-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OH0/0CFFln2hXMKdENopY3IX9PRDBtITQp+wVACO1FZsRN6p5iIT8IMMk+u564fZ 1Ch19p9J2U7H+dMsOF5kfQ== 0000702808-99-000009.txt : 19990817 0000702808-99-000009.hdr.sgml : 19990817 ACCESSION NUMBER: 0000702808-99-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JACOR COMMUNICATIONS INC CENTRAL INDEX KEY: 0000702808 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 310978313 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-12404 FILM NUMBER: 99691234 BUSINESS ADDRESS: STREET 1: 50 E RIVERCENTER BLVD STREET 2: 12TH FLOOR CITY: COVINGTON STATE: KY ZIP: 41011 BUSINESS PHONE: 6066552267 MAIL ADDRESS: STREET 1: 50 EAST RIVERCENTER BLVD 12TH FLOOR CITY: COVINGTON STATE: KY ZIP: 41011 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-12404 JACOR COMMUNICATIONS, INC. (A wholly owned subsidiary of Clear Channel Communications, Inc.) A Delaware Corporation Employer Identification No. 74-2916308 50 East RiverCenter Blvd. 12TH Floor Covington, KY 41011 Telephone (606) 655-2267 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 twelve 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 ninety days. Yes X No At August 13, 1999, 1 share of common stock was outstanding. JACOR COMMUNICATIONS, INC. (A wholly owned subsidiary of Clear Channel Communications, Inc.) INDEX Page Number PART I. Financial Information Item 1. - Financial Statements Condensed Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998 3 Condensed Consolidated Statements of Operations and Comprehensive Income for the period from May 5, 1999 through June 30, 1999, the period from April 1, 1999 through May 4, 1999, and the three months ended June 30, 1998 4 Condensed Consolidated Statements of Operations and Comprehensive Income for the period from May 5, 1999 through June 30, 1999, the period from January 1, 1999 through May 4, 1999, and the six months ended June 30, 1998 5 Condensed Consolidated Statements of Cash Flows for the period from May 5, 1999 through June 30, 1999, the period from January 1, 1999 through May 4, 1999, and the six months ended June 30, 1998 6 Notes to Condensed Consolidated Financial Statements 7 Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations 17 PART II. Other Information Item 6. - Exhibits and Reports on Form 8-K 27 Signatures 28 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) (UNAUDITED)
Predecessor June 30, December 31, 1999 1998 ASSETS Current assets: Cash and cash equivalents $ 19,505 $ 20,051 Accounts receivable, less allowance for doubtful accounts of $9,050 at June 30, 1999 and $8,303 at December 31, 1998 210,722 201,466 Prepaid expenses and other 34,261 32,796 Total current assets 264,488 254,313 Property and equipment, net 308,151 281,049 Intangible assets, net 6,771,602 2,749,348 Other assets 185,700 135,998 Total assets $ 7,529,941 $ 3,420,708 LIABILITIES Current liabilities: Current portion long-term debt $ - $ 35,000 Accounts payable, accrued expenses and other current liabilities 221,537 128,400 Total current liabilities 221,537 163,400 Due to Clear Channel 832,480 - Long-term debt 547,944 1,289,574 Liquid Yield Option Notes 492,705 306,202 Deferred tax liability 888,660 345,478 Other liabilities 112,542 112,988 Commitments and contingencies SHAREHOLDERS' EQUITY Preferred stock, authorized and unissued 4,000,000 shares - - Common stock, no par value, $0.01 per share stated value; authorized 100,000,000 shares, issued and outstanding shares: 1 in 1999 and 51,184,217 in 1998 - 512 Additional paid-in capital 4,382,377 1,124,057 Common stock warrants 57,935 30,819 Accumulated other comprehensive income - 25,428 Retained earnings (6,239) 22,250 Total shareholders' equity 4,434,073 1,203,066 Total liabilities and shareholders' equity $ 7,529,941 $ 3,420,708 The accompanying notes are an integral part of the condensed consolidated financial statements.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME for the period from May 5, 1999 through June 30, 1999, the period from April 1, 1999 through May 4, 1999, and the three months ended June 30, 1998 (in thousands, except per share amounts) (UNAUDITED)
Predecessor May 5, 1999 April 1, 1999 Three Months through through ended June 30, 1999 May 4, 1999 June 30, 1998 Broadcast revenue $ 192,788 $ 87,110 $ 207,101 Less agency commissions 22,709 10,126 23,265 Net revenue 170,079 76,984 183,836 Broadcast operating expenses 99,978 52,321 120,747 Depreciation and amortization 51,462 11,928 28,833 Corporate general and administrative expenses 2,766 1,744 4,530 Operating income 15,873 10,991 29,726 Interest expense (19,525) (9,822) (25,079) Gain on sale of assets - 46,909 - Other (expense) income, net (1,387) 10 6,275 (Loss) income before income taxes (5,039) 48,088 10,922 Income tax expense (1,200) (26,500) (5,900) Net (loss) income (6,239) 21,588 5,022 Comprehensive (loss) income $ (6,239) $ 21,588 $ 5,022 Basic net income per common share $ 0.42 $ 0.10 Diluted net income per common share $ 0.36 $ 0.09 Number of common shares used in Basic calculation 51,345 50,895 Number of common shares used in Diluted calculation 61,962 54,892 The accompanying notes are an integral part of the condensed consolidated financial statements.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME for the period from May 5, 1999 through June 30, 1999, the period from January 1, 1999 through May 4, 1999, and the six months ended June 30, 1998 (in thousands, except per share amounts) (UNAUDITED)
