15,026,706
----------- ---------- -----------
OPERATING EXPENSES 12,174,684 2,858,641 9,316,043
GENERAL AND ADMINISTRATIVE EXPENSES 6,926,682 1,201,250 5,725,432
----------- ---------- -----------
19,101,366 4,059,891 15,041,475
----------- ---------- -----------
INCOME(LOSS) FROM OPERATIONS $ 289,369 $ 304,138 $ (14,769)
=========== ========== ===========
</TABLE>
<PAGE> 58
CITADEL COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial
statements reflect the results of operations and balance sheet of Citadel
Communications Corporation after giving effect to the following completed
transactions (collectively, the "Completed Transactions"):
o the February 9, 1999 acquisition of WKQZ-FM, WYLZ-FM, WILZ-FM, WIOG-FM,
WGER-FM and WSGW-AM in Saginaw/Bay City/Midland, Michigan for the purchase
price of approximately $35.0 million (the "Saginaw/Bay City Acquisition"),
o the February 17, 1999 acquisition of WHYL-FM and WHYL-AM in
Harrisburg/Lebanon/Carlisle, Pennsylvania for the purchase price of
approximately $4.5 million (the "Carlisle Acquisition"),
o the March 17, 1999 acquisition of Citywide Communications, Inc., which
owned KQXL-FM, WEMX-FM, WCAC-FM, WXOK-AM and WIBR-AM serving the Baton
Rouge, Louisiana market and KFXZ-FM, KNEK-FM, KRRQ-FM and KNEK-AM serving
the Lafayette, Louisiana market for the purchase price of approximately
$31.5 million (the "Baton Rouge/Lafayette Acquisition"),
o the April 30, 1999 acquisition of KSPZ-FM serving the Colorado Springs,
Colorado market in exchange for KKLI-FM in Colorado Springs, the April 30,
1999 acquisition of KVOR-AM and KTWK-AM serving the Colorado Springs,
Colorado market and KEYF-FM and KEYF-AM serving the Spokane, Washington
market for the purchase price of approximately $10.0 million and the April
30, 1999 termination of a joint sales agreement under which Citadel
Communications operated certain other radio stations in Colorado Springs
and Spokane (collectively, the "Capstar Transactions"),
o the June 30, 1999 acquisition of WSSX-FM, WWWZ-FM, WMGL-FM, WSUY-FM,
WNKT-FM, WTMA-AM, WTMZ-AM and WXTC-AM in Charleston, South Carolina,
WHWK-FM, WYOS-FM, WAAL-FM, WNBF-AM and WKOP-AM in Binghamton, New York,
WMDH-FM and WMDH-AM in Muncie, Indiana and WWKI-FM in Kokomo, Indiana for
the purchase price of approximately $77.0 million (the
"Charleston/Binghamton/ Muncie/Kokomo Acquisition"),
o the August 31, 1999 acquisition of Fuller-Jeffrey Broadcasting Companies,
Inc. which owned WOKQ-FM, WPKQ-FM, WXBB-FM and WXBP-FM serving the
Portsmouth/Dover/Rochester, New Hampshire market and WBLM-FM, WCYI-FM,
WCYY-FM, WHOM-FM, WJBQ-FM and WCLZ-FM serving the Portland, Maine market
for the purchase price of approximately $65.3 million, which amount
includes the repayment of certain indebtedness of Fuller-Jeffrey
Broadcasting and approximately $1.8 million in consulting and
noncompetition payments payable over a seven-year period (the
"Portsmouth/Dover/ Rochester/Portland Acquisition"),
o the November 1, 1999 acquisition of KOOJ-FM in Baton Rouge, Louisiana for
the purchase price of approximately $9.5 million (the "KOOJ Acquisition"),
<PAGE> 59
o the December 23, 1999 acquisition of Caribou Communications Co., which
owned KATT-FM, KYIS-FM, KCYI-FM, KNTL-FM and WWLS-AM in Oklahoma City,
Oklahoma, for a purchase price of approximately $60.0 million, which amount
includes the repayment of certain indebtedness of Caribou Communications
(the "Oklahoma City Acquisition"),
o the February 10, 2000 acquisition of WXLO-FM in Worcester, Massachusetts
for the purchase price of approximately $21.0 million (the "WXLO
Acquisition"),
