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Delaware | 4832 | 20-4530834 | ||
Delaware | 4832 | 20-4531045 | ||
(State or other jurisdiction of incorporation or organization) 7929 | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||
Title of Each Class of | Amount to be | Offering | Aggregate | Registration | ||||||||
Securities to be Registered | Registered | Price per Unit | Offering Price | Fee | ||||||||
97/8% Senior Subordinated Notes due 2014 of CMP Susquehanna Corp. | $250,000,000 | 100%(1) | $250,000,000(1) | $7,675(2) | ||||||||
Guarantees of 97/8% Senior Subordinated Notes due 2014(3) | (4) | (4) | (4) | (4) | ||||||||
(1) | Estimated solely for the purpose of calculating the registration fee under Rule 457 of the Securities Act of 1933, as amended. | |
(2) | The registration fee for the securities offered hereby has been calculated under Rule 457(f)(2) of the Securities Act of 1933, as amended. | |
(3) | See inside facing page for table of additional registrant guarantors. | |
(4) | Pursuant to Rule 457(n) under the Securities Act of 1933, as amended, no separate fee for the guarantees is payable. |
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Address, Including Zip Code and | ||||||||
State of | IRS Employer | Telephone Number, Including Area | ||||||
Exact Name of Registrant as | Incorporation or | Identification | Code of Registrant’s Principal | |||||
Specified in its Charter | Organization | Number | Executive Offices | Phone Number | ||||
CMP KC Corp. | Delaware | 20-4531244 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
CMP Houston-KC, LLC | Delaware | 20-3779032 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Susquehanna Pfaltzgraff Co. | Delaware | 23-1139608 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Susquehanna Media Co. | Delaware | 23-2722964 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Susquehanna Radio Corp. | Pennsylvania | 23-2381976 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Susquehanna Radio Services, Inc. | Pennsylvania | 02-0544269 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Sunnyside Communications, Inc. | Indiana | 35-1518442 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
WSBA Lico, Inc. | Nevada | 88-0379285 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Radio San Francisco, Inc. | California | 23-2265690 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
WVAE Lico, Inc. | Nevada | 23-2937065 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Susquehanna License Co., LLC | Pennsylvania | 56-2324614 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
WNNX Lico, Inc. | Nevada | 23-2937105 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Radio Metroplex, Inc. | Nevada | 23-2868556 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Radio Cincinnati, Inc. | Ohio | 31-0810263 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KRBE Broadcasting, Inc. | Nevada | 88-0473024 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Radio Indianapolis, Inc. | Indiana | 23-1882077 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Bay Area Radio Corp. | Delaware | 23-2605614 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Indianapolis Radio License Co. | Indiana | 23-2732077 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KLIF Broadcasting, Inc. | Nevada | 23-2877208 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Texas Star Radio, Inc. | Texas | 75-2555002 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
S.C.I. Broadcasting, Inc. | Indiana | 35-1776674 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KFFG Lico, Inc. | Nevada | 23-2937060 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KPLX Lico, Inc. | Nevada | 23-2868552 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KPLX Limited Partnership | Texas | 23-2877202 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KPLX Radio, Inc. | Texas | 23-2869611 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
WRRM Lico, Inc. | Nevada | 52-2149473 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 |
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Address, Including Zip Code and | ||||||||
State of | IRS Employer | Telephone Number, Including Area | ||||||
Exact Name of Registrant as | Incorporation or | Identification | Code of Registrant’s Principal | |||||
Specified in its Charter | Organization | Number | Executive Offices | Phone Number | ||||
WFMS Lico, Inc. | Nevada | 52-2149467 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KNBR, Inc. | Delaware | 23-2563449 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
Indy Lico, Inc. | Nevada | 52-2149477 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KRBE Lico, Inc. | Nevada | 23-2937063 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KNBR Lico, Inc. | Nevada | 88-0379287 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KLIF Lico, Inc. | Nevada | 23-2877199 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KLIF Radio, Inc. | Texas | 23-2877204 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KRBE Limited Partnership | Texas | 23-3055696 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KRBE Radio, Inc. | Texas | 88-0473024 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 | ||||
KLIF Broadcasting Limited Partnership | Texas | 23-2877226 | 14 Piedmont Center, Suite 1400 Atlanta, Georgia 30305 | (404) 949-0700 |
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Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. |
which have been registered under the Securities Act of 1933, for any and all
outstanding 97/8% Senior Subordinated Notes due 2014
• | We will exchange all outstanding notes that are validly tendered and not validly withdrawn for an equal principal amount of exchange notes that are freely tradable. | |
• | You may withdraw tenders of outstanding notes at any time prior to the expiration date of the exchange offer. | |
• | The exchange offer expires at 12:00 a.m. midnight, New York City time, on [ • ], 2007, unless extended. | |
• | The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes. | |
• | The terms of the exchange notes to be issued in the exchange offer are substantially identical to the outstanding notes, except that the exchange notes will be freely tradable. |
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• | The terms “we,” “our,” and “us” refer to CMP Susquehanna Corp. (“CMP”), the entity that acquired all of the capital stock of Susquehanna Pfaltzgraff Co. (“SPC”) in connection with the transactions described under “The Transactions,” and its consolidated subsidiaries. When the context so requires, we use these terms to refer to the historical radio broadcasting businesses of SPC and its subsidiaries that were acquired in those transactions for the periods prior to the consummation of those transactions. SPC is also referred to as “Predecessor” in the Consolidated Financial Statements and Notes thereto contained in this prospectus. | |
• | The term “Radio Holdings” refers to CMP Susquehanna Radio Holdings Corp., the direct owner of 100% of CMP’s capital stock, and its consolidated subsidiaries. | |
• | The term “Holdings” refers to CMP Susquehanna Holdings Corp., the direct owner of 100% of Radio Holdings’ capital stock and an indirect parent of CMP. | |
• | The term “market rank by revenue” means the ranking of the market revenue of the principal radio market served by a station among all radio markets in the United States. | |
• | The term “cluster rank by revenue” means the ranking of our revenues among all other radio operators in a given market. | |
• | The term “station rank by format” means the ranking of a specific station relative to other stations operating in that format in that market. | |
• | The term “EBI” refers to effective buying income, which means after-tax disposable income. |
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• | our substantial indebtedness; | |
• | our ability to service our outstanding indebtedness and the impact such indebtedness may have on the way we operate our businesses; | |
• | interest rate movements; | |
• | general economic and business conditions, both nationally and in our markets; | |
• | expectations and estimates concerning future financial performance; | |
• | acquisition opportunities and our ability to successfully integrate acquired businesses, properties or other assets and realize anticipated benefits of such acquisitions; | |
• | financing plans and access to adequate capital on favorable terms; | |
• | the impact of competition from other radio stations, media forms and communication service providers; | |
• | the impact of existing and future regulations affecting our businesses, including radio licensing and ownership rules; | |
• | increases in programming costs; | |
• | the accuracy of our predictions of anticipated trends in our businesses; | |
• | advances in technology and our ability to adapt to and capitalize on such advances; | |
• | decreases in our customers’ advertising expenditures; and | |
• | our ability to achieve anticipated cost savings. |
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Market | Cluster | Station | ||||||||||||||
Rank by | Rank by | Audience | Target | |||||||||||||
Markets and Stations | Revenue | Revenue | Format | Share(1) | Demographic | |||||||||||
San Francisco, CA | 4 | 3 | ||||||||||||||
KFOG-FM/KFFG-FM(2) “KFOG” | Adult Alternative / Classic Rock | 2.8 | Adults 25-54 | |||||||||||||
KNBR-AM/KTCT-AM(3) | ||||||||||||||||
“KNBR” | Sports | 2.9 | Men 25-54 | |||||||||||||
KSAN-FM “The Bone” | Rock | 2.3 | Adults 25-54 | |||||||||||||
Dallas/Ft. Worth, TX | 5 | 3 | ||||||||||||||
KDBN-FM “The Bone” | Album Oriented Rock / Classic Rock | 1.5 | Adults 25-54 | |||||||||||||
KLIF-AM/KKLF-AM(2) | News/Talk/Sports | 1.5 | Adults 35-64 | |||||||||||||
KPLX-FM “The Wolf” | Country | 4.5 | Adults 25-54 | |||||||||||||
KTCK-AM/KTDK-FM(2) “The Ticket” | Sports | 2.1 | Men 25-54 | |||||||||||||
Atlanta, GA | 6 | 7 | ||||||||||||||
WNNX-FM “99x” | Rock | 2.0 | Adults 18-34 | |||||||||||||
WWWQ-FM “Q100” | Contemporary Hit Radio / Top 40 | 1.6 | Women 18-34 | |||||||||||||
Houston, TX | 8 | 6 | ||||||||||||||
KRBE-FM | Contemporary Hit Radio / Top 40 | 3.8 | Women 18-34 | |||||||||||||
Cincinnati, OH | 23 | 3 | ||||||||||||||
WGRR | Oldies | 3.7 | Adults 25-54 | |||||||||||||
WRRM-FM “Warm 98” | Adult Contemporary | 6.2 | Women 25-54 | |||||||||||||
WFTK | FM Talk | 0.8 | Adults 25-54 | |||||||||||||
Kansas City, MO | 31 | 3 | ||||||||||||||
KCFX-FM “The Fox” | Album Oriented Rock / Classic Rock | 4.4 | Adults 25-54 | |||||||||||||
KCJK-FM“JACK-FM” | Adult Contemporary | 2.8 | Adults 25-54 | |||||||||||||
KCMO-AM | News/Talk/Sports | 2.3 | Adults 35-64 | |||||||||||||
KCMO-FM | Oldies | 4.8 | Adults 25-54 | |||||||||||||
Indianapolis, IN | 33 | 3 | ||||||||||||||
WFMS-FM | Country | 9.6 | Adults 25-54 | |||||||||||||
WJJK-FM“JACK-FM” | Adult Contemporary | 3.8 | Adults 25-54 | |||||||||||||
WISG-FM “The Song” | Religion | 2.7 | Adults 25-54 | |||||||||||||
York, PA(4) | 125 | 1 | ||||||||||||||
WARM-FM “WARM 103” | Adult Contemporary | 6.6 | Women 25-54 | |||||||||||||
WSOX-FM “Oldies96.1”/WGLD-AM(2) | Oldies | 5.9 | Adults 35-64 | |||||||||||||
WSBA-AM | News/Talk/Sports | 4.4 | Adults 35-64 |
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(1) | “Station Audience Share” represents a percentage generally computed by dividing the average number of persons over 12 listening to a particular station during specified time periods by the average number of such persons for all stations in the market area as determined by Arbitron. | |
(2) | These stations are simulcast. For station audience share purposes, we aggregate the simulcast stations, and for station ranking purposes, we show the higher-rated station’s rank. | |
(3) | These stations are partially simulcast and co-branded under the name “KNBR,” and have been treated as simulcast for the purposes of this table. | |
(4) | These stations also reach Lancaster, PA. |
• | Focus on Clusters in Large Markets. We believe that large markets provide an attractive combination of scale, stability and opportunity for future growth. We have followed a focused strategy of operating sizeable clusters of stations within our markets, and we manage a large share of the radio advertising within each market. This market position allows us to offer advertisers more attractive advertising packages targeted towards more specific audiences. In addition, the ability to share human resources, information technology, engineering, legal, marketing and other costs across cluster stations helps to improve our Station Operating Income margins. | |
• | Improve Operating Performance Using Cumulus’sBest-in-Class Practices. Our indirect parent, Holdings, has entered into a management agreement with Cumulus, the second largest radio company in the United States based on number of stations owned or operated. Cumulus has been recognized as having one of the top management teams in the radio industry. The Chairman and Chief Executive Officer of Cumulus, Lewis W. Dickey, Jr., is our Chairman, President and Chief Executive Officer. Mr. Dickey was named “Best Radio & TV Broadcasting CEO” by Institutional Investor (January 2005). Among the reasons identified for this recognition were Mr. Dickey’s record for reducing Cumulus’s debt and improving its free cash flow while still acquiring operationally critical assets. We believe that the combination ofbest-in-class business practices from Cumulus’s management team together with the enhanced purchasing power, scale and supplier relationships that results from the common management of the portfolios of Cumulus and our company helps us drive local sales growth and operating efficiencies and improve Station Operating Income margins. |
• | Drive Local Sales Growth. We are implementingbest-in-class business practices of Cumulus to drive local sales growth at each of our stations. Our sales strategy includes expanding our local sales forces, employing a tiered commission structure to focus individual sales staffs on new business development as distinct from existing accounts, and implementing new inventory and account management systems to enhance the overall productivity of our local sales forces. We believe that this strategy provides a higher level of service to our existing customer base and expands our base of advertisers, which enables us to outperform the traditional growth rates of our markets. Cumulus has successfully employed a similar strategy with its sales force driving industry-leading local sales growth in recent years. | |
• | Drive Operating Efficiencies. Following the Acquisition, we centralized a significant portion of operations, including programming, that had historically been decentralized. Mr. Dickey and his management team intend to continue to identify specific opportunities to reduce operating costs at each of our stations, across general and administrative, technical, programming, sales and promotions areas. |
• | Employ Market Research and Targeted Programming. We seek to maximize station operating performance through market research and targeted programming. We maintain and regularly update extensive listener databases that provide valuable insight into our listener base. We also retain consultants and research organizations to continually evaluate listeners’ preferences and use information gathered from |
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these sources to optimize our programming and marketing strategies. These strategies have included format changes and utilization of customized marketing campaigns to expand our listener base. We believe these strategies have contributed to the strong ratings and market positions of our stations. We believe the combination of our existing local market research abilities with the scale of Cumulus’s in-house market research allows us to maximize our future station operating performance. |
• | Continue to Build Strong Relationships with Listeners and Advertisers. We are focused on developing and maintaining strong relationships with both our listener and advertiser bases in our stations’ communities. Our stations maintain close relationships with our listeners viae-mail event notification and weekly/biweekly station newsletters made possible by maintaining extensive listener databases. In addition, our stations host numerous high-profile community service events, concerts and listener promotions each year. These relationships with our listeners allow us to offer value-added marketing services to our advertiser base, including contacting listeners via targeted marketing campaigns. | |
• | Maintain Balanced Advertising Load. We closely manage our on-air inventory to maximize revenue without jeopardizing listening levels and resulting ratings. We believe that our stations maintain lower inventory levels than our competitors in many of the markets we serve. Our stations generally respond to demand for on-air inventory by varying pricing rather than varying target inventory levels. We believe that this strategy supports long-term positive ratings trends and stable revenue growth. | |
• | Pursue Focused Portfolio Development. Our portfolio development strategy has been focused on clustering radio stations in our existing markets and making opportunistic acquisitions in new markets in which we believe we can cost-effectively achieve a leading position in terms of audience and revenue share. We may also pursue strategic alternatives, such as asset swaps, to diversify or strengthen our portfolio of stations. In evaluating potential new stations, we assess the strategic fit of the station with our existing clusters of radio stations. When entering a new market, we would typically seek to acquire a “platform” upon which to expand our portfolio of stations and build a leading cluster of stations. We believe our ability to further develop our portfolio has been enhanced by our association with Cumulus, which we believe has a long history of successfully identifying and integrating acquisitions and asset swaps. |
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General | In connection with the private offering, we entered into a registration rights agreement with the initial purchasers of the outstanding notes in which we and the guarantors agreed, among other things, to deliver this prospectus to you and to use our reasonable best efforts to complete the exchange offer for the outstanding notes within 360 days after the date of issuance of the outstanding notes, subject to certain terms and conditions as described under “Exchange Offer; Registration Rights.” | |
You are entitled to exchange in the exchange offer your outstanding notes for exchange notes, which are identical in all material respects to the outstanding notes except: | ||
• the exchange notes have been registered under the Securities Act of 1933, as amended, which we refer to as the “Securities Act”; | ||
• the exchange notes are not entitled to certain registration rights that are applicable to the outstanding notes under the registration rights agreement; and | ||
• certain additional interest rate provisions are no longer applicable. | ||
The Exchange Offer | We are offering to exchange up to $250,000,000 aggregate principal amount of our 97/8% Senior Subordinated Notes due 2014, which have been registered under the Securities Act, for a like aggregate principal amount of the outstanding 97/8% Senior Subordinated Notes due 2014. | |
Subject to the satisfaction or waiver of specified conditions, we will exchange the exchange notes for all outstanding notes that are validly tendered and not validly withdrawn prior to the expiration of the exchange offer. We will cause the exchange to be effected promptly after the expiration of the exchange offer. | ||
Upon completion of the exchange offer, there may be no market for the outstanding notes and you may have difficulty selling them. |
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Resales | Based on interpretations by the staff of the Securities and Exchange Commission, or the “SEC,” set forth in no-action letters issued to third parties referred to below, we believe that you may resell or otherwise transfer exchange notes issued in the exchange offer without complying with the registration and prospectus delivery requirements of the Securities Act, if: | |
(1) you are acquiring the exchange notes in the ordinary course of your business; | ||
(2) you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes; | ||
(3) you are not one of our “affiliates” within the meaning of Rule 405 under the Securities Act; and | ||
(4) you are not engaged in, and do not intend to engage in, a distribution of the exchange notes. | ||
If you are not acquiring the exchange notes in the ordinary course of your business, or if you are engaging in, intend to engage in, or have any arrangement or understanding with any person to participate in, a distribution of the exchange notes, or if you are one of our affiliates, then: | ||
(1) you cannot rely on the position of the staff of the SEC enunciated inMorgan Stanley & Co., Inc. (available June 5, 1991),Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter toShearman & Sterlingdated July 2, 1993, or similar no-action letters; and | ||
(2) in the absence of an exception from the position of the SEC stated in (1) above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale or other transfer of the exchange notes. | ||
If you are a broker-dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making or other trading activities, you must acknowledge that you will deliver a prospectus, as required by law, in connection with any resale or other transfer of the exchange notes that you receive in the exchange offer. See “Plan of Distribution.” | ||
Expiration Date | The exchange offer will expire at 12:00 a.m. midnight, New York City time, on [ • ], 2007, unless we extend it. We do not currently intend to extend the expiration date of the exchange offer. | |
Withdrawal | You may withdraw the tender of your outstanding notes at any time prior to the expiration date of the exchange offer. We will return to you any of your outstanding notes that are not accepted for any reason for exchange, without expense to you, promptly after the expiration or termination of the exchange offer. | |
Interest on the Exchange Notes and the Outstanding Notes | Each exchange note will bear interest at 97/8% per year from the most recent date to which interest has been paid on the outstanding notes, or, if no interest has been paid on the outstanding notes, |
