UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
(Amendment No. 1)
(Mark One):
X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934. For the quarterly period ended March 31, 1996
__ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number: 0-26102
AMERICAN RADIO SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-3196245
State or other jurisdiction of (I.R.S. Employer
ncorporation or organization) Identification No.)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of principal executive offices)
Telephone Number (617)-375-7500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
Yes X No
Class of Common Stock Outstanding at April 15, 1996
Class A Common Stock 12,389,969 shares
Class B Common Stock 5,465,315 shares
Class C Common Stock 1,295,518 shares
Total 19,150,802 shares
Page 1 of 26 pages
Exhibit Index on page 22
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
This amendment to the Company's Form 10-Q for the quarterly period ended March
31, 1996 previously filed May 3, 1996 corrects certain typographical errors
contained within the originally filed Form 10-Q.
Item 1. Condensed Consolidated Unaudited Financial Statements Page No.
Consolidated Balance Sheets
March 31, 1996 and December 31, 1995................. 1
Consolidated Statements of Operations
Three months ended March 31, 1996 and 1995........... 3
Consolidated Statements of Cash Flows
Three months ended March 31, 1996 and 1995........... 4
Notes to Consolidated Statements...................... 5
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings......................................... 21
Item 2. Changes in Securities..................................... 21
Item 6. Exhibits and Reports on Form 8-K.......................... 22
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
AMERICAN RADIO SYSTEMS CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................... $ 106,115,670 $ 3,889,720
Accounts receivable, net................................ 19,726,764 24,388,719
Prepaid expenses and other current assets............... 3,556,514 2,280,544
Note receivable-other................................... 1,121,687 1,108,414
Deferred income taxes................................... 1,161,901 1,161,901
------------- ----------
Total current assets.............................. 131,682,536 32,829,298
------------- ----------
PROPERTY AND EQUIPMENT-Net................................. 36,655,170 31,786,011
------------- ----------
OTHER ASSETS:
Station investment note receivable-related party........ 500,000 500,000
Station investment notes receivable..................... 64,111,572 48,597,338
Intangible assets-net:
Goodwill............................................ 67,269,500 66,463,708
FCC licenses........................................ 45,048,784 45,023,219
Other intangible assets............................. 21,401,099 15,863,918
Deposits and other long-term assets..................... 21,301,494 7,732,337
--------------- -------------
Total other assets................................ 219,632,449 184,180,520
--------------- -------------
TOTAL...................................................... $ 387,970,155 $ 248,795,829
============== =============
</TABLE>
See notes to condensed consolidated unaudited financial statements.
1
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Continued)
<TABLE>
<CAPTION>
March 31, 1996 December 31, 1995
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt............................... $ 332,717 $ 355,283
Accounts payable and accrued expenses.............................. 12,535,386 10,408,954
Current redeemable Common Stock.................................... 19,460 19,460
------------ -------------
Total current liabilities....................................... 12,887,563 10,783,697
------------ -------------
DEFERRED INCOME TAXES................................................ 7,727,757 7,899,090
------------- -------------
OTHER LONG-TERM LIABILITIES.......................................... 2,042,458 1,929,307
------------- -------------
LONG-TERM DEBT....................................................... 174,401,612 152,148,939
------------- ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred Stock; $.01 par value; 1,000,000 shares authorized;
0 shares issued and outstanding in 1996 and 1995.................
Class A Common Stock; $.01 par value; 25,000,000 shares
authorized; 12,120,174 and 6,645,862 shares issued and
outstanding, respectively........................................ 121,202 66,459
Class B Common Stock; $.01 par value; 10,000,000 shares
authorized; 5,496,064 and 5,938,050 shares issued and
5,477,615 and 5,919,601 shares outstanding,
respectively.................................................... 54,776 59,196
Class C Common Stock; $.01 par value 6,000,000 shares
authorized; 1,295,518 and 1,795,518 shares issued and
outstanding, respectively....................................... 12,955 17,955
Additional paid-in capital......................................... 186,190,808 70,928,215
Unearned compensation.............................................. (367,544) (391,206)
Retained earnings.................................................. 5,336,741 5,792,350
------------- -----------
Total......................................................... 191,348,938 76,472,969
Less:
Treasury stock, at cost, 18,449 shares........................ (438,173) (438,173)
------------- -----------
Total stockholders' equity.................................... 190,910,765 76,034,796
------------- -----------
TOTAL................................................................ $ 387,970,155 $ 248,795,829
============= =============
</TABLE>
See notes to condensed consolidated unaudited financial statements.
2
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1996 1995
---- ----
<S> <C> <C>
NET REVENUES.................................................................... $ 23,648,253 $ 19,841,727
------------ ------------
OPERATING EXPENSES:
Excluding depreciation and amortization and
corporate general and administrative expenses............................... 18,574,257 15,622,196
Depreciation and amortization................................................ 2,200,192 2,761,284
Corporate general and administrative......................................... 1,081,276 786,097
----------- -----------
Total Operating Expenses.................................................... 21,855,725 19,169,577
----------- -----------
OPERATING INCOME................................................................ 1,792,528 672,150
OTHER INCOME (EXPENSE):
Interest income............................................................... 2,117,577 88,908
Interest expense.............................................................. (4,702,220) (3,181,644)
Gain (loss) on sale of assets and other....................................... (34,758) 11,594,607
---------- ----------
TOTAL OTHER INCOME (EXPENSE).................................................... (2,619,401) 8,501,871
INCOME (LOSS) BEFORE INCOME TAXES:.............................................. (826,873) 9,174,021
Benefit (provision) for income taxes......................................... 371,264 (3,967,187)
--------- ----------
NET INCOME (LOSS)............................................................... (455,609) 5,206,834
Redeemable common and preferred stock
dividends.................................................................. (518,545)
--------- ----------
NET INCOME (LOSS) APPLICABLE TO COMMON
SHARES...................................................................... $ (455,609) $ 4,688,289
------------- ------------
Primary and fully diluted earnings (loss) per common
share......................................................................... $ (0.03) $ 0.50
Weighted average common share and share equivalents
outstanding................................................................... 17,901,023 9,299,760
</TABLE>
See notes to condensed consolidated unaudited financial statements.