o the March 31, 2000 acquisition of KSMB-FM, KDYS-AM, KVOL-FM and KVOL-AM in
Lafayette, Louisiana for the purchase price of approximately $8.5 million
(the "Lafayette Acquisition"),
o the April 7, 2000 acquisition of WORC-FM in Worcester, Massachusetts for
the purchase price of approximately $3.5 million (the "WORC Acquisition"),
o the (A) April 15, 2000 acquisition of WGRF-FM, WEDG-FM, WHTT-FM, WMNY-AM
and WHLD-AM in Buffalo/Niagara Falls, New York, WAQX-FM, WLTI-FM, WNSS-AM,
and WNTQ-FM in Syracuse, New York, WIII-FM and WKRT-AM in Ithaca, New York,
WMME-FM, WEZW-AM, WEBB-FM and WTVL-AM in Augusta/Waterville, Maine,
WBPW-FM, WOZI-FM and WQHR-FM in Presque Isle, Maine, WCRQ-FM in
Dennysville/Calais, Maine, KMYY-FM, KYEA-FM, KZRZ-FM and KTJC-FM in Monroe,
Louisiana, KDOK-FM, KTBB-AM, KEES-AM, KYZS-AM and KGLD-AM in
Tyler/Longview, Texas, WFPG-AM, WFPG-FM and WPUR-FM in Atlantic City/Cape
May, New Jersey, WFHN-FM and WBSM-AM in New Bedford/Fall River,
Massachusetts, WQGN-FM, WSUB-AM and WVVE-FM in New London, Connecticut and
the right to operate WKOE-FM in Atlantic City/Cape May under a program
service and time brokerage agreement and the right to sell advertising in
the United States for one FM radio Station in Niagara Falls, Ontario under
a joint sales agreement for the aggregate purchase price of approximately
$189.0 million, and (B) entry into a local marketing agreement dated June
1, 2000 pursuant to which a third party operates the five Tyler/Longview,
Texas stations acquired and has an obligation to purchase such stations
(the unaudited pro forma financial information does not give effect to any
future sale of the stations pursuant to this agreement) (collectively, the
"BPH Transactions"),
o the June 19, 2000 acquisition of WWFX-FM in Worcester, Massachusetts for
the purchase price of approximately $12.8 million (the "WWFX Acquisition"),
o the June 28, 2000 acquisition of Bloomington Broadcasting Holdings, Inc.,
which owned WKLQ-FM, WBBL-AM, WLAV-FM and WODJ-FM, in Grand Rapids,
Michigan, WTCB-FM, WOMG-FM, WLXC-FM and WISW-AM in Columbia, South
Carolina, WSKZ-FM, WOGT-FM, WGOW-AM and WGOW-FM in Chattanooga, Tennessee,
WQUT-FM, WKOS-FM, WJCW-AM, WKIN-AM and WGOC-AM in Johnson
City/Kingsport/Bristol, Tennessee and WJBC-AM, WBNQ-FM and WBWN-FM in
Bloomington, Illinois, for the aggregate purchase price of approximately
$175.9 million, which amount includes repayment of indebtedness of
Bloomington Broadcasting Holdings and a deferred obligation relating to a
recent radio station purchase by Bloomington Broadcasting Holdings (the
"Bloomington Acquisition"),
<PAGE> 60
o the (A) August 1, 2000 acquisition of WMMQ-FM, WJIM-FM, WFMK-FM, WITL-FM,
WVFN-AM and WJIM-AM in Lansing/East Lansing, Michigan, WHNN-FM and WTCF-FM
in Saginaw/Bay City/Midland, Michigan and WFBE-FM in Flint, Michigan, and
the right to operate WTRX-AM in Flint under a time brokerage agreement, as
well as the right to acquire such station, for the aggregate purchase price
of approximately $120.9 million in cash, and (B) the concurrent sale of
WSGW-AM, WGER-FM and WTCF-FM in Saginaw/Bay City/Midland, Michigan for the
sale price of approximately $16.1 million in cash (collectively, the
"Michigan Transactions"),
o the October 2, 2000 acquisition of WKDF-FM and WGFX-FM in Nashville,
Tennessee, WIVK-FM, WNOX-AM, WNOX-FM and WSMJ-FM in Knoxville, Tennessee,
and WRAX-FM, WZRR-FM, WYSF-FM, WJOX-AM and WAPI-AM in Birmingham, Alabama
for the aggregate purchase price of approximately $288.6 million in cash
(the "Dick Acquisition"),
o the November 9, 1999 sale of KKTT-FM, KEHK-FM and KUGN-AM in Eugene,
Oregon, KAKT-FM, KBOY-FM, KCMX-FM, KTMT-FM, KCMX-AM and KTMT-AM in Medford,
