-----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, Fds4JFOS53HENguwvbZXbtYma3WN1lazivjaTgmxP6kRPkB4lnb3Hfsft2ObHHqt gNqpeVLMH5Vwilw1c9Y4aQ== 0000950134-99-001263.txt : 19990224 0000950134-99-001263.hdr.sgml : 19990224 ACCESSION NUMBER: 0000950134-99-001263 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990223 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990223 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLEAR CHANNEL COMMUNICATIONS INC CENTRAL INDEX KEY: 0000739708 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 741787536 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-09645 FILM NUMBER: 99548082 BUSINESS ADDRESS: STREET 1: 200 CONCORD PLAZA STREET 2: STE 600 CITY: SAN ANTONIO STATE: TX ZIP: 78216 BUSINESS PHONE: 2108222828 MAIL ADDRESS: STREET 1: 200 CONCORD PLAZA SUITE 600 STREET 2: 200 CONCORD PLAZA SUITE 600 CITY: SAN ANTONIO STATE: TX ZIP: 78216 8-K/A 1 AMENDMENT NO. 1 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) February 23, 1999 Clear Channel Communications, Inc. (Exact name of registrant as specified in its charter) Texas (State of Incorporation) 1-9645 74-1787536 (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 5 OTHER EVENTS On March 12, 1998, Clear Channel Communications, Inc., a Texas corporation (the Company), filed a Current Report on Form 8-K. The Company is filing this amendment to adjust the pro forma information under item 7(b). Item 7 FINANCIAL STATEMENTS AND EXHIBITS (b) Pro Forma Financial Information. 3 Item 7.(b) Pro forma financial information. UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS The following unaudited pro forma combined condensed financial statements give effect to the Merger. For accounting purposes the Merger will be accounted for as a purchase of Universal by the Company; accordingly the net assets of Universal have been adjusted to their estimated fair values based upon a preliminary purchase price allocation. The unaudited pro forma combined condensed statements of operations for the year ended December 31, 1997 give effect to the Merger as if it had occurred at January 1, 1997. The unaudited pro forma combined condensed balance sheet at December 31, 1997 gives effect to the Merger as if it occurred on December 31, 1997. The unaudited pro forma combined condensed statements of operations were prepared based upon the historical statement of operations of the Company adjusted to reflect the acquisition of Eller Media and the Paxson Radio Acquisition as if such acquisitions had occurred at January 1, 1997 (Clear Channel Pro Forma) and the historical statement of operations of Universal. The unaudited pro forma combined condensed balance sheet was prepared based upon the historical balance sheets of the Company and Universal. The unaudited pro forma combined condensed financial statements do not give effect to any potential divestitures or regulatory costs that may be imposed by a Governmental entity as a condition for their approval of the Merger. The unaudited pro forma combined condensed financial statements should be read in conjunction with the historical financial statements of the Company and Universal included herein. The unaudited pro forma combined condensed financial statements are not necessarily indicative of the actual results of operations or financial position that would have occurred had the Merger and the above described acquisitions by the Company and Universal occurred on the dates indicated nor are they necessarily indicative of future operating results or financial position. 4 CLEAR CHANNEL AND UNIVERSAL UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET (Dollars in thousands) December 31, 1997
Clear Channel Pro Forma and Universal Clear Channel Universal Merger Pro Forma Historical Historical Adjustments Merger ----------- ----------- ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 24,657 $ 89 $ (15,000) $ 9,746 Accounts receivable, net 155,962 35,876 -- 191,838 Film rights - current 14,826 -- -- 14,826 Other current assets 3,202 14,802 -- 18,004 ----------- ----------- ----------- ----------- Total Current Assets 198,647 50,767 (15,000) 234,414 Property, plant & equipment, net 746,284 622,179 -- 1,368,463 Intangible assets: Network affiliation agreements 33,727 -- -- 33,727 Licenses and goodwill 2,175,944 260,504 902,290 3,338,738 Covenants not-to-compete 24,892 9,084 -- 33,976 Other intangible assets 19,593 -- -- 19,593 ----------- ----------- ----------- ----------- 2,254,156 269,588 902,290 3,426,034 Less accumulated amortization (141,066) (20,103) 18,213 (142,956) ----------- ----------- ----------- ----------- 