3
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three months Three months
ended ended
March 31, 1996 March 31, 1995
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss)............................................................... $ (455,609) $ 5,206,834
Adjustments to reconcile net income to cash (used for)
provided by operating activities:
Net barter revenue............................................................. (279,903) (198,950)
Depreciation and amortization.................................................. 2,200,192 2,761,284
Other changes not affecting cash............................................... 380,103 3,876,546
Loss (gain) on sale of assets.................................................. 34,758 (11,594,607)
Net changes in operating assets and liabilities.............................. 5,705,939 2,825,564
---------- -----------
Total adjustments.......................................................... 8,041,089 (2,330,163)
---------- -----------
Cash provided by operating activities...................................... 7,585,480 2,876,671
---------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchase of property and equipment and
intangible assets............................................................. (3,295,301) (2,121,655)
Proceeds from asset and radio station sales................................... -- 15,283,301
Payments for purchase of radio stations....................................... -- (12,000,000)
Payments for station investment note receivable............................... (15,514,234) --
Payments for purchase of land................................................. (2,200,000) --
Payments for purchase of towers............................................... (2,501,615) --
Restricted cash............................................................... -- (4,561,743)
Deposits and other long-term assets........................................... (13,569,157) (2,365,848)
------------ ----------
Cash used for investing activities......................................... (37,080,307) (5,765,945)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under Credit Agreement.............................................. -- 3,000,000
Repayments under Credit Agreement.............................................. (151,500,000) --
Net proceeds from equity offering and options.................................. 115,075,853 --
Net proceeds from note offering - net of discount.............................. 168,321,387 --
Expenditures for public equity offering........................................ -- (362,292)
Repayment of other obligations................................................. (176,463) (45,589)
------------ ----------
Cash provided by financing activities...................................... 131,720,777 2,592,119
------------ ----------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS................................................................... 102,225,950 (297,155)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD....................................................................... 3,889,720 3,168,298
------------ ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD........................................ $ 106,115,670 $ 2,871,143
------------ ------------
</TABLE>
See notes to condensed consolidated unaudited financial statements.
4
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
1. Basis of Presentation - The financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Although certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, the Company believes that the disclosures are adequate to make
the information presented not misleading and reflect all adjustments
(consisting only of normal recurring adjustments) which are necessary for a
fair presentation of results of operations for such periods. Results of
interim periods may not be indicative of results for the full year. It is
suggested that these financial statements be read in conjunction with the
consolidated financial statements for the year ended December 31, 1995 and
the notes thereto included in the Company's Annual Report on Form 10-K.
2. Significant Accounting Policies - In March 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 121
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets
to Be Disposed Of" (FAS 121). FAS 121 addresses the accounting for the
impairment of long-lived assets, certain identifiable intangibles and
goodwill when events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. FAS 121 was adopted effective
January 1, 1996. The impact of FAS 121 did not have a material impact on
the Company's results of operations, liquidity or financial position.
In October 1995 The Financial Accounting Standards Board Issued FAS No.
123, "Accounting For Stock- Based Compensation," which is effective for the
Company beginning January 1, 1996. FAS 123 requires expanded disclosures of
stock-based compensation arrangements with employees and encourages (but
does not require) compensation cost to be measured based on the fair value
of the equity instrument awarded. Companies are permitted, however, to
continue to apply APB Opinion No. 25, which recognizes compensation cost
based on the intrinsic value of the equity instrument awarded. The Company
will continue to apply APB Opinion No. 25 to its stock based compensation
awards to employees and will disclose the required pro forma effect on net
income and earnings per share in the Company's Annual Report on Form 10-K
for the year-ended December 31,1996.
In connection with accounting for the combination, the Predecessor
Entities' accumulated deficits or retained earnings at November 1, 1993
were carried forward into the Company in the form of a permanent capital
deficiency account. Effective January 1, 1996 the Company reclassified the
balance of the account against additional paid-in capital.
3. Per Share data - Earnings and losses per common share are based on the
number of common shares outstanding during the period as adjusted for
dilutive stock options and warrants. Fully diluted earnings (loss) per
share amounts are not reported separately as the effects are not dilutive.
4. Debt and equity offering - In February 1996, the Company consummated an
offering (the "Equity Offering") of 5,514,707 shares of Class A Common
Stock at an offering price of $27 per share. The total shares issued
pursuant to the Equity offering consisted of 4,000,000 shares sold by the
Company, 1,013,370 shares by selling shareholders and an additional 501,337
shares sold by the Company pursuant to the underwriters' over-allotment
option. Proceeds to the Company, net of underwriters' discount and
associated costs, were approximately $114.5 million.
Concurrent with the Equity Offering, the Company sold $175,000,000 of 9%
Senior Subordinated Notes due 2006 (the "Subordinated Notes") with a
discount of $1,419,250 to yield 9.125% (the "Debt Offering"). As of March
31, 1996 the Subordinated Notes aggregated $173,595,731 net of an
unamortized discount of $1,404,269. Interest is payable semi-annually on
February 1 and August 1 with the face amount of the Subordinated Notes due
on February 1, 2006. The Subordinated Notes are
5
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
4. Debt and equity offering - (continued): redeemable at the option of the
Company, in whole or in part at any time on or after February 1, 2001 and
prior to maturity at the following redemption prices (expressed as
percentages of principal amount) plus accrued and unpaid interest, if any,
to but excluding the redemption date, if redeemed during the 12 month
period beginning February 1 of the years indicated: 2001 - 104.5%; 2002 -
103.0%; 2003 - 101.5%; 2004 and thereafter - 100.0%. Notwithstanding the
foregoing, at any time prior to February 1, 1999, the Company may redeem up
to $58.3 million principal amount of the Subordinated Notes from the net
proceeds of a public equity offering (as defined in the Subordinated Notes)
at a redemption price equal to 109.0% of the principal amount thereof plus
accrued and unpaid interest, if any, to the Redemption Date; provided that
at least $116.7 million principal amount of the Subordinated Notes remain
outstanding immediately after the occurrence of any such redemption. The
Subordinated Notes are subordinate in right of payment to the prior payment
in full of all obligations under the 1995 Credit Agreement. The
Subordinated Notes contain certain covenants including, but not limited to,
limitations on sales of assets, dividend payments, future indebtedness and
issuance of preferred stock and require an offer to purchase in the event
of a Change of Control (as defined). Proceeds to the Company, net of
underwriters' discount and associated costs, were approximately $167.5
million.