Oregon, KEYW-FM, KORD-FM, KXRX-FM, KTHT-FM and KFLD-AM in Tri-Cities,
Washington, KCTR-FM, KKBR-FM, KBBB-FM, KMHK-FM and KBUL-AM in Billings,
Montana, WQKK-AM and WGLU-FM in Johnstown, Pennsylvania and WQWK-FM,
WNCL-FM, WRSC-AM and WBLF-AM in State College, Pennsylvania for the sale
price of approximately $26.0 million (the "Marathon Disposition"),
o the June 1999 public offering by Citadel Communications of shares of its
common stock and the use of net proceeds from that offering (the "1999
Offering"),
o the August 1999 redemption of a portion of Citadel Broadcasting's
outstanding 13-1/4% Exchangeable Preferred Stock (the "Preferred
Redemption"), and
o the February 2000 public offering by Citadel Communications of shares of
its common sock and the use of net proceeds from that offering (the "2000
Offering").
The unaudited pro forma condensed consolidated financial statements are
based on Citadel Communications' historical consolidated financial statements,
the financial statements of those entities acquired, or from which assets were
acquired, in connection with the Completed Transactions.
In the opinion of management, all adjustments necessary to fairly present
this pro forma information have been made. The interest rate applied to
borrowings under, and repayments of, Citadel Broadcasting's credit facility in
the pro forma consolidated statements of operations was 7.8%, which represents
the interest rate in effect under the then existing credit facility as of
January 1, 1999. Pro forma financial information has been adjusted to reflect
the following, when applicable:
o Prior to the acquisition dates, Citadel Communications operated some of the
acquired stations under a joint sales agreement ("JSA") or local marketing
agreement ("LMA"). Citadel Communications receives or pays fees for such
services accordingly. Net revenue and station operating expenses for
stations operated under JSAs are included to reflect ownership of the
stations as of January 1, 1999. Net revenue and station operating expenses
for stations operated under LMAs are included in Citadel
<PAGE> 61
Communications' historical consolidated financial statements. For those
stations operated under JSAs and LMAs and subsequently acquired, associated
fees and redundant expenses were eliminated and estimated occupancy costs
were included to adjust the results of the operations to reflect ownership
of the stations as of January 1, 1999.
o Elimination of revenue and operating expenses from the entities acquired,
or from which assets were acquired, in connection with the Completed
Transactions, which would not have been incurred if the acquisition had
occurred on January 1, 1999. The eliminated items were deemed redundant and
therefore are not reflected as of January 1, 1999.
Depreciation and amortization for the acquisitions are based upon
preliminary allocations of the purchase price to property and equipment and
intangible assets. Actual depreciation and amortization may differ depending on
the final allocation of the purchase price. However, management does not believe
these differences will be material.
For pro forma purposes, Citadel Communications' balance sheet as of June 30,
2000 has been adjusted to give effect to the Michigan Transactions and the Dick
Acquisition as if each had occurred on June 30, 2000 (collectively, the "Recent
2000 Transactions").
The unaudited pro forma information is presented for illustrative purposes
only and does not indicate the operating results or financial position that
would have occurred if the transactions described above had been completed on
the dates indicated.