Predecessor May 5, 1999 January 1, 1999 Six Months through through ended June 30, 1999 May 4, 1999 June 30, 1998 Broadcast revenue $ 192,788 $ 306,824 $ 366,293 Less agency commissions 22,709 35,177 40,429 Net revenue 170,079 271,647 325,864 Broadcast operating expenses 99,978 192,077 228,100 Depreciation and amortization 51,462 46,951 56,283 Corporate general and administrative expenses 2,766 7,373 8,174 Operating income 15,873 25,246 33,307 Interest expense (19,525) (39,731) (49,037) Gain on sale of assets - 130,385 - Other (expense) income, net (1,387) (163) 8,754 (Loss) income before income taxes (5,039) 115,737 (6,976) Income tax (expense) benefit (1,200) (52,300) 5,100 Net (loss) income (6,239) 63,437 (1,876) Other comprehensive (loss) income before tax: Reclassification adjustment for gains included in net income, net of taxes - (25,428) - Comprehensive (loss) income $ (6,239) $ 38,009 $ (1,876) Basic net income (loss) per common share $ 1.24 $(0.04) Diluted net income (loss) per common share $ 1.07 $(0.04) Number of common shares used in Basic calculation 51,299 49,696 Number of common shares used in Diluted calculation 61,916 49,696 The accompanying notes are an integral part of the condensed consolidated financial statements.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS for the period from May 5, 1999 through June 30, 1999, the period from January 1, 1999 through May 4, 1999, and the six months ended June 30, 1998 (in thousands) (UNAUDITED)
Predecessor May 5, 1999 January 1, 1999 Six Months through through Ended June 30, 1999 May 4, 1999 June 30, 1998 Cash flows from operating activities: Net cash (used) provided by operating activities $ (2,022) $ 46,698 $ 14,521 Cash flows from investing activities: Deposits on broadcast properties and other (13,361) (7,656) (4,730) Capital expenditures (1,552) (12,540) (13,160) Cash paid for acquisitions - (127,311) (68,578) Proceeds from sale of investments - 87,605 - Proceeds from sale of broadcast properties - 5,017 - Net cash used by investing activities (14,913) (54,885) (86,468) Cash flows from financing activities: Issuance of long-term debt - 180,000 149,539 Issuance of LYONs - - 166,950 Common stock proceeds, net of issuance costs - 19,232 247,412 Repayment of long-term debt (872,136) (115,000) (197,500) Payment of finance costs - - (8,336) Advances to Clear Channel (35,000) - - Advances from Clear Channel 847,480 - - Net cash (used) provided by financing activities (59,656) 84,232 358,065 Net (decrease) increase in cash and cash equivalents (76,591) 76,045 286,118 Cash and cash equivalents at beginning of period 96,096 20,051 28,724 Cash and cash equivalents at end of period $ 19,505 $ 96,096 $314,842 Supplemental schedule of non-cash investing and financing activities: Liabilities assumed in acquisitions $ - $ - $ 2,687 Fair value of assets exchanged, net of cash - 20,000 70,000 The accompanying notes are an integral part of the condensed consolidated financial statements.
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. FINANCIAL STATEMENTS The December 31, 1998 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. 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 for interim periods may not be indicative of results for the full year. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements for the year ended December 31, 1998 and the notes thereto. 2. CLEAR CHANNEL MERGER On October 8, 1998 the Company entered into a definitive merger agreement with Clear Channel Communications, Inc. ("Clear Channel") for a tax-free, stock for stock transaction (the "Merger" or the "Clear Channel Merger"). The Company and Clear Channel consummated the Merger at the close of business May 4, 1999. Pursuant to terms of the agreement, each share of Jacor common stock was exchanged for 1.1573151 shares of Clear Channel common stock. Upon conclusion of the Merger, Clear Channel became the sole shareholder of the Company, owning one outstanding share of Jacor common stock. Clear Channel accounted for its acquisition of the Company as a purchase and purchase accounting adjustments, including goodwill, have been pushed down and reflected in the consolidated financial statements of the Company subsequent to May 4, 1999. The consolidated financial statements of the Company for the periods ended before May 5, 1999, were prepared using the Company's historical basis of accounting and are designated as "Predecessor." The comparability of operating results for the Predecessor and the periods encompassing push down accounting are affected by the purchase accounting adjustments including the amortization of goodwill over a period of 25 years. The process of determining the fair value of assets and liabilities at the Merger date is continuing, and the final result awaits resolution of income tax and other contingencies and finalization of certain preliminary estimates. The following table summarizes the preliminary changes made to the accounts of the Company as of May 5, 1999 as a result of applying push down accounting: Adjustments (in thousands) Current assets $ (50,000) Goodwill and other intangible assets 4,023,799 Total assets $3,973,799 Current liabilities $ 35,000 Long-term debt (603,837) Other liabilities 1,366,932 Shareholders' equity 3,175,704 Total liabilities and equity $3,973,799 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 2. CLEAR CHANNEL MERGER, Continued Upon consummation of the Merger, a change in control event occurred with respect to covenants in the Company's credit facility, liquid yield option notes and each outstanding issue of the senior subordinated notes. Such change in control gave the credit facility lenders the right to require repayment of amounts borrowed under the facility, and required the Company to offer repayment of the senior subordinated notes at 101% of the principal amount and the liquid yield option notes at their issue price plus accrued original issue discount at such date. Approximately $22.1 million of senior subordinated notes were tendered in connection with the repayment offer. As a result of the Merger, all options and stock appreciation rights for Jacor common stock not vested at the effective time of the Merger became fully vested and exercisable one day before the effective time of the Merger. Clear Channel assumed all of these options and stock appreciation rights on the same terms and conditions as were applicable prior to the effective time of the Merger. The holders may exercise such options and stock appreciation rights for or with respect to shares of Clear Channel common stock at an exercise price adjusted to reflect the exchange ratio of the Merger. In August 1998, the Company entered into an advisory agreement with Equity Group Investments, Inc. ("EGI"), an affiliate of the Company's largest shareholder, the Zell/Chilmark Fund L.P., whereby the Company agreed to pay EGI a fee equal to .75% of the equity value of the Company, as defined in the advisory agreement, on any change in control event. As a result of the Merger, EGI received a fee of approximately $38.2 million. 