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from and including May 5, 2006. The interest will be payable semi-annually on each May 15 and November 15, beginning November 15, 2006. No interest will be paid on outstanding notes following their acceptance for exchange. As a result of the exchange offer not having been consummated by April 30, 2007, additional interest began to accrue on the outstanding notes on May 1, 2007, as described under “The Exchange Offer.” | ||
Conditions to the Exchange Offer | The exchange offer is subject to customary conditions, which we may assert or waive. See “The Exchange Offer — Conditions to the Exchange Offer.” | |
Procedures for Tendering Outstanding Notes | If you wish to participate in the exchange offer, you must complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter of transmittal, according to the instructions contained in this prospectus and the letter of transmittal. You must then mail or otherwise deliver the letter of transmittal, or a facsimile of the letter of transmittal, together with the outstanding notes and any other required documents, to the exchange agent at the address set forth on the cover page of the letter of transmittal. If you hold outstanding notes through The Depository Trust Company, or “DTC,” and wish to participate in the exchange offer, you must comply with the Automated Tender Offer Program procedures of DTC, by which you will agree to be bound by the letter of transmittal. By signing, or agreeing to be bound by, the letter of transmittal, you will represent to us that, among other things: | |
(1) you are acquiring the exchange notes in the ordinary course of your business; | ||
(2) you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes; | ||
(3) you are not an “affiliate” of CMP within the meaning of Rule 405 under the Securities Act; and | ||
(4) you are not engaged in, and do not intend to engage in, a distribution of the exchange notes. | ||
If you are a broker-dealer and receive exchange notes for your own account in exchange for outstanding notes that you acquired as a result of market-making or other trading activities, you must represent to us that you will deliver a prospectus, as required by law, in connection with any resale or other transfer of such exchange notes. | ||
If you are not acquiring the exchange notes in the ordinary course of your business, or if you are engaged in, or intend to engage in, or have an arrangement or understanding with any person to participate in, a distribution of the exchange notes, or if you are one of our affiliates, then you cannot rely on the applicable positions and interpretations of the staff of the SEC and you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale or other transfer of the exchange notes. |
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Special Procedures for Beneficial Owners | If you are a beneficial owner of outstanding notes that are held in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender those outstanding notes in the exchange offer, you should contact such person promptly and instruct such person to tender those outstanding notes on your behalf. | |
Guaranteed Delivery Procedures | If you wish to tender your outstanding notes and your outstanding notes are not immediately available or you cannot deliver your outstanding notes, the letter of transmittal and any other documents required by the letter of transmittal or you cannot comply with the DTC procedures for book-entry transfer prior to the expiration date, then you must tender your outstanding notes according to the guaranteed delivery procedures set forth in this prospectus under “The Exchange Offer — Guaranteed Delivery Procedures.” | |
Effect on Holders of Outstanding | By making the exchange offer, we will have fulfilled most of our obligations under the registration rights agreement. Accordingly, we will not be obligated to pay additional interest as described in the registration rights agreement. If you do not tender your outstanding notes in the exchange offer, you will continue to be entitled to all the rights and limitations applicable to the outstanding notes as set forth in the indenture, except we will not have any further obligation to you to provide for the registration of the outstanding notes under the registration rights agreement and we will not be obligated to pay additional interest as described in the registration rights agreement, except in certain limited circumstances. See “Exchange Offer; Registration Rights.” To the extent that outstanding notes are tendered and accepted in the exchange offer, the trading market for outstanding notes could be adversely affected. | |
Consequences of Failure to Exchange | All untendered outstanding notes will continue to be subject to the restrictions on transfer set forth in the outstanding notes and in the indenture. In general, the outstanding notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will register the outstanding notes under the Securities Act. | |
Material Income Tax Considerations | The exchange of outstanding notes for exchange notes in the exchange offer will not be a taxable event for United Stated federal income tax purposes. See “Material U.S. Income Tax Considerations.” | |
Use of Proceeds | We will not receive any cash proceeds from the issuance of exchange notes in the exchange offer. | |
Exchange Agent | Wells Fargo Bank, N.A., whose addresses and telephone numbers are set forth in the section captioned “The Exchange Offer — Exchange Agent” of this prospectus, is the exchange agent for the exchange offer. | |
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Issuer | CMP Susquehanna Corp. | |
Notes offered | $250,000,000 aggregate principal amount of 97/8% Senior Subordinated Notes due 2014. | |
Maturity | May 15, 2014. | |
Interest payment dates | May 15 and November 15, beginning on November 15, 2006. | |
Guarantees | Radio Holdings and each of our existing and future domestic subsidiaries that guarantee our senior secured credit facilities, jointly and severally unconditionally guarantee the notes on an unsecured senior subordinated basis. | |
Ranking | The outstanding notes are, and the exchange notes will be, our unsecured senior subordinated obligations and: | |
• are subordinated in right of payment to our existing and future senior debt, including its senior secured credit facilities; | ||
• are effectively subordinated in right of payment to all of our existing and future secured debt (including its senior secured credit facilities), to the extent of the value of the assets securing such debt; | ||
• are structurally subordinated to all obligations of each of our future subsidiaries that is not a guarantor of the notes; | ||
• rank equally in right of payment to all of our future senior subordinated debt; and | ||
• rank senior in right of payment to all of our future debt and other obligations that are, by their terms, expressly subordinated in right of payment to the notes. | ||
Similarly, the guarantees are unsecured senior subordinated obligations of the guarantors and: | ||
• are subordinated in right of payment to all of the applicable guarantor’s existing and future senior debt, including such guarantor’s guarantee under our senior secured credit facilities; | ||
• are effectively subordinated in right of payment to all of the applicable guarantor’s existing and future secured debt (including |
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such guarantor’s guarantee under our senior secured credit facilities), to the extent of the value of the assets securing such debt; | ||
• are structurally subordinated to all obligations of any subsidiary of a guarantor if that subsidiary is not also a guarantor of the notes; | ||
• rank equally in right of payment to all of the applicable guarantor’s future senior subordinated debt; and | ||
• rank senior in right of payment to all of the applicable guarantor’s future subordinated debt and other obligations that are, by their terms, expressly subordinated in right of payment to the notes. | ||
As of March 31, 2007, we and our guarantors had $669.8 million of senior indebtedness, all of which was indebtedness under our senior secured credit facilities to which the notes and the related guarantees are subordinated, and no senior subordinated indebtedness other than the notes and the related guarantees. | ||
Optional redemption | We may redeem some or all of the notes prior to May 15, 2010 for cash at a redemption price equal to 100% of their principal amount plus a “make-whole” premium (as described in “Description of the Notes — Optional Redemption”), plus accrued and unpaid interest to the redemption date. We may redeem some or all of the notes at any time on or after May 15, 2010 at the redemption prices set forth under “Description of the Notes — Optional Redemption” plus accrued and unpaid interest on the notes to the date of redemption. | |
Optional redemption after certain equity offerings | On or before May 15, 2009, we may redeem up to 35% of the aggregate principal amount of the notes with the net proceeds of one or more equity offerings at 109.875% of the principal amount of the notes, plus accrued and unpaid interest, if at least 65% of the aggregate principal amount of the notes originally issued remains outstanding after such redemption. See “Description of the Notes — Optional Redemption.” | |
Change of control offer | Upon the occurrence of a change of control, you will have the right, as holders of the notes, to require us to repurchase some or all of your notes at 101% of their face amount, plus accrued and unpaid interest to the repurchase date. See “Description of the Notes — Repurchase at the Option of Holders — Change of Control.” | |
We may not be able to pay you the required price for the notes you present to us at the time of a change of control because we may not have enough funds at that time or terms of our senior debt may prevent us from making such payment. | ||
Certain indenture provisions | The indenture governing the notes contains covenants limiting our ability and the ability of our restricted subsidiaries to: | |
• incur additional debt or issue certain preferred shares; |
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• pay dividends on or make distributions in respect of our capital stock or make other restricted payments; | ||
• make certain investments; | ||
• sell certain assets; | ||
• create liens on certain assets to secure debt; | ||
• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; | ||
• enter into certain transactions with our affiliates; and | ||
• designate our subsidiaries as unrestricted subsidiaries. | ||
These covenants are subject to a number of important limitations and exceptions. See “Description of the Notes.” | ||
Certain Indenture Provisions | The indenture governing the notes contains covenants limiting our ability and the ability of most or all of our subsidiaries to: | |
• incur additional debt or issue certain preferred shares; | ||
• pay dividends on or make distributions in respect of our capital stock or make other restricted payments; | ||
• make certain investments; sell certain assets; | ||
• create liens on certain debt without securing the notes; | ||
• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; | ||
• enter into certain transactions with our affiliates; and | ||
• designate our subsidiaries as unrestricted subsidiaries. | ||
These covenants are subject to a number of important limitations and exceptions. See “Description of Notes.” | ||
Absence of Public Market | The exchange notes will generally be freely transferable (subject to certain restrictions discussed in “Exchange Offers; Registration Rights”) but will be a new issue of securities for which there will not initially be a market. Accordingly, there can be no assurance as to the development or liquidity of any market for the exchange notes. The initial purchasers in the private offering of the outstanding notes have advised us that they currently intend to make a market for the exchange notes, as permitted by applicable laws and regulations. However, they are not obligated to do so and may discontinue any such market making activities at any time without notice. | |
Listing | We do not intend to apply for a listing of the exchange notes on any securities exchange or automated dealer quotation system. | |
Use of Proceeds | We will not receive any cash proceeds from the exchange offer. For a description of the use of proceeds from the private offering of the outstanding notes, see “Use of Proceeds.” | |
Risk Factors | See “Risk Factors” for a description of some of the risks you should consider before deciding to participate in the exchange offer. |
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CONSOLIDATED FINANCIAL AND OTHER DATA
• | the Acquisition; | |
• | interest expense for the issuance of $250 million of the notes; | |
• | interest expense for the borrowings of $700 million of term loans under our senior secured credit facilities; | |
• | the elimination of certain corporate level general and administrative expenses; | |
• | the elimination of minority interests, the impact of the SPC tax-sharing agreement and certain other liabilities retained by the selling stockholders of SPC; and | |
• | elimination of certain interest expense due to the repayment of SPC’s then-existing indebtedness. |
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(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
SPC | Radio Holdings | SPC | Radio Holdings | ||||||||||||||||||||||||||||||||
January 1, 2006 | May 5, 2006 to | Pro Forma Year | Three Months | Three Months | |||||||||||||||||||||||||||||||
Year Ended December 31, | to May 4, | December 31, | Ended | Ended March 31, | Ended March 31, | ||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2006 | December 31, 2006 | 2006 | 2007 | ||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||||||||||||||||
Net revenues | $ | 228,966 | $ | 231,058 | $ | 231,587 | $ | 65,987 | $ | 156,704 | $ | 223,109 | $ | 49,211 | $ | 46,667 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||||
Station operating expense excluding depreciation and amortization and including non-cash contract termination costs of $6,723 for the period May 5, 2006 through December 31, 2006 | 147,748 | 147,608 | 152,542 | 49,510 | 92,660 | 139,190 | 31,771 | 26,813 | |||||||||||||||||||||||||||
Corporate general and administrative expenses(1) | 17,917 | 20,297 | 24,708 | 31,029 | 4,106 | 7,425 | 6,254 | 1,683 | |||||||||||||||||||||||||||
Depreciation and amortization, including pre-sold advertising amortization of $23,023 for the period May 5, 2006 through December 31, 2006(2) | 7,691 | 7,759 | 7,401 | 2,421 | 30,963 | 35,508 | 1,790 | 2,834 | |||||||||||||||||||||||||||
Gain on sale of assets(3) | — | (10,151 | ) | (300 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Costs related to sale of business, principally advisory fees | — | — | — | 14,513 | — | — | — | — | |||||||||||||||||||||||||||
Total operating expenses | 173,356 | 165,513 | 184,351 | 97,473 | 127,729 | 182,123 | 39,815 | 31,330 | |||||||||||||||||||||||||||
Operating income (loss) from continuing operations | 55,610 | 65,545 | 47,236 | (31,486 | ) | 28,975 | 40,986 | 9,396 | 15,337 | ||||||||||||||||||||||||||
Non-operating income (expense) from continuing operations: | |||||||||||||||||||||||||||||||||||
Interest expense, net(4) | (18,820 | ) | (19,841 | ) | (17,141 | ) | (4,638 | ) | (54,061 | ) | (80,369 | ) | (4,466 | ) | (19,508 | ) | |||||||||||||||||||
Loss on early extinguishment of debt(5) | — | (3,024 | ) | — | (6,492 | ) | — | — | (6,492 | ) | — | ||||||||||||||||||||||||
Other income (expense) | (168 | ) | 261 | — | — | (1,702 | ) | (27 | ) | 225 | (9 | ) | |||||||||||||||||||||||
Income (loss) from continuing operations before income taxes and minority interest | 36,622 | 42,941 | 30,095 | (42,616 | ) | (26,788 | ) | (39,410 | ) | (1,337 | ) | (4,180 | ) | ||||||||||||||||||||||
Provision (benefit) for income taxes | (15,591 | ) | 17,543 | 4,541 | (16,640 | ) | (8,185 | ) | (12,040 | ) | 109 | (1,856 | ) | ||||||||||||||||||||||
Minority interest (loss)(6) | (4,869 | ) | (8,507 | ) | 1,795 | (1,368 | ) | — | — | (471 | ) | — | |||||||||||||||||||||||
Earnings (loss) from continuing operations | $ | 16,162 | $ | 16,891 | $ | 27,349 | $ | (27,344 | ) | $ | (18,603 | ) | $ | (27,370 | ) | (1,917 | ) | (2,324 | ) | ||||||||||||||||
Other Financial Data: | |||||||||||||||||||||||||||||||||||
Station Operating Income(7) | $ | 81,218 | $ | 83,450 | $ | 79,045 | $ | 16,477 | $ | 64,044 | $ | 83,919 | $ | 17,440 | $ | 19,854 | |||||||||||||||||||
Cash provided by (used in) operating activities | 85,126 | 119,903 | 60,491 | (204,009 | ) | 22,656 | — | 4,434 | 6,843 | ||||||||||||||||||||||||||
Cash provided by (used in) investing activities | (60,129 | ) | (169,868 | ) | (3,191 | ) | 719,806 | (1,220,515 | ) | — | (7,970 | ) | (179 | ) | |||||||||||||||||||||
Cash provided by (used in) financing activities | (19,836 | ) | 45,469 | (56,766 | ) | (523,134 | ) | 1,205,707 | — | (3,886 | ) | (11,750 | ) | ||||||||||||||||||||||
Capital Expenditures | 8,397 | 7,820 | 7,238 | 8,522 | 472 | 472 | 6,098 | 179 | |||||||||||||||||||||||||||
Ratio of Earnings to Fixed Charges:(8) | 2.83 | 3.03 | 2.63 | ** | ** | ** | ** | ** |
** | Not applicable. |
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March 31, | December 31, | |||||||
2007 | 2006 | |||||||
(Unaudited) | ||||||||
Cash and Equivalents | $ | 2,762 | $ | 7,848 | ||||
Working capital | 24,616 | 32,602 | ||||||
Net intangible assets (including deferred financing costs) | 1,363,014 | 1,364,424 | ||||||
Total assets | 1,493,618 | 1,503,861 | ||||||
Debt (including current portion of long-term debt) | 919,750 | 931,500 | ||||||
Total stockholders’ equity | 288,346 | 290,740 |
(1) | Corporate general and administrative expenses during the historical periods consist of substantially all of the corporate level general and administrative expenses for SPC, which were previously shared among SPC’s cable, dinnerware, real estate and radio operations. The portion of these expenses that were not internally allocated to Radio are recorded in Other. The portion that was internally allocated to Radio includes amounts paid to SPC and Media for SPC’s corporate management and shared services under a management agreement that was terminated in connection with the Acquisition. Corporate general and administrative expenses on a pro forma basis reflect a decrease primarily relating to the elimination of certain costs and a replacement of those costs with the annual cash fee payable under the management agreement with Cumulus equal to the greater of $4 million or 4% of Holdings’ consolidated free cash flows (as described in the management agreement with Cumulus) with certain adjustments and the annual cash fee payable to the Sponsors under the advisory services agreement equal to the greater of $1 million or 1% of Holdings’ consolidated free cash flows with certain adjustments. See the notes to the audited consolidated financial statements of SPC for segment information for continuing operations. | |
(2) | For the years ended December 31, 2003, 2004 and 2005, the portion of depreciation and amortization attributable to SPC’s radio operations was $6.5 million, $6.6 million and $6.2 million, respectively and for the three months ended March 31, 2006, was $1.5 million. See the notes to the audited consolidated financial statements of SPC for segment information for continuing operations. | |
(3) | On November 12, 2004, SPC’s subsidiary, Susquehanna Media Co., sold the assets of a radio station for $11.5 million in cash. The gain on the sale recognized in 2004 was $10.2 million. An additional $0.3 million of gain was recognized in 2005. See notes to the audited consolidated financial statements of SPC for additional information. | |
(4) | Interest expense attributable to SPC’s radio operations for the years ended December 31, 2003, 2004 and 2005 was $6.9 million, $8.0 million and $4.1 million, respectively, and for the three months ended March 31, 2006, was $0.7 million. Interest expense for the year ended December 31, 2004 includes $3.6 million of interest and $0.1 million of other expense related to the summary judgment granted in favor of Bridge Capital Investors II against SPC’s indirect subsidiary, Susquehanna Radio Corp., by the United States District Court for the Northern District of Georgia on January 26, 2005. Pro forma interest expense includes amortization of capitalized debt issuance cost. | |
(5) | Represents a $3.0 million loss on debt extinguishment (including $0.9 million charge for unamortized deferred financing costs) incurred in 2004 relating to the redemption of SPC’s then-outstanding 8.5% senior subordinated notes due 2009. See the notes to the audited consolidated financial statements of SPC for additional information. | |
(6) | Represents changes in the value of (a) outstanding shares under Susquehanna Radio Corp.’s Employee Stock Plan (“ESOP”) that allowed certain key employees to purchase Susquehanna Radio Corp.’s Class B non-voting common stock and (b) outstanding shares of station subsidiaries owned by persons other than SPC and its subsidiaries. Those shares and other interests were redeemed or eliminated prior to, or in connection with the Acquisition. See the notes to the audited consolidated financial statements of SPC for additional information. |
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(7) | We define Station Operating Income as operating income from continuing operations plus corporate general and administrative expenses, depreciation and amortization, gain on sale of assets and costs related to sale of business. | |
We believe that Station Operating Income is the most frequently used financial measure in determining the market value of a radio station or group of stations. We have observed that Station Operating Income is commonly employed by firms that provide appraisal services to the broadcasting industry in valuing radio stations. Given its relevance to the estimated value of a radio station, we believe, and our experience indicates, that investors consider the measure to be useful in order to determine the value of our portfolio of stations. We believe that Station Operating Income is the most commonly used financial measure employed by the investment community to compare the performance of radio station operators. Finally, Station Operating Income is the primary measure that our management uses to evaluate the performance and results of our stations. As a result, in disclosing Station Operating Income, we are providing investors with an analysis of our performance that is consistent with that which is utilized by our management. | ||