Proceeds from the Debt and Equity Offerings were used to repay all the
outstanding borrowings under the 1995 Credit Agreement with the balance,
approximately $131.0 million, held in short-term interest-bearing
securities to be used to fund future acquisitions.
5. The Telecommunications Act of 1996 - In February 1996, the President
signed into law the Telecommunications Act of 1996 (the "Telecommunications
Act"). This law provides for, among other things, a relaxation of current
ownership restrictions. It eliminates the restriction of the number of
commercial radio broadcast stations which one company can own at a national
level, though limits exist with respect to the number permitted to be owned
in local markets, the precise number being dependent upon the number of
commercial radio stations serving the local market. This legislation will
permit the consummation, subject to FCC approval, of the transactions
discussed in Notes 7 and 8.
6. Acquisition - on February 16, 1996, the American Tower Systems, Inc. (the
"Tower Subsidiary") acquired Skyline Communications and Skyline Antenna
Management for approximately $3.3 million consisting of 26,989 shares of
Class A Common Stock, $2.2 million cash and the assumption of approximately
$0.3 million of long-term debt. Skyline Communications owns eight towers,
six of which are in West Virginia and the remaining two in northern
Virginia. Skyline Antenna Management manages more than 200 antenna sites,
primarily in the northeast region of the United States.
The acquisition has been accounted for by the purchase method of
accounting. The purchase price has been allocated to the assets acquired,
principally intangible assets, and the liabilities assumed based on their
estimated fair values at the date of acquisition. The excess of purchase
price over the estimated fair value of the net assets acquired has been
recorded as goodwill.
The operating results of the acquisition is included in the Company's
consolidated results of operations from the date of acquisition. The
unaudited pro forma results of operations as if the acquisition had
occurred as of January 1, 1994 and 1995 are not presented as the effect is
not material to the consolidated financial statements.
7. Other transactions - During the first quarter of 1996, the Company has
agreed to purchase (or is in the process of negotiating agreements to
purchase) additional stations as follows:
6
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
7. Other transactions - (continued):
Dayton: In January 1996, American entered into a nonbinding letter of
intent to acquire for approximately $12 million two FM stations (WLQT-FM
and WDOL-FM) in Dayton. Because of then existing FCC regulations, American
assigned its rights under the letter of intent to Palm Beach Radio
Broadcasters, Inc. ("PBRB") which has entered into the definitive purchase
and sale agreement. American has loaned PBRB the funds to finance the
acquisition and has an option to purchase the stations. In light of the
changes effected by the Telecommunications Act, American intends to
exercise its option to acquire, subject to FCC approval, the stations,
using the loans to do so. Subject to the receipt of FCC approval, this
acquisition is expected to occur in the third quarter of 1996.
Buffalo: During the first quarter, the Company loaned PBRB $8.0 million to
finance the acquisition of WBLK-FM. The Company has an option to acquire,
and a right of first refusal with respect to the station. American intends
to exercise its option to acquire, subject to FCC approval, the station,
using the loan to do so, and such acquisition is expected to occur in the
third quarter of 1996.
Philadelphia: In March 1996, the Company entered into a merger agreement
(the "Marlin Transaction") with Marlin Broadcasting, Inc. ("Marlin")
pursuant thereto American will acquire Marlin, which owns WFLN-FM in
Philadelphia, WQRS-FM in Detroit and WTMI-FM in Miami for an aggregate
purchase price of approximately $57.0 million, together with the assumption
of approximately $9.5 million of long-term debt. As part of the Marlin
Transaction, the principal stockholder of Marlin will acquire,
simultaneously with the merger, WTMI-FM in Miami back from the Company, for
approximately $18.0 million. Subject to receipt of required FCC approval,
American expects to consummate the Marlin Transaction in the second quarter
of 1996.
Detroit: As noted above, as part of the Marlin Transaction, the Company
expects to acquire WQRS-FM in Detroit in the third quarter of 1996. See
"Philadelphia" above.
Portland, Oregon: In March 1996, American entered into a merger agreement
(the "HBC Merger") with Henry Broadcasting Company ("HBC"). Pursuant to the
HBC Merger, American will issue shares of Class A Common Stock with a then
current market value of $64.0 million, pay approximately $8.0 million in
cash and assume long-term debt of approximately $38.0 million. As part of a
related transaction (the "HBC Real Estate Transactions", and collectively
with the HBC Merger, the "HBC Transactions"), American will acquire certain
real estate used in the business of HBC for approximately $5.0 million and
obtain a five-year option to acquire, for approximately $1.0 million,
certain other real estate. HBC owns an aggregate of twelve stations, of
which nine are included in the merger agreement as follows: KUFO- FM and
KBBT-AM in Portland, Oregon, KYMX-FM and KCTC-AM in Sacramento, KGOR-FM and
KFAB-AM in Omaha, and KSKS-FM, KKDJ-FM and KMJ-AM in Fresno. Subject to
receipt of FCC approvals, American expects to consummate the HBC
Transactions in the third quarter of 1996. American will be the surviving
entity in the HBC Merger and approval of its stockholders will not be
required.
In March 1996, American entered into an agreement to acquire a second FM
station, KDBX-FM, in Portland, Oregon for a purchase price of approximately
$14.0 million. Subject to receipt of FCC approval, American expects to
consummate the acquisition in the third quarter of 1996.
Sacramento: As noted above, as part of the HBC Transaction, American
expects to acquire KYMX-FM and KCTC-AM in Sacramento in the third quarter
of 1996. See "Portland, Oregon" above.