3. ACQUISITIONS AND DISPOSITIONS Completed Radio Station Acquisitions and Dispositions First Quarter Transactions In the first three months of 1999, the Company acquired the stock of one and the assets of 25 radio stations and one low- powered television station in four of the Company's existing broadcast areas and ten new broadcast areas for a purchase price of approximately $110.8 million in cash, of which approximately $10.2 million was placed in escrow in 1998 and 1997. April Transactions The Company acquired WCOH-AM in Newnan, Georgia, WXMY-AM and WZLG-FM in Hogansville, Georgia, and WMKJ-FM in Peachtree City, Georgia from MetroSouth Communications, City of Homes Radio, LLC and Radio LaGrange, LLC for $4.4 million in cash, of which $0.2 million was placed in escrow in 1998. The Company sold WEAE-AM in Pittsburgh, Pennsylvania for $5.0 million in cash. The Company exchanged WLRS-FM, WDJX-FM and WFIA-AM in Louisville, Kentucky for an aggregate purchase price of $24.0 million, all of which has been placed in escrow with a qualified intermediary in anticipation of subsequent radio station acquisitions which would result in the exchange being treated as a tax-deferred like-kind exchange. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3. ACQUISITIONS AND DISPOSITIONS, Continued May Transactions The Company exchanged WSFR-FM in Louisville, Kentucky for WBBS-FM in Syracuse, New York. The exchange was valued at $20.0 million and is being treated as a tax-deferred like- kind exchange. The Company exchanged WVEZ-FM in Louisville, Kentucky and WDUV-FM in Tampa, Florida. These exchanges were valued at an aggregate purchase price of $59.0 million, all of which has been placed in escrow with a qualified intermediary in anticipation of subsequent radio station acquisitions which would result in the exchange being treated as a tax-deferred like-kind exchange. June Transactions The Company acquired WBZY-AM in New Castle, Pennsylvania from WBZY Radio Sam, Robert L. McCracken and Samuel M. Shirey for approximately $0.8 million in cash. The Company acquired WMBL-AM in Morehead City, North Carolina from Ashley L. Mosley for approximately $0.2 million in cash. Pro Forma Results of Operations The Company's 1999 completed acquisitions both individually and in the aggregate are immaterial to the Company's results of operations. Assuming the Company's significant acquisitions in 1998 were completed as of January 1, 1998, unaudited pro forma consolidated results of operations would have been as follows (in thousands except per share amounts): Pro forma (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 1998 1998 Net revenue $ 203,996 $ 368,380 Income (loss) before extraordinary items $ 4,460 $ (3,230) Diluted income (loss) per common share before extraordinary items $ 0.08 $ (0.06) These unaudited pro forma amounts do not purport to be indicative of the results that might have occurred if the foregoing transactions had been consummated on the indicated dates. Pending Radio Station Acquisitions The Company has entered into agreements to purchase the stock of one and the FCC licenses and substantially all of the broadcast assets of 11 radio stations in four of the Company's existing broadcast areas and two new broadcast areas for approximately $18.8 million in cash, of which approximately $2.7 million has been placed in escrow. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4. SUBSIDIARY GUARANTORS The Company's 10 1/8% senior subordinated notes, 9 3/4% senior subordinated notes, 8 3/4% senior subordinated notes, and 8% senior subordinated notes (the "Notes") are obligations of Jacor Communications Company ("JCC") and are jointly and severally, fully and unconditionally guaranteed on a senior subordinated basis by Jacor and by all of the Company's subsidiaries (the "Subsidiary Guarantors"). JCC is a wholly-owned subsidiary of Jacor and the Subsidiary Guarantors are wholly-owned subsidiaries of JCC. Separate financial statements of JCC and each of the Subsidiary Guarantors are not presented because Jacor believes that such information would not be material to investors. The direct and indirect non-guarantor subsidiaries of Jacor are inconsequential, both individually and in the aggregate. Additionally, there are no current restrictions on the ability of the Subsidiary Guarantors to make distributions to JCC, except to the extent provided by law generally. The terms of the indentures governing the Notes do restrict the ability of JCC and of the Subsidiary Guarantors to make distributions to the Registrant. Summarized financial information with respect to Jacor, JCC and with respect to the Subsidiary Guarantors on a combined basis as of June 30, 1999 and for the period from May 5, 1999 through June 30, 1999, the period from January 1, 1999 through May 4, 1999, and the six months ended June 30, 1998 is as follows: JACOR Predecessor May 5, 1999 January 1, 1999 Six Months through through Ended June 30, 1999 May 4, 1999 June 30, 1998 Operating Statement Data (in thousands): Net revenue - - - Equity in earnings of subsidiaries $ (556) $ (955) $ 445 Operating loss (3,869) (10,928) (8,276) (Loss) income before extraordinary items (6,239) 63,437 (1,876) Net (loss) income (6,239) 63,437 (1,876) Balance Sheet Data (in thousands): Current assets $ 2,337 Non-current assets 5,829,305 Current liabilities 837,277 Non-current liabilities 589,442 Shareholders' equity 4,404,923 Statement of Cash Flow Data (in thousands): Operating activities $ (3,242) $ (7,711) $ (8,314) Investing activities (200) 92,222 (490) Financing activities 3,442 (84,511) 170,685 Net change in cash and cash equivalents - - 161,881 Cash and cash equivalents at beginning of period - - (613) Cash and cash equivalents at end of period - - 161,268 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4. SUBSIDIARY GUARANTORS, Continued JCC Predecessor May 5, 1999 January 1, 1999 Six Months through through Ended June 30, 1999 May 4, 1999 June 30, 1998 