<PAGE> 62
CITADEL COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACTUAL ADJUSTMENTS PRO FORMA
CITADEL FOR RECENT 2000 CITADEL
COMMUNICATIONS TRANSACTIONS (1) COMMUNICATIONS
-------------- ---------------- --------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 6,610 $ (4,074) $ 2,536
Accounts and notes
receivable, net 68,041 -- 68,041
Prepaid expenses 4,487 -- 4,487
Net assets of
discontinued operations 2,350 -- 2,350
---------- -------- ----------
Total current assets 81,488 (4,074) 77,414
Property and equipment,
net 90,783 19,013 109,796
Intangible assets, net 939,809 375,712 1,315,521
Restricted cash 2,000 -- 2,000
Other assets 7,105 -- 7,105
---------- -------- ----------
TOTAL ASSETS $1,121,185 $390,651 $1,511,836
========== ======== ==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Accounts payable and
accrued liabilities $ 16,577 $ -- $ 16,577
Current maturities of
other long-term
obligations 842 -- 842
---------- -------- ----------
Total current
liabilities 17,419 -- 17,419
Notes payable, less
current maturities 280,000 389,000 669,000
Senior subordinated
notes 210,734 -- 210,734
Other long-term
obligations, less
current maturities 2,744 -- 2,744
Deferred tax liability 77,692 -- 77,692
Exchangeable preferred
stock 89,818 -- 89,818
Common stock and
additional paid-in
capital 517,168 -- 517,168
Deferred compensation (20,681) -- (20,681)
Accumulated deficit/
retained earnings (53,709) 1,651 (52,058)
---------- -------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,121,185 $390,651 $1,511,836
========== ======== ==========
</TABLE>
(1) Represents the net effect of the Michigan Transactions and the Dick
Acquisition, as if each transaction had taken place on June 30, 2000.
<PAGE> 63
CITADEL COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACTUAL ADJUSTMENTS FOR PRO FORMA
CITADEL COMPLETED CITADEL
COMMUNICATIONS TRANSACTIONS(1) COMMUNICATIONS
-------------- --------------- --------------
<S> <C> <C> <C>
Net revenue $114,349 $ 51,545 $165,894
Station operating expenses 72,490 36,076 108,566
Depreciation and
amortization 28,518 24,460 52,978
Corporate general and
administrative 4,382 -- 4,382
Non-cash deferred
compensation 6,455 -- 6,455
-------- -------- --------
Operating expenses 111,845 60,536 172,381
Operating income (loss) 2,504 (8,991) (6,487)
Interest expense 17,632 23,809 41,441
Other (income) expense, net (3,497) 57 (3,440)
--------- -------- --------
Income (loss) from continuing
operations before
income taxes (11,631) (32,857) (44,488)
Income taxes (benefit) (1,307) (1,062) (2,369)
Net income (loss) from
continuing operations (10,324) (31,795) (42,119)
Net (loss) from discontinued
operations, net of tax (1,775) -- (1,775)
Net income (loss) (12,099) (31,795) (43,894)
Dividend requirement for
exchangeable preferred
stock (5,832) -- (5,832)
--------- -------- --------
Income (loss) applicable
to common shares $(17,931) $(31,795) $(49,726)
======== ======== ========
</TABLE>
(1) Represents the net effect of the Completed Transactions that were
consummated after January 1, 2000 as if each transaction had taken place on
January 1, 1999. Dollars in the tables below are shown in thousands.
<TABLE>
<CAPTION>
DICK MICHIGAN BLOOMINGTON WWFX BPH
ACQUISITION TRANSACTIONS ACQUISITION ACQUISITION TRANSACTIONS
----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net revenue $ 15,703 $ 7,692 $14,692 $ 922 $11,362
Station operating expenses 12,359 4,024 10,094 457 8,310
Depreciation and
amortization 9,554 3,527 6,847 409 3,793
Corporate general and
administrative -- -- -- -- --
-------- ------- ------- ----- -------
Operating expenses 21,913 7,551 16,941 866 12,103
-------- ------- ------- ----- -------
Operating income (loss) (6,210) 141 (2,249) 56 (741)
Interest expense 11,271 3,866 6,248 473 3,696
Other (income) expenses, net 57 -- -- -- --
-------- ------- ------- ----- -------
Income (loss) from continuing
operations before income
taxes (17,538) (3,725) (8,497) (417) (4,437)
Income taxes (benefit) -- -- (1,062) -- --