7
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
7. Sacramento (continued): In March 1996, the Company entered into an
agreement to acquire KSTE-AM in Sacramento, California for a purchase price
of $7.25 million. Subject to FCC approval, American expects to consummate
the acquisition in the third quarter of 1996.
Las Vegas: In March 1996, the Company entered into an agreement to acquire
KLUC-FM and KXNO-AM for a purchase price of approximately $11.0 million.
Subject to FCC approval, the Company expects to consummate the acquisition
in the third quarter of 1996.
Omaha: As noted above, as part of the HBC Transaction, American expects to
acquire KGOR-FM and KFAB-AM in Omaha in the third quarter of 1996. See
"Portland, Oregon" above.
Fresno: As noted above, as part of the HBC Transaction, American expects to
acquire KSKS-FM, KKDJ- FM and KMJ-AM in Fresno in the third quarter of
1996. See "Portland, Oregon" above.
Rochester: In February 1996, American entered into an agreement to acquire
two FM (WVOR-FM and WPXY-FM) stations and two AM (WHAM-AM and WHTK-AM)
stations serving the Rochester market for a purchase price of approximately
$30.5 million. Subject to receipt of FCC approvals, American expects to
consummate this acquisition in the second quarter of 1996.
West Palm Beach: In March 1996, the Company loaned PBRB $7.2 million to
finance the acquisition of WHLG-FM and WSTU-AM. The Company has an option
to acquire, and a right of first refusal with respect to the stations.
American intends to exercise its option to acquire, subject to FCC
approval, the FM station, using loans to do so, and such acquisition is
expected to occur in the third quarter of 1996.
As of March 31, 1996 the Company had deposits totaling $19.9 million
relating to acquisitions.
8. Subsequent Events - Subsequent to March 31, 1996 American has agreed to
purchase (or is in the process of negotiating agreements to purchase)
additional stations as follows:
Las Vegas: In April 1996, the Company entered into an agreement to acquire
KJMZ-FM for a purchase price of approximately $8.0 million. American has
also executed an agreement to acquire KMZQ-FM, KFBI-FM and KVEG-AM serving
Las Vegas, for an aggregate purchase price of approximately $30.0 million.
Subject to FCC approval, the Company expects to consummate the acquisition
in the third quarter of 1996.
Buffalo: In April 1996, the Company entered into an agreement to acquire
WSJZ-FM for a purchase price of approximately $12.5 million. Subject to FCC
approval, the Company expects to consummate the acquisition in the third
quarter of 1996.
Sacramento: In April 1996, the Company agreed to the material terms of an
acquisition of KSFM-FM and KMJI-AM. Subject to negotiation and execution of
a definitive agreement and FCC approval, the Company expects to consummate
the acquisition in the third quarter of 1996.
Portland and San Jose: In April 1996, the Company entered into an agreement
to acquire KUPL-FM and KKJZ-FM in Portland, Oregon and KSJO-FM and KUFX-FM
in San Jose, California for approximately $103.0 million. Subject to FCC
approval, the Company expects to consummate the acquisition in the third
quarter of 1996.
8
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
8. Subsequent Events (continued)
In April 1996, the Tower Subsidiary acquired BDS Communication, Inc. and
BRIDAN Communications Corporation for shares of the Company's Class A
Common Stock equal to approximately $7.0 million and the assumption of $1.9
million of long-term debt. BDS Communications owns three towers in
Pennsylvania and BRIDAN Communications manages or has sublease agreements
on approximately forty tower sites located throughout the Mid-Atlantic
region.
9. Subsidiary Guarantees - The Company's payment obligations under the
Subordinated Notes are fully senior subordinated basis by its wholly owned
subsidiary American Radio Systems License Corp. ("ARSLC") and any future
Restricted Subsidiaries (collectively "Restricted Guarantors"). ARSLC has
also and unconditionally guaranteed on a joint and several basis
(collectively, the "Subsidiary Guarantees") on a guaranteed, and any future
Subsidiaries will be required to guarantee, all obligations of the Company
under the 1995 Credit Agreement. The Company's Tower Subsidiary has not
guaranteed obligations under the 1995 Credit Agreement or the Subordinated
Notes.
The Subordinated Notes and the Subsidiary Guarantees are subordinated to
all Senior Debt of the Company including indebtedness under the 1995 Credit
Agreement and Senior Debt of each Subsidiary Guarantor. The indenture
governing the Subordinated Notes contains limitations on the amount of
indebtedness (including Senior Debt) which the Company may incur.
With the intent that the Subsidiary Guarantees not constitute fraudulent
transfers or conveyances under applicable state or federal law, the
obligation of each Guarantor under its Subsidiary Guarantee is also limited
to the maximum amount as will, after giving effect to any rights to
contribution of such Guarantor pursuant to any agreement providing for an
equitable contribution among such Guarantor and other affiliates of the
Company of payments made by guarantees by such parties, result in the
obligations of such Guarantor in respect of such maximum amount not
constituting a fraudulent conveyance.
The following unaudited consolidating condensed financial data illustrates
the composition of the combined Guarantors. Separate complete financial
statements of the respective Subsidiary Guarantors would not provide
additional material information which would be useful in assessing the
financial composition of the Subsidiary Guarantors. No single Subsidiary
Guarantor has any significant legal restrictions on the ability of
investors or creditors to obtain access to its assets in event of default
on the Subsidiary Guarantee other than its subordination to senior
indebtedness described above.
Investments in subsidiaries are accounted for by the parent on the equity
method for purposes of the supplemental consolidating presentation.
Earnings of subsidiaries are therefore reflected in the parent's investment
accounts and earnings. The principal elimination entries eliminate
investments in subsidiaries and intercompany balances and transactions.