Operating Statement Data (in thousands): Net revenue - - - Equity in earnings of subsidiaries $ (439) $ (2,031) $ (1,909) Operating loss (439) (2,031) (1,909) (Loss) income before extraordinary items (556) (955) 445 Net (loss) income (556) (955) 445 Balance Sheet Data (in thousands): Current assets $ 24,412 Non-current assets 6,368,288 Current liabilities 14,530 Non-current liabilities 1,973,247 Shareholders' equity 4,404,923 Statement of Cash Flow Data (in thousands): Operating activities $ 260 $ 821 $ 8,654 Investing activities (13,361) (134,967) (73,308) Financing activities (63,490) 210,190 188,891 Net change in cash and cash equivalents (76,591) 76,045 124,237 Cash and cash equivalents at beginning of period 96,096 20,051 29,337 Cash and cash equivalents at end of period 19,505 96,096 153,574 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4. SUBSIDIARY GUARANTORS, Continued COMBINED SUBSIDIARY GUARANTORS Predecessor May 5, 1999 January 1, 1999 Six Months through through Ended June 30, 1999 May 4, 1999 June 30, 1998 Operating Statement Data (in thousands): Net revenue $ 170,079 $ 271,647 $ 325,864 Equity in earnings of subsidiaries - - - Operating income 19,186 35,220 42,028 Loss before extraordinary items (439) (2,031) (1,909) Net loss (439) (2,031) (1,909) Balance Sheet Data (in thousands): Current assets $ 237,739 Non-current assets 7,335,649 Current liabilities 252,210 Non-current liabilities 2,916,255 Shareholders' equity 4,404,923 Statement of Cash Flow Data (in thousands): Operating activities $ 959 $ 53,588 $ 14,182 Investing activities (1,352) (12,140) (12,670) Financing activities 393 (41,448) (1,512) Net change in cash and cash equivalents - - - Cash and cash equivalents at beginning of period - - - Cash and cash equivalents at end of period - - - JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5. EARNINGS PER SHARE The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share ("EPS") computations for the period from April 1, 1999 through May 4, 1999, the period from January 1, 1999 through May 4, 1999, and the three months and six months ended June 30, 1998 (in thousands except per share amounts):
April 1, Three January 1, Six 1999 Months 1999 Months through Ended through Ended May 4, 1999 1998 May 4, 1999 1998 Net income (loss) for basic EPS $21,588 $ 5,022 $63,437 $(1,876) LYONs interest expense, net of tax 780 - 2,686 - Net income (loss) for diluted EPS $22,368 $ 5,022 $66,123 $(1,876) Weighted average shares - basic 51,345 50,895 51,299 49,696 Effect of dilutive securities: Stock options 1,661 1,256 1,661 - Warrants 2,817 2,363 2,817 - LYONs 6,097 - 6,097 - Other 42 378 42 - Weighted average shares - diluted 61,962 54,892 61,916 49,696 Net income (loss) per common share: Basic $ .42 $ .10 1.24 $ (0.04) Diluted $ .36 $ .09 1.07 $ (0.04)
Earnings per share is not presented subsequent to May 4, 1999. At the date of the Merger all of the outstanding stock of the Company was converted into Clear Channel common stock rendering the calculation not meaningful. Prior to the Merger, the Company's 1996 Liquid Yield Option Notes and 1998 Liquid Yield Option Notes (collectively, the "LYONs") could be converted into approximately 6.1 million shares of common stock at the option of the holder. Assuming conversion of the LYONs for the three and six months ended June 30, 1998 would result in a decrease in the diluted net loss per share amount, therefore the LYONs are not included in the computation of diluted EPS. Due to the Merger, the LYONs are now convertible into shares of Clear Channel common stock at the Merger conversion ratio. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 6. SEGMENT INFORMATION The Company operates in a single reportable segment, radio, which derives its revenue from the sale of commercial broadcast inventory. The radio segment includes all of the Company's radio stations owned or operated and Premiere, a radio syndication business. The Company also aggregates into the category "other", one television station and several broadcast related businesses that provide market research, traffic reporting and satellite connectivity. Intersegment sales consist primarily of license fees for syndicated programming and broadcast services provided to the Company's radio stations. Intersegment revenues are recorded at market value. No single customer provides more than 10% of the Company's revenues, and the Company derives less than 10% of its revenues from markets outside of the U.S. "Broadcast cash flow" means operating income before depreciation and amortization and corporate general and administrative expenses. The Company's management believes that broadcast cash flow is helpful in understanding cash flow generated from its broadcasting in comparing operating performance of the Company's broadcast entities to other broadcast companies. Broadcast cash flow is also a key factor in the Company's assessment of performance. Broadcast cash flow should not be considered an alternative to net income or operating income as an indicator of the Company's overall performance. Financial information for the Company's business segment is as follows (in thousands):
Period from May 5, 1999 Radio Other Corporate Eliminations Consolidated through June 30, 1999 Net broadcast revenue $ 141,011 $ 30,536 - $ (1,468) $ 170,079 Broadcast operating expenses 76,136 25,301 - (1,459) 99,978 Broadcast cash flow 64,875 5,235 - (9) 70,101 Corporate expenses - - $ 2,766 - 2,766 Depreciation 3,548 606 186 - 4,340 Amortization 45,852 744 532 (6) 47,122 Operating income (loss) 15,475 3,885 (3,484) (3) 15,873 Capital expenditures 683 844 25 - 1,552 Radio station and other acquisitions 13,361 - - - 13,361 Total assets 7,048,147 259,786 246,635 (24,627) 7,529,941 Period from April 1, 1999 through May 4, 1999 (Predecessor) Net broadcast revenue $ 82,972 $ 3,160 $ (8,414) $ (734) $ 76,984 Broadcast operating expenses 55,078 2,952 (4,812) (897) 52,321 Broadcast cash flow 27,894 208 (3,602) 163 24,663 Corporate expenses - - 1,744 - 1,744 Depreciation 2,758 75 (83) - 2,750 Amortization 9,413 91 (325) (1) 9,178 Operating income (loss) 15,723 42 (4,938) 164 10,991 Capital expenditures 4,074 725 28 - 4,827 Radio station and other acquisitions 12,683 - - - 12,683 Total assets 3,015,497 257,738 352,676 (24,627) 3,601,284