-------- ------- ------- ----- -------
Net income (loss) from
continuing operations $(17,538) $(3,725) $(7,435) $(417) $(4,437)
======== ======= ======= ===== =======
</TABLE>
<PAGE> 64
<TABLE>
<CAPTION>
WORC AND ADJUSTMENTS
LAFAYETTE WXLO FOR THE THE COMPLETED
ACQUISITION ACQUISITION 2000 OFFERING TRANSACTIONS
----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenue $ 688 $ 486 $ -- $ 51,545
Station operating expenses 464 368 -- 36,076
Depreciation and amortization 151 179 -- 24,460
Corporate general and
administrative -- -- -- --
----- ----- ------- --------
Operating expenses 615 547 -- 60,536
----- ----- ------- --------
Operating income (loss) 73 (61) -- (8,991)
Interest expense 166 178 (2,089) 23,809
Other (income) expenses, net -- -- -- 57
----- ----- ------- --------
Income (loss) from continuing
operations before income
taxes (93) (239) 2,089 (32,857)
Income tax (benefit) -- -- -- (1,062)
----- ----- ------- --------
Net income (loss) from
continuing operations (93) (239) 2,089 (31,795)
===== ===== ======= ========
</TABLE>
<PAGE> 65
CITADEL COMMUNICATIONS CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACTUAL ADJUSTMENTS FOR PRO FORMA
CITADEL COMPLETED CITADEL
COMMUNICATIONS TRANSACTIONS(1) COMMUNICATIONS
-------------- --------------- --------------
<S> <C> <C> <C>
Net revenue $ 178,495 $145,185 $323,680
Station operating expenses 115,312 95,143 210,455
Depreciation and
amortization 35,749 68,245 103,994
Corporate general and
administrative 7,010 (131) 6,879
Non-cash deferred
compensation 1,727 -- 1,727
--------- -------- --------
Operating expenses 159,798 163,257 323,055
--------- -------- --------
Operating income (loss) 18,697 (18,072) 625
Interest expense 25,385 45,746 71,131
Other (income) expense, net (388) (8,406) (8,794)
--------- -------- --------
Income (loss) from
continuing operations
before income taxes (6,300) (55,412) (61,712)
Income tax (benefit) (1,647) (2,975) (4,622)
Net income (loss) from
continuing operations (4,653) (52,437) (57,090)
Net (loss) from
discontinued
operations, net of tax (4,275) -- (4,275)
Net income (loss) (8,928) (52,437) (61,365)
Dividend requirement for
exchangeable preferred
stock (14,103) 3,324 (10,779)
--------- -------- --------
Income (loss) applicable
to common shares $ (23,031) $(49,113) $(72,144)
========= ======== ========
</TABLE>
(1) Represents the net effect of the Completed Transactions as if each
transaction had taken place on January 1, 1999. Dollars in the tables below
are shown in thousands.
<PAGE> 66
<TABLE>
<CAPTION>
DICK MICHIGAN BLOOMINGTON BPH
ACQUISITION TRANSACTIONS ACQUISITION TRANSACTIONS
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Net Revenue $ 31,205 $15,264 $ 28,304 $ 42,061
Station operating expenses 21,960 8,071 19,354 28,997
Depreciation and
amortization 19,107 7,054 13,695 13,006
Corporate general and
administrative -- -- -- --
-------- ------- -------- --------
Operating expenses 41,067 15,125 33,049 42,003
-------- ------- -------- --------
Operating income (loss) (9,862) 139 (4,745) 58
Interest expense 22,541 7,732 12,496 12,671
Other (income) expenses,
net 1,232 -- -- --
-------- ------- -------- --------
Income (loss) from
continuing operations
before income taxes (33,635) (7,593) (17,241) (12,613)
Income tax (benefit) -- -- (2,125) --
Net income (loss) from
continuing operations (33,635) (7,593) (15,116) (12,613)
Net (loss) from
discontinued operations,
net of tax -- -- -- --
Net income (loss) (33,635) (7,593) (15,116) (12,613)
Dividend requirement for
exchangeable preferred
stock -- -- -- --
-------- ------- -------- --------
Income (loss) applicable
to common shares (33,635) (7,593) (15,116) (12,613)
======== ======= ======== ========
</TABLE>
<PAGE> 67
<TABLE>
<CAPTION>
PORTSMOUTH/ CHARLESTON/
DOVER/ BINGHAMTON/
OKLAHOMA ROCHESTER/ MUNCIE/ BATON ROUGE/
CITY PORTLAND KOKOMO LAFAYETTE
ACQUISITION ACQUISITION ACQUISITION ACQUISITION
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Revenue $ 9,736 $10,642 $ 9,543 $1,371