Station Operating Income is not a recognized term under GAAP and does not purport to be an alternative to operating income from continuing operations as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, Station Operating Income is not intended to be a measure of free cash flow available for dividends, reinvestment in our business or other management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Station Operating Income should be viewed as a supplement to, and not a substitute for, results of operations presented on the basis of GAAP. We compensate for the limitations of using Station Operating Income by using it only to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone. Station Operating Income has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Moreover, because not all companies use identical calculations, these presentations of Station Operating Income may not be comparable to other similarly titled measures of other companies. The following table reconciles operating income (loss) from continuing operations, which we believe is the most directly comparable GAAP financial measure, to Station Operating Income: |
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
SPC | Radio Holdings | SPC | Radio Holdings | ||||||||||||||||||||||||||||||||
January 1, | Pro Forma | Three Months | Three Months | ||||||||||||||||||||||||||||||||
2006 | May 5, 2006 to | Year Ended | Ended | Ended | |||||||||||||||||||||||||||||||
Year Ended December 31, | to May 4, | December 31, | December 31, | March 31, | March 31, | ||||||||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2006 | 2006 | 2006 | 2007 | ||||||||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||||||||||||||||||||
Operating income (loss) from continuing operations | $ | 55,610 | $ | 65,545 | $ | 47,236 | $ | (31,486 | ) | $ | 28,975 | $ | 40,986 | $ | 9,396 | $ | 15,337 | ||||||||||||||||||
Corporate general and administrative expenses | 17,917 | 20,297 | 24,708 | 31,029 | 4,106 | 7,425 | 6,254 | 1,683 | |||||||||||||||||||||||||||
Depreciation and amortization | 7,691 | 7,759 | 7,401 | 2,421 | 30,963 | 35,508 | 1,790 | 2,834 | |||||||||||||||||||||||||||
Gain on sale of assets | — | (10,151 | ) | (300 | ) | — | — | — | — | — | |||||||||||||||||||||||||
Costs related to sale of business, principally advisory fees | — | — | — | 14,513 | — | — | — | — | |||||||||||||||||||||||||||
Station Operating Income | $ | 81,218 | $ | 83,450 | $ | 79,045 | $ | 16,477 | $ | 64,044 | $ | 83,919 | $ | 17,440 | $ | 19,854 | |||||||||||||||||||
(8) | For purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings from continuing operations before income taxes plus fixed charges. Fixed charges consist of interest on all indebtedness, amortization of capitalized financing costs and an estimated interest component on rents. Earnings were inadequate to cover fixed charges by $42.6 million for the period January 1, 2006 to May 4, 2006, $26.8 million for the period May 5, 2006 to December 31, 2006, $39.4 million in 2006 (pro forma), $1.3 million for the three-month period ended March 31, 2006 and $4.2 million for the three-month period ended March 31, 2007. |
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• | making it more difficult for us to make payments on the notes; | |
• | increasing our vulnerability to general economic downturns and adverse industry conditions; | |
• | requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; | |
• | exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our senior secured credit facilities, will be at variable rates of interest; | |
• | restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; | |
• | limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes; and | |
• | limiting our ability to adjust to changing market conditions and placing us at a disadvantage compared to our competitors who have less debt. |
• | incur additional indebtedness or issue preferred stock; | |
• | pay dividends on or make distributions in respect of our capital stock or make other restricted payments; | |
• | make certain investments; | |
• | sell certain assets; | |
• | create liens on certain assets to secure debt; | |
• | consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; | |
• | enter into certain transactions with our affiliates; and | |
• | designate our subsidiaries as unrestricted subsidiaries. |
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• | another radio station in the market were to convert its programming format to a format similar to our station or launch aggressive promotional campaigns; | |
• | a new station were to adopt a competitive format; or | |
• | an existing competitor were to strengthen its operations. |
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• | audio programming by cable television systems, direct broadcast satellite systems, Internet content providers (both landline and wireless), Internet based audio radio services, satellite delivered digital audio radio service and other digital audio broadcast formats; | |
• | HD Radiotm digital radio, which could provide multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services; | |
• | low power FM radio, which could result in additional FM radio broadcast stations in markets where we have stations; and | |
• | other digital audio recording and listening devices, such as iPodstm. |
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• | we or any of the guarantors, as applicable, were insolvent or rendered insolvent by reason of the issuance of the notes or the incurrence of the applicable guarantee; | |
• | the issuance of the notes or the incurrence of the applicable guarantee left us or the guarantor, as applicable, with an unreasonably small amount of capital to carry on the business; | |
• | we or any of the guarantors intended to, or believed that we or such guarantor would, incur debts beyond our or such guarantor’s ability to pay as they mature; or | |
• | we or any of the guarantors was a defendant in an action for money damages, or had a judgment for money damages docketed against us or such guarantor if, in either case, after final judgment, the judgment is unsatisfied. |
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• | the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets; or | |
• | the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or | |
• | it could not pay its debts as they become due. |
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Radio Holdings | ||||||||
As of March 31, | ||||||||
2007 | ||||||||
(Unaudited) | ||||||||
(Dollars in thousands) | ||||||||
Cash and cash equivalents | $ | 2,762 | ||||||
Debt: | ||||||||
Senior secured credit facilities(1): | ||||||||
Revolving credit facility | — | |||||||
Term loan B facility | 669,750 | |||||||
Notes | 250,000 | |||||||
Total debt | 919,750 | |||||||
Total stockholders’ equity | 288,346 | |||||||
Total capitalization | $ | 1,210,858 | ||||||
(1) | In connection with the closing of the Acquisition, CMP entered into senior secured credit facilities, consisting of a $700 million term loan B facility having a seven-year maturity and a $100 million senior secured revolving credit facility having a six-year maturity. We did not utilize any borrowings under the revolving credit facility at the closing of the Transactions. As of March 31, 2007 there were no amounts outstanding under the revolver. See “Description of Other Indebtedness — Senior Secured Credit Facilities.” |
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• | Cumulus and the respective investment funds affiliated with the Sponsors made an aggregate cash equity investment of $250 million (consisting of $6.25 million from Cumulus and $243.75 million from affiliates of the Sponsors) in our ultimate parent, Media Partners, in exchange for membership interests in Media Partners. Media Partners contributed this cash equity, indirectly, to us. In connection with the Transactions, Media Partners paid $14.2 million to the members for their equity-raising efforts. | |
• | Cumulus contributed four radio stations (including related licenses and assets) in the Houston, Texas and Kansas City, Missouri markets to Media Partners in exchange for membership interests in Media Partners. Media Partners contributed, indirectly, three of the four stations to our affiliate, StationCo, which entered into senior secured credit facilities and distributed $64.1 million of term loan borrowings thereunder to its direct parent, Holdings. Holdings, in turn, made an indirect cash contribution of $64.1 million to us. Media Partners contributed, indirectly, the fourth station (including related licenses and assets) to us for further distribution to one of our restricted subsidiaries, KC Corp., which placed it in a divestiture trust pending resolution of a multiple-license ownership issue under FCC regulations. In late March 2007, this issue was resolved and the station, which was not subject to any restrictive covenants under the senior secured credit facilities or the indenture governing the outstanding notes, was subsequently transferred to a direct subsidiary of Holdings. | |
• | We entered into $800 million senior secured credit facilities, consisting of a $700 million term loan B facility and a $100 million revolving credit facility. | |
• | We issued the notes. |
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(1) | Cumulus made a cash contribution of $6.25 million and the respective affiliates of the Sponsors made an aggregate cash contribution of $243.75 million, for total cash contribution of $250 million from Cumulus and affiliates of the Sponsors. Each of Cumulus and the respective affiliates of the Sponsors beneficially owns membership interests representing a 25% equity ownership interest in Media Partners. Media Partners indirectly owns all of our issued and outstanding capital stock. In connection with the Transactions, Media Partners paid $14.2 million to the members for their equity-raising efforts. See “Principal Stockholders.” | |
(2) | Our indirect parent, Holdings, made an indirect cash contribution of $64.1 million to us, using borrowings made by its wholly owned subsidiary, StationCo, collateralized with station assets contributed by Cumulus. | |
(3) | Radio Holdings and our direct and indirect wholly owned domestic restricted subsidiaries guarantee our senior secured credit facilities on a senior secured basis and the notes on an unsecured senior subordinated basis. All of our subsidiaries are restricted subsidiaries. | |
(4) | We entered into $800 million senior secured credit facilities, consisting of a $700 million term loan B facility having a seven-year maturity and a $100 million senior secured revolving credit facility having a six-year maturity. We did not utilize any borrowings under the revolving credit facility at the closing of the Transactions. Borrowings under the senior secured credit facilities are secured by a first priority security interest in substantially all of our and our guarantors’ tangible and intangible assets, including all of our capital stock and the capital stock of each of our existing and future domestic subsidiaries and 65% of the capital stock of our future foreign subsidiaries. See “Description of Other Indebtedness — Senior Secured Credit Facilities.” |
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• | the Acquisition; | |
• | interest expense for the issuance of $250 million of the notes; | |
• | interest expense for the borrowings of $700 million of term loans under Radio Holdings’ senior secured credit facilities; | |
• | the elimination of certain corporate level general and administrative expenses; | |
• | the elimination of minority interests, the impact of the SPC tax-sharing agreement and certain other liabilities retained by the selling stockholders of SPC; and | |
• | elimination of certain interest expense due to the repayment of SPC’s then-existing indebtedness. |
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For the Year Ended December 31, 2006
SPC | Radio Holdings | |||||||||||||||||||
Historical | Historical | Pro Forma | ||||||||||||||||||
January 1, 2006 to | May 5, 2006 to | Historical | Pro Forma | Consolidated | ||||||||||||||||
May 4, 2006 | December 31, 2006 | Total | Adjustments | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Net revenues | $ | 65,987 | $ | 156,704 | $ | 222,691 | $ | 418 | (a) | $ | 223,109 | |||||||||
Operating expenses: | ||||||||||||||||||||
Station operating expense excluding depreciation amortization and including non-cash contract termination costs of $6,723 | 49,510 | 92,660 | 142,170 | (2,980 | )(b) | 139,190 | ||||||||||||||
Corporate general and administrative expenses | 31,029 | 4,106 | 35,135 | (27,710 | )(c) | 7,425 | ||||||||||||||
Depreciation and amortization | 2,421 | 30,963 | 33,384 | 2,124 | (d) | 35,508 | ||||||||||||||
Costs related to sale of business, principally advisory fees | 14,513 | — | 14,513 | (14,513 | )(e) | — | ||||||||||||||
Total operating expenses | 97,473 | 127,729 | 225,202 | (43,079 | ) | 182,123 | ||||||||||||||
Operating income (loss) from continuing operations | (31,486 | ) | 28,975 | (2,511 | ) | 43,497 | 40,986 | |||||||||||||
Non-operating income (expense) from continuing operations: | ||||||||||||||||||||
Interest expense, net | (4,638 | ) | (54,061 | ) | (58,699 | ) | (21,670 | )(f) | (80,369 | ) | ||||||||||
Loss on early extinguishment of debt | (6,492 | ) | — | (6,492 | ) | 6,492 | (g) | — | ||||||||||||
Other income (expense) | — | (1,702 | ) | (1,702 | ) | 1,675 | (h) | (27 | ) | |||||||||||
Loss from continuing operations before income taxes and minority interests | (42,616 | ) | (26,788 | ) | (69,404 | ) | 29,994 | (39,410 | ) | |||||||||||
(Provision) benefit for income taxes | 16,640 | 8,185 | 24,825 | (12,785 | )(i) | 12,040 | ||||||||||||||
Minority interest income (expense) | (1,368 | ) | — | (1,368 | ) | 1,368 | (j) | — | ||||||||||||
Loss from continuing operations | $ | (27,344 | ) | $ | (18,603 | ) | $ | (45,947 | ) | $ | 18,577 | $ | (27,370 | ) | ||||||
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(a) | Reflects the additional revenue generated by a radio station, for the period January 1, 2006 through May 4, 2006, which was contributed to us on May 5, 2006 by an affiliate. | |
(b) | Reflects the decrease in station operating expense primarily related to the elimination of expenses associated with an ESOP and pension plan that was terminated in connection with the Acquisition. Ongoing benefits and overall compensation structure do not include an employee stock purchase plan or pension plan or otherwise replace this benefit. There is also an increase of station operating expenses of $0.2 million for the January 1, 2006 through May 4, 2006, resulting from stations contributed to us on May 5, 2006 by an affiliate. | |
(c) | Reflects the decrease in corporate general and administrative expenses primarily relating to the elimination of expenses that have been replaced by those contractually provided under the Cumulus management agreement for an annual cash fee which is the greater of $4 million or 4% of Holdings’ consolidated free cash flows (as described in the Cumulus management agreement) with certain adjustments. Ongoing advisory fees payable to the Sponsors pursuant to the advisory services agreement, which annually total the greater of $1 million or 1% of Holdings’ consolidated free cash flows (as described in the Cumulus management agreement) with certain adjustments, have been added to the corporate general and administrative expenses. | |
(d) | Reflects the increase in depreciation and amortization expense primarily due to the amortization of identified intangible assets using a weighted average straight-line life of 1.2 years. These intangible assets exclude broadcast licenses which are not amortized because they are classified as having indefinite lives. | |
(e) | Reflects the elimination of certain non-recurring costs related to the sale of the business by the previous SPC shareholders. | |
(f) | Reflects the increase in interest expense resulting from the issuance of debt to finance a portion of the purchase price for the Acquisition. The interest rate on the new debt of $950 million is assumed to be at a weighted average of 8.3%. A 1/8% fluctuation of the weighted average interest rate would result in a change in interest expense and net loss of approximately $1.2 million and approximately $0.8 million before and after taxes, respectively. Pro forma interest expense includes amortization of capitalized debt issuance costs. | |
(g) | Reflects the elimination of non-recurring costs related to the termination of certain credit facilities due to the repayment of all existing debt of SPC. | |
(h) | As of the consummation of the Acquisition, Radio Holdings incurred approximately $1.7 million in expenses related to a commitment fee for a bridge loan which could have been activated if needed to complete the transaction. The bridge loan was never utilized and the commitment was terminated and a termination fee was paid. This amount is non-recurring and was included in Radio Holdings’ reported financial results within the 12 months following the consummation of the Acquisition. This amount has not been included in the Unaudited Pro Forma Condensed Consolidated Statement of Operations. | |
(i) | Reflects the income tax benefit at an effective tax rate of 30.55%. Although realization is not assured, management believes that it is more likely than not that the deferred tax assets will be realized. The amount of the deferred tax asset considered realizable, however, could be reduced in the future, if estimates of future taxable income are reduced. | |
(j) | Reflects the elimination of minority interest that was made because those interests were redeemed or eliminated prior to, or in connection with, the Acquisition. |
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(Dollars in thousands) | |||||||||||||||||||||||||||||||
Radio Holdings | SPC | Radio Holdings | SPC | ||||||||||||||||||||||||||||
Three Months | Three Months | May 5, 2006 | January 1, 2006 | ||||||||||||||||||||||||||||
Ended | Ended | Through | Through | ||||||||||||||||||||||||||||
March 31, | March 31, | December 31, | May 4, | Year Ended December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||||||||||||||
Net revenues | $ | 46,667 | $ | 49,211 | $ | 156,704 | $ | 65,987 | $ | 231,587 | $ | 231,058 | $ | 228,966 | |||||||||||||||||
Operating expenses: excluding depreciation amortization and including non-cash contract termination costs of $6,723 for the period May 5, 2006 through December 31, 2006 | 26,813 | 31,771 | 92,660 | 49,510 | 152,542 | 147,608 | 147,748 | ||||||||||||||||||||||||
Corporate general and administrative expenses(1) | 1,683 | 6,254 | 4,106 | 31,029 | 24,708 | 20,297 | 17,917 | ||||||||||||||||||||||||
Depreciation and amortization, including pre-sold advertising amortization of $23,023 for the period May 5, through December 31, 2006(2) | 2,834 | 1,790 | 30,963 | 2,421 | 7,401 | 7,759 | 7,691 | ||||||||||||||||||||||||
Gain on sale of assets(3) | — | — | — | — | (300 | ) | (10,151 | ) | — | ||||||||||||||||||||||
Costs related to sale of business, principally advisory fees | — | — | — | 14,513 | — | — | — | ||||||||||||||||||||||||
Total operating expenses | 31,330 | 39,815 | 127,729 | 97,473 | 184,351 | 165,513 | 173,356 | ||||||||||||||||||||||||
Operating income (loss) from continuing operations | 15,337 | 9,396 | 28,975 | (31,486 | ) | 47,236 | 65,545 | 55,610 | |||||||||||||||||||||||
Other income (expense) from continuing operations: | |||||||||||||||||||||||||||||||
Interest expense(4) | (19,508 | ) | (4,466 | ) | (54,061 | ) | (4,638 | ) | (17,141 | ) | (19,841 | ) | (18,820 | ) | |||||||||||||||||
Loss on early extinguishment of debt(5) | — | (6,492 | ) | — | (6,492 | ) | — | (3,024 | ) | — | |||||||||||||||||||||
Other income (expense) | (9 | ) | 225 | (1,702 | ) | — | — | 261 | (168 | ) | |||||||||||||||||||||
Income (loss) from continuing operations before income taxes and minority interests | (4,180 | ) | (1,337 | ) | (26,788 | ) | (42,616 | ) | 30,095 | 42,941 | 36,622 | ||||||||||||||||||||
Provision (benefit) for income taxes | (1,856 | ) | 109 | (8,185 | ) | (16,640 | ) | 4,541 | 17,543 | 15,591 | |||||||||||||||||||||
Minority interests(6) | — | (471 | ) | — | (1,368 | ) | 1,795 | (8,507 | ) | (4,869 | ) | ||||||||||||||||||||
Earnings (loss) from continuing operations | (2,324 | ) | (1,917 | ) | (18,603 | ) | (27,344 | ) | 27,349 | 16,891 | 16,162 | ||||||||||||||||||||
Discontinued operations: | |||||||||||||||||||||||||||||||
Gain (loss) from operations of discontinued operations (including gain on sale of $498,387 in 2006) | — | 3,922 | — | 502,718 | (19,659 | ) | (12,866 | ) | 5,135 | ||||||||||||||||||||||
Proceeds (benefit) for income taxes | — | 1,725 | — | 195,647 | (9,765 | ) | (2,321 | ) | 2,274 | ||||||||||||||||||||||
Minority interest income (expense) | — | 37 | — | (73,966 | ) | (1,446 | ) | (997 | ) | (1,989 | ) | ||||||||||||||||||||
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(Dollars in thousands) | |||||||||||||||||||||||||||||||
Radio Holdings | SPC | Radio Holdings | SPC | ||||||||||||||||||||||||||||
Three Months | Three Months | May 5, 2006 | January 1, 2006 | ||||||||||||||||||||||||||||
Ended | Ended | Through | Through | ||||||||||||||||||||||||||||
March 31, | March 31, | December 31, | May 4, | Year Ended December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||||||||
Gain (loss) on discontinued operations | — | 2,234 | — | 233,105 | (11,340 | ) | (11,542 | ) | 872 | ||||||||||||||||||||||
Net income (loss) | $ | (2,324 | ) | $ | 317 | $ | (18,603 | ) | $ | 205,761 | $ | 16,009 | $ | 5,349 | $ | 17,034 | |||||||||||||||
Other Financial Data: | |||||||||||||||||||||||||||||||
Station Operating Income(7) | $ | 19,854 | $ | 17,440 | $ | 64,044 | $ | 16,477 | $ | 79,045 | $ | 83,450 | $ | 81,218 | |||||||||||||||||
Cash provided by (used in) operating activities | 6,843 | 4,435 | 22,656 | (204,009 | ) | 60,491 | 119,903 | 85,126 | |||||||||||||||||||||||
Cash provided by (used in) investing activities | (179 | ) | (7,970 | ) | (1,220,515 | ) | 719,806 | (3,191 | ) | (169,868 | ) | (60,129 | ) | ||||||||||||||||||
Cash provided by (used in) financing activities | (11,750 | ) | (3,886 | ) | 1,205,707 | (523,134 | ) | (56,766 | ) | 45,469 | (19,836 | ) | |||||||||||||||||||
Capital Expenditures | 179 | 6,098 | 472 | 8,522 | 7,238 | 7,820 | 8,397 | ||||||||||||||||||||||||
Ratio of Earnings to Fixed Charges:(8) | * | * | * | * | 2.63 | 3.03 | 2.83 | ||||||||||||||||||||||||
* | Not applicable. |
Radio Holdings | Radio Holdings | SPC | |||||||||||||||
March 31, | December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2005 | |||||||||||||||
(unaudited) | |||||||||||||||||
Balance Sheet Data (dollars in thousands): | |||||||||||||||||
Cash and cash equivalents | $ | 2,762 | $ | 7,848 | $ | 7,337 | |||||||||||
Working capital (deficiency) | 24,616 | 32,602 | (8,214 | ) | |||||||||||||