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 6. SEGMENT INFORMATION, Continued
Quarter ended June 30, 1998 Radio Other Corporate Eliminations Consolidated (Predecessor) Net broadcast revenue $ 168,417 $ 16,472 - $ (1,053) $ 183,836 Broadcast operating expenses 108,823 12,977 - (1,053) 120,747 Broadcast cash flow 59,594 3,495 - - 63,089 Corporate expenses - - $ 4,530 - 4,530 Depreciation 5,138 847 276 - 6,261 Amortization 20,511 992 1,069 - 22,572 Operating income (loss) 33,945 1,656 (5,875) - 29,726 Capital expenditures 7,202 442 721 - 8,365 Radio station and other acquisitions 15,040 - - - 15,040 Total assets 2,289,640 238,599 446,177 (3,354) 2,971,062 Period from January 1, 1999 through May 4, 1999 (Predecessor) Net broadcast revenue $ 265,773 $ 17,450 $ (8,414) $ (3,162) $ 271,647 Broadcast operating expenses 184,809 15,600 (5,062) (3,270) 192,077 Broadcast cash flow 80,964 1,850 (3,352) 108 79,570 Corporate expenses - - 7,373 - 7,373 Depreciation 9,104 990 100 - 10,194 Amortization 35,489 1,255 17 (4) 36,757 Operating income (loss) 36,371 (395) (10,842) 112 25,246 Capital expenditures 10,698 965 877 - 12,540 Radio station and other acquisitions 134,967 - - - 134,967 Total assets 3,015,497 257,738 352,676 (24,627) 3,601,284 Six Months ended June 30, 1998 (Predecessor) Net broadcast revenue $ 296,163 $ 31,807 - $ (2,106) $ 325,864 Broadcast operating expenses 205,240 24,966 - (2,106) 228,100 Broadcast cash flow 90,923 6,841 - - 97,764 Corporate expenses - - $ 8,174 - 8,174 Depreciation 9,748 1,685 564 - 11,997 Amortization 40,905 1,983 1,398 - 44,286 Operating income (loss) 40,270 3,173 (10,136) - 33,307 Capital expenditures 9,784 1,381 1,995 - 13,160 Radio station and other acquisitions 73,308 - - - 73,308 Total assets 2,289,640 238,599 446,177 (3,354) 2,971,062
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 7. LONG-TERM DEBT Credit Facility At the date of the Merger, the Company's credit facility, consisting of $450.0 million of outstanding debt under a revolving credit facility and $400.0 million of outstanding debt under a term loan, along with accrued interest, was paid in full by Clear Channel. Senior Subordinated Notes Due to the change in control, provisions in the Company's 10 1/8% senior subordinated notes, 9 _% senior subordinated notes, 8 _% senior subordinated notes and 8% senior subordinated notes (the "Notes") required the Company to offer repayment of the Notes at 101% of the principal amount. As of June 30, 1999, approximately $22.1 million in Notes were tendered for repayment and were paid by Clear Channel. 8. RECENTLY ISSUED ACCOUNTING STANDARDS In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 Accounting for Derivative Instruments and Hedging Activities. Statement 133 establishes new rules for the recognition and measurement of derivatives and hedging activities. Statement 133 is amended by Statement 137 Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133, and is effective for years beginning after June 15, 2000. The Company plans to adopt this statement in fiscal year 2001. Management does not believe adoption of this statement will materially impact the Company's financial position or results of operations. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. GENERAL The following discussion should be read in conjunction with the financial statements beginning on page 3. This report includes certain forward-looking statements within the meaning of Section 27A of the Securities Act. When used in this report, the words "believes," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially from those described in the forward-looking statements as a result of the matters discussed in this report generally. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. LIQUIDITY AND CAPITAL RESOURCES CLEAR CHANNEL MERGER On October 8, 1998 the Company entered into a definitive merger agreement with Clear Channel Communications, Inc. ("Clear Channel") for a tax-free, stock for stock transaction (the "Merger" or the "Clear Channel Merger"). The Company and Clear Channel consummated the Merger at the close of business May 4, 1999. Pursuant to terms of the agreement, each share of Jacor common stock was exchanged for 1.1573151 shares of Clear Channel common stock. Upon conclusion of the Merger, Clear Channel became the sole shareholder of the Company, owning one outstanding share of Jacor common stock. Upon consummation of the Merger, a change in control event occurred with respect to the Company's credit facility, liquid yield option notes and the senior subordinated notes. Such change in control gave the credit facility lenders the right to require repayment of amounts borrowed under the facility, and required the Company to offer repayment of the senior subordinated notes at 101% of the principal amount and the liquid yield option notes at their issue price plus accrued original issue discount at such date. As a result of the Merger, all options and stock appreciation rights for Jacor common stock not vested at the effective time of the Merger became fully vested and exercisable one day before the effective time of the Merger. Clear Channel assumed all of these options and stock appreciation rights on the same terms and conditions as were applicable prior to the effective time of the Merger. The holders may exercise such options and stock appreciation rights for or with respect to shares of Clear Channel common stock at an exercise price adjusted to reflect the exchange ratio of the Merger. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) LIQUIDITY AND CAPITAL RESOURCES, Continued Additionally, the Merger resulted in each holder of the Company's common stock warrants becoming entitled to exercise such warrants for shares of Clear Channel common stock instead of Jacor common stock. Upon the exercise of such warrants after the Merger, the holders of such warrants will receive that number of shares of Clear Channel common stock that the holder would have received if he or she had exercised such warrants for shares of Jacor common stock immediately prior to the effective time of the Merger, as adjusted to reflect the exchange ratio of the Merger. Financing Activities Cash provided by financing activities for the first six months of 1999 was $24.6 million compared to $358.1 million provided by financing activities for the first six months of 1998. The decrease is due to the issuance of the 8% Senior Subordinated Notes, 1998 LYONs and equity offering that occurred during the first six months in 1998. Additionally, during the first six months of 1999 the outstanding debt under the Company's credit facility and $22.1 million of the Company's senior subordinated notes were paid by Clear Channel and replaced with an intercompany payable. Investing Activities Cash flows used for investing activities were $69.8 million for the first six months of 1999 as compared to $86.5 million for the first six months of 1998. The variations from year to year are primarily related to station acquisition activity, as described below. Completed Acquisitions During the first six months of 1999, the Company acquired the stock of one and the assets of 31 radio stations and one low- powered television station in four of the Company's existing broadcast areas and 15 new broadcast areas for cash consideration of approximately $116.3 million, of which approximately $10.4 million was placed in escrow in 1997 and 1998. These acquisitions were funded primarily through borrowings under the Company's credit facility, which was paid in full by Clear Channel at the date of the Merger. Pending Radio Station Acquisitions and Dispositions The Company has entered into agreements to purchase the stock of one and the FCC licenses and substantially all of the broadcast assets of 11 radio stations in four of the Company's existing broadcast areas and two new broadcast areas for approximately $18.8 million in cash, of which approximately $2.7 million has been placed in escrow. The Company expects all financing of its pending acquisitions will be provided by cash flows from operating activities. Capital Expenditures The Company had capital expenditures of $14.1 million and $13.2 million for the six months ended June 30, 1999 and 1998, respectively. The Company's capital expenditures consist primarily of broadcasting equipment, tower upgrades, and purchases related to the Company's plan to replace and upgrade business, programming, and connectivity technology. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) LIQUIDITY AND CAPITAL RESOURCES, Continued Operating Activities For the six months ended June 30, 1999, cash flow provided by operating activities was $44.7 million, as compared to $14.5 million for the six months ended June 30, 1998. The change is primarily due to an increase in operating income related to acquisitions. RESULTS OF OPERATIONS The Company operates in one reportable segment - Radio. At June 30, 1999, the radio segment includes 240 radio stations in 71 broadcast areas and Premiere Radio Networks, Inc. ("Premiere"), a radio syndication business. Substantially all revenues of each broadcast area and Premiere is generated from the sale of commercial broadcast inventory. Aggregated segments included in the caption "other" includes one television station and various broadcast related businesses that provide services such as market research, satellite connectivity and traffic reporting. The Company's management evaluates each broadcast area's performance based on operating income before corporate expenses, interest expense, income taxes, gains or losses and miscellaneous expenses. Specific industry related performance measures also reviewed by management include "Broadcast Cash Flow", which excludes depreciation and amortization from the operating income measurement defined above. Intersegment sales consist primarily of license fees for syndicated programming and other broadcast services provided to the Company's radio stations. Intersegment revenues are recorded at market rates. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) RESULTS OF OPERATIONS, Continued Financial information for the Company's segments is as follows (in thousands): Favorable (Unfavorable) For the quarter ended June 30, 1999 Change 1998 Net revenues: Radio $ 223,983 33.0% $ 168,417 Other 23,080 49.7% 15,419 Total net revenues $ 247,063 34.4% $ 183,836 Broadcast operating expenses: Radio $ 131,214 (20.6%) $ 108,823 Other 21,085 (76.8%) 11,924 Total broadcast operating expenses $ 152,299 (26.1%) $ 120,747 Broadcast cash flow: Radio $ 92,769 55.7% $ 59,594 Other 1,995 (42.9%) 3,495 Total broadcast cash flow $ 94,764 50.2% $ 63,089 Depreciation & amortization: Radio $ 61,571 (140.1%) $ 25,649 Other 1,509 17.9% 1,839 Corporate 310 77.0% 1,345 Total depreciation & amortization $ 63,390 (119.9%) $ 28,833 Operating income (loss) before Corporate general and administrative expense: Radio $ 31,198 (8.1%) $ 33,945 Other 486 (70.7%) 1,656 Corporate (310) 77.0% (1,345) Subtotal 31,374 (8.4%) 34,256 Corporate general and administrative expense: (4,510) 0.4% (4,530) Net operating income $ 26,864 (9.6%) $ 29,726 Other Consolidated Statements of Operations Data: Interest expense $ (29,347) (17.0%) $ (25,079) Gain on sale of assets $ 46,909 - - Income tax expense $ (27,700) (369.5%) $ (5,900) Net income (loss) $ 15,349 205.6% $ 5,022 Other Consolidated Financial Statement Data: Capital expenditures $ 6,379 (23.7%) $ 8,365 Radio station and other acquisitions $ 26,044 (23.6%) $ 34,093 Total assets $7,529,941 153.4% $ 2,971,062 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) RESULTS OF OPERATIONS, Continued Favorable (Unfavorable) For the six months ended June 30, 1999 Change 1998 Net revenues: Radio $ 406,784 37.4% $ 296,163 Other 34,942 17.6% 29,701 Total net revenues $ 441,726 35.6% $ 325,864 Broadcast operating expenses: Radio $ 260,777 (27.1%) $ 205,240 Other 31,278 (36.8%) 22,860 Total broadcast operating expenses $ 292,055 (28.0%) $ 228,100 Broadcast cash flow: Radio $ 146,007 60.6% $ 90,923 Other 3,664 (46.4%) 6,841 Total broadcast cash flow $ 149,671 53.1% $ 97,764 Depreciation & amortization: Radio $ 93,993 (85.6%) $ 50,653 Other 3,585 2.3% 3,668 Corporate 