-----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, PYntLNpJtSVk++GDbaIzW4DXnEcfm0wzS1+iw7GTs63Yvgmqj3++AqttXXin882E k5m4lyCDvZKMM9mCa1tbUQ== 0000950134-96-005501.txt : 19961021 0000950134-96-005501.hdr.sgml : 19961021 ACCESSION NUMBER: 0000950134-96-005501 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960805 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961018 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLEAR CHANNEL COMMUNICATIONS INC CENTRAL INDEX KEY: 0000739708 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 741787539 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09645 FILM NUMBER: 96645406 BUSINESS ADDRESS: STREET 1: 200 CONCORD PLAZA STREET 2: SUITE 600 CITY: SAN ANTONIO STATE: TX ZIP: 78216 BUSINESS PHONE: 2108222828 MAIL ADDRESS: STREET 2: 200 CONCORD PLAZA SUITE 600 CITY: SAN ANTONIO STATE: TX ZIP: 78216 8-K/A 1 AMENDMENT TO FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 5, 1996 Clear Channel Communications, Inc. (Exact name of registrant as specified in its charter) Texas (State of Incorporation) 1-9645 74-1787539 (Commission File Number) (I.R.S. Employer Identification No.) 200 Concord Plaza, Suite 600 San Antonio, Texas 78216 (210) 822-2828 (Address and telephone number of principal executive offices) 2 Clear Channel Communications, Inc. Form 8-K/A Item 2.(a) On August 5, 1996, Clear Channel Radio, Inc., a wholly owned subsidiary of Clear Channel Communications, Inc. (the "Company") acquired a total of 5,141,022 shares of Common Stock of Heftel Broadcasting Corporation (Heftel) via a tender offer (269,309 shares) and via a stock purchase agreement with certain selling shareholders of Heftel (4,871,713 shares) for $23.00 per share, net to seller in cash (collectively referred to as the "Tender Offer"). As a result of the Tender Offer, the Company now beneficially owns a total of 7,297,821 shares of Heftel Class A Common Stock, representing approximately 63.2% of the outstanding Heftel Class A Common Stock outstanding. There are no longer any shares of Heftel Class B Common Stock outstanding. Sources of funds utilized in completing the Tender Offer were provided by the Company's revolving long-term line of credit facility by and between NationsBank of Texas, N.A., as agent, and the Company. Item 2.(b) The assets represented by the stock purchased by registrant's subsidiary were utilized by Heftel for the purposes of radio broadcasting. Registrant intends to continue such use. 3 Clear Channel Communications, Inc. Form 8-K/A Item 7.(a)-l Historical Financial Statements The historical financial statements of Heftel Broadcasting Corporation as of and for the year ended September 30, 1995 and as of and for the quarters ended June 30, 1995, December 31, 1995, March 31, 1996 and June 30, 1996 are hereby incorporated by reference to the Form 8-K/A of Heftel Broadcasting Corporation dated October 15, 1996. Item 7.(b) Pro Forma Financial Information As a result of the Tender Offer reported under Item 2 above, the Company now beneficially owns a total of 7,297,821 shares of Heftel Class A Common Stock, representing approximately 63.2% of the outstanding Heftel Class A Common Stock outstanding. The Company announced on July 9, 1996 its proposed merger (hereinafter referred to as the "Tichenor Merger") of Heftel with Tichenor Media System, Inc. (Tichenor), another Spanish-language broadcasting company, in which an additional 5,689,878 shares of Heftel Class A Common Stock will be issued to Tichenor shareholders to effect the Tichenor Merger (see the Company's Form 8-K filed July 10, 1996). As a result, the Company's beneficial ownership interest in the total number of shares of Heftel Common Stock outstanding will be reduced to approximately 43%. Upon consummation of the Merger, the Company's shares of Heftel Class A Common Stock will be converted to shares of Heftel Nonvoting Common Stock, which will effectively eliminate the Company's voting control of Heftel. Therefore, the Company's control of Heftel is temporary because of the Merger and the Company will continue to account for its investment in Heftel under the equity method. This is in accordance with FAS 94, which indicates that a majority-owned subsidiary shall not be consolidated if control is likely to be temporary. As such, the pro forma financial information for the year ended December 31, 1995 and for the six months ended June 30, 1996 presents the pro forma effect on the Company's statements of earnings (via its "Equity in net income of, and other income from, nonconsolidated affiliates") as if the Company's acquisition of its total 63.2% interest in Heftel were consummated as a single transaction on January 1, 1995. The pro forma condensed consolidated balance sheet as of June 30, 1996 presents the pro forma effect of the Company's investment in Heftel on the Company's balance sheet as of June 