-----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, Pw8+x2FHO/pZwkib9PUExqinXPU7RrjuWRx2vaq8OiGwB2i01TodMv7BSk4cmsVi xWish/jZS2umvb8aQn9prA== 0000950134-99-001264.txt : 19990224 0000950134-99-001264.hdr.sgml : 19990224 ACCESSION NUMBER: 0000950134-99-001264 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19971208 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: 99548097 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 (December 8, 1997) 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 December 22, 1997, 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. 1 3 (b) Pro forma financial information: UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma condensed consolidated financial statements give effect to the acquisition of Paxson Radio, herein after referred to as ("the Acquisition"). For accounting purposes the Acquisition has been accounted for as a purchase of Paxson Radio by the Company; accordingly the assets of Paxson Radio have been adjusted to their estimated fair values based upon a preliminary purchase price allocation. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 1997 and for the year ended December 31, 1996 give effect to the Acquisition as if it had occurred at the beginning of each period presented. The unaudited pro forma condensed consolidated balance sheet at September 30, 1997 gives effect to the Acquisition as if it occurred on September 30, 1997. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements of The Company as filed in the Company's Annual Report on Form 10-K for the year ended December 31, 1996, and the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997, and the historical financial statements of Paxson Radio included under Item 7 (a). The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the actual results of operations or financial position that would have occurred had the Acquisition and transactions of The Company and Paxson Radio occurred on the dates indicated nor are they necessarily indicative of future operating results or financial position. 26 4 CLEAR CHANNEL COMMUNICATIONS, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Dollars in Thousands) September 30, 1997
Clear Channel and Clear Channel Paxson Radio Pro Forma Paxson Radio Historical Historical Adjustment (1) Pro Forma ----------- ----------- ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 35,178 $ -- $ -- $ 35,178 Accounts receivable, net 126,756 17,927 -- 144,683 Film rights - current 16,124 -- -- 16,124 Other current assets -- 1,356 (1,356) -- ----------- ----------- ----------- ----------- Total Current Assets 178,058 19,283 (1,356) 195,985 Property, plant & equipment, net 667,831 53,846 -- 721,677 Intangible assets: Network affiliation agreements 33,727 -- -- 33,727 Licenses and goodwill 1,601,062 240,078 317,149 2,158,289 Covenants not-to-compete 24,592 -- -- 24,592 Other intangible assets 13,002 -- -- 13,002 ----------- ----------- ----------- ----------- 1,672,383 240,078 317,149 2,229,610 Less accumulated amortization (120,198) (32,642) 32,642 (120,198) ----------- ----------- ----------- ----------- 1,552,185 207,436 349,791 2,109,412 Other assets: Deferred tax asset 10,520 -- -- 10,520 Film rights - noncurrent, net of accumulated amortization 16,182 -- -- 16,182 Equity investments in, and advances to, nonconsolidated affiliates 273,326 -- -- 273,326 Other assets 65,760 1,828 (1,828) 65,760 Other investments 27,343 2,960 (2,960) 27,343 ----------- ----------- ----------- ----------- TOTAL ASSETS $ 2,791,205 $ 285,353 $ 343,647 $ 3,420,205 =========== =========== =========== ===========
27 5
Clear Channel and Clear Channel Paxson Radio Pro Forma Paxson Radio Historical Historical Adjustment (1) Pro Forma ----------- ----------- ----------- ----------- LIABILITIES Current liabilities: Accounts payable $ 12,877 $ 3,272 $ (3,272) $ 12,877 Accrued interest 2,037 24 (24) 2,037 Accrued expenses 37,523 -- -- 37,523 Accrued income and other taxes 3,742 -- -- 3,742 Deferred income 1,380 -- -- 1,380 Current portion of long-term debt 13,067 160 (160) 13,067 Current portion of film rights liability 16,989 -- -- 16,989 Payable due to Paxson Corp. -- 22,911 (22,911) -- ----------- ----------- ----------- ----------- Total Current Liabilities 87,615 26,367 (26,367) 87,615 Long-term debt 897,588 275 628,725 1,526,588 Film rights liability 17,857 -- -- 17,857 Deferred income taxes 15,840 -- -- 15,840 Deferred income - long-term 10,075 -- -- 10,075 Other liabilities 43,241 -- -- 43,241 Minority interest 21,113 -- -- 21,113 Shareholders' equity: Preferred stock -- -- -- -- Common stock 9,809 -- -- 9,809 Additional paid-in capital 1,540,072 -- -- 1,540,072 Retained earnings 147,356 -- -- 147,356 Divisional equity -- 258,711 (258,711) -- Other 1,226 -- -- 1,226 Cost of shares held in treasury (587) -- -- (587) ----------- ----------- ----------- ----------- Total Shareholders' Equity 1,697,876 258,711 (258,711) 1,697,876 ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,791,205 $ 285,353 $ 343,647 $ 3,420,205 =========== =========== =========== ===========
28 6 CLEAR CHANNEL COMMUNICATIONS, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (In thousands, except per share data) Year ended December 31, 1996