835 (57.4%) 1,962 Total depreciation & amortization $ 98,413 (74.9%) $ 56,283 Operating income (loss) before Corporate general and administrative expense: Radio $ 52,014 29.2% $ 40,270 Other 79 (97.5%) 3,173 Corporate (835) 57.4% (1,962) Subtotal 51,258 23.6% 41,481 Corporate general and administrative expense: (10,139) (24.0%) (8,174) Net operating income $ 41,119 23.5% $ 33,307 Other Consolidated Statements of Operations Data: Interest expense $ (59,256) (20.8%) $ (49,037) Gain on sale of assets $ 130,385 - - Income tax (expense) benefit $ (53,500) (1149.0%) $ 5,100 Net income (loss) $ 57,198 3148.9% $ (1,876) Other Consolidated Financial Statement Data: Capital expenditures $ 14,092 7.1% $ 13,160 Radio station and other acquisitions $ 148,328 116.3% $ 68,578 Total assets $7,529,941 153.4% $2,971,062 JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) RESULTS OF OPERATIONS, Continued Discussion of Radio Segment Financial Statement Changes for the Quarters ended June 30, 1999 and 1998 The increase in net revenue from 1998 to 1999 is due primarily to revenue generated at those properties owned or operated during 1999, but not during the comparable 1998 period. On a "same station" basis - reflecting results from stations operated since January 1, 1998 - broadcast revenue increased $20.4 million or 11.9%, from $170.6 million in 1998 to $191.0 million in 1999. The increase is due in part to favorable ratings and a strong advertising environment. The increase in radio broadcast operating expenses from 1998 to 1999 is due primarily to expenses incurred at those properties owned or operated during 1999 but not during the comparable 1998 period. "Same station" broadcast expenses increased by $5.8 million or 5.1% from $112.6 million in 1998 to $118.4 million in 1999. The increases between years was the result of increased payroll, programming and selling costs. Depreciation and amortization expense increased from 1998 to 1999 primarily due to the increase in intangible assets associated with the Clear Channel Merger, and also due to acquisitions made during 1998 and the first six months of 1999. Operating income decreased from 1998 to 1999 as a result of the increase in amortization expense associated with the Clear Channel Merger. Discussion of Other Statement of Operations Data Interest expense increased from 1998 to 1999 due to increases in outstanding debt incurred in connection with the Company's acquisitions. The gain on sale of assets in 1999 resulted from the disposal of radio stations in Tampa, Florida and Louisville, Kentucky. Income tax expense for the second quarter of 1999 increased compared to the second quarter of 1998 due primarily to the gains from the sale of radio stations. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) RESULTS OF OPERATIONS, Continued Discussion of Radio Segment Financial Statement Changes for the Six Months ended June 30, 1999 and 1998 The increase in net revenue from 1998 to 1999 is due primarily to revenue generated at those properties owned or operated during 1999, but not during the comparable 1998 period. On a "same station" basis - reflecting results from stations operated since January 1, 1998 - broadcast revenue increased $35.4 million or 11.6%, from $306.5 million in 1998 to $341.9 million in 1999. The increase is due in part to favorable ratings and a strong advertising environment. The increase in radio broadcast operating expenses from 1998 to 1999 is due primarily to expenses incurred at those properties owned or operated during 1999 but not during the comparable 1998 period. "Same station" broadcast expenses increased by $10.9 million or 5.1% from $215.5 million in 1998 to $226.4 million in 1999. The increases between years was the result of increased payroll, programming and selling costs. Depreciation and amortization expense increased from 1998 to 1999 primarily due to the increase in intangible assets associated with the Clear Channel Merger, and also due to acquisitions made during 1998 and the first six months of 1999. Operating income increased from 1998 to 1999 as a result of the acquisitions made throughout 1998 and 1999, and to a lesser extent, increases in "same station" operating performance. Discussion of Other Statement of Operations Data Interest expense increased from 1998 to 1999 due to increases in outstanding debt incurred in connection with the Company's acquisitions. The gain on sale of assets in 1999 resulted from the sale of an investment in a marketable equity security and the recognition of gains on the disposal of radio stations in Tampa, Florida and Louisville, Kentucky. Income tax expense for the first six months of 1999 increased compared to an income tax benefit for the first six months of 1998. The increase is primarily related to the gain on the sale of assets in 1999. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) RESULTS OF OPERATIONS, Continued Year 2000 Computer System Compliance The year 2000 issue (Y2K) is the result of computer programs written with date sensitive codes that contain two digits (rather than four) to define the year. As the year 2000 approaches, certain computer systems may be unable to accurately process certain date-based information as the program may interpret the year 2000 as 1900. In connection with this date change, the Company's management has developed a formal, enterprise-wide strategic plan to ensure that computer systems are Y2K compliant. The Y2K issue involves the identification and assessment of the existing problem, plan of remediation, as well as a testing and implementation plan. To date, the Company has substantially completed the identification and assessment process, with the following significant financial and operational components identified as being affected by the Y2K issue: Computer hardware running critical financial accounting and information system software that is not capable of recognizing a four-digit code for the applicable year. Advertising inventory management software responsible for managing, scheduling and billing customer's broadcasting and outdoor advertising purchases. Broadcasting studio equipment and software necessary to