Net intangible assets | 1,363,014 | 1,364,424 | 352,400 | ||||||||||||||
Total assets | 1,493,618 | 1,503,861 | 878,796 | ||||||||||||||
Total debt (including current portion of long-term debt) | 919,750 | 931,500 | 255,328 | ||||||||||||||
Total stockholders’ equity | $ | 288,346 | $ | 290,740 | $ | 74,118 |
(1) | Corporate general and administrative expenses during the historical periods consist of substantially all of the corporate level general and administrative expenses for SPC, which were previously shared among SPC’s cable, dinnerware, real estate and radio operations. The portion of these costs that were not internally allocated to Radio are recorded in Other. The portion that was internally allocated to Radio includes amounts paid to SPC and Media for SPC’s corporate management and shared services under a management agreement that was terminated in connection with the Acquisition. See the notes to the audited consolidated financial statements of SPC for segment information for continuing operations. | |
(2) | For the years ended December 31, 2003, 2004 and 2005, the portion of depreciation and amortization attributable to SPC’s radio operations was $6.5 million, $6.6 million and $6.2 million, respectively and for the three months ended March 31, 2006, was $1.5 million. See the notes to the audited consolidated financial statements of SPC for segment information for continuing operations. | |
(3) | On November 12, 2004, SPC’s subsidiary, Susquehanna Media Co., sold the assets of a radio station for $11.5 million in cash. The gain on the sale recognized in 2004 was $10.2 million. An additional $0.3 million of gain was recognized in 2005. See the notes to the audited consolidated financial statements of SPC for additional information. | |
(4) | Interest expense attributable to SPC’s radio broadcasting operations for the years ended December 31, 2003, 2004 and 2005 was $6.9 million, $8.0 million and $4.1 million, respectively, and for the three months ended March 31, 2006, was $0.7 million. Interest expense for the year ended December 31, 2004 includes $3.6 million of interest and $0.1 million of other expense related to the summary judgment granted in favor of Bridge Capital Investors II against SPC’s subsidiary, Susquehanna Radio Corp., by the United States District Court for the Northern District of Georgia on January 26, 2005. | |
(5) | Represents a $3.0 million loss on debt extinguishment (including $0.9 million charge for unamortized deferred financing costs) incurred in 2004 relating to the redemption of SPC’s then outstanding 8.5% senior subordinated notes due 2009. See the notes to the audited consolidated financial statements of SPC for additional information. | |
(6) | Represents changes in the value of (a) outstanding shares under Susquehanna Radio Corp.’s Employee Stock Plan that allowed certain key employees to purchase Susquehanna Radio Corp.’s Class B non-voting |
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common stock and (b) outstanding shares of station subsidiaries owned by persons other than SPC and its subsidiaries. Those shares and other interests will be redeemed or eliminated prior to, or in connection with, the Acquisition. See the notes to the audited consolidated financial statements of SPC for additional information. |
(7) | We define Station Operating Income as operating income from continuing operations plus corporate general and administrative expenses, depreciation and amortization, gain on sale of assets and costs related to sale of business. | |
We believe that Station Operating Income is the most frequently used financial measure in determining the market value of a radio station or group of stations. We have observed that Station Operating Income is commonly employed by firms that provide appraisal services to the broadcasting industry in valuing radio stations. Given its relevance to the estimated value of a radio station, we believe, and our experience indicates, that investors consider the measure to be useful in order to determine the value of our portfolio of stations. We believe that Station Operating Income is the most commonly used financial measure employed by the investment community to compare the performance of radio station operators. Finally, Station Operating Income is the primary measure that our management uses to evaluate the performance and results of our stations. As a result, in disclosing Station Operating Income, we are providing investors with an analysis of our performance that is consistent with that which is utilized by our management. | ||
Station Operating Income is not a recognized term under GAAP and does not purport to be an alternative to operating income from continuing operations as a measure of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, Station Operating Income is not intended to be a measure of free cash flow available for dividends, reinvestment in our business or other management’s discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. Station Operating Income should be viewed as a supplement to, and not a substitute for, results of operations presented on the basis of GAAP. We compensate for the limitations of using Station Operating Income by using it only to supplement our GAAP results to provide a more complete understanding of the factors and trends affecting our business than GAAP results alone. Station Operating Income has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Moreover, because not all companies use identical calculations, these presentations of Station Operating Income may not be comparable to other similarly titled measures of other companies. The following table reconciles operating income (loss) from continuing operations, which we believe is the most directly comparable GAAP financial measure, to Station Operating Income: |
(Dollars in thousands) | |||||||||||||||||||||||||||||||
Radio Holdings | SPC | Radio Holdings | SPC | ||||||||||||||||||||||||||||
Three Months | Three Months | May 5, 2006 | January 1, 2006 | ||||||||||||||||||||||||||||
Ended | Ended | Through | Through | ||||||||||||||||||||||||||||
March 31, | March 31, | December 31, | May 4, | Year Ended December 31, | |||||||||||||||||||||||||||
2007 | 2006 | 2006 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||
(unaudited) | (unaudited) | ||||||||||||||||||||||||||||||
Operating income (loss) from continuing operations | $ | 15,337 | $ | 9,396 | $ | 28,975 | $ | (31,486 | ) | $ | 47,236 | $ | 65,545 | $ | 55,610 | ||||||||||||||||
Corporate general and administrative expenses | 1,683 | 6,254 | 4,106 | 31,029 | 24,708 | 20,297 | 17,917 | ||||||||||||||||||||||||
Depreciation and amortization | 2,834 | 1,790 | 30,963 | 2,421 | 7,401 | 7,759 | 7,691 | ||||||||||||||||||||||||
Gain on sale of assets | — | — | — | — | (300 | ) | (10,151 | ) | — | ||||||||||||||||||||||
Costs related to sale of business, principally advisory fees | — | — | — | 14,513 | — | — | — | ||||||||||||||||||||||||
Station Operating Income | $ | 19,854 | $ | 17,440 | $ | 64,044 | $ | 16,477 | $ | 79,045 | $ | 83,450 | $ | 81,218 | |||||||||||||||||
(8) | For purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings from continuing operations before income taxes plus fixed charges. Fixed charges consist of interest on all indebtedness, amortization of capitalized financing costs and an estimated interest component on rents. Earnings were inadequate to cover fixed charges by $42.6 million for the period January 1, 2006 to May 4, 2006, $26.8 million for the period May 5, 2006 to December 31, 2006, $1.3 million for the three-month period ended March 31, 2006, and $4.2 million for the three-month period ended March 31, 2007. |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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• | radio general and administrative expenses (not included at the station level) that directly support Radio operations (these expenses primarily consist of central radio (non-station level) general and administrative costs associated with the radio operations and certain miscellaneous other expenses); and | |
• | corporate management fees allocated to Radio based on management’s best estimates of percentage of effort dedicated to radio-related tasks or incremental costs incurred (these services included primarily management, legal, accounting, internal audit and tax services, and human resources). |
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Percent | ||||||||
Change | ||||||||
3/31/2007 | ||||||||
Three Months Ended | vs. | |||||||
March 31, 2007 | 3/31/2006 | |||||||
Net revenues | $ | 46,667 | (5.17 | )% | ||||
Operating expenses: | ||||||||
Station operating expense excluding depreciation amortization | 26,813 | (15.76 | )% | |||||
Corporate general and administrative expenses | 1,683 | (80.98 | )% | |||||
Depreciation and amortization | 2,834 | 58.32 | % | |||||
Total operating expenses | 31,330 | (22.58 | )% | |||||
Operating income (loss) from continuing operations | 15,337 | 68.60 | % | |||||
Non-operating income (expense) from continuing operations: | ||||||||
Interest expense, net | (19,508 | ) | 336.81 | % | ||||
Loss on early extinguishment of debt | — | ** | ||||||
Other income (expense) | (9 | ) | ** | |||||
Income (loss) from continuing operations before income taxes and minority interest | (4,180 | ) | (312.64 | )% | ||||
Provision (benefit) for income taxes | (1,856 | ) | ** | |||||
Minority interest income (expense) | — | ** | ||||||
Loss from continuing operations | $ | (2,324 | ) | ** | ||||
** | Calculation is not meaningful |
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Percent | ||||||||||||||||
Change | ||||||||||||||||
12/31/2006 | ||||||||||||||||
Combined Period - 2006 | vs. | |||||||||||||||
Radio | Other | Total | 12/31/2005 | |||||||||||||
Net revenues | $ | 222,691 | $ | — | $ | 222,691 | (3.84 | )% | ||||||||
Operating expenses: | ||||||||||||||||
Station operating expense excluding depreciation amortization and including non-cash contract termination costs of $6,723 | 142,170 | — | 142,170 | (6.80 | )% | |||||||||||
Corporate general and administrative expenses | 35,135 | — | 35,135 | 42.20 | % | |||||||||||
Depreciation and amortization | 33,384 | — | 33,384 | 351.07 | % | |||||||||||
Gain on sale of assets | — | — | — | ** | ||||||||||||
Costs related to sale of business, principally advisory fees | 14,513 | — | 14,513 | ** | ||||||||||||
Total operating expenses | 225,202 | — | 225,202 | 22.16 | % | |||||||||||
Operating income (loss) from continuing operations | (2,511 | ) | — | (2,511 | ) | ** | ||||||||||
Non-operating income (expense) from continuing operations: | ||||||||||||||||
Interest expense, net | (58,699 | ) | — | (58,699 | ) | 242.45 | % | |||||||||
Loss on early extinguishment of debt | (6,492 | ) | — | (6,492 | ) | ** | ||||||||||
Other income (expense) | (1,702 | ) | (1,702 | ) | ** | |||||||||||
Income (loss) from continuing operations before income taxes and minority interests | $ | (69,404 | ) | $ | — | (69,404 | ) | ** | ||||||||
Provision (benefit) for income taxes | 24,825 | |||||||||||||||
Minority interest income (expense) | (1,368 | ) | ||||||||||||||
Loss from continuing operations | $ | (45,947 | ) | |||||||||||||
Percent | ||||||||||||||||
Change | ||||||||||||||||
(Radio) | ||||||||||||||||
SPC | 2005 | |||||||||||||||
Year Ended December 31, 2005 | vs. | |||||||||||||||
Radio | Other | Total | 2004 | |||||||||||||
Net revenues | $ | 231,587 | $ | — | $ | 231,587 | $ | 0.2 | % | |||||||
Operating expense: | ||||||||||||||||
Station operating expenses excluding depreciation and amortization | 152,542 | — | 152,542 | 3.3 | % | |||||||||||
Corporate general and administrative expenses | 12,651 | 12,057 | 24,708 | (1.3 | )% | |||||||||||
Depreciation and amortization | 6,165 | 1,236 | 7,401 | (6.7 | )% | |||||||||||
Gain on sale of assets | (300 | ) | — | (300 | ) | ** | ||||||||||
Total operating expenses | 171,058 | 13,293 | 184,351 | 11.4 | % | |||||||||||
Operating income (loss) from continuing operations | 60,529 | (13,293 | ) | 46,936 | (28.4 | )% | ||||||||||
Non-operating income (expense) from continuing operations: | ||||||||||||||||
Interest expense, net | (4,142 | ) | (12,999 | ) | (17,141 | ) | (13.6 | )% | ||||||||
Income (loss) from continuing operations before income taxes and minority interests | $ | 56,387 | $ | (26,292 | ) | 30,095 | (30.0 | )% | ||||||||
Provision (benefit) for income taxes | (4,541 | ) | ||||||||||||||
Minority interest income (expense) | 1,795 | |||||||||||||||
Earnings from continuing operations | $ | 27,349 | ||||||||||||||
** | Calculation is not meaningful |
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Percent | ||||||||||||||||
Change | ||||||||||||||||
(Radio) | ||||||||||||||||
SPC | 2004 | |||||||||||||||
Year Ended December 31, 2004 | vs. | |||||||||||||||
Radio | Other | Total | 2003 | |||||||||||||
Net revenues | $ | 231,058 | $ | — | $ | 231,058 | 0.9 | % | ||||||||
Operating expense: | ||||||||||||||||
Station operating expenses: excluding depreciation and amortization | 147,608 | — | 147,608 | (0.1 | )% | |||||||||||
Corporate general and administrative expenses | 12,823 | 7,474 | 20,297 | 5.5 | % | |||||||||||
Depreciation and amortization | 6,605 | 1,154 | 7,759 | 2.1 | % | |||||||||||
Gain on sale of assets | (10,151 | ) | — | (10,151 | ) | ** | ||||||||||
Total operating expenses | 156,885 | 8,628 | 165,513 | (4.5 | )% | |||||||||||
Operating income (loss) from continuing operations | 74,173 | (8,628 | ) | 65,545 | 17.9 | % | ||||||||||
Non-operating income (expense) from continuing operations: | ||||||||||||||||
Interest expense, net | (7,975 | ) | (11,866 | ) | (19,841 | ) | 15.4 | % | ||||||||
Loss on early extinguishment of debt | (2,080 | ) | (944 | ) | (3,024 | ) | ** | |||||||||
Other income (expense) | 261 | — | 261 | ** | ||||||||||||
Income (loss) from continuing operations before income taxes and minority interests | $ | 64,379 | $ | (21,438 | ) | 42,941 | 16.0 | % | ||||||||
Provision (benefit) for income taxes | (17,543 | ) | ||||||||||||||
Minority interest income (expense) | (8,507 | ) | ||||||||||||||
Earnings from continuing operations | $ | 16,891 | ||||||||||||||
** | Calculation is not meaningful |
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Radio Holdings | SPC | |||||||||||||||||
Three Months | Three Months | |||||||||||||||||
Ended | Ended | $ Dollar | % Percent | |||||||||||||||
March 31, 2007 | March 31, 2007 | Change | Change | |||||||||||||||
Operating income | $ | 15,337 | $ | 9,396 | $ | 6,446 | 68.6 | % | ||||||||||
Corporate general and administrative | 1,683 | 6,254 | (4,571 | ) | (73.1 | ) | % | |||||||||||
Depreciation and amortization | 2,834 | 1,790 | 1,044 | 58.3 | % | |||||||||||||
Station operating income | $ | 19,854 | $ | 17,440 | $ | 2,414 | 13.8 | % | ||||||||||
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January 1, 2006 | May 5, 2006 | Year Ended | ||||||||||||||
to | to | Combined | December 31, | |||||||||||||
May 4, 2006 | December 31, 2006 | Period-2006 | 2005 | |||||||||||||
Operating income (loss) from continuing operations | $ | (31,486 | ) | $ | 28,975 | $ | (2,511 | ) | $ | 47,236 | ||||||
Corporate general and administrative expenses | 31,029 | 4,106 | 35,135 | 24,708 | ||||||||||||
Depreciation and amortization | 2,421 | 30,963 | 33,384 | 7,401 | ||||||||||||
Gain on sale of assets | — | — | — | (300 | ) | |||||||||||
Costs related to sale of business, principally advisory fees | 14,513 | — | 14,513 | — | ||||||||||||
Station Operating Income | $ | 16,477 | $ | 64,044 | $ | 80,521 | $ | 79,045 | ||||||||
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Year Ended December 31, | ||||||||
2005 | 2004 | |||||||
Operating income from continuing operations | $ | 60,529 | $ | 74,173 | ||||
Depreciation and amortization | 6,165 | 6,605 | ||||||
Corporate general and administrative expenses | 12,651 | 12,823 | ||||||
Gain on sale of assets | (300 | ) | (10,151 | ) | ||||
Station Operating Income | $ | 79,045 | $ | 83,450 | ||||
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Total | ||||||||||||||||||||||||||||
Contractual Cash | Amounts | |||||||||||||||||||||||||||
Obligations | Committed | 2007 | 2008 | 2009 | 2010 | 2011 | Thereafter | |||||||||||||||||||||
Long-term CMP debt | $ | 931,500 | $ | 7,000 | $ | 7,000 | $ | 7,000 | $ | 7,000 | $ | 7,000 | $ | 896,500 | ||||||||||||||
Broadcast rights(1) | 34,600 | 11,300 | 11,650 | 11,650 | — | — | — | |||||||||||||||||||||
Operating leases | 35,929 | 4,753 | 4,879 | 4,456 | 4,328 | 3,290 | 14,223 | |||||||||||||||||||||
Other contractual obligations | 32,143 | 12,350 | 10,279 | 9,466 | 48 | — | — | |||||||||||||||||||||
Total | $ | 1,034,172 | $ | 35,403 | $ | 33,808 | $ | 32,572 | $ | 11,376 | $ | 10,290 | $ | 910,723 | ||||||||||||||
(1) | Broadcast rights represent fees we are obligated to pay in exchange for the rights for our station,KNBR-AM, to broadcast San Francisco Giants baseball games through the 2009 MLB baseball seasons and Radio Holdings, through an indirect subsidiary, holds broadcast rights for the Kansas City Chiefs NFL franchise through the 2009 football season. The contract requires minimum rights payments of $2.8 million, $2.9 million, and $3.0 million for the 2007, 2008 and 2009 football seasons, respectively. See the notes to the audited consolidated financial statements of Radio Holdings for more information. | |
(2) | Other contractual obligations includes minimum management fee payments under the management agreement with Cumulus and the advisory services agreement with the Sponsors, amounts owed under our contractual agreement with Arbitron and amounts payable to certain on-air talent. |
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• | a decision not to file a tax return in a particular jurisdiction for which a return might be required, | |
• | an allocation or a shift of income between taxing jurisdictions, | |
• | the characterization of income or a decision to exclude reporting taxable income in a tax return, or | |
• | a decision to classify a transaction, entity, or other position in a tax return as tax exempt. |
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Market | Cluster | Station | ||||||||||||||
Rank by | Rank by | Audience | Target | |||||||||||||
Markets and Stations | Revenue | Revenue | Format | Share(1) | Demographic | |||||||||||
San Francisco, CA | 4 | 3 | ||||||||||||||
KFOG-FM/KFFG-FM(2) | Adult Alternative / | |||||||||||||||
“KFOG” | Classic Rock | 2.8 | Adults 25-54 | |||||||||||||
KNBR-AM/KTCT-AM(3) | ||||||||||||||||
“KNBR” | Sports | 2.9 | Men 25-54 | |||||||||||||
KSAN-FM “The Bone” | Rock | 2.3 | Adults 25-54 | |||||||||||||
Dallas/Ft. Worth, TX | 5 | 3 | ||||||||||||||
KDBN-FM “The Bone” | Album Oriented Rock / | 1.5 | Adults 25-54 | |||||||||||||
Classic Rock | ||||||||||||||||
KLIF-AM/KKLF-AM(2) | News/Talk/Sports | 1.5 | Adults 35-64 | |||||||||||||
KPLX-FM “The Wolf” | Country | 4.5 | Adults 25-54 | |||||||||||||
KTCK-AM/KTDK-FM(2) | ||||||||||||||||
“The Ticket” | Sports | 2.1 | Men 25-54 | |||||||||||||
Atlanta, GA | 6 | 7 | ||||||||||||||
WNNX-FM “99x” | Rock | 2.0 | Adults 18-34 | |||||||||||||
WWWQ-FM “Q100” | Contemporary Hit Radio/ | 1.6 | Women 18-34 | |||||||||||||
Top 40 | ||||||||||||||||
Houston, TX | 8 | 6 | ||||||||||||||
KRBE-FM | Contemporary Hit Radio / | 3.8 | Women 18-34 | |||||||||||||
Top 40 | ||||||||||||||||
Cincinnati, OH | 23 | 3 | ||||||||||||||
WGRR | Oldies | 3.7 | Adults 25-54 | |||||||||||||
WRRM-FM “Warm 98” | Adult Contemporary | 6.2 | Women 25-54 | |||||||||||||
WFTK | FM Talk | 0.8 | Adults 25-54 | |||||||||||||
Kansas City, MO | 31 | 3 | ||||||||||||||
KCFX-FM “The Fox” | Album Oriented Rock / | 4.4 | Adults 25-54 | |||||||||||||
Classic Rock | ||||||||||||||||
KCJK-FM“JACK-FM” | Adult Contemporary | 2.8 | Adults 25-54 | |||||||||||||
KCMO-AM | News/Talk/Sports | 2.3 | Adults 35-64 | |||||||||||||
KCMO-FM | Oldies | 4.8 | Adults 25-54 | |||||||||||||
Indianapolis, IN | 33 | 3 | ||||||||||||||
WFMS-FM | Country | 9.6 | Adults 25-54 | |||||||||||||
WJJK-FM“JACK-FM” | Adult Contemporary | 3.8 | Adults 25-54 | |||||||||||||
WISG-FM “The Song” | Religion | 2.7 | Adults 25-54 | |||||||||||||
York, PA(4) | 125 | 1 | ||||||||||||||
WARM-FM “WARM 103” | Adult Contemporary | 6.6 | Women 25-54 | |||||||||||||
WSOX-FM “Oldies | ||||||||||||||||
96.1”/WGLD-AM(2) | Oldies | 5.9 | Adults 35-64 | |||||||||||||
WSBA-AM | News/Talk/Sports | 4.4 | Adults 35-64 |
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(1) | “Station Audience Share” represents a percentage generally computed by dividing the average number of persons over 12 listening to a particular station during specified time periods by the average number of such persons for all stations in the market area as determined by Arbitron. | |
(2) | These stations are simulcast. For station audience share purposes, we aggregate the simulcast stations, and for station ranking purposes, we show the higher-rated station’s rank. | |
(3) | These stations are partially simulcast and co-branded under the name “KNBR,” and have been treated as simulcast for the purposes of this table. | |
(4) | These stations also reach Lancaster, PA. |
• | Focus on Clusters in Large Markets. We believe that large markets provide an attractive combination of scale, stability and opportunity for future growth. We have followed a focused strategy of operating sizeable clusters of stations within our markets, and we manage a large share of the radio advertising within each market. This market position allows us to offer advertisers more attractive advertising packages targeted towards more specific audiences. In addition, the ability to share human resources, information technology, engineering, legal, marketing and other costs across cluster stations helps to improve our Station Operating Income margins. | |
• | Improve Operating Performance Using Cumulus’sBest-in-Class Practices. Our indirect parent, Holdings, has entered into a management agreement with Cumulus, the second largest radio company in the United States based on number of stations owned or operated. Cumulus has been recognized as having one of the top management teams in the radio industry. The Chairman and Chief Executive Officer of Cumulus, Lewis W. Dickey, Jr., is our Chairman, President and Chief Executive Officer. Mr. Dickey was named “Best Radio & TV Broadcasting CEO” by Institutional Investor (January 2005). Among the reasons identified for this recognition were Mr. Dickey’s record for reducing Cumulus’s debt and improving its free cash flow while still acquiring operationally critical assets. We believe that the combination ofbest-in-class business practices from Cumulus’s management team together with the enhanced purchasing power, scale and supplier relationships that results from the common management of the portfolios of Cumulus and our company helps us drive local sales growth and operating efficiencies and improve Station Operating Income margins. |