Clear Channel Clear Channel Eller Media Pro Forma Eller Media Historical Historical Adjustment(2) Pro Forma --------- --------- -------- --------- Net revenue $ 351,739 $ 237,032 -- $ 588,771 Operating expenses 198,332 141,839 -- 340,171 Depreciation and amortization 45,790 40,269 23,895 109,954 Corporate general and admin expense 8,527 10,204 -- 18,731 --------- --------- -------- --------- Operating income (loss) 99,090 44,720 (23,895) 119,915 Interest expense 30,080 35,626 10,071 75,777 Other income (expense) 2,230 (6,721) -- (4,491) --------- --------- -------- --------- Income (loss) before income taxes 71,240 2,373 (33,966) 39,647 Income tax (expense) benefit (28,386) (977) 5,259 (24,104) --------- --------- -------- --------- Income (loss) before equity in net income (loss) of, and other income from, nonconsolidated affiliates 42,854 1,396 (28,707) 15,543 Equity in net income (loss) of, and other income from, nonconsolidated affiliates (5,158) -- -- (5,158) --------- --------- -------- --------- Income (loss) from continuing operations $ 37,696 $ 1,396 $(28,707) $ 10,385 ========= ========= ======== ========= Income (loss) from continuing operations per common share $ .50 $ .13 Weighted average common and common share equivalents outstanding 74,649 7,835 82,484 ========= ========= =========
Clear Channel, Eller Media and Paxson Radio Pro Forma Paxson Radio Historical Adjustment(4) Pro Forma --------- --------- --------- Net revenue $ 81,710 $ -- $ 670,481 Operating expenses 69,415 (1,782) 407,804 Depreciation and amortization 10,203 17,037 137,194 Corporate general and admin expense 5,155 -- 23,886 --------- --------- --------- Operating income (loss) (3,063) (15,255) 101,597 Interest expense 1,999 36,999 114,775 Other income (expense) 163 -- (4,328) --------- --------- --------- Income (loss) before income taxes (4,899) (52,254) (17,506) Income tax (expense) benefit -- 20,902 (3,202) --------- --------- --------- Income (loss) before equity in net income (loss) of, and other income from, nonconsolidated affiliates (4,899) (31,352) (20,708) Equity in net income (loss) of, and other income from, nonconsolidated affiliates -- -- (5,158) --------- --------- --------- Income (loss) from continuing operations $ (4,899) $ (31,352) $ (25,866) ========= ========= ========= Income (loss) from continuing operations per common share $ (.31) ========= Weighted average common and common share equivalents outstanding 82,484 =========
29 7 Nine Months ended September 30, 1997
Clear Channel Clear Channel Eller Media Pro Forma Eller Media Historical Historical Adjustment(3) Pro Forma --------- -------- -------- --------- Net revenue $ 469,176 $ 56,642 -- $ 525,818 Operating expenses 266,542 33,804 -- 300,346 Depreciation and amortization 80,216 10,547 $ 5,974 96,737 Corporate general and admin. expense 13,699 2,318 -- 16,017 --------- -------- -------- --------- Operating income (loss) 108,719 9,973 (5,974) 112,718 Interest expense 51,804 8,565 2,518 62,887 Other income (expense) 7,641 (4,082) -- 3,559 --------- -------- -------- --------- Income (loss) before income taxes 64,556 (2,674) (8,492) 53,390 Income tax (expense) benefit (31,642) (3) 1,315 (30,330) --------- -------- -------- --------- Income (loss) before equity in net income (loss) of,and other income from, nonconsolidated affiliates 32,914 (2,677) (7,177) 23,060 Equity in net income(loss) of, and other income from, nonconsol- idated affiliates 8,388 -- -- 8,388 --------- -------- -------- --------- Income (loss) from continuing operations $ 41,302 $ (2,677) $ (7,177) $ 31,448 ========= ======== ======== ========= Income (loss) from continuing operations per common share $ .47 $ .35 ========= ========= Weighted average common and common share equivalents outstanding 87,564 3,303 90,867 ========= ======== ========
Clear Channel Eller Media and Paxson Radio Pro Forma Paxson Radio Historical Adjustment(5) Pro Forma -------- -------- --------- Net revenue $ 78,104 $ -- $ 603,922 Operating expenses 63,362 (1,246) 362,462 Depreciation and amortization 12,101 9,377 118,215 Corporate general and admin. expense 4,059 -- 20,076 -------- -------- --------- Operating income (loss) (1,418) (8,131) 103,169 Interest expense 1,370 29,276 93,533 Other income (expense) (1,034) -- 2,525 -------- -------- --------- Income (loss) before income taxes (3,822) (37,407) 12,161 Income tax (expense) benefit -- 14,963 (15,367) -------- -------- --------- Income (loss) before equity in net income (loss) of,and other income from, nonconsolidated affiliates (3,822) (22,444) (3,206) Equity in net income(loss) of, and other income from, nonconsol- idated affiliates -- -- 8,388 -------- -------- --------- Income (loss) from continuing operations $ (3,822) $(22,444) $ 5,182 ======== ======== ========= Income (loss) from continuing operations per common share $ .06 ========= Weighted average common and common share equivalents outstanding 90,867 =========
30 8 CLEAR CHANNEL NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (1) Represents the pro forma effect of the acquisition of Paxson Radio. Adjustments to reflect the application of the purchase method of accounting and the payment of the related consideration as if the acquisition had been consummated September 30, 1997 are as follows:
Increase (Decrease) ---------- Other current assets $ (1,356) Licenses and goodwill 317,149 Accumulated amortization 32,642 Other assets (1,828) Other investments (2,960) Accounts payable (3,272) Accrued interest (24) Current portion of long-term debt (160) Payable due to Paxson Corp. (22,911) Long-term debt 628,725 Divisional equity (258,711)
31 9 CLEAR CHANNEL NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ELLER MEDIA ACQUISITION YEAR ENDED DECEMBER 31, 1996 (2) Represents the pro forma effect of the acquisition of Eller Media assuming it was acquired January 1, 1996.