deliver radio and television programming. Significant non-technical systems and equipment that may contain microcontrollers which are not Y2K compliant. The Company has instituted the following remediation plan to address the Y2K issues: A computer hardware replacement plan for computers running essential broadcast, operational and financial software applications with Y2K compatible computers has been instituted. As of June 30, 1999 approximately 80% of all essential computers related to broadcast or studio equipment are Y2K compatible. Substantially all of the essential financial based computers are Y2K compliant. The Company anticipates this replacement plan to be complete by the end of October 1999. Software upgrades or replacement with advertising inventory management software which is Y2K compliant have been planned, are in process, or have been completed as of June 30, 1999. The Company has received assurances from its software vendors, with a few minor exceptions, that supply its advertising inventory management software that their software is Y2K compliant. For these non-compliant vendors, the Company will install inventory management software from a compliant vendor by the end of the third quarter of 1999. Substantially all of the broadcasting properties have Y2K compliant advertising inventory management software as of June 30, 1999. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) RESULTS OF OPERATIONS, Continued The Company has received assurances from its software vendors that supply broadcasting digital automation systems that the software used by the Company is currently compliant or has upgrades currently available that are compliant. Broadcast software and studio equipment is considered to be 80% compliant as of June 30, 1999 and is anticipated to be 100% compliant by the end of October 1999. Financial accounting software has been replaced and is Y2K compliant. The Company believes its remediation plan will provide reasonable assurance that material disruptions will not occur due to internal failure, however the possibility of some interruption still exists. The final phase of the strategic plan, the testing phase, will include the actual testing of the enhanced and upgraded systems and will be completed by the end of the third quarter of 1999. This process includes internal and external user review and confirmation, as well as unit testing and integration testing with other systems interfaces. Certain critical systems have already been successfully tested after remediation, and such remediation can be applied to other systems where needed. The Company is currently querying other significant vendors that do not share information systems with it (external agents). To date, the Company is not aware of any external agent with a Y2K issue that would materially impact its results of operations, liquidity, or capital resources. However, the Company has no means of ensuring that external agents will be Y2K ready. The inability of external agents to complete their Y2K resolution process in a timely fashion could materially impact the Company. The effect of non-compliance by external agents is not determinable. In addition, disruptions in the economy generally resulting from the Y2K issues could also materially adversely affect the Company. The Company could be subject to litigation for computer systems failures, equipment shutdowns or failure to properly date business records. The amount of potential liability and lost revenue cannot be reasonably estimated. The Company has contingency plans for certain critical applications in sites deemed significant to operations. These contingency plans involve, among other actions, manual work around for on-air and financial systems, a store of Y2K compliant computers available for rapid deployment, backup generators at key broadcast and transmitter sites and staffing strategies to affect such contingency plans. The Company believes that its Y2K compliance issues will be resolved on a timely basis and that any related costs will not have a material impact on the Company's operations, cash flows, or financial condition of future periods. The costs incurred in the assessment phase are primarily internal costs, which have been expensed as incurred and are immaterial. Costs in the remediation phase include replacement of certain computer hardware and software, are not expected to be material and are included in the capital expenditures of the Company. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) RESULTS OF OPERATIONS, Continued Recent Pronouncements In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133 Accounting for Derivative Instruments and Hedging Activities. Statement 133 establishes new rules for the recognition and measurement of derivatives and hedging activities. Statement 133 is amended by Statement 137 Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133, and is effective for years beginning after June 15, 2000. The Company plans to adopt this statement in fiscal year 2001. Management does not believe adoption of this statement will materially impact the Company's financial position or results of operations. JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES (A wholly owned subsidiary of Clear Channel Communications, Inc.) PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Number Description Page 27 Financial Data Schedule 29 __ _________ (b) Reports on Form 8-K The following 8-K was filed during the second quarter of 1999: Form 8-K dated May 26, 1999. This Form 8-K was filed to report that the Company is the successor registrant to the former Jacor Communications, Inc. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. JACOR COMMUNICATIONS, INC. (A wholly owned subsidiary of Clear Channel Communications, Inc.) (Registrant) DATED: August 16, 1999 BY /s/ Randall T. Mays Randall T. Mays, Executive Vice President and Chief Financial Officer EX-27 2
5 1,000 6-MOS DEC-31-1999 JUN-30-1999 19,505 0 219,772 9,050 0 264,488 312,491 4,340 7,529,941 221,537 1,040,649 0 0 0 4,434,073 7,529,941 0 499,612 0 349,941 108,552 747 59,256 110,698 53,500 57,198 0 0 0 57,198 0 0
-----END PRIVACY-ENHANCED MESSAGE-----