9
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
9. Subsidiary Guarantees (Continued)
Condensed Consolidating Balance Sheet
March 31, 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent and Guarantor Non-guarantor Consolidated
its Divisions Subsidiary Subsidiary Eliminations Totals
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $105,971 $ 145 $106,116
Accounts receivable, net 19,646 81 19,727
Prepaid expenses and other current assets 3,548 8 3,556
Note receivable - other 1,122 1,122
Deferred income taxes 1,162 1,162
------- ------- ------ ------- --------
Total current assets 131,449 -- 234 -- 131,683
PROPERTY AND EQUIPMENT, NET 32,232 4,423 36,655
OTHER ASSETS:
Investment in and advances to Subsidiaries 52,172 $(52,172) --
Station investment notes receivable 64,612 64,612
Goodwill 65,529 1,740 67,269
FCC licenses $45,049 45,049
Other intangible assets 19,608 1,793 21,401
Deposits and other long-term assets 21,232 69 21,301
------- ------- ------ ------- -------
Total other assets 223,153 45,049 3,602 (52,172) 219,632
------- ------- ------ ------- -------
TOTAL ASSETS $386,834 $45,049 $8,259 $ (52,172) $387,970
======== ======= ====== ========= ========
</TABLE>
10
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
9. Subsidiary Guarantees (Continued)
Condensed Consolidating Balance Sheet
March 31, 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent and Guarantor Non-guarantor Consolidated
its Divisions Subsidiary Subsidiary Eliminations Totals
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $323 $10 $333
Accounts payable and accrued expenses 11,953 601 12,554
------ -------- ------ --------- ------
Total current liabilities 12,276 -- 611 -- 12,887
NON-CURRENT LIABILITIES
Deferred income taxes 7,519 209 7,728
Other long-term liabilities 2,025 17 2,042
Long-term debt 174,102 300 174,402
------- -------- ------ --------- -------
Total non-current liabilities 183,646 -- 526 -- 184,172
STOCKHOLDERS' EQUITY
Common Stock 189 189
Additional paid-in capital 186,191 $45,049 7,146 $(52,195) 186,191
Retained earnings 5,337 (23) 23 5,337
Treasury stock (438) (438)
Unearned compensation (368) (368)
------- ------ ------- --------- -------
Total stockholders' equity 190,911 45,049 7,123 (52,172) 190,911
------- ------ ------- --------- -------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $386,833 $45,049 $8,260 $(52,172) $387,970
======== ======= ======== ======== ========
</TABLE>
11
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
9. Subsidiary Guarantees (Continued)
Condensed Consolidating Statement of Operations
For the Three Months Ended March 31, 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent and Guarantor Non-guarantor Consolidated
its Divisions Subsidiary Subsidiary Eliminations Totals
<S> <C> <C> <C> <C> <C>
Net broadcast revenues $23,374 $23,374
Tower revenues $274 274
License fees charged to Parent (500) $500 -- --
------- ------ ------ ------ -------
Total net revenues 22,874 500 274 -- 23,648
Operating expenses excluding
depreciation and amortization and
corporate general and administrative
expenses 18,321 253 18,574
Depreciation and amortization 1,590 500 110 2,200
Corporate general and administrative 1,081 1,081
------ ----- ------ ------ ------
Operating income (loss) 1,882 0 (89) -- 1,793
Other income (expense):
Interest expense (4,700) (3) (4,703)
Interest income 2,118 2,118
Gain (loss) on sale of assets and other (35) (35)
Equity in (loss) of subsidiaries, net of
income taxes recorded at the
subsidiary level (50) $50 --
------ ------ ------ ------ -------
Income (loss) before income taxes (785) 0 (92) 50 (827)
Benefit (provision) for income taxes 329 42 371
------ ------ ------ ------ --------
Net income (loss) $(456) 0 $(50) $50 $(456)
------ ------ ------ ------ -------
</TABLE>
12
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
9. Subsidiary Guarantees (Continued)
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent and Guarantor Non-guarantor Consolidated
its Divisions Subsidiary Subsidiary Eliminations Totals
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities $6,798 -- $787 $7,585
------ ------- -------- --------- -------
Investing Activities:
Payments for purchase of property and
equipment and intangible assets (2,585) (710) (3,295)
Payments for purchase of towers (2,502) (2,502)
Payment for purchase of land (2,200) (2,200)
Payments for station investment note
receivable (15,514) (15,514)
Deposits and other long-term assets (13,514) (55) (13,569)
------ -------- -------- -------- -------
Cash flows used by investing activities (33,813) -- (3,267) (37,080)
------ -------- -------- -------- -------
Financing Activities:
Repayment of Credit Agreements (151,500) (151,500)
Net proceeds from note offering - net of
discount 168,321 168,321
Net proceeds from equity offering and
options 115,076 115,076
Repayment of other obligations (175) (1) (176)
Investment in and advances to subsidiaries 2,626 $(2,626) --
------- -------- -------- -------- -------
Cash flows from financing activities 131,722 -- 2,625 (2,626) 131,721
------- -------- -------- -------- -------
Increase in cash and cash equivalents 104,707 145 (2,626) 102,226
Cash and cash equivalents at beginning
of year 3,890 0 3,890
-------- --------- -------- -------- --------
Cash and cash equivalents at end of year $108,597 -- $145 $ (2,626) $106,116
======== ========= ======== ======== ========
</TABLE>
13
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
9. Subsidiary Guarantees (Continued)
Condensed Consolidating Balance Sheet
December 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent and Guarantor Non-guarantor Consolidated
its Divisions Subsidiary Subsidiary Eliminations Totals
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $3,890 $3,890
Accounts receivable, net 24,352 $37 24,389
Note receivable-other 1,108 1,108
Prepaid expenses and other current asset 2,281 2,281
Deferred income taxes 1,162 1,162
------ --------- --------- --------- ----------
Total current assets 32,793 -- 37 -- 32,830
PROPERTY AND EQUIPMENT 28,040 3,746 31,786
OTHER ASSETS:
Investment in and advances to subsidiaries 48,771 $(48,771) --
Station investment notes receivable 49,097 49,097
Goodwill 66,464 66,464
FCC licenses $45,023 45,023
Other intangible assets 15,840 24 15,864
Deposits and other long-term assets 7,718 14 7,732
------- ------- --------- -------- -------
Total other assets 187,890 45,023 38 (48,771) 184,180
-------- ------- --------- -------- --------
TOTAL ASSETS $248,723 $45,023 $3,821 $(48,771) $248,796