Increase (Decrease) Income (in Thousands) ------------- (a) Increase in amortization of goodwill of $20,818 resulting from the additional goodwill created by the acquisition and a decrease in amortizable life from 40 years (Eller Media) to 25 years (Clear Channel) and additional depreciation of $3,077 related to the adjustment of fixed assets to fair value. $(23,895) (b) Increase in interest expense due to a higher amount of average debt outstanding which was partially offset by a lower average interest rate (6.2% average rate for Clear Channel and 8.8% for Eller Media in 1996). (10,071) (c) Tax effect of the above adjustments to depreciation and interest expense at Clear Channel's effective tax rate of 40% 5,259 (d) Increase in weighted average common and common share equivalents outstanding resulting from the issuance of shares of Clear Channel's common stock and the issuance of options to purchase shares of Clear Channel's common stock to shareholders of Eller Media to effect the acquisition. 7,835
Clear Channel granted to the former Eller Media stockholders certain demand and piggyback registration rights relating to the shares of common stock received by them. The holders of the approximately 7% of the outstanding capital stock of Eller Media, not purchased by Clear Channel, have the right to put such stock to Clear Channel for 1,081,469 shares of Clear Channel's common stock until April 10, 2002. From and after April 10, 2004, Clear Channel will have the right to call in this minority interest stake in Eller Media for 1,081,469 shares of its common stock. If such right would have been exercised on April 10, 1997, Clear Channel would have issued additional shares of its common stock with an aggregate value of $48.5 million (assuming a price of $44.8625 per share) and recorded a corresponding increase in goodwill. The annual amortization of goodwill associated therewith would decrease Clear Channel's net income by $1.9 million or $.02 per share; however such would have no effect on after tax cash flow. A $1 per share change in the market price of Clear Channel's common stock would cause a $1.1 million change in goodwill. The pro forma statement of operations excludes the effect of nonrecurring charges related to the acquisition. 32 10 NINE MONTHS ENDED SEPTEMBER 30, 1997 (3) 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 goodwill created by the acquisition and a decrease in amortizable life from 40 years (Eller Media) to 25 years (Clear Channel) and additional depreciation of $769 related to the adjustment of fixed assets to fair value. $(5,974) (b) Increase in interest expense due to a higher amount of average debt outstanding which was partially offset by a lower average interest rate (6% average rate for Clear Channel and 8.8% for Eller Media during the first three months of 1997). (2,518) (c) Tax effect of the above adjustments to depreciation and interest expense at Clear Channel's effective tax rate of 40% 1,315 (d) Increase in weighted average common and common share equivalents outstanding resulting from the issuance of shares of Clear Channel's common stock and the issuance of options to purchase shares of Clear Channel's common stock to shareholders of Eller Media to effect the acquisition. 3,303
PAXSON RADIO ACQUISITION YEAR ENDED DECEMBER 31, 1996 (4) Represents the pro forma effect of the acquisition of Paxson Radio assuming it was acquired January 1, 1996
Increase (Decrease) Income (in Thousands) ------------ (a) Elimination of option plan compensation expense resulting from the elimination of the plan. 1,782 (b) Increase in amortization expense resulting from the additional goodwill created by the acquisition. $(17,037) (c) Increase in interest expense (at an average interest rate of 6.2% in 1996) due to additional borrowing on the Company's credit facility to finance the acquisition cost. (36,999) (d) Tax effect of the above adjustments at the Company's effective tax rate of 40% 18,840 (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, 1996 includes $5,155, $3,093 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.
NINE MONTHS ENDED SEPTEMBER 30, 1997 (5) Represents the pro forma effect of the acquisition of Paxson assuming it was acquired January 1, 1997
Increase (Decrease) Income (in Thousands) ------------ (a) Elimination of option plan compensation expense resulting from the elimination of the plan. 1,246 (b) Increase in amortization expense resulting from the additional goodwill created by the acquisition. $(9,377) (c) Increase in interest expense (at an average interest rate of 6.5% for the first nine months of 1997) due to additional borrowing on the Company's credit facility to finance the acquisition cost. (29,276) (d) Tax effect of the above adjustments at the Company's 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 nine months ended September 30, 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.
33 11 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-----