30, 1996 (via its "Equity investments in, and advances to, nonconsolidated affiliates") as if the acquisition had been consummated on June 30, 1996. The unaudited pro forma condensed consolidated statements of operations do not reflect the effects of certain one-time charges resulting from the reorganization of Heftel upon the acquisition mentioned above. Such charges, which have been omitted from the pro forma adjustments, include (i) employment contract settlement payments plus certain other estimated severance costs, both of which are related to the Tender Offer, in the aggregate amount of approximately $21,000,000; (ii) the non-cash write-off of approximately 4 $7,461,000 in unamortized deferred financing costs related to Heftel's former credit agreement; (iii) approximately $8,100,000 relating to the discontinued operations of Heftel's radio network operations (Cadena Radio Centro, or "CRC"), of which $6,500,000 reflects non-cash charges resulting from the write-off of goodwill; and (iv) approximately $3,723,000 in transaction costs relating to the Tender Offer and estimated costs of $2,900,000 to dispose of certain duplicate facilities. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1995
Heftel acquisition Clear Channel/ Historical pro forma Heftel Clear Channel adjustments combined pro forma ------------- ------------------ ----------------- (In thousands, except per share data) Net broadcast revenue $243,813 --- $243,813 Station operating expenses 131,258 --- 131,258 Depreciation and amortization 33,769 --- 33,769 Corporate general and administrative expenses 7,414 --- 7,414 -------- -------- -------- STATION OPERATING INCOME 71,372 --- 71,372 Interest expense (20,752) (8,041)(a) (28,792) Equity in net income of, and other income from, nonconsolidated affiliates 2,927 2,150 (b) (4,285)(c) 792 Other income (expense) (803) --- (803) -------- -------- -------- INCOME (LOSS) BEFORE INCOME TAXES 52,744 (10,176) 42,568 Income tax (expense)/benefit (20,730) 2,815 (d) (17,915) -------- -------- -------- NET INCOME $ 32,014 $ (7,361) $ 24,653 ======== ======== ======== Net income per common share $ 0.91 $ 0. 70 ======== ======== Number of common shares used in per share computations 35,100 35,100 ======== ========
5 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996
Heftel acquisition Clear Channel/ Historical pro forma Heftel Clear Channel adjustments combined pro forma ------------- ------------------ ------------------ (In thousands, except per share data) Net broadcast revenue $143,577 $143,577 Station operating expenses 81,992 81,992 Depreciation and amortization 19,343 --- 19,343 Corporate general and administrative expenses 3,478 3,478 -------- -------- -------- STATION OPERATING INCOME 38,764 38,764 Interest expense (11,745) (3,606) (e) (15,351) Equity in net income of, and other income from, nonconsolidated affiliates 2,070 (215) (f) (1,999) (g) (144) Other income (expense) 186 --- 186 -------- -------- -------- INCOME BEFORE INCOME TAXES 29,275 (5,820) 23,455 Income tax (expense) / benefit (10,489) 1,262 (h) (9,227) -------- -------- -------- NET INCOME $ 18,786 $ (4,558) $ 14,228 ======== ======== ======== Net income per common share $ 0.53 $ 0.40 ======== ======== Number of common shares used in per share computations 35,590 35,590 ======== ========
6 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996
Heftel acquisition Clear Channel/ Historical pro forma Heftel Clear Channel adjustments combined pro forma ------------- ------------------ ------------------ ASSETS Current assets $ 82,694 $ --- $ 82,694 Property, plant and equipment net 114,556 --- 114,556 Intangible assets, net 459,974 --- 459,974 Equity investments in, and advances to, --- --- nonconsolidated affiliates 81,299 118,244 (i) 199,543 Other assets 30,119 --- 30,119 -------- -------- -------- TOTAL ASSETS $768,642 $118,244 $886,886 ======== ======== ======== LIABILITIES Current liabilities $ 40,623 $ --- $ 40,623 Long-term debt 237,486 118,244 (i) 355,730 Other noncurrent liabilities 17,969 --- 17,969 Minority interest 6,353 --- 6,353 Shareholders' equity 466,211 --- 466,211 -------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $768,642 $118,244 $886,886 ======== ======== ========