• | Drive Local Sales Growth. We are implementingbest-in-class business practices of Cumulus to drive local sales growth at each of our stations. Our sales strategy includes expanding our local sales forces, employing a tiered commission structure to focus individual sales staffs on new business development as distinct from existing accounts, and implementing new inventory and account management systems to enhance the overall productivity of our local sales forces. We believe that this strategy provides a higher level of service to our existing customer base and expands our base of advertisers, which enables us to outperform the traditional growth rates of our markets. Cumulus has successfully employed a similar strategy with its sales force driving industry-leading local sales growth in recent years. | |
• | Drive Operating Efficiencies. Following the Acquisition, we centralized a significant portion of operations, including programming, that had historically been decentralized. Mr. Dickey and his management team intend to continue to identify specific opportunities to reduce operating costs at each of our stations, across general and administrative, technical, programming, sales and promotions areas. |
• | Employ Market Research and Targeted Programming. We seek to maximize station operating performance through market research and targeted programming. We maintain and regularly update extensive listener databases that provide valuable insight into our listener base. We also retain consultants and research organizations to continually evaluate listeners’ preferences and use information gathered from |
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these sources to optimize our programming and marketing strategies. These strategies have included format changes and utilization of customized marketing campaigns to expand our listener base. We believe these strategies have contributed to the strong ratings and market positions of our stations. We believe the combination of our existing local market research abilities with the scale of Cumulus’s in-house market research allows us to maximize our future station operating performance. |
• | Continue to Build Strong Relationships with Listeners and Advertisers. We are focused on developing and maintaining strong relationships with both our listeners and advertiser base in our stations’ communities. Our stations maintain close relationships with listeners viae-mail event notification and weekly/biweekly station newsletters made possible by maintaining extensive listener databases. In addition, our stations host numerous high-profile community service events, concerts and listener promotions each year. These relationships with our listeners allow us to offer value-added marketing services to our advertiser base, including contacting listeners via targeted marketing campaigns. | |
• | Maintain Balanced Advertising Load. We closely manage our on-air inventory to maximize revenue without jeopardizing listening levels and resulting ratings. We believe that our stations maintain lower inventory levels in many of the markets we serve than our competitors. Our stations generally respond to demand for on-air inventory by varying pricing rather than varying target inventory levels. We believe that this strategy supports long-term positive ratings trends and stable revenue growth. | |
• | Pursue Strategic Acquisitions and Alternatives. Our portfolio development strategy has been focused on clustering radio stations in our existing markets and making opportunistic acquisitions in new markets in which we believe we can cost-effectively achieve a leading position in terms of audience and revenue share. We may also pursue strategic alternatives, such as asset swaps, to diversify or strengthen our portfolio of stations. In evaluating potential new stations, we assess the strategic fit of the station with our existing clusters of radio stations. When entering a new market, we would typically seek to acquire a “platform” upon which to expand our portfolio of stations and build a leading cluster of stations. We believe our ability to further develop our portfolio has been enhanced by our association with Cumulus, which we believe has a long history of successfully identifying and integrating acquisitions and asset swaps. | |
• | Pursue Internet Initiatives. We have aggressively pursued Internet opportunities, such as online streaming and incorporating advertisement-replacement technologies into streams. We have achieved success with radio streaming and, as a result, all of our stations are currently streamed over the Internet. Further, we believe San Francisco’s KFOG and Dallas’ “The Wolf” are among the most streamed stations in the country. These Internet initiatives expand our audience reach through new distribution methods while offering potential new revenue sources. |
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• | a station’s share of audiences in the demographic groups targeted by advertisers; | |
• | the number of stations in the market competing for the same demographic groups; | |
• | the supply of and demand for radio advertising time; and | |
• | certain qualitative factors. |
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Frequency | Power in | |||||||||||||||
(FM-MHZ) | FCC | HAAT | Kilowatts | Expiration Date of | ||||||||||||
Market and Stations | City of License | (AM-KHZ) | Class | (Meters) | (Day) | License | ||||||||||
San Francisco, CA | ||||||||||||||||
KNBR — AM | San Francisco | 680 KHz | A | — | 50 KW | December 1, 2013 | ||||||||||
KFOG-FM | San Francisco | 104.5 MHz | B | 442 | 7.9 KW | December 1, 2013 | ||||||||||
KFFG — FM | Los Altos | 97.7 MHz | A | 137 | 3.2 KW | December 1, 2013 | ||||||||||
KSAN — FM | San Mateo | 107.7 MHz | B | 354 | 8.9 KW | December 1, 2013 | ||||||||||
KTCT — AM | San Mateo | 1050 KHz | B | — | 50 KW | December 1, 2013 | ||||||||||
Dallas/Ft. Worth, TX | ||||||||||||||||
KLIF — AM | Dallas | 570 KHz | B | — | 5 KW | August 1, 2013 | ||||||||||
KTCK — AM | Dallas | 1310 KHz | B | — | 9 KW | August 1, 2013 | ||||||||||
KPLX — FM | Ft. Worth | 99.5 MHz | C | 511 | 100 KW | August 1, 2013 | ||||||||||
KDBN — FM | Haltom City | 93.3 MHz | C2 | 120 | 50 KW | August 1, 2013 | ||||||||||
KTDK — FM | Sanger | 104.1 MHz | C3 | 192 | 4.1 KW | August 1, 2013 | ||||||||||
KKLF — AM (CP) | Sherman | 1700 KHz | B | — | 10 KW | August 1, 2013 | ||||||||||
Houston, TX | ||||||||||||||||
KRBE — FM | Houston | 104.1 MHz | C | 585 | 100 KW | August 1, 2013 | ||||||||||
Atlanta, GA | ||||||||||||||||
WNNX — FM | Atlanta | 99.7 MHz | C0 | 340 | 100 KW | April 1, 2012 | ||||||||||
WWWQ — FM | College Park | 100.5 MHz | C2 | 298 | 12.5 KW | April 1, 2012 | ||||||||||
Cincinnati, OH | ||||||||||||||||
WRRM — FM | Cincinnati | 98.5 MHz | B | 246 | 18 KW | October 1, 2012 | ||||||||||
WGRR-FM(1) | Hamilton | 103.5 MHz | B | 316 | 11 KW | October 1, 2012 | ||||||||||
WFTK — FM | Lebanon | 96.5 MHz | B | 247 | 19.5 KW | October 1, 2012 | ||||||||||
Indianapolis, IN | ||||||||||||||||
WFMS — FM | Indianapolis | 95.5 MHz | B | 301 | 13 KW | August 1, 2012 | ||||||||||
WISG — FM(2) | Fishers | 93.9 MHz | A | 150 | 2.75 KW | August 1, 2012 | ||||||||||
WJJK — FM | Noblesville | 104.5 MHz | B | 150 | 50 KW | August 1, 2012 | ||||||||||
Kansas City, MO | ||||||||||||||||
KCMO — FM | Kansas City | 94.9 MHz | C0 | 332 | 100 KW | February 1, 2013 | ||||||||||
KCMO — AM | Kansas City | 710 KHz | B | — | 10 KW | February 1, 2013 | ||||||||||
KCFX — FM | Harrisonville | 101.1 MHz | C0 | 335 | 100 KW | February 1, 2013 | ||||||||||
KCJK — FM(3) | Garden City | 105.1 MHz | C1 | 349 | 69 KW | February 1, 2013 | ||||||||||
York, PA(4) | ||||||||||||||||
WSBA — AM | York | 910 KHz | B | — | 5 KW | August 1, 2014 | ||||||||||
WARM — FM | York | 103.3 MHz | B | 398 | 6.4 KW | August 1, 2014 | ||||||||||
WSOX — FM | Red Lion | 96.1 MHz | B | 290 | 13.5 KW | August 1, 2014 | ||||||||||
WGLD-AM | Red Lion | 1440 KHz | D | — | 1 KW | August 1, 2014 | ||||||||||
Stations Operated by Third Parties under LMAs | ||||||||||||||||
WAVG — AM | Jeffersonville | 1450 KHz | C | — | 1 KW | August 1, 2012 | ||||||||||
WZZB — AM | Seymour | 1390 KHz | D | — | 1 KW | August 1, 2012 | ||||||||||
WQKC — FM(5) | Seymour | 93.7 MHz | B | 213 | 25 KW | August 1, 2012 | ||||||||||
WSWD-FM | Fairfield | 94.9 MHz | B | 322 | 105 KW | October 1, 2012 |
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(1) | WGRR — FM is currently being operated pursuant to an LMA with Entercom Cincinnati License, LLC. | |
(2) | WGRL — FM changed its call letters to WISG — FM effective August 11, 2004. | |
(2) | KFME — FM changed its call letters to KCJK — FM effective October 15, 2004. | |
(3) | These stations also reach Lancaster, PA. | |
(4) | FCC has granted this station a construction permit allowing it to change its city of license and construct a broadcast facility in Sellersburg, IN, which would also serve the Louisville market. |
• | in a market with 45 or more commercial and noncommercial radio stations, an entity may own up to 8 commercial radio stations, not more than 5 of which are in the same service (FM or AM); | |
• | in a market with between 30 and 44 (inclusive) commercial and noncommercial radio stations, an entity may own up to 7 commercial radio stations, not more than 4 of which are in the same service; | |
• | in a market with between 15 and 29 (inclusive) commercial and noncommercial radio stations, an entity may own up to 6 commercial radio stations, not more than 4 of which are in the same service; and | |
• | in a market with 14 or fewer commercial and noncommercial radio stations, an entity may own up to 5 commercial radio stations, not more than 3 of which are in the same service, except that an entity may not own more than 50% of the stations in such market. |
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Name | Age | Position | ||||
Lewis W. Dickey, Jr. | 45 | Chairman, President and Chief Executive Officer | ||||
Martin R. Gausvik | 50 | Executive Vice President, Treasurer and Chief Financial Officer | ||||
John G. Pinch | 58 | Executive Vice President and Co-Chief Operating Officer | ||||
John W. Dickey | 40 | Executive Vice President and Co-Chief Operating Officer | ||||
John Connaughton | 41 | Director | ||||
Michael Goody | 30 | Director | ||||
Holcombe T. Green, Jr. | 67 | Director | ||||
Ian Loring | 40 | Director | ||||
Soren Oberg | 36 | Director | ||||
David Tolley | 39 | Director | ||||
Kent Weldon | 39 | Director |
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• | a $700 million term loan B facility; and | |
• | a $100 million revolving credit facility. |
• | 50% (which percentage may be reduced based on leverage) of our annual excess cash flow; | |
• | 100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions of property by Radio Holdings and its subsidiaries (including insurance and condemnation proceeds) if we do not commit to reinvest those proceeds in assets to be used in our business or to make certain other permitted investments within 15 months of the receipt of such proceeds, or within 180 days of a binding commitment (which binding commitment must be made within such15-month period) to reinvest such proceeds; and | |
• | 100% of the net cash proceeds of any incurrence of debt other than debt permitted under the senior secured credit agreement. |
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• | a pledge of 100% of our capital stock, 100% of the capital stock of each of our existing and future domestic wholly owned subsidiaries and 65% of the capital stock of each of our wholly owned foreign subsidiaries that are directly owned by us or one of the Guarantors; and | |
• | a security interest in, and mortgages on, substantially all material tangible and intangible assets of us, Radio Holdings, and our subsidiary guarantors. |
• | incur additional indebtedness or issue preferred stock; | |
• | create liens on assets; | |
• | enter into sale and leaseback transactions; | |
• | engage in mergers or consolidations; | |
• | sell assets; | |
• | pay dividends and distributions or repurchase our capital stock; | |
• | make investments, loans or advances; | |
• | make capital expenditures; | |
• | repay subordinated indebtedness (including the notes); | |
• | make certain acquisitions; | |
• | engage in certain transactions with affiliates; | |
• | amend material agreements governing subordinated indebtedness (including the senior subordinated notes); | |
• | change our lines of business; and | |
• | change the status of Radio Holdings as a passive holding company. |
• | a maximum total net leverage ratio; | |
• | a minimum interest coverage ratio; and | |
• | an annual maximum on capital expenditures. |
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• | if applicable law or interpretations of the staff of the SEC do not permit us and our guarantors to effect this exchange offer; | |
• | if for any other reason the exchange offer is not consummated within 360 days of the issue date of the outstanding notes; | |
• | any initial purchaser or any other holder of the outstanding notes that is not able to participate in the exchange offer due to applicable law so requests at any time prior to the commencement of the exchange offer; or | |
• | if any holder of the outstanding notes notifies us prior to the 15th day following consummation of the exchange offer that it is prohibited by law or SEC policy from participating in the exchange offer or does not receive exchange notes that may be sold without restriction (other than due solely to the status of such holder as one of our affiliates). |
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• | any exchange notes to be received by such holder will be acquired in the ordinary course of its business; | |
• | such holder has no arrangement or understanding with any person to participate in the distribution (within the meaning of the Securities Act) of the exchange notes in violation of the provisions of the Securities Act; | |
• | such holder is not one of our affiliates, as defined by Rule 405 of the Securities Act, or if it is an affiliate, it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable; and | |
• | it is not engaged in, and does not intend to engage in, a distribution of exchange notes. |
• | you are acquiring the exchange notes in your ordinary course of business; | |
• | you do not have an arrangement or understanding with any person to participate in a distribution of the exchange notes; | |
• | you are not one of our “affiliates,” as defined by Rule 405 of the Securities Act; and | |
• | you are not engaged in, and do not intend to engage in, a distribution of the exchange notes. |
• | you cannot rely on the position of the staff of the SEC enunciated inMorgan Stanley & Co., Inc. (available June 5, 1991),Exxon Capital Holdings Corporation(available May 13, 1988), as interpreted in the SEC’s letter toShearman & Sterlingdated July 2, 1993, or similar no-action letters; and | |
• | in the absence of an exception from the position stated immediately above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes. |
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• | to delay accepting for exchange any outstanding notes; |
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• | to extend the exchange offer or to terminate the exchange offer and to refuse to accept outstanding notes not previously accepted if any of the conditions set forth below under “— Conditions to the Exchange Offer” have not been satisfied, by giving oral or written notice of such delay, extension or termination to the exchange agent; and | |
• | subject to the terms of the registration rights agreement, to amend the terms of the exchange offer in any manner. |
• | the exchange offer, or the making of any exchange by a holder of outstanding notes, violates any applicable law or interpretation of the staff of the SEC; | |
• | any action or proceeding shall have been instituted or threatened in any court or by any governmental agency that might materially impair our ability to proceed with the exchange offer, and any material adverse development shall have occurred in any existing action or proceeding with respect to us; | |
• | all governmental approvals shall not have been obtained, which approvals we deem necessary for the consummation of the exchange offer. |
• | the representations described under “— Purpose and Effect of the Exchange Offer” and “— Procedures for Tendering Outstanding Notes”; and | |
• | any other representations as may be reasonably necessary under applicable SEC rules, regulations, or interpretations to make available to us an appropriate form for registration of the exchange notes under the Securities Act. |
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• | complete, sign and date the letter of transmittal or a facsimile of the letter of transmittal, have the signature on the letter of transmittal guaranteed if required by the letter of transmittal and mail or deliver such letter of transmittal or facsimile to the exchange agent prior to the expiration date; or | |
• | comply with DTC’s Automated Tender Offer Program procedures described below. |
• | the exchange agent must receive outstanding notes along with the letter of transmittal; or | |
• | prior to the expiration date, the exchange agent must receive a timely confirmation of book-entry transfer of outstanding notes into the exchange agent’s account at DTC according to the procedure for book-entry transfer described below or a properly transmitted agent’s message; or | |
• | the holder must comply with the guaranteed delivery procedures described below. |
• | by a registered holder of the outstanding notes who has not completed the box entitled “Special Registration Instructions” or “Special Delivery Instructions” on the letter of transmittal; or | |
• | for the account of an eligible guarantor institution. |
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• | DTC has received an express acknowledgment from a participant in its Automated Tender Offer Program that is tendering outstanding notes that are the subject of the book-entry confirmation; | |
• | the participant has received and agrees to be bound by the terms of the letter of transmittal or, in the case of an agent’s message relating to guaranteed delivery, such participant has received and agrees to be bound by the applicable notice of guaranteed delivery; and | |
• | we may enforce that agreement against such participant. |
• | outstanding notes or a timely book-entry confirmation of such outstanding notes into the exchange agent’s account at the book-entry transfer facility; and | |
• | a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message. |
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• | the holder is acquiring the exchange notes in the ordinary course of its business; | |
• | the holder does not have an arrangement or understanding with any person to participate in a distribution of the exchange notes; | |
• | the holder is not one of our affiliates within the meaning of Rule 405 under the Securities Act; and | |
• | the holder is not engaged in, and does not intend to engage in, a distribution of the exchange notes. |
• | the holder cannot rely on the position of the staff of the SEC enunciated inMorgan Stanley & Co., Inc. (available June 5, 1991),Exxon Capital Holdings Corporation(available May 13, 1988), as interpreted in the SEC’s letter toShearman & Sterlingdated July 2, 1993, or similar no-action letters; and | |
• | in the absence of an exception from the position stated immediately above, the holder must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes. |
• | the tender is made through an eligible guarantor institution; |
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• | prior to the expiration date, the exchange agent receives from such eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery by facsimile transmission, mail, or hand delivery or a properly transmitted agent’s message and notice of guaranteed delivery: | |
• | setting forth the name and address of the holder, the registered number(s)of such outstanding notes and the principal amount of outstanding notes tendered; | |
• | stating that the tender is being made thereby; | |
• | guaranteeing that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal, or facsimile thereof, together with the outstanding notes or a book-entry confirmation, and any other documents required by the letter of transmittal, will be deposited by the eligible guarantor institution with the exchange agent; and | |
• | the exchange agent receives the properly completed and executed letter of transmittal or facsimile thereof, as well as certificate(s) representing all tendered outstanding notes in proper form for transfer or a book-entry confirmation of transfer of the outstanding notes into the exchange agent’s account at DTC and all other documents required by the letter of transmittal within three New York Stock Exchange trading days after the expiration date. |
• | the exchange agent must receive a written notice, which may be by telegram, telex, facsimile or letter, of withdrawal at one of the addresses set forth below under “— Exchange Agent”; or | |
• | holders must comply with the appropriate procedures of DTC’s Automated Tender Offer Program system. |
• | specify the name of the person who tendered the outstanding notes to be withdrawn; | |
• | identify the outstanding notes to be withdrawn, including the principal amount of the outstanding notes; and | |
• | where certificates for outstanding notes have been transmitted, specify the name in which such outstanding notes were registered, if different from that of the withdrawing holder. |
• | the serial numbers of the particular certificates to be withdrawn; and | |
• | a signed notice of withdrawal with signatures guaranteed by an eligible guarantor institution unless such holder is an eligible guarantor institution. |
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By registered mail or certified mail: | By regular mail or overnight courier: | By Hand: | ||
Wells Fargo Bank, N.A. MAC —N9303-121 Corporate Trust Operations P.O. Box 1517 Minneapolis, MN55480-1517 Attn.: Reorg. | Wells Fargo Bank, N.A. MAC —N9303-121 Corporate Trust Operations Sixth & Marquette Avenue Minneapolis, MN 55479 Attn.: Reorg. | Wells Fargo Bank, N.A. Northstar East Building - 12th floor Corporate Trust Services 608 Second Avenue South Minneapolis, MN 55402 Attn.: Reorg. |
Telephone Inquiries:(800) 344-5128
transmit instructions via facsimile other than as set forth above,
that delivery or those instructions will not be effective.