2,113,090 249,485 920,503 3,283,078 Other assets: Notes receivable 35,373 -- -- 35,373 Film rights 14,171 -- -- 14,171 Investments in and advances to, nonconsolidated affiliates 266,691 -- -- 266,691 Other assets 30,122 18,417 -- 48,539 Other investments 51,259 -- -- 51,259 ----------- ----------- ----------- ----------- TOTAL ASSETS $ 3,455,637 $ 940,848 $ 905,503 $ 5,301,988 =========== =========== =========== =========== LIABILITIES Current liabilities: Accounts payable $ 11,904 $ 5,512 $ -- $ 17,416 Accrued interest 9,950 -- -- 9,950 Accrued expenses 34,489 27,177 -- 61,666 Deferred income 1,340 -- -- 1,340 Current portion of long-term debt 13,294 12,374 -- 25,668 Current portion of film rights liability 15,875 -- -- 15,875 ----------- ----------- ----------- ----------- Total Current Liabilities 86,852 45,063 -- 131,915 Long-term debt 1,540,421 507,600 -- 2,048,021 Film rights liability 15,551 -- -- 15,551 Deferred income taxes 10,114 91,830 -- 101,944 Deferred income - long-term 9,750 -- -- 9,750 Other long-term liabilities 25,378 -- -- 25,378 Minority interest 20,787 -- -- 20,787 Shareholders' equity: Preferred stock -- -- -- -- Common stock 9,823 268 1,661 11,752 Additional paid-in capital 1,541,865 374,129 825,800 2,741,794 Retained earnings/ (accumulated deficit) 169,631 (87,541) 87,541 169,631 Other 2,398 9,499 (9,499) 2,398 Unrealized gain on investments 23,754 -- -- 23,754 Cost of shares held in treasury (687) -- -- (687) ----------- ----------- ----------- ----------- Total Shareholders' Equity 1,746,784 296,355 905,503 2,948,642 ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 3,455,637 $ 940,848 $ 905,503 $ 5,301,988 =========== =========== =========== ===========
5 CLEAR CHANNEL AND UNIVERSAL UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS (In thousands, except per share data) Year ended December 31, 1997
Clear Channel Pro Forma and Universal Clear Channel Universal Merger Pro Forma Pro Forma Historical Adjustments Merger ----------- ----------- ----------- ----------- Net revenue $ 831,814 $ 209,639 $ -- $ 1,041,453 Operating expenses 490,324 101,613 -- 591,937 Depreciation and amortization 152,206 59,977 30,881 243,064 Noncash compensation for incentive options -- 8,289 (8,289) -- Corporate expenses 27,260 -- -- 27,260 ----------- ----------- ----------- ----------- Operating income (loss) 162,024 39,760 (22,592) 179,192 Interest expense 116,805 46,400 -- 163,205 Other income (expense) - net 6,463 (2,621) -- 3,842 ----------- ----------- ----------- ----------- Income (loss) before income taxes 51,682 (9,261) (22,592) 19,829 Income tax (expense) benefit (30,841) -- -- (30,841) ----------- ----------- ----------- ----------- Income before equity in earnings (loss) of nonconsolidated affiliates 20,841 (9,261) (22,592) (11,012) Equity in earnings (loss) of nonconsolidated affiliates 6,615 -- -- 6,615 ----------- ----------- ----------- ----------- Net income (loss) $ 27,456 $ (9,261) $ (22,592) $ (4,397) =========== =========== =========== =========== Net income (loss) per common share: Basic $ .30 $ (0.04) =========== =========== Diluted $ .26 $ (0.07) =========== ===========
6 CLEAR CHANNEL AND UNIVERSAL NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS The Company and Universal unaudited pro forma combined condensed financial statements reflect the Merger, accounted for as a purchase, as follows (In thousands, except per share amounts): Universal Common Stock outstanding at December 31, 1997 adjusted to reflect the exercise of all outstanding options and warrants 28,787,442 Exchange ratio .67 ------------ Shares of the Company's Common Stock assumed to be issued in connection with the Merger 19,287,586 Estimated value per share x $62.3125 ------------ $ 1,201,858 Estimated transaction costs 15,000 ------------ Total estimated purchase price $ 1,216,858 ============
For purpose of these statements the total estimated purchase price was allocated as follows: Total estimated purchase price $ 1,216,858 Universal's net assets at December 31,1997 adjusted for the elimination of existing goodwill of $242,291 54,064 ------------ Estimated excess purchase price (allocated to goodwill) $ 1,162,794 ============
The estimated excess purchase price allocated to goodwill of $1,162,794 will be amortized over a 25 year period using the straight line method which will result in annual goodwill amortization of $46,512. The pro forma merger adjustments at December 31, 1997 are as follows:
Increase (Decrease) In Thousands ------------ Cash and cash equivalents $ (15,000) Licenses and goodwill 902,290 Common stock 1,661 Additional paid-in capital 825,800 Retained earnings (accumulated deficit) 87,541 Other shareholders' equity (9,499)
The pro forma merger adjustments for the year ended December 31, 1997 are as follows:
Increase (Decrease) Income In Thousands ------------ Depreciation and amortization $ (30,881) Noncash compensation for incentive options 8,289
7 CLEAR CHANNEL UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data) Year ended December 31, 1997
Clear Channel Paxson Clear Channel Eller Media Pro Forma Eller Media Radio Pro Forma Clear Channel Historical Historical Adjustment(1) Pro Forma Historical Adjustment(2) Pro Forma --------- --------- --------- --------- --------- --------- --------- Net revenue $ 697,068 $ 56,642 -- $ 753,710 $ 78,104 $ -- $ 831,814 Operating expenses 394,404 33,804 -- 428,208 63,362 (1,246) 490,324 Depreciation and amortization 114,207 10,547 $ 5,974 130,728 12,101 9,377 152,206 Corporate expenses 20,883 2,318 -- 23,201 4,059 -- 27,260 --------- --------- --------- --------- --------- --------- --------- Operating income (loss) 167,574 9,973 (5,974) 171,573 (1,418) (8,131) 162,024 Interest expense 75,076 8,565 2,518 86,159 1,370 29,276 116,805 Other income (expense) - net 11,579 (4,082) -- 7,497 (1,034) -- 6,463 --------- --------- --------- --------- --------- --------- --------- Income (loss) before income taxes 104,077 (2,674) (8,492) 92,911 (3,822) (37,407) 51,682 Income tax (expense) benefit (47,116) (3) 1,315 (45,804) -- 14,963 (30,841) --------- --------- --------- --------- --------- --------- --------- Income before equity in earnings (loss) of nonconsolidated affiliates 56,961 (2,677) (7,177) 47,107 (3,822) (22,444) 20,841 Equity in earnings (loss) of non- consolidated affiliates 6,615 -- -- 6,615 -- -- 6,615 --------- --------- --------- --------- --------- --------- --------- Net income (loss) $ 63,576 $ (2,677) $ (7,177) $ 53,722 $ (3,822) $ (22,444) $ 27,456 ========= ========= ========= ========= ========= ========= ========= Net income (loss) per common share: Basic $ .72 $ .60 $ .30 ========= ========= ========= Diluted $ .67 $ .54 $ .26 ========= ========= =========
8 CLEAR CHANNEL NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, 1997 ELLER MEDIA ACQUISITION (1) Represents the pro forma effect of the acquisition of Eller Media assuming it was acquired January 1, 1997.
Increase (Decrease) Income (in Thousands) -------------- (a) Increase in amortization of goodwill of $5,205 resulting from the additional $(5,974) goodwill created by the acquisition and a decrease in amortizable life from 40 years (Eller Media) to 25 years (The Company) and additional depreciation of $769 related to the adjustment of fixed assets to fair value. (b) Increase in interest expense due to a higher amount of average debt outstanding (2,518) which was partially offset by a lower average interest rate (6% average rate for The Company and 8.8% for Eller Media during the first three months of 1997). (c) Tax effect of the above adjustments to depreciation and interest expense at The 1,315 Company's estimated effective tax rate of 40%
PAXSON RADIO ACQUISITION (2) Represents the pro forma effect of the acquisition of Paxson Radio assuming it was acquired January 1, 1997.
Increase (Decrease) Income (in Thousands) -------------- (a) Elimination of option plan compensation expense resulting from the elimination of $ 1,246 the plan. (b) Increase in amortization expense resulting from the additional goodwill created (9,377) by the acquisition.
9 (c) Increase in interest expense (at an average interest rate of 6.5% for the first (29,276) nine months of 1997) due to additional borrowing on the Company's credit facility to finance the acquisition cost. (d) Tax effect of the above adjustment at the Company's estimated effective tax rate of 40%. 13,339 (e) This pro forma does not include certain benefits Clear Channel believes it will achieve through the discontinuance of a corporate headquarters operating solely for the Paxson Radio stations. Paxson Radio's historical statement of operations for the year ended December 31, 1997 includes $4,059, $2,435 net of tax, of expenses as the allocation of corporate expense. Clear Channel does not expect to incur these expenses relating to the Paxson Radio stations subsequent to the acquisition.
10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Clear Channel Communications, Inc. Date: February 23, 1999 By: /s/ HERBERT W. HILL, JR. ------------------------------ Herbert W. Hill, Jr. Senior Vice President and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----