======== ======= ========= ======== ========
</TABLE>
14
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
9. Subsidiary Guarantees (Continued)
Condensed Consolidating Balance Sheet
December 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent and Guarantor Non-guarantor Consolidated
its Divisions Subsidiary Subsidiary Eliminations Totals
<S> <C> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 355 $ 355
Accounts payable and accrued expenses 10,387 $ 42 10,429
------- -------- -------- -------- --------
Total current liabilities 10,742 -- 42 -- 10,784
NON-CURRENT LIABILITIES
Deferred income taxes 7,899 7,899
Other long-term liabilities 1,923 6 1,929
Long-term debt 152,149 152,149
------- -------- -------- -------- --------
Total non-current liabilities 161,971 -- 6 -- 161,977
STOCKHOLDERS' EQUITY
Common Stock 144 144
Additional paid-in capital 70,928 $45,023 3,746 $(48,769) 70,928
Retained earnings 5,792 27 (27) 5,792
Unearned compensation (391) (391)
Treasury stock (438) (438)
------- -------- -------- -------- -------
Total stockholders' equity 76,035 45,023 3,773 (48,796) 76,035
------- -------- -------- -------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY $ 248,748 $ 45,023 $ 3,821 $ (48,796) $ 248,796
========= ======== ======== ========= =========
</TABLE>
15
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
9. Subsidiary Guarantees (Continued)
Condensed Consolidating Statement of Operations
For the Three Months Ended March 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent and Guarantor Non-guarantor Consolidated
its Divisions Subsidiary Subsidiary(a) Eliminations Totals
------------- ---------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net broadcast revenues $ 19,842 $ 19,842
License fees $ 360 (360) --
------------ ----------- -------------- ----------- ------------
Total net revenues -- 360 19,482 19,842
Operating expenses excluding depreciation and
amortization and corporate general and
administrative expenses 15,622 15,622
Depreciation and amortization 360 2,401 2,761
Corporate general and administrative 787 787
------------ ----------- ------------- ----------- -----------
Operating income -- 0 672 672
Other income (expense):
Interest expense $(25) (3,157) (3,182)
Interest income 89 89
Gain on sale of assets and other 11,595 11,595
Equity in (loss) of subsidiaries, net of income
taxes recorded at the subsidiary level 5,232 $(5,232) --
------------ ----------- ------------- ---------- ----------
Income before income taxes 5,207 0 9,199 (5,232) 9,174
Provision for income taxes 3,967 (3,967)
------------ ----------- ------------- ---------- ----------
Net Income 5,207 0 5,232 (5,232) 5,207
------------ ----------- ------------- ---------- ----------
Redeemable common and preferred stock (519) (519)
dividends ------------ ----------- ------------- ---------- ----------
Net income applicable to common shares $ 4,688 $ 0 $ 5,232 $ (5,232) $ 4,688
============ =========== ============= ========== ==========
(a) Includes American Radio Systems, Inc. (ARSI), a wholly owned subsidiary of the Company
until December 1995.
</TABLE>
16
<PAGE>
AMERICAN RADIO SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
(Continued)
9. Subsidiary Guarantees (Continued)
Condensed Consolidating Statement of Cash Flows
For the Three Months Ended March 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Parent and Guarantor Non-guarantor Consolidated
its Divisions Subsidiary Subsidiary(a) Eliminations Totals
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities -- -- $2,877 -- $2,877
_____________ __________ ____________ ____________ ___________
Investing Activities:
Capital expenditures (2,121) (2,121)
Proceeds from asset and station sales 15,283 15,283
Payments for purchase of radio stations (12,000) (12,000)
Restricted cash (4,562) (4,562)
Deposits and other long-term assets (2,366) (2,366)
_____________ __________ _____________ ____________ ___________
Cash flows used by investing activities -- -- (5,766) -- (5,766)
_____________ __________ _____________ ____________ ___________
Financing Activities
Borrowings under credit agreements 3,000 3,000
Expenditures for public equity offerings (362) (362)
Repayment of other obligations (46) (46)
_____________ __________ _____________ ____________ ___________
Cash flows from financing activities -- -- 2,592 -- 2,592
Increase (decrease) in cash and cash equivalents (297) (297)
Cash and cash equivalents at beginning of year 3,168 3,168
_____________ __________ _____________ ____________ ___________
Cash and cash equivalents at end of year -- -- $2,871 -- $2,871
_____________ __________ _____________ ____________ ___________
(a) Includes American Radio Systems, Inc. (ARSI), a wholly owned subsidiary of the Company
until December 1995.
</TABLE>
17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
American desires to take advantage of the new "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. This Report contains
"forward-looking statements" including statements concerning projections, plans,
objectives, future events or performance and underlying assumptions and other
statements which are other than statements of historical fact. American wishes
to caution readers that certain important factors may have affected and could in
the future affect American's actual results and could cause American's actual
results for subsequent periods to differ materially from those expressed in any
forward- looking statement made by or on behalf of American. These important
factors include those set forth in American's Annual Report on Form 10-K for
year ended December 31, 1995 under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and are incorporated
by reference herein.
Results of Operations
Three months ended March 31, 1996 and 1995
As of March 31, 1995, the Company owned and/or operated sixteen FM and nine AM
stations. The Company acquired WEGQ-FM in Boston in January 1995 and WKGR-FM in
West Palm Beach in July 1995. The Company also entered into a time brokerage
agreements with KKMJ-FM, KPTY-FM (relaunched as KAMX-FM) and KJCE-FM in Austin
in September 1995 and WBLK-FM in Buffalo in March 1996. The Company sold
KGGO-FM, KHKI-FM and KDMI-AM in Des Moines in January 1995 and WHWK-FM and
WNBF-AM in Binghamton, New York in March 1995. The Tower Subsidiary also
purchased eight tower sites and more than 200 antenna management agreements in
February 1996. These transactions have significantly affected operations for the
three months ended March 31, 1996 as compared to the three months ended March
31, 1995.