• | SEC registration fees; | |
• | fees and expenses of the exchange agent and trustee; | |
• | accounting and legal fees and printing costs; and | |
• | related fees and expenses. |
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• | certificates representing outstanding notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of outstanding notes tendered; | |
• | tendered outstanding notes are registered in the name of any person other than the person signing the letter of transmittal; or | |
• | a transfer tax is imposed for any reason other than the exchange of outstanding notes under the exchange offer. |
• | as set forth in the legend printed on the notes as a consequence of the issuance of the outstanding notes pursuant to the exemptions from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws; and | |
• | as otherwise set forth in the prospectus distributed in connection with the private offering of the outstanding notes. |
• | the holder is acquiring the exchange notes in the ordinary course of its business; | |
• | the holder does not have an arrangement or understanding with any person to participate in a distribution of the exchange notes; and | |
• | the holder is not engaged in, and does not intend to engage in, a distribution of the exchange notes. |
• | cannot rely on the position of the staff of the SEC enunciated inMorgan Stanley & Co., Inc. (available June 5, 1991),Exxon Capital Holdings Corporation(available May 13, 1988), as interpreted in the SEC’s letter toShearman & Sterlingdated July 2, 1993, or similar no-action letters; and |
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• | in the absence of an exception from the position stated immediately above, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes. |
• | are unsecured senior subordinated obligations of the Issuer; | |
• | are subordinated in right of payment to all existing and future Senior Indebtedness (including the Senior Credit Facilities) of the Issuer; | |
• | are effectively subordinated to all secured Indebtedness of the Issuer (including the Senior Credit Facilities); |
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• | are senior in right of payment to any future Subordinated Indebtedness (as defined with respect to the Notes) of the Issuer; and | |
• | are guaranteed on an unsecured senior subordinated basis by our direct parent, Radio Holdings, and each Restricted Subsidiary that guarantees the Senior Credit Facilities. |
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Year | Percentage | |||
2010 | 104.938% | |||
2011 | 102.469% | |||
2012 and thereafter | 100.000% |
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Annual Consolidated Financial Statements | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-9 | ||||
Unaudited Condensed Consolidated Financial Statements | ||||
F-39 | ||||
F-40 | ||||
F-41 | ||||
F-42 |
F-1
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F-2
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F-3
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
CONSOLIDATED BALANCE SHEETS
(In thousands) | |||||||||
Radio Holdings | Predecessor | ||||||||
December 31, | December 31, | ||||||||
2006 | 2005 | ||||||||
ASSETS | |||||||||
CURRENT ASSETS | |||||||||
Cash and cash equivalents | $ | 7,848 | $ | 7,337 | |||||
Accounts receivable, less allowance for doubtful accounts of $1,509 in 2006 and $878 in 2005 | 50,329 | 46,112 | |||||||
Deferred income taxes | 927 | 24,948 | |||||||
Prepaid expenses and other current assets | 2,714 | 2,965 | |||||||
Assets held for sale, discontinued operations | — | 384,933 | |||||||
Total Current Assets | 61,818 | 466,295 | |||||||
Property, plant and equipment, net | 41,389 | 36,006 | |||||||
Intangible assets, net (including goodwill of $550,163 in 2006 and $6,456 in 2005) | 1,364,424 | 352,400 | |||||||
Other assets | 36,230 | 24,095 | |||||||
$ | 1,503,861 | $ | 878,796 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
CURRENT LIABILITIES | |||||||||
Accounts payable | $ | 2,023 | $ | 5,166 | |||||
Current portion of long-term debt | 7,000 | 9,236 | |||||||
Accrued interest | 6,437 | 7,030 | |||||||
Accrued income taxes | 2,355 | 27,597 | |||||||
Other current liabilities | 11,401 | 58,381 | |||||||
Liabilities held for sale | — | 367,099 | |||||||
Total Current Liabilities | 29,216 | 474,509 | |||||||
Long-term debt | 924,500 | 246,092 | |||||||
Other liabilities | 8,689 | 162 | |||||||
Deferred income taxes | 250,716 | 52,887 | |||||||
Minority interest | — | 31,028 | |||||||
Total Liabilities | 1,213,121 | 804,678 | |||||||
Stockholders’ equity | |||||||||
CMP Susquehanna Radio Holdings Corp. Common stock — Voting $.01 par value, authorized 1,000 shares and issued 100 shares | — | — | |||||||
Susquehanna Pfaltzgraff Co. and subsidiaries Common stock — Voting $.01 par value, authorized 40,000,000 shares | — | 182 | |||||||
Susquehanna Pfaltzgraff Co. and subsidiaries Common stock — Class “A” Non-voting, $.01 par value, authorized 10,000,000 shares | — | 20 | |||||||
Susquehanna Pfaltzgraff Co. and subsidiaries ESOP common stock — $.01 par value, authorized 50,000,000 shares | — | 66 | |||||||
Additional paid-in capital | 309,161 | 162,197 | |||||||
Retained earnings (accumulated deficit) | (18,603 | ) | 45,106 | ||||||
Susquehanna Pfaltzgraff Co. and subsidiaries Unearned ESOP Shares | — | (124,489 | ) | ||||||
Accumulated other comprehensive income (loss) | 182 | (8,964 | ) | ||||||
Total Stockholders’ Equity | 290,740 | 74,118 | |||||||
Total liabilities and stockholders’ equity | $ | 1,503,861 | $ | 878,796 | |||||
F-4
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands) | |||||||||||||||||
Radio Holdings | |||||||||||||||||
May 5, 2006 | Predecessor | ||||||||||||||||
through | January 1, 2006 | ||||||||||||||||
December 31, | through May 4, | Year Ended December 31, | |||||||||||||||
2006 | 2006 | 2005 | 2004 | ||||||||||||||
Net revenues | $ | 156,704 | $ | 65,987 | $ | 231,587 | $ | 231,058 | |||||||||
Operating expenses: | |||||||||||||||||
Station operating expense excluding depreciation amortization and including non-cash contract termination costs of $6,723 for the period May 5, 2006 through December 31, 2006 | 92,660 | 49,510 | 152,542 | 147,608 | |||||||||||||
Corporate general and administrative expenses | 4,106 | 31,029 | 24,708 | 20,297 | |||||||||||||
Depreciation and amortization , including pre-sold advertising amortization of $23,023 for the period May 5, 2006 through December 31, 2006 | 30,963 | 2,421 | 7,401 | 7,759 | |||||||||||||
Gain on sale of assets | — | — | (300 | ) | (10,151 | ) | |||||||||||
Costs related to sale of business, principally advisory fees | — | 14,513 | — | — | |||||||||||||
Total operating expenses | 127,729 | 97,473 | 184,351 | 165,513 | |||||||||||||
Operating income (loss) from continuing operations | 28,975 | (31,486 | ) | 47,236 | 65,545 | ||||||||||||
Non-operating income (expense) from continuing operations: | |||||||||||||||||
Interest expense, net | (54,061 | ) | (4,638 | ) | (17,141 | ) | (19,841 | ) | |||||||||
Loss on early extinguishment of debt | — | (6,492 | ) | — | (3,024 | ) | |||||||||||
Other income (expense) | (1,702 | ) | — | — | 261 | ||||||||||||
Income (loss) from continuing operations before income taxes and minority interest | (26,788 | ) | (42,616 | ) | 30,095 | 42,941 | |||||||||||
Provision (benefit) for income taxes | (8,185 | ) | (16,640 | ) | 4,541 | 17,543 | |||||||||||
Minority interest income (expense) | — | (1,368 | ) | 1,795 | (8,507 | ) | |||||||||||
Earnings (loss) from continuing operations | (18,603 | ) | (27,344 | ) | 27,349 | 16,891 | |||||||||||
Discontinued operations: | |||||||||||||||||
Gain (loss) from operations of discontinued operations (including gain on sale of $498,387 in 2006) | — | 502,718 | (19,659 | ) | (12,866 | ) | |||||||||||
Provision (benefit) for income taxes | — | 195,647 | (9,765 | ) | (2,321 | ) | |||||||||||
Minority interest income (expense) | — | (73,966 | ) | (1,446 | ) | (997 | ) | ||||||||||
Gain (loss) on discontinued operations | — | 233,105 | (11,340 | ) | (11,542 | ) | |||||||||||
Net income (loss) | $ | (18,603 | ) | $ | 205,761 | $ | 16,009 | $ | 5,349 | ||||||||
F-5
Table of Contents
for the period May 5, 2006 through December 31, 2006
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
for the period January 1, 2006 through May 4, 2006 and years ended December 31, 2005 and 2004
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)
Retained | Accumulated | |||||||||||||||||||||||
Additional | Earnings | Comprehensive | Unearned | Total | ||||||||||||||||||||
Common | Paid-In | (Accumulated | Income | ESOP | Stockholders’ | |||||||||||||||||||
Stock | Capital | Deficit) | (Loss) | Shares | Equity | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Balance as of January 1, 2004 | $ | 273 | $ | 145,248 | $ | 37,510 | $ | — | $ | (143,641 | ) | $ | 39,390 | |||||||||||
Net income and other comprehensive income | — | — | 5,349 | — | — | 5,349 | ||||||||||||||||||
Class “A” common shares repurchased | — | (30 | ) | (21 | ) | — | — | (51 | ) | |||||||||||||||
ESOP common shares repurchased | (1 | ) | (2,764 | ) | (2,354 | ) | — | — | (5,119 | ) | ||||||||||||||
Allocation of ESOP common shares | — | 10,713 | — | — | 9,576 | 20,289 | ||||||||||||||||||
Cash dividends | — | — | (2,293 | ) | — | — | (2,293 | ) | ||||||||||||||||
Balance as of December 31, 2004 | $ | 272 | $ | 153,167 | $ | 38,191 | $ | — | $ | (134,065 | ) | $ | 57,565 | |||||||||||
Net income | — | — | 16,009 | — | — | 16,009 | ||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||
Additional minimum pension liability, net of income taxes | — | — | — | (8,964 | ) | — | (8,964 | ) | ||||||||||||||||
Total comprehensive income (loss) | 16,009 | (8,964 | ) | 7,045 | ||||||||||||||||||||
Class “A” common shares repurchased | (1 | ) | (1,825 | ) | (1,885 | ) | — | — | (3,711 | ) | ||||||||||||||
Tax benefit of lapse in restrictions on class “A” common shares | — | 6,161 | — | — | — | 6,161 | ||||||||||||||||||
Common shares repurchased | (2 | ) | (34 | ) | (1,941 | ) | — | — | (1,977 | ) | ||||||||||||||
ESOP common shares repurchased | (1 | ) | (3,773 | ) | (2,700 | ) | — | — | (6,474 | ) | ||||||||||||||
Allocation of ESOP common shares | — | 8,501 | — | — | 9,576 | 18,077 | ||||||||||||||||||
Cash dividends | — | — | (2,568 | ) | — | — | (2,568 | ) | ||||||||||||||||
Balance as of December 31, 2005 | $ | 268 | $ | 162,197 | $ | 45,106 | $ | (8,964 | ) | $ | (124,489 | ) | $ | 74,118 | ||||||||||
Net income | — | — | 205,761 | — | — | 205,761 | ||||||||||||||||||
Cash dividends | — | — | (268 | ) | — | — | (268 | ) | ||||||||||||||||
Distribution of net equity in subsidiaries to Trusts | — | 887 | (129,884 | ) | 8,964 | — | (120,033 | ) | ||||||||||||||||
Purchase of Radio minority interest from control group | — | — | (59,959 | ) | — | — | (59,959 | ) | ||||||||||||||||
ESOP shares repurchased | (1 | ) | (35 | ) | (22 | ) | — | — | (58 | ) | ||||||||||||||
Return of ESOP shares | (2 | ) | (10,558 | ) | — | — | 10,560 | — | ||||||||||||||||
Stock options | — | 186 | — | — | — | 186 | ||||||||||||||||||
Balance as of May 4, 2006 | 265 | 152,677 | 60,734 | — | (113,929 | ) | 99,747 | |||||||||||||||||
Eliminate Predecessor balances upon acquisition | (265 | ) | (152,677 | ) | (60,734 | ) | — | 113,929 | (99,747 | ) | ||||||||||||||
Subtotal | — | — | — | — | — | — | ||||||||||||||||||
Contribution of assets | — | 9,233 | — | — | — | 9,233 | ||||||||||||||||||
Contributed capital, net | — | 299,928 | — | — | — | 299,928 | ||||||||||||||||||
Balance as of May 5, 2006 | — | 309,161 | — | — | — | 309,161 | ||||||||||||||||||
Net loss | — | — | (18,603 | ) | — | — | (18,603 | ) | ||||||||||||||||
Other comprehensive income: Change in fair value of derivative | — | — | — | 182 | — | 182 | ||||||||||||||||||
Total comprehensive income (loss) | — | — | (18,603 | ) | 182 | — | (18,421 | ) | ||||||||||||||||
Balance as of December 31, 2006 | $ | — | $ | 309,161 | $ | (18,603 | ) | $ | 182 | $ | — | $ | 290,740 | |||||||||||
F-6
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) | |||||||||||||||||
Radio Holdings | Predecessor | ||||||||||||||||
May 5, 2006 | January 1, | ||||||||||||||||
through | 2006 to | Year Ended | |||||||||||||||
December 31, | May 4, | December 31, | |||||||||||||||
2006 | 2006 | 2005 | 2004 | ||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||
Net income (loss) | $ | (18,603 | ) | $ | 205,761 | $ | 16,009 | $ | 5,349 | ||||||||
Adjustments to reconcile net income(loss) to net cash provided (used in) by operating activities: | |||||||||||||||||
Depreciation and amortization | 30,963 | 15,143 | 49,033 | 50,425 | |||||||||||||
Non-cash contract termination charge | 6,723 | — | — | — | |||||||||||||
ESOP benefit expense | — | — | 13,962 | 15,296 | |||||||||||||
Cable Performance Share Plan | — | — | — | 2,401 | |||||||||||||
Radio Employee Stock Plan | — | 118 | — | 289 | |||||||||||||
Pfaltzgraff restructuring and closing costs | — | — | — | 3,431 | |||||||||||||
Loss on impairment | — | — | 10,631 | — | |||||||||||||
Loss on extinguishment of debt | — | 6,492 | — | 2,690 | |||||||||||||
Loss (gain) on sale of properties | — | — | 1,436 | 1,735 | |||||||||||||
Loss (gain) on sale ofWABZ-FM, | |||||||||||||||||
SusQtech and Pfaltzgraff | — | (498,528 | ) | 1,590 | (10,151 | ) | |||||||||||
Deferred income taxes | (11,025 | ) | 2,633 | 5,753 | 14,092 | ||||||||||||
Minority interests | — | 75,334 | (349 | ) | 9,505 | ||||||||||||
Deferred financing amortization | 2,314 | 197 | 902 | 1,574 | |||||||||||||
Changes in assets and liabilities: | |||||||||||||||||
Decrease (increase) in accounts receivable, net | (7,774 | ) | 825 | 2,844 | 3,908 | ||||||||||||
Decrease (increase) in inventories | — | — | (5,665 | ) | 7,996 | ||||||||||||
Decrease (increase) in prepaid and other current assets | (2,727 | ) | (8,694 | ) | 3,966 | (1,978 | ) | ||||||||||
Decrease (increase) in other assets | 5,065 | — | |||||||||||||||
Increase(decrease) in accounts payable | 1,481 | (28,643 | ) | (5,625 | ) | (65 | ) | ||||||||||
Increase (decrease) in accrued interest | 6,437 | (6,775 | ) | (572 | ) | 2,897 | |||||||||||
Increase (decrease) in accrued income taxes | 2,355 | (5,461 | ) | (9,924 | ) | 2,425 | |||||||||||
Increase (decrease) in other liabilities | 1,966 | (20,125 | ) | (19,777 | ) | (1,027 | ) | ||||||||||
Increase (decrease) in other current liabilities | 5,481 | 57,714 | (3,723 | ) | 9,111 | ||||||||||||
Net cash provided by(used in) operating activities | 22,656 | (204,009 | ) | 60,491 | 119,903 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||
Purchase of property, plant and equipment, net | (472 | ) | (8,522 | ) | (35,018 | ) | (44,658 | ) | |||||||||
(Acquisitions) dispositions | (1,220,043 | ) | 728,328 | — | (125,404 | ) | |||||||||||
Proceeds from sale of Pfaltzgraff assets | — | — | 32,500 | — | |||||||||||||
Proceeds from sale ofWABZ-FM | — | — | 300 | 11,500 | |||||||||||||
Proceeds from sale of real estate properties | — | — | 2,878 | 2,077 | |||||||||||||
Increase in FCC Licenses due to judgment | — | — | — | (10,000 | ) | ||||||||||||
Decrease (increase) in intangible assets, investments and other assets | — | — | (3,851 | ) | (3,383 | ) | |||||||||||
Net cash provided by (used in) investing activities | (1,220,515 | ) | 719,806 | (3,191 | ) | (169,868 | ) | ||||||||||
F-7
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) | |||||||||||||||||
Radio Holdings | Predecessor | ||||||||||||||||
May 5, 2006 | January 1, | ||||||||||||||||
through | 2006 to | ||||||||||||||||
December 31, | May 4, | Year Ended December 31, | |||||||||||||||
2006 | 2006 | 2005 | 2004 | ||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||
Net decrease in revolving credit borrowings | — | — | (33,338 | ) | (15,594 | ) | |||||||||||
Increase in cash overdrafts | — | 2,214 | — | — | |||||||||||||
Long-term borrowings | 700,000 | (466,219 | ) | 248,750 | 400,000 | ||||||||||||
Subordinated debt | 250,000 | — | — | — | |||||||||||||
Increase in revolving credit facilities | — | 113,200 | — | — | |||||||||||||
Construction loan repayments | — | — | (931 | ) | (543 | ) | |||||||||||
Redemption of Senior Subordinated Notes | — | — | — | (150,000 | ) | ||||||||||||
Repayment of long-term debt | (18,500 | ) | — | (252,767 | ) | (175,324 | ) | ||||||||||
Capital contributions | 299,928 | — | — | — | |||||||||||||
Payment of debt issuance costs | (25,721 | ) | — | — | — | ||||||||||||
Subsidiary common stock transactions | — | — | (3,256 | ) | (5,113 | ) | |||||||||||
Repurchase of ESOP shares | — | (58 | ) | (6,474 | ) | (5,119 | ) | ||||||||||
Proceeds from stock options | — | 186 | — | — | |||||||||||||
Repurchase of common stock | — | — | (1,977 | ) | — | ||||||||||||
Class “A” common stock transactions | — | — | (3,711 | ) | (51 | ) | |||||||||||
Payment of dividends | — | (268 | ) | (2,568 | ) | (2,293 | ) | ||||||||||
Distribution of cash accounts to Trusts | — | (48,579 | ) | — | — | ||||||||||||
Purchase of minority interest | — | (123,610 | ) | — | — | ||||||||||||
Payments to minority interests | — | — | (494 | ) | (494 | ) | |||||||||||
Net cash provided by (used in) by financing activities | 1,205,707 | (523,134 | ) | (56,766 | ) | 45,469 | |||||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 7,848 | (7,337 | ) | 534 | (4,496 | ) | |||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | — | 7,337 | 8,708 | 13,204 | |||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 7,848 | $ | — | $ | 9,242 | $ | 8,708 | |||||||||
Supplemental disclosures of cash flow information | |||||||||||||||||
Interest paid | $ | 44,017 | $ | 17,309 | $ | 35,100 | $ | 33,800 | |||||||||
Taxes paid | $ | — | $ | 219,600 | $ | 2,200 | $ | 5,500 | |||||||||
Non-cash distribution to Trusts | $ | — | $ | 81,305 | $ | — | $ | — |
F-8
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. | Formation, Nature of Operations and Financial Statement Presentation |
F-9