7 NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION (a) TO ADJUST FOR THE INCREMENTAL INTEREST EXPENSE FOR ADDITIONAL BORROWINGS UNDER CCC'S REVOLVING CREDIT FACILITY @ 6.8% AVERAGE RATE FOR 1995, PER ANNUAL REPORT) $118,244,000 BORROWED FOR AUGUST 5, 1996 ACQUISITION: Amount borrowed for August 5, 1996 Heftel acquisition: 118,244 Times avge. interest rate (6.8% for the year ended December 31, 1995): 6.80% -------- Equals incremental interest expense resulting from the transaction: 8,041 ===== (b) TO CALCULATE THE ADDITIONAL EQUITY IN EARNINGS OF, AND OTHER INCOME FROM, NONCONSOLIDATED AFFILIATES: INCOME FROM CONTINUING OPERATIONS -- HEFTEL: Net income from continuing operations for the three months ended December 31, 1994: (1,768) Net income from continuing operations for the twelve months ended September 30, 1995: 4,319 Net income from continuing operations for the three months ended December 31, 1995: 1,302 ------ Net income from continuing operations for the twelve months ended December 31, 1995: 3,853 Clear Channel's 63.2% interest 63.2% -------- Clear Channel's pro forma equity in earnings for the twelve months ended December 31, 1995: 2,435 Clear Channel's equity in earnings already recorded for the period May 15, 1995 to December 31, 1995 (at 21.44%): 285 -------- Clear Channel's pro forma equity in earnings for the twelve months ended December 31, 1995 to be included in the pro forma calculation: 2,150 ====== (c) TO CALCULATE THE ADDITIONAL AMORTIZATION OF EXCESS COST RELATED TO CLEAR CHANNEL'S INVESTMENT IN HEFTEL: Heftel equity balance at June 30, 1996: 43,776 Clear Channel interest in Heftel: 63.2% ------ Clear Channel's share of Heftel negative equity 27,666 Clear Channel's May 15,1995 investment in Heftel: (20,499) Clear Channel's Aug. 5, 1996 investment in Heftel: (118,244) -------- Excess cost to be amortized over 25 yrs. (111,077) 25 yrs. amortizable life, times # of qtrs. per year: 100 Number of qtrs included this period 4 -------- Annual amortization of excess cost (4,443) Actual amortization already recorded by Clear Channel in 1995: 158 -------- Additional pro forma amortization of excess cost: 4,285 ====== (d) TO CALCULATE THE INCOME TAX BENEFIT FROM THE INCREMENTAL INTEREST EXPENSE: Incremental interest expense resulting from the transaction: 8,041 35% statutory rate: 35.0% -------- Income tax benefit from incremental interest expense incurred since Jan. 1, 1995 2,815 ======
8 (e) TO ADJUST FOR THE INCREMENTAL INTEREST EXPENSE FOR ADDITIONAL BORROWINGS UNDER CCC'S REVOLVING CREDIT FACILITY @ 6.1% AVERAGE RATE FOR THE SIX MONTHS ENDED JUNE 30, 1996) $118,244,000 BORROWED FOR AUGUST 5, 1996 ACQUISITION OF SHARES: Amount borrowed for August 5, 1996 Heftel acquisition: 118,244 Times avge. interest rate (6.1% for the six months ended June 30, 1996): 6.10% Equals incremental interest expense resulting from the transaction: 3,606 ======== (f) TO CALCULATE THE ADDITIONAL EQUITY IN EARNINGS OF, AND OTHER INCOME FROM, NONCONSOLIDATED AFFILIATES: INCOME FROM CONTINUING OPERATIONS -- HEFTEL: Net income from continuing operations for the three months ended December 31, 1995: (1,302) Net income from continuing operations for the nine months ended June 30, 1996: 632 -------- Net income (loss) from continuing operations for the six months ended June 30, 1996: (670) Clear Channel's 63.2% interest 63.2% -------- Clear Channel's pro forma equity in earnings (loss) for the six months ended June 30, 1996: (423) Clear Channel's equity in earnings already recorded for the period January 1 to June 30, 1996 (at 21.4%): (208) -------- Clear Channel's pro forma equity in earnings (loss) for the six months ended June 30, 1996 to be included in the pro forma calculation: (215) ======== (g) TO CALCULATE THE ADDITIONAL AMORTIZATION OF EXCESS COST RELATED TO CLEAR CHANNEL'S INVESTMENT IN HEFTEL: Heftel equity balance at June 30, 1996: 43,776 Clear Channel interest in Heftel: 63.2% -------- Clear Channel's share of Heftel negative equity 27,666 Clear Channel's May 15, 1995 investment in Heftel: (20,499) Clear Channel's August 5, 1996 investment in Heftel: (118,244) -------- Excess cost to be amortized over 25 yrs. (111,077) 25 yrs. amortizable life, times # of qtrs. per year: 100 Number of qtrs included this period 2 -------- Annual amortization of excess cost (2,222) Actual amortization already recorded in the six months ended 6/30/96: 223 -------- Additional pro forma amortization of excess cost: (1,999) ====== (h) TO CALCULATE THE INCOME TAX BENEFIT FROM THE INCREMENTAL INTEREST EXPENSE: Incremental interest expense resulting from the transaction: 3,606 35% statutory rate: 35.0% -------- Income tax benefit from incremental interest expense incurred since Jan. 1, 1995 1,262 ====== (i) TO RECORD CLEAR CHANNEL'S INVESTMENT IN HEFTEL AS OF JUNE 30, 1996: The entire purchase price for the additional shares of Heftel Class A Common Stock acquired was funded by the Company's line of credit facility.
9 Item 7.(c) See index to exhibits following "Signatures." 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 hereunto duly authorized. Clear Channel Communications, Inc. Date October 18, 1996 By /s/ L. Lowry Mays ------------------------------------ L. Lowry Mays, President Date October 18, 1996 By /s/ Herbert W. Hill, Jr. ------------------------------------ Herbert W. Hill, Jr. Vice President/Controller and Principal Financial Officer 10 CCR Houston-Nevada, Inc. Nevada Clear Channel Real Estate Nevada -----END PRIVACY-ENHANCED MESSAGE-----