Net revenues were $23.6 million for the three months ended March 31, 1996
compared to $19.8 million for the same three months in 1995, an increase of $3.8
million or 19.2%. This increase was attributable to both acquisitions and
revenue growth at substantially all of the Company's radio stations.
Station operating expenses excluding depreciation and amortization and corporate
general and administrative expenses were $18.6 million for the three months
ended March 31, 1996 and $15.6 million for the comparable period in 1995, an
increase of $3.0 million or 19.2%. This increase was due to station acquisitions
as well as increased sales commissions resulting from the Company's revenue
growth.
Depreciation and amortization was $2.2 million and $2.8 million for the three
months ended March 31, 1996 and March 31, 1995 respectively, a decrease of $0.6
million or 21.4%. This decrease was primarily attributable to 1994 station
acquisition intangible assets with short-term lives becoming fully amortized
during 1995.
Corporate general and administrative expenses increased to $1.1 million for the
three months ended March 31, 1996 from $0.8 million for the three months ended
March 31, 1995 an increase of $0.3 million or 37.5%. This 37.5% increase was due
to the higher costs associated with supporting the Company's growth.
Net interest expense was $2.6 million for the three months ended March 31, 1996
compared to $3.1 million for the 1995 period, a decrease of $0.5 million or
16.1%. The decrease is related to increased borrowing costs related to the
Senior Subordinated Notes offset by interest income related to the Station
investment notes.
The loss on the sale of assets in 1996 was not material. Gain on sale of assets
for 1995 represents two gains on the sale of radio broadcasting properties in
Binghamton ($3.9 million) and Des Moines ($7.7 million).
18
<PAGE>
Results of Operation (continued)
Benefit from income taxes for the three months ended March 31, 1996 was $0.4
million compared to a provision for income taxes of $4.0 million for three
months ended March 31, 1995. The effective tax rate for the three months ended
March 31, 1996 was approximately 45% compared to 43% in 1995. The higher
effective rate in 1996 is due to the non-deductibility of certain intangible
asset amortization as a percentage of the income (loss) before taxes compared to
1995.
Redeemable common and preferred stock dividends for the three months ended March
31, 1996 were $0 million as compared to $0.5 million for the three months ended
March 31, 1995. The decrease was attributable to the retirement of Series C
Common Stock in June 1995 which accompanied the initial public offering.
Net loss applicable to common shareholders was $0.5 million for the three months
ended March 31, 1996 compared to a net income applicable to common shareholders
of $4.7 million for the three months ended March 31, 1995, a decrease of $5.2
million as a result of the factors discussed above.
Liquidity and Capital Resources
The Company's liquidity needs arise from its debt service, working capital,
capital expenditure and acquisition-related requirements. Historically, the
Company has met its liquidity need with internally generated funds and has
financed the acquisition of radio broadcasting properties with bank borrowings
and proceeds from the sale of the Company's equity and debt securities. For the
three months ended March 31, 1996 cash flows from operating activities was $7.6
million, as compared to $2.9 million for the three months ended March 31, 1995.
The increase is primarily attributable to station acquisition and growth.
Cash flows used for investing activities were $37.1 million for the three
months ended March 31, 1996 as compared to $5.8 million for the three months
ended March 31, 1995. The 1996 increase was due to greater station acquisition
activity in 1996 compared to 1995.
Cash provided by financing activities were $131.7 million for the three
months ended March 31, 1996 as compared to $2.6 million for the three months
ended March 31, 1995. The increase in 1996 was due to the Equity and Debt
offerings described below offset by a repayment of borrowings under the Credit
Agreement.
In February 1996, the Company completed two offerings (the "Equity
Offering" and the "Debt Offering" and collectively, the "Offerings"). Pursuant
to the Equity Offering, the Company sold 5,514,707 shares of its Class A Common
Stock ($.01 par value) at a price of $27 per share. The total shares issued
consisted of 4,000,000 shares sold by the Company; 1,013,370 shares by selling
shareholders and an additional 501,337 shares sold by the Company pursuant to
the underwriters' over-allotment option. Proceeds to the Company, net of
underwriters' discount and associated costs, were approximately $114.5 million.
19
<PAGE>
Liquidity and Capital Resources - (continued)
Pursuant to the Debt Offering, the Company sold $175 million of 9% Senior
Subordinated Notes (the "Notes") with a discount of $1.4 million to yield
9.125%. Interest is payable semi-annually on February 1 and August 1 with the
face value of the note due on February 1, 2006. The Company, may at its option,
redeem, in whole or in part, the Notes beginning February 1, 2001, initially at
104.5% of principal amount declining annually to 100.0% in 2004 and thereafter.
The Company is also required to redeem the Notes upon the occurrence of certain
events. The Notes are subordinate in right of payment to the prior payment in
full of the Credit Agreement and contain certain convenants including, but not
limited to, limitations on sales of assets, dividend payments, future
indebtedness, issuance of preferred stock and changes in control. The Notes are
guaranteed by American Radio Systems License Corp., a wholly owned subsidiary of
American. Proceeds to the Company, net of underwriters' discount and associated
costs were approximately $167.5 million.
Credit Agreement
In December 1995, the Company entered into a new credit agreement (the
"Credit Agreement"), which among other things, increased American's borrowing
limit and provided the Company with a revolving loan commitment based on the
lesser of (a) $300.0 million or (b) an amount based on a financial test. The
terms of the Credit Agreement are described in the Company's Annual Report on
Form 10-K for the year ended December 31, 1995. At March 31, 1996 there were no
borrowings outstanding under the Credit Agreement.
As of March 31, 1995, the Company had approximately $174.7 million of total
long-term debt (including current portion thereof) outstanding.
The Company believes that its cash flow from operations will be sufficient
to meet any quarterly debt service requirements for interest and scheduled
payments of principal under the Credit Agreement and the Notes. If such cash
flow is not sufficient to meet such debt service requirements, the Company may
be required to sell equity securities, refinance its obligations or dispose of
one or more of its properties in order to make such scheduled payments. There
can be no assurance that the Company would be able to effect any of such
transaction on favorable terms.