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2. | Significant Accounting Policies |
F-10
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
• | A $6.7 million non-cash charge recorded by Radio Holdings related to the termination of our contract with our former national advertising agent. | |
• | Potential commission rebates from Katz should national revenue not meet certain targets for certain periods during the contract term. These amounts are measured annually with settlement to occur shortly thereafter. The rebate amounts currently deemed probable of settlement relate to the first year of the contract. | |
• | Potential additional commissions in excess of the base rates if Katz should exceed certain revenue targets. No additional commission payments have been assumed. |
F-11
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-12
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-13
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
• | a decision not to file a tax return in a particular jurisdiction for which a return might be required, | |
• | an allocation or a shift of income between taxing jurisdictions, | |
• | the characterization of income or a decision to exclude reporting taxable income in a tax return, or | |
• | a decision to classify a transaction, entity, or other position in a tax return as tax exempt. |
F-14
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
3. | Discontinued Operations of the Predecessor |
Revenues from discontinued operations | $ | 70,394 | ||
Interest expense, net | $ | 6,065 |
Gain on disposal of businesses included in discontinued operations before income taxes and minority interests | $ | 498,387 | ||
Income taxes related to gain on disposal of businesses included in discontinued operations | (194,371 | ) | ||
Gain on disposal of business, net | $ | 304,016 | ||
F-15
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2005 | 2004 | |||||||
Revenues from discontinued operations | $ | 259,019 | $ | 333,161 | ||||
Depreciation and amortization | 41,632 | 42,666 | ||||||
Impairment losses | 10,631 | — | ||||||
ESOP expense | 3,601 | 5,454 | ||||||
Interest expense, net | 17,533 | 18,018 | ||||||
Loss from early extinguishment of debt | — | 6,040 |
2005 | ||||
Losses on disposal of businesses included in loss from discontinued operations before income taxes and minority interests | $ | (11,193 | ) | |
Benefit for income taxes on disposal of businesses | 4,029 | |||
Loss on disposal of businesses | $ | (7,164 | ) | |
F-16
Table of Contents
And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2005 | ||||
ASSETS | ||||
Cash and cash equivalents | $ | 1,905 | ||
Accounts receivable, net | 6,305 | |||
Prepaid income taxes | 29,389 | |||
Property, plant and equipment, net | 178,352 | |||
Intangible assets, net | 156,297 | |||
Investments and other assets | 8,957 | |||
Other | 3,728 | |||
Total assets held for sale | $ | 384,933 | ||
LIABILITIES | ||||
Accounts payable | $ | 7,132 | ||
Other current liabilities | 16,223 | |||
Long-term debt | 305,843 | |||
Deferred income taxes | 26,214 | |||
Minority interests | 7,651 | |||
Other liabilities | 4,036 | |||
Total liabilities held for sale | $ | 367,099 | ||
F-17
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
4. | Property, Plant and Equipment |
Estimated Useful | Radio Holdings | Predecessor | |||||||||||
Life | 2006 | 2005 | |||||||||||
Land | $ | 6,420 | $ | 5,766 | |||||||||
Machinery and equipment | 3 to 20 years | 30,949 | 59,599 | ||||||||||
Buildings and improvements | 10 to 40 years | 7,794 | 21,179 | ||||||||||
Construction in progress | — | 518 | |||||||||||
45,163 | 87,062 | ||||||||||||
Less accumulated depreciation | (3,774 | ) | (51,056 | ) | |||||||||
$ | 41,389 | $ | 36,006 | ||||||||||
5. | Long-term Debt |
Radio Holdings | Predecessor | ||||||||
2006 | 2005 | ||||||||
9.875% Senior subordinated notes | $ | 250,000 | $ | — | |||||
Term loan | 681,500 | — | |||||||
7.375% Senior subordinated notes | — | 150,000 | |||||||
Term loan “A” | — | 150,000 | |||||||
Term loan “C” | — | 248,125 | |||||||
Radio notes payable | — | 3,484 | |||||||
Other | — | 9,563 | |||||||
Total | $ | 931,500 | $ | 561,172 | |||||
Debt classified as continuing operations: | |||||||||
9.875% Senior subordinated notes | $ | 250,000 | $ | — | |||||
Term loan | 681,500 | — | |||||||
7.375% Senior subordinated notes | — | 68,793 | |||||||
Term loan “A” | — | 68,793 | |||||||
Term loan “C” | — | 113,796 | |||||||
Radio notes payable | — | 3,484 | |||||||
Other | — | 462 | |||||||
Total | 931,500 | 255,328 | |||||||
Less amounts payable within one year | 7,000 | 9,236 | |||||||
$ | 924,500 | $ | 246,092 | ||||||
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2007 | $ | 7,000 | ||
2008 | 7,000 | |||
2009 | 7,000 | |||
2010 | 7,000 | |||
2011 | 7,000 | |||
Thereafter | 896,500 | |||
$ | 931,500 | |||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
6. | Derivative Financial Instruments |
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
7. | Income Taxes |
Radio Holdings | Predecessor | ||||||||||||||||
Period from May 5, | Period from January 1, | ||||||||||||||||
2006 through | 2006 through | ||||||||||||||||
December 31, | May 4, | ||||||||||||||||
2006 | 2006 | 2005 | 2004 | ||||||||||||||
Income tax expense (benefit) from continuing operations | $ | (8,185 | ) | $ | (16,640 | ) | $ | 4,541 | $ | 17,543 | |||||||
Income tax expense (benefit) from discontinued operations | — | 195,647 | (9,765 | ) | (2,321 | ) | |||||||||||
Total income tax expense (benefit) | $ | (8,185 | ) | $ | 179,007 | $ | (5,224 | ) | $ | 15,222 | |||||||
Radio Holdings | Predecessor | ||||||||||||||||
Period from May 5, | Period from January 1, | ||||||||||||||||
2006 through | 2006 through | ||||||||||||||||
December 31, | May 4, | ||||||||||||||||
2006 | 2006 | 2005 | 2004 | ||||||||||||||
Current: | |||||||||||||||||
Federal | $ | 557 | $ | 4,839 | $ | 555 | $ | 12,092 | |||||||||
State | 2,283 | 854 | 169 | 722 | |||||||||||||
Total current | 2,840 | 5,693 | 724 | 12,814 | |||||||||||||
Deferred: | |||||||||||||||||
Federal | (9,455 | ) | (18,983 | ) | (309 | ) | 5,596 | ||||||||||
State | (1,570 | ) | (3,350 | ) | 4,126 | (867 | ) | ||||||||||
Total deferred | (11,025 | ) | (22,333 | ) | 3,817 | 4,729 | |||||||||||
Income tax expense (benefit) | $ | (8,185 | ) | $ | (16,640 | ) | $ | 4,541 | $ | 17,543 | |||||||
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Radio Holdings | Predecessor | ||||||||||||||||
Period from May 5, 2006 | Period from January 1, | ||||||||||||||||
through | 2006 through | ||||||||||||||||
December 31, | May 4, | ||||||||||||||||
2006 | 2006 | 2005 | 2004 | ||||||||||||||
U.S. statutory rate | $ | (9,376 | ) | $ | (14,916 | ) | $ | 10,533 | $ | 15,029 | |||||||
Permanent differences | 727 | ||||||||||||||||
State income taxes, net of Federal income tax effect | 464 | (1,622 | ) | 2,799 | 945 | ||||||||||||
Compensation deduction | — | — | (9,840 | ) | — | ||||||||||||
Other | — | (102 | ) | 1,049 | 1,569 | ||||||||||||
Income tax expense (benefit) | $ | (8,185 | ) | $ | (16,640 | ) | $ | 4,541 | $ | 17,543 | |||||||
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Radio Holdings | Predecessor | ||||||||
2006 | 2005 | ||||||||
Current deferred tax assets: | |||||||||
Allowance for doubtful accounts | $ | 581 | $ | 450 | |||||
Accrued expenses | 346 | 3,824 | |||||||
Current deferred tax assets | 927 | 4,274 | |||||||
Valuation Allowance | — | — | |||||||
Net current deferred tax assets | 927 | 4,274 | |||||||
Non-current deferred tax assets: | |||||||||
Non-cash contract termination cost | 2,273 | 1,180 | |||||||
Net operating loss and other carryforwards | 16,621 | 34,749 | |||||||
Pension benefits & deferred compensation | — | 12,926 | |||||||
Tangible assets | — | 188 | |||||||
Noncurrent deferred tax assets | 18,894 | 49,043 | |||||||
Valuation Allowance | (16,621 | ) | (16,755 | ) | |||||
2,273 | 32,288 | ||||||||
Deferred tax liabilities: | |||||||||
Pension benefits | — | 6,434 | |||||||
Tangible assets, primarily property & equipment | 5,765 | 3,973 | |||||||
Intangible assets | 247,224 | 51,035 | |||||||
Investments in flow-through entities | — | 2,833 | |||||||
Other liabilities | — | 226 | |||||||
Noncurrent deferred tax liabilities | 252,989 | 64,501 | |||||||
Net Noncurrent deferred tax liabilities | $ | 250,716 | $ | 32,213 | |||||
Net deferred tax liabilities | $ | 249,789 | $ | 27,939 | |||||
8. | Acquisitions and Dispositions |
F-24
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Purchase price | $ | 1,207,991 | ||
Acquisition costs | 12,052 | |||
Total purchase price consideration | $ | 1,220,043 | ||
Allocated to: | ||||
Current assets | (47,776 | ) | ||
Property, plant & equipment, net | (44,081 | ) | ||
Broadcast licenses,non-amortizable | (795,572 | ) | ||
Other intangible assets, amortizable | (37,612 | ) | ||
Investments & other assets (including assets held for sale of $13,500) | (17,640 | ) | ||
Current liabilities and long-term liabilities | 6,294 | |||
Income tax holdback | 5,692 | |||
Deferred income taxes | 260,815 | |||
Allocation of excess purchase price | ||||
over the assets acquired | $ | 550,163 | ||
(In thousands) | ||||||||
2006 | 2005 | |||||||
Net revenues | $ | 223,109 | $ | 233,089 | ||||
Loss before cumulative effect of change in accounting principle | (65,205 | ) | (49,359 | ) | ||||
Net loss | $ | (65,205 | ) | $ | (49,359 | ) |
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F-26
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
9. | Intangible Assets |
Radio Holdings | Predecessor | ||||||||
2006 | 2005 | ||||||||
Indefinite-lived, at carrying value: | |||||||||
Federal Communications Commission licenses (includingKCHZ-FM) | $ | 803,741 | $ | 344,688 | |||||
Goodwill | 550,163 | 6,456 | |||||||
Subtotal | 1,353,904 | 351,144 | |||||||
Definite-lived Favorable leases | 2,413 | 3,348 | |||||||
Other, primarily pre-sold advertising | 35,295 | 1,278 | |||||||
37,708 | 4,626 | ||||||||
Less accumulated amortization | (27,188 | ) | (3,370 | ) | |||||
Subtotal | 10,520 | 1,256 | |||||||
$ | 1,364,424 | $ | 352,400 | ||||||
Predecessor | ||||||||
Federal Communications | Predecessor | |||||||
Commission Licenses | Goodwill | |||||||
Balance January 1, 2005 | $ | 340,771 | $ | 6,456 | ||||
Acquisitions | 3,917 | — | ||||||
Ending Balance December 31, 2005 | $ | 344,688 | $ | 6,456 | ||||
Years ended December 31, | ||||
2007 | $ | 4,094 | ||
2008 | 1,717 | |||
2009 | 774 | |||
2010 | 530 | |||
2011 | 466 | |||
Thereafter | 2,939 | |||
$ | 10,520 | |||
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Goodwill | $ | 550,163 | ||||||
Intangible assets: | ||||||||
Broadcast licenses | 803,741 | |||||||
Pre-sold commercial advertising contracts | 23,125 | |||||||
On-air talent agreements | 8,326 | |||||||
Favorable transmitter site leasehold interests | 2,413 | |||||||
Other | 3,844 | |||||||
Less: accumulated amortization | (27,188 | ) | ||||||
Goodwill and intangible assets, net | $ | 1,364,424 | ||||||
10. | Other Current Liabilities |
Radio Holdings | Predecessor | ||||||||
2006 | 2005 | ||||||||
Accrued employee-related costs | $ | 1,887 | $ | 42,745 | |||||
Deferred income | 114 | 888 | |||||||
Judgment payable | — | 10,134 | |||||||
Trade expense payable | 1,171 | — | |||||||
Other accrued expenses | 8,229 | 4,614 | |||||||
$ | 11,401 | $ | 58,381 | ||||||
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
11. | Predecessor Employee Stock Plan |
F-29
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
12. | Predecessor Employee Benefits |
2005 | ||||
Reconciliation of Funded Status | ||||
Projected Benefit Obligation (PBO) | $ | (40,210 | ) | |
Fair value of Plan assets | 37,430 | |||
PBO (in excess of) or less than Plan assets | (2,780 | ) | ||
Unrecognized prior service cost | 383 | |||
Unrecognized net loss | 14,609 | |||
Net amount recognized | $ | 12,212 | ||
Amounts Recognized in the Consolidated Balance Sheet | ||||
Prepaid benefit cost | $ | 12,212 | ||
Accumulated other comprehensive loss | (14,992 | ) | ||
Net amount recognized | $ | (2,780 | ) | |
Projected Benefit Obligation | $ | 40,210 | ||
Accumulated Benefit Obligation | 40,210 | |||
Fair Value of Assets | 37,430 |
F-30
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2005 | 2004 | |||||||
Net Periodic Pension Cost | ||||||||
Service cost | $ | 201 | $ | 180 | ||||
Interest cost | 2,054 | 2,005 | ||||||
Expected return on assets | (2,442 | ) | (3,303 | ) | ||||
Amortization of prior service cost | 39 | 44 | ||||||
Amortization of loss | 534 | 156 | ||||||
Net Periodic Pension Cost | 386 | (918 | ) | |||||
Curtailment Charge | 109 | — | ||||||
Total | $ | 495 | $ | (918 | ) | |||
Other Comprehensive Loss | ||||||||
Change in intangible asset | $ | (383 | ) | $ | — | |||
Additional minimum pension liability | 14,992 | — | ||||||
Total | $ | 14,609 | $ | — | ||||
2005 | ||||
Reconciliation of Changes in Benefit Obligation | ||||
Projected benefit obligation, beginning of year | $ | 36,226 | ||
Service cost | — | |||
Interest cost | 2,054 | |||
Actuarial losses | 3,701 | |||
Benefits paid | (1,771 | ) | ||
Projected benefit obligation, end of year | $ | 40,210 | ||
Reconciliation of Changes in Fair Value of Assets | ||||
Fair value of assets, beginning of year | $ | 38,701 | ||
Actual Return on Plan Assets | 500 | |||
Contributions by the Employer | — | |||
Benefits Paid | (1,771 | ) | ||
Fair Value of Assets, end of year | $ | 37,430 | ||
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Actuarial Assumptions Used to Determine Plan | ||||||||
Benefit Obligations as of December 31, | 2005 | 2004 | ||||||
Discount rate | 5.28 | % | 5.74 | % | ||||
Compensation increases | N/A | N/A | ||||||
Measurement Date | 12/31/2005 | 12/31/2004 | ||||||
Expected long-term return on assets | 4.00 | % | 8.75 | % | ||||
Actuarial Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31, | ||||||||
Discount rate | 5.74 | % | 6.10 | % | ||||
Compensation increases | N/A | N/A | ||||||
Expected long-term return on assets | 4.00 | % | 8.75 | % |
2005 | ||||
Cash and Money Market | $ | 37,084 | ||
Other | 346 | |||
Total | $ | 37,430 | ||
13. | Predecessor’s Employee Stock Ownership Plan and Class “A” Nonvoting Common Stock |
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2005 | ||||
Voting common stock | 18,195,185 | |||
Class “A” non voting common stock | 2,047,932 | |||
ESOP voting common stock | 6,564,448 |
14. | Lease Commitments |
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Year Ending December 31, | ||||
2007 | $ | 4,753 | ||
2008 | 4,879 | |||
2009 | 4,456 | |||
2010 | 4,328 | |||
2011 | 3,290 | |||
Thereafter | 14,223 |
15. | Commitments and Contingencies |
16. | Segment Information for Continuing Operations |
F-34
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And SUSQUEHANNA PFALTZGRAFF CO. AND SUBSIDIARIES (“Predecessor”)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Radio | Other | Total | ||||||||||
For the Year Ended December 31, 2005 | ||||||||||||
Operating income (loss) | $ | 60,230 | $ | (13,294 | ) | $ | 46,936 | |||||
Interest expense | 4,142 | 12,999 | 17,141 | |||||||||
Depreciation and amortization | 6,165 | 1,236 | 7,401 | |||||||||
Income (loss) before income taxes and minority interests | 56,387 | (26,292 | ) | 30,095 | ||||||||
Identifiable assets | 447,463 | 46,400 | 493,863 | |||||||||
Capital expenditures | 6,944 | 294 | 7,238 | |||||||||
For the Year Ended December 31, 2004 | ||||||||||||
Operating income (loss) | $ | 64,022 | $ | (8,628 | ) | $ | 55,394 | |||||
Interest expense | 7,975 | 11,866 | 19,841 | |||||||||
Depreciation and amortization | 6,605 | 1,154 | 7,759 | |||||||||
Income (loss) before income taxes and minority interests | 64,379 | (21,438 | ) | 42,941 | ||||||||
Identifiable assets | 441,206 | 43,816 | 485,022 | |||||||||
Capital expenditures | 6,772 | 1,048 | 7,820 |
17. | Guarantor and Non Guarantor Financial Information |
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Supplemental Condensed Consolidating Balance Sheet
As of December 31, 2006
(In thousands) | ||||||||||||||||||||
Parent | Guarantor | Non-guarantor | ||||||||||||||||||
Company | Companies | Company | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 7,898 | $ | (49 | ) | $ | — | $ | 7,848 | |||||||||
Accounts receivable, net | — | 49,041 | 1,289 | — | 50,329 | |||||||||||||||
Deferred income taxes & prepaids | — | 4,115 | (474 | ) | — | 3,641 | ||||||||||||||
Intercompany receivable | — | 180,374 | 248 | (180,622 | ) | — | ||||||||||||||
Total Current Assets | — | 241,427 | 1,013 | (180,622 | ) | 61,818 | ||||||||||||||
PROPERTY, PLANT AND EQUIPMENT, AT COST | ||||||||||||||||||||
Property and equipment, net | — | 40,851 | 538 | — | 41,389 | |||||||||||||||
Goodwill and intangible assets, net | — | 1,356,251 | 8,173 | — | 1,364,424 | |||||||||||||||
Receivable from CMP | — | — | — | — | — | |||||||||||||||
Other assets | — | 36,230 | — | — | 36,230 | |||||||||||||||
Intercompany investment | 290,740 | — | — | (290,740 | ) | — | ||||||||||||||
TOTAL ASSETS | $ | 290,740 | $ | 1,674,759 | $ | 9,724 | $ | (471,362 | ) | $ | 1,503,861 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||
Accounts payable | $ | — | $ | 2,023 | $ | — | $ | — | $ | 2,023 | ||||||||||
Current portion of long-term debt | — | 7,000 | — | — | 7,000 | |||||||||||||||
Other current liabilities | — | 20,136 | 57 | — | 20,193 | |||||||||||||||
Intercompany payable | — | 180,374 | 248 | (180,622 | ) | — | ||||||||||||||
Total Current Liabilities | — | 209,533 | 305 | (180,622 | ) | 29,216 | ||||||||||||||
LONG-TERM DEBT | — | 924,500 | — | — | 924,500 | |||||||||||||||
PAYABLE TO AFFILIATE, CMP KC LLC | — | — | — | — | — | |||||||||||||||
PAYABLE TO PARENT CO | — | — | — | — | — | |||||||||||||||
OTHER LIABILITIES | — | 8,598 | 91 | — | 8,689 | |||||||||||||||
DEFERRED INCOME TAXES | — | 250,625 | 91 | — | 250,716 | |||||||||||||||
TOTAL LIABILITIES | — | 1,393,256 | 487 | (180,622 | ) | 1,213,121 | ||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Common stock | — | — | — | |||||||||||||||||