Station operating expenses 6,402 6,021 6,711 1,275
Depreciation and
amortization 4,298 3,628 2,685 628
Corporate general and
administrative -- -- -- --
------- ------- ------- ------
Operating expenses 10,700 9,649 9,396 1,903
------- ------- ------- ------
Operating income (loss) (964) 993 147 (532)
Interest expense 4,282 2,994 2,343 --
Other (income) expenses, net -- -- -- --
------- ------- ------- ------
Income (loss) from
continuing operations
before income taxes (5,246) (2,001) (2,196) (532)
Income tax (benefit) -- (724) -- (126)
Net income (loss) from
continuing operations (5,246) (1,277) (2,196) (406)
Net (loss) from
discontinued
operations, net of tax -- -- -- --
Net income (loss) (5,246) (1,277) (2,196) (406)
Dividend requirement for
exchangeable preferred
stock -- -- -- --
------- ------- ------- ------
Income (loss) applicable
to common shares $(5,246) (1,277) $(2,196) $ (406)
======= ======= ======= ======
</TABLE>
<PAGE> 68
<TABLE>
<CAPTION>
CARLISLE
ACQUISITION,
CAPSTAR
TRANSACTIONS,
KOOJ ACQUISITION
WXL0 ACQUISITION, ADJUSTMENTS
LAFAYETTE FOR THE
ACQUISITION, 1999 OFFERING,
WORC ACQUISITION, THE PREFERRED
SAGINAW/ WWFX ACQUISITION AND REDEMPTION
BAY CITY MARATHON AND THE THE COMPLETED
ACQUISITION DISPOSITION 2000 OFFERING TRANSACTIONS
----------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
Net Revenue $ 526 $(3,467) $ -- $145,185
Station operating
expenses 486 (4,134) -- 95,143
Depreciation and
amortization 202 3,942 -- 68,245
Corporate general and
administrative -- (131) -- (131)
----- ------- -------- --------
Operating expenses 688 (323) -- 163,257
----- ------- -------- --------
Operating income (loss) (162) (3,144) -- (18,072)
Interest expense -- 2,395 (21,708) 45,746
Other (income)
expenses, net -- (9,638) -- (8,406)
----- ------- -------- --------
Income (loss) from
continuing
operations before
income taxes (162) 4,099 21,708 (55,412)
Income tax (benefit) -- -- -- (2,975)
Net income (loss)
from continuing
operations (162) 4,099 21,708 (52,437)
Net (loss) from
discontinued
operations, net
of tax -- -- -- --
Net income (loss) (162) 4,099 21,708 (52,437)
Dividend requirement
for exchangeable
preferred stock -- -- 3,324 3,324
----- ------- -------- --------
Income (loss)
applicable to common
shares $(162) 4,099 $ 25,032 (49,113)
===== ======= ======== ========
</TABLE>
<PAGE> 69
SIGNATURES
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 thereunto duly authorized.
CITADEL COMMUNICATIONS CORPORATION
Date: October 17, 2000 By: /s/ Lawrence R. Wilson
---------------------- --------------------------
Lawrence R. Wilson
Chairman, Chief Executive Officer
and President
<PAGE> 70
EXHIBIT INDEX
2.1 Asset Purchase Agreement effective as of April 30, 2000 among Dick
Broadcasting Company, Inc. of Tennessee, Dick Broadcasting Company,
Inc. of Alabama, Dick Broadcasting Company, Inc. of Nashville, Dick
Radio Alabama, Inc., DFT Realty, DFT Realty II, LLC, James Allen Dick,
Sr., James Allen Dick, Jr., Charles Arthur Dick, Emily Dick McAlister,
Jeannette Dick Hundley and Citadel Broadcasting Company (incorporated
by reference to Exhibit 2.1 to Citadel Communications Corporation's
Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
2000).
2.2 First Amendment to Asset Purchase Agreement dated September 30, 2000
among Dick Broadcasting Company, Inc. of Tennessee, Dick Broadcasting
Company, Inc. of Alabama, DFT Realty, DFT Realty II, LLC, James Allen
Dick, Sr., James Allen Dick, Jr., Charles Arthur Dick, Emily Dick
McAlister, Jeannette Dick Hundley and Citadel Broadcasting Company.
4.1 Second Amended and Restated Credit Agreement dated as of October 2,
2000 among Citadel Broadcasting Company, Citadel Communications
Corporation, Credit Suisse First Boston, as Lead Arranger,
Administrative Agent and Collateral Agent, FINOVA Capital Corporation,
as Syndication Agent, First Union National Bank and Fleet National
Bank, as Documentation Agents, and the lenders named therein.
23.1 Consent of Hines and Company, P.C.