The Company's working capital needs fluctuate throughout the year due to
industry-wide seasonality and its broadcast of Boston Red Sox baseball games.
The Company historically has had sufficient cash from its operations to meet its
working capital needs and believes that it has sufficient financial resources
available to it, including through borrowing under its Credit Agreement, to
finance future operations.
The Company has entered into numerous station and tower acquisition and
related agreements (see Notes 7 and 8). The consummation of each of these
agreements is subject to, among other things, FCC approval and in some cases the
negotiation of definitive agreements. The Company intends to acquire all of the
acquisitions as soon as FCC approval is obtained. The Company intends to finance
these acquisitions with cash and borrowings under the Credit Agreement.
The Company expects capital expenditures in 1996 to be approximately $9.0
million, consisting principally of tower construction (approximately $5.0
million) and office consolidations and ongoing technical improvements. To the
extent that funds generated from operations, or available cash, are insufficient
to finance nonrecurring capital expenditures, American would seek to borrow the
necessary funds under the Credit Agreement.
Inflation
The impact of inflation on the Company's operations has not been
significant to date. However, there can be no assurance that a high rate of
inflation in the future would not have an adverse effect on the Company's
operating results.
20
<PAGE>
PART II OTHER INFORMATION
Item 1. - Legal Proceedings
In the normal course of business, the Company is subject to certain suits and
other matters. Management believes that the eventual resolution of any pending
matters, either individually or in the aggregate, will not have a material
effect on financial position, liquidity or results of operations.
Item 2 - Changes in Securities
None
21
<PAGE>
Item 6. - Exhibits and Reports on Form 8-K
a. Exhibits
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description of Document
<S> <C> <C>
10.41 Asset Purchase Agreement, dated February 23, 1996
between the Company and The Lincoln Group, L.P.
(WVOR-FM, WPXY-FM, WHAM-AM and WHTK-AM;
Rochester, NY).............................................. Filed herewith as Exhibit 10.41*
10.42 Asset Purchase Agreement, dated March 14, 1996 between
the Company and Nationwide Communications, Inc.
(KLUC-FM and KXNO-AM; Las Vegas)............................ Filed herewith as Exhibit 10.42*
10.43 Agreement and Plan of Merger, dated March 15, 1996 by
and among the Company, ARS Acquisition Company,
Inc. and Marlin Broadcasting, Inc........................... Filed herewith as Exhibit 10.43*
10.44 Agreement and Plan of Merger, dated March 21, 1996 by
and among the Company and Henry Broadcasting
Company..................................................... Filed herewith as Exhibit 10.44*
10.45 Asset Purchase Agreement, dated March 27, 1996 between
the Company and Fuller-Jeffrey Broadcasting Companies,
Inc. (KSTE-FM); Sacramento, California...................... Filed herewith as Exhibit 10.45*
10.46 Time Brokerage Agreement, dated March 26, 1996 between
the Company and Fuller-Jeffrey Broadcasting Companies,
Inc......................................................... Filed herewith as Exhibit 10.46**
10.47 Asset Purchase Agreement, dated March 28, 1996 between
the Company and Common Ground Broadcasting, Inc............. Filed herewith as Exhibit 10.47**
10.48 Asset Purchase Agreement, dated April 4, 1996 between the
Company and Evergreen Media Corporation of Buffalo.......... Filed herewith as Exhibit 10.48**
10.49 Time Brokerage Agreement, dated April 4, 1996 between the
Company and Evergreen Media Corporation of
Buffalo..................................................... Filed herewith as Exhibit 10.49**
10.50 Asset Purchase Agreement, dated April 19, 1996 between the
Company and Crescent Communications, L.P.................... Filed herewith as Exhibit 10.50**
10.51 Time Brokerage Agreement, dated April 19, 1996 between
the Company and K-G Communications, Inc..................... Filed herewith as Exhibit 10.51**
10.52 Time Brokerage Agreement, dated April 19, 1996 between
the Company and Crescent Communications, L.P................ Filed herewith as Exhibit 10.52**
10.53 Asset Purchase Agreement, dated April 22, 1996 between the
Company and Parker Communications - Las Vegas,
Inc......................................................... Filed herewith as Exhibit 10.53**
10.54 Time Brokerage Agreement, dated April 22, 1996 between
the Company and Parker Communications - Las Vegas,
Inc......................................................... Filed herewith as Exhibit 10.54**
22
<PAGE>
10.55 Asset Purchase Agreement dated April 25, 1996 between the
Company and BayCom San Jose, L.P. and BayCom
Oregon, L.P................................................. Filed herewith as Exhibit 10.55**
11 Schedule re computation of earnings per share................. Filed herewith as Exhibit 11**
12 Ratio of earnings to fixed charges............................ Filed herewith as Exhibit 12**
</TABLE>
Each exhibit marked by an (*) is incorporated by reference to the
corresponding exhibit filed as an exhibit to the Company's Annual Report on Form
10-K for year ended December 31, 1995. Each exhibit marked by an (**) is
incorporated by reference to the corresponding exhibit filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1996. Exhibits 10.41 through 10.55 do not contain schedules and exhibits noted
within the agreements. This additional information is available upon request
from the Company.
b. Reports on Form 8-K
1. Form 8-K (Items 5, 7) on February 22, 1996.
2. Form 8-K (Items 5, 7) on February 26, 1996.
3. Form 8-K (Items 5, 7) on March 19, 1996.
4. Form 8-K (Items 5, 7) on March 26, 1996.
5. Form 8-K (Items 5, 7) on April 24, 1996.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN RADIO SYSTEMS CORPORATION
Date: June 6, 1996 BY: /s/ Joseph L. Winn
------------------------
Joseph L. Winn
Treasurer & Chief Financial Officer
(Duly Authorized Officer)
Date: June 6, 1996 BY: /s/ Justin D. Benincasa
------------------------------
Justin D. Benincasa
Vice President & Corporate Controller
(Duly Authorized Officer)
24
<PAGE>