Additional paid-in capital | 309,161 | 299,928 | 9,233 | (309,161 | ) | 309,161 | ||||||||||||||
Retained earnings/(Accumulated deficit) | (18,603 | ) | (18,607 | ) | 3 | 18,604 | (18,603 | ) | ||||||||||||
Accumulated other comprehensive loss | 182 | 182 | — | (182 | ) | 182 | ||||||||||||||
Total Stockholders’ Equity | 290,740 | 281,503 | 9,237 | (290,740 | ) | 290,740 | ||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 290,740 | $ | 1,674,759 | $ | 9,724 | $ | (471,362 | ) | $ | 1,503,861 | |||||||||
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Supplemental Condensed Consolidating Statement of Operations
For the period from May 5, 2006 (date of inception) to December 31, 2006
(In thousands) | ||||||||||||||||||||
Parent | Guarantor | Non-guarantor | ||||||||||||||||||
Company | Companies | Company | Eliminations | Consolidated | ||||||||||||||||
Net revenues | $ | — | $ | 155,607 | $ | 1,097 | $ | — | $ | 156,704 | ||||||||||
Operating expenses: | ||||||||||||||||||||
Station operating expenses, excluding depreciation and amortization | — | 91,870 | 790 | — | 92,660 | |||||||||||||||
Corporate general and administrative | — | 4,106 | — | — | 4,106 | |||||||||||||||
Depreciation and amortization | — | 30,798 | 165 | — | 30,963 | |||||||||||||||
Total operating expenses | — | 126,774 | 955 | — | 127,729 | |||||||||||||||
Operating income | — | 28,833 | 142 | — | 28,975 | |||||||||||||||
Non-operating income (expense): | ||||||||||||||||||||
Interest expense, net | — | (54,061 | ) | — | (54,061 | ) | ||||||||||||||
Other income (expense), net | (18,603 | ) | (1,667 | ) | (35 | ) | 18,603 | (1,702 | ) | |||||||||||
Total non-operating expenses, net | (18,603 | ) | (55,728 | ) | (35 | ) | 18,603 | (55,763 | ) | |||||||||||
Income before income taxes | (18,603 | ) | (26,895 | ) | 107 | 18,603 | (26,788 | ) | ||||||||||||
Income tax benefit (expense) | — | 8,276 | (91 | ) | — | 8,185 | ||||||||||||||
Net income (loss) | $ | (18,603 | ) | $ | (18,619 | ) | $ | 16 | $ | 18,603 | $ | (18,603 | ) | |||||||
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Supplemental Condensed Consolidating Statement of Cash Flows
For the period from May 5, 2006 (date of inception) to December 31, 2006
(In thousands) | ||||||||||||||||||||
Parent | Guarantor | Non-guarantor | ||||||||||||||||||
Company | Companies | Company | Eliminations | Consolidated | ||||||||||||||||
Net cash provided by operating activities | $ | — | $ | 22,705 | $ | (49 | ) | $ | — | $ | 22,656 | |||||||||
Cash flows from investing activities: | — | |||||||||||||||||||
Investment in subsidiary | (299,928 | ) | — | — | 299,928 | — | ||||||||||||||
Acquisitions | — | (1,220,043 | ) | — | — | (1,220,043 | ) | |||||||||||||
Acquisition costs | — | — | — | — | — | |||||||||||||||
Loans to affiliates | — | — | — | — | — | |||||||||||||||
Capital expenditures | — | (472 | ) | — | — | (472 | ) | |||||||||||||
Net cash used in investing activities | (299,928 | ) | (1,220,515 | ) | — | 299,928 | (1,220,515 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from bank credit facility | — | 700,000 | — | — | 700,000 | |||||||||||||||
Proceeds from senior subordinated notes | — | 250,000 | — | — | 250,000 | |||||||||||||||
Repayments of borrowings from credit facility | — | (18,500 | ) | — | — | (18,500 | ) | |||||||||||||
Proceeds from affiliate borrowings | — | — | — | — | — | |||||||||||||||
Payments for debt issuance costs | — | (25,721 | ) | — | — | (25,721 | ) | |||||||||||||
Proceeds from contributed capital | 299,928 | 299,928 | — | (299,928 | ) | 299,928 | ||||||||||||||
Net cash provided by (used in) financing activities | 299,928 | 1,205,707 | — | (299,928 | ) | 1,205,707 | ||||||||||||||
Net increase (decrease) in cash and cash equivalents | — | 7,898 | (49 | ) | — | 7,848 | ||||||||||||||
Cash and cash equivalents, beginning of period | — | — | — | — | — | |||||||||||||||
Cash and cash equivalents, end of period | $ | — | $ | 7,898 | $ | (49 | ) | $ | — | $ | 7,848 | |||||||||
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Radio Holdings | ||||||||
March 31, | December 31, | |||||||
2007 | 2006 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 2,762 | $ | 7,848 | ||||
Accounts receivable, less allowance for doubtful accounts of $2,012 in 2007 and $1,509 in 2006 | 41,211 | 50,329 | ||||||
Deferred income taxes | 4,460 | 927 | ||||||
Prepaid expenses and other current assets | 7,092 | 2,714 | ||||||
Total Current Assets | 55,525 | 61,818 | ||||||
Property, plant and equipment, net | 40,144 | 41,389 | ||||||
Intangible assets, net (including goodwill of $550,163 in 2007 and $550,163 in 2006) | 1,363,014 | 1,364,424 | ||||||
Other assets | 34,935 | 36,230 | ||||||
Total assets | $ | 1,493,618 | $ | 1,503,861 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 1,310 | $ | 2,023 | ||||
Current portion of long-term debt | 7,000 | 7,000 | ||||||
Accrued interest | 12,340 | 6,437 | ||||||
Accrued income taxes | 510 | 2,355 | ||||||
Other current liabilities | 9,749 | 11,401 | ||||||
Total Current Liabilities | 30,909 | 29,216 | ||||||
Long-term debt | 912,750 | 924,500 | ||||||
Other liabilities | 9,220 | 8,689 | ||||||
Deferred income taxes | 252,393 | 250,716 | ||||||
Total liabilities | 1,205,272 | 1,213,121 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Common Stock — Voting $.01 par value, authorized 1,000 shares and issued 100 shares | — | — | ||||||
Additional paid-in capital | 309,161 | 309,161 | ||||||
Retained earnings/(Accumulated deficit) | (20,927 | ) | (18,603 | ) | ||||
Accumulated other comprehensive income | 112 | 182 | ||||||
Total Stockholders’ Equity | 288,346 | 290,740 | ||||||
Total Liabilities and Stockholders’ Equity | $ | 1,493,618 | $ | 1,503,861 | ||||
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(Dollars in thousands)
(Unaudited)
Radio Holdings | Predecessor | ||||||||
Three Months | Three Months | ||||||||
Ended March 31, | Ended March 31, | ||||||||
2007 | 2006 | ||||||||
Net revenues | $ | 46,667 | $ | 49,211 | |||||
Operating expenses: | |||||||||
Station operating expense excluding depreciation amortization | 26,813 | 31,771 | |||||||
Corporate general and administrative expenses | 1,683 | 6,254 | |||||||
Depreciation and amortization | 2,834 | 1,790 | |||||||
Total operating expenses | 31,330 | 39,815 | |||||||
Operating income from continuing operations | 15,337 | 9,396 | |||||||
Non-operating income (expense) from continuing operations: | |||||||||
Interest expense, net | (19,508 | ) | (4,466 | ) | |||||
Loss on early extinguishment of debt | — | (6,492 | ) | ||||||
Other income (expense) | (9 | ) | 225 | ||||||
Loss from continuing operations before income taxes and minority interest | (4,180 | ) | (1,337 | ) | |||||
Provision (benefit) for income taxes | (1,856 | ) | 109 | ||||||
Minority interest income (expense) | — | (471 | ) | ||||||
Loss from continuing operations | (2,324 | ) | (1,917 | ) | |||||
Discontinued operations: | |||||||||
Gain from operations of discontinued operations | — | 3,922 | |||||||
Provision for income taxes | — | 1,725 | |||||||
Minority interest income | — | 37 | |||||||
Gain on discontinued operations | — | 2,234 | |||||||
Net income (loss) | $ | (2,324 | ) | $ | 317 | ||||
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(Dollars in thousands)
(Unaudited)
Radio Holdings | Predecessor | ||||||||
March 31, | March 31, | ||||||||
2007 | 2006 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
Net income (loss) | $ | (2,324 | ) | $ | 317 | ||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||
Depreciation and amortization | 2,834 | 2,013 | |||||||
Loss (gain) on sale of properties | — | 472 | |||||||
Deferred income taxes | (1,856 | ) | (15,975 | ) | |||||
Minority interests | — | 434 | |||||||
Loss on equity investments | — | 188 | |||||||
Deferred financing amortization | 1,225 | 183 | |||||||
Changes in assets and liabilities: | |||||||||
Decrease (increase) in accounts receivable, net | 9,118 | 8,927 | |||||||
Decrease (increase) in other assets | (4,377 | ) | (2,828 | ) | |||||
Increase (decrease) in accounts payable and accrued expenses | 3,539 | (4,362 | ) | ||||||
Increase (decrease) in prepaid and accrued income taxes | (1,845 | ) | 18,675 | ||||||
Increase (decrease) in other liabilities | 529 | (149 | ) | ||||||
Increase (decrease) in other current liabilities | — | (3,460 | ) | ||||||
Net cash provided by operating activities | 6,843 | 4,435 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
Purchase of property, plant and equipment, net | (179 | ) | (6,098 | ) | |||||
Intangible assets, investments and other assets | — | (1,872 | ) | ||||||
Net cash used in investing activities | (179 | ) | (7,970 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
Net increase in revolving credit borrowings | — | 156,301 | |||||||
Construction loan repayments | — | (209 | ) | ||||||
Repayment of long-term debt | (11,750 | ) | (152,674 | ) | |||||
Subsidiary common stock transactions | — | (7,050 | ) | ||||||
Payment of dividends | — | (254 | ) | ||||||
Net cash used in financing activities | (11,750 | ) | (3,886 | ) | |||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (5,086 | ) | (7,422 | ) | |||||
CASH AND CASH EQUIVALENTS, at beginning of period | 7,848 | 9,242 | |||||||
CASH AND CASH EQUIVALENTS, at end of period | $ | 2,762 | $ | 1,820 | |||||
Supplemental disclosures of cash flow information | |||||||||
Interest paid | $ | 12,846 | $ | 5,768 | |||||
Income taxes paid | $ | — | $ | — | |||||
F-41
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1. | Interim Financial Data and Basis of Presentation |
• | a decision not to file a tax return in a particular jurisdiction for which a return might be required, |
F-42
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• | an allocation or a shift of income between taxing jurisdictions, | |
• | the characterization of income or a decision to exclude reporting taxable income in a tax return, or | |
• | a decision to classify a transaction, entity, or other position in a tax return as tax exempt. |
2. | Discontinued Operations of the Predecessor |
Revenues from discontinued operations | $ | 53,221 | ||
Interest expense, net | $ | 4,738 | ||
3. | Long-term Debt |
Radio Holdings | ||||||||
March 31, | December 31, | |||||||
2007 | 2006 | |||||||
Debt classified as continuing operations: | ||||||||
9.875% Senior subordinated notes | 250,000 | 250,000 | ||||||
Term loan | 669,750 | 681,500 | ||||||
Total | 919,750 | 931,500 | ||||||
Less amounts payable within one year | 7,000 | 7,000 | ||||||
912,750 | 924,500 | |||||||
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4. | Derivative Financial Instruments |
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5. | Contingencies |
6. | Related Party |
7. | Guarantor and Non Guarantor Financial Information |
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(In thousands) | ||||||||||||||||||||
Parent | Guarantor | Non-guarantor | ||||||||||||||||||
Company | Companies | Company | Eliminations | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 3,001 | $ | (239 | ) | $ | — | $ | 2,762 | |||||||||
Accounts receivable, net | — | 40,755 | 456 | — | 41,211 | |||||||||||||||
Deferred income taxes & prepaids | — | 10,598 | 1,111 | (157 | ) | 11,552 | ||||||||||||||
Intercompany receivable | — | 266,439 | 312 | (266,751 | ) | — | ||||||||||||||
Total Current Assets | — | 320,793 | 1,641 | (266,909 | ) | 55,525 | ||||||||||||||
PROPERTY, PLANT AND EQUIPMENT, AT COST | ||||||||||||||||||||
Property and equipment, net | — | 39,643 | 501 | — | 40,144 | |||||||||||||||
Goodwill and intangible assets, net | — | 1,354,844 | 8,170 | — | 1,363,014 | |||||||||||||||
Receivable from CMP | — | — | — | — | — | |||||||||||||||
Other assets | — | 34,935 | — | — | 34,935 | |||||||||||||||
Intercompany investment | 288,346 | — | — | (288,346 | ) | — | ||||||||||||||
$ | 288,346 | $ | 1,750,215 | $ | 10,312 | $ | (555,255 | ) | $ | 1,493,618 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||
Accounts payable | — | 1,310 | — | — | 1,310 | |||||||||||||||
Current portion of long-term debt | — | 7,000 | — | — | 7,000 | |||||||||||||||
Other current liabilities | — | 22,508 | 91 | — | 22,599 | |||||||||||||||
Intercompany payable | — | 266,145 | 763 | (266,909 | ) | — | ||||||||||||||
Total Current Liabilities | — | 296,964 | 854 | (266,909 | ) | 30,909 | ||||||||||||||
LONG-TERM DEBT | — | 912,750 | — | — | 912,750 | |||||||||||||||
PAYABLE TO AFFILIATE, CMP KC LLC | — | — | — | — | — | |||||||||||||||
PAYABLE TO PARENT CO | — | — | — | — | — | |||||||||||||||
OTHER LIABILITIES | — | 9,128 | 92 | — | 9,220 | |||||||||||||||
DEFERRED INCOME TAXES | — | 252,268 | 125 | — | 252,393 | |||||||||||||||
Total Liabilities | — | 1,471,109 | 1,071 | (266,909 | ) | 1,205,272 | ||||||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Common stock | — | — | — | |||||||||||||||||
Additional paid-in capital | 309,161 | 299,928 | 9,233 | (309,161 | ) | 309,161 | ||||||||||||||
Retained earnings/(Accumulated deficit) | (20,927 | ) | (20,935 | ) | 8 | 20,927 | (20,927 | ) | ||||||||||||
Accumulated other comprehensive income | 112 | 112 | — | (112 | ) | 112 | ||||||||||||||
Total Stockholders’ Equity | 288,346 | 279,105 | 9,241 | (288,346 | ) | 288,346 | ||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 288,346 | $ | 1,750,215 | $ | 10,312 | $ | (555,255 | ) | $ | 1,493,618 | |||||||||
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(In thousands) | ||||||||||||||||||||
Parent | Guarantor | Non-guarantor | ||||||||||||||||||
Company | Companies | Company | Eliminations | Consolidated | ||||||||||||||||
Net Revenues | $ | — | $ | 46,126 | $ | 541 | $ | — | $ | 46,667 | ||||||||||
Operating Expenses: | ||||||||||||||||||||
Station operating expenses, excluding depreciation and amortization | — | 26,553 | $ | 260 | — | 26,813 | ||||||||||||||
Corporate general and administrative | — | 1,683 | $ | — | — | 1,683 | ||||||||||||||
Depreciation and amortization | — | 2,794 | $ | 40 | — | 2,834 | ||||||||||||||
Total operating expenses | — | 31,030 | 300 | — | 31,330 | |||||||||||||||
Operating income | — | 15,096 | 241 | — | 15,337 | |||||||||||||||
Non-operating income (expense): | ||||||||||||||||||||
Interest expense, net | — | (19,508 | ) | — | (19,508 | ) | ||||||||||||||
Other income (expense), net | (2,324 | ) | (9 | ) | — | 2,324 | (9 | ) | ||||||||||||
Total non-operating expenses, net | (2,324 | ) | (19,517 | ) | — | 2,324 | (19,517 | ) | ||||||||||||
Income before income taxes | (2,324 | ) | (4,421 | ) | 241 | 2,324 | (4,180 | ) | ||||||||||||
Income tax benefit (expense) | — | 2,093 | (237 | ) | — | 1,856 | ||||||||||||||
Net income (loss) | $ | (2,324 | ) | $ | (2,328 | ) | $ | 4 | $ | 2,324 | $ | (2,324 | ) | |||||||
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(In thousands) | ||||||||||||||||||||
Parent | Guarantor | Non-guarantor | ||||||||||||||||||
Company | Companies | Company | Eliminations | Consolidated | ||||||||||||||||
Net cash provided by operating activities | $ | — | $ | 7,033 | $ | (189 | ) | $ | 6,843 | |||||||||||
Cash flows from investing activities: | — | |||||||||||||||||||
Investment in subsidiary | — | — | ||||||||||||||||||
Acquisitions | — | — | ||||||||||||||||||
Acquisition costs | — | |||||||||||||||||||
Loans to affiliates | — | |||||||||||||||||||
Capital expenditures | (179 | ) | — | (179 | ) | |||||||||||||||
Net cash used in investing activities | — | (179 | ) | — | — | (179 | ) | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Proceeds from bank credit facility | — | — | ||||||||||||||||||
Proceeds from senior subordinated notes | — | — | ||||||||||||||||||
Repayments of borrowings from credit facility | (11,750 | ) | (11,750 | ) | ||||||||||||||||
Proceeds from affiliate borrowings | — | — | — | |||||||||||||||||
Payments for debt issuance costs | — | |||||||||||||||||||
Proceeds from contributed capital | — | |||||||||||||||||||
Net cash provided by (used in) financing activities | — | (11,750 | ) | — | — | (11,750 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | — | (4,897 | ) | (189 | ) | — | (5,086 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | — | 7,898 | (49 | ) | — | 7,848 | ||||||||||||||
Cash and cash equivalents, end of period | $ | — | $ | 3,001 | $ | (239 | ) | $ | — | $ | 2,762 |
F-48
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Financial Statement Schedule
Valuation and Qualifying Accounts
(In thousands) | ||||||||||||||||
Balance at | Provision for | |||||||||||||||
Beginning of | Doubtful | Balance at | ||||||||||||||
Year | Accounts | Write-offs | End of Year | |||||||||||||
Fiscal Year | ||||||||||||||||
2006, May 5 through December 31 | ||||||||||||||||
Allowance for Doubtful Accounts for Radio Holdings | $ | 578 | 1,010 | (79 | ) | $ | 1,509 | |||||||||
2006, January 1 through May 4 | ||||||||||||||||
Allowance for Doubtful Accounts for Predecessor | $ | 878 | 207 | (507 | ) | $ | 578 | |||||||||
2005 | ||||||||||||||||
Allowance for Doubtful Accounts for Predecessor | $ | 1,136 | 371 | (629 | ) | $ | 878 | |||||||||
2004 | ||||||||||||||||
Allowance for Doubtful Accounts for Predecessor | $ | 1,152 | 976 | (992 | ) | $ | 1,136 |
S-1
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which have been registered under the Securities Act of 1933, for any and all
outstanding 97/8% Senior Subordinated Notes due 2014
Table of Contents
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II-2
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Item 21. | Exhibits and Financial Statement Schedules. |
(a) | Exhibits |
Exhibit No. | Description | |||
3 | .1 | Certificate of Incorporation of CMP Susquehanna Radio Holdings Corp., as amended | ||
3 | .2 | Bylaws of CMP Susquehanna Guarantor Corp. (former name of CMP Susquehanna Radio Holdings Corp.) | ||
3 | .3 | Certificate of Incorporation of CMP Susquehanna Corp. | ||
3 | .4 | Bylaws of CMP Susquehanna Corp. | ||
3 | .5 | Certificate of Incorporation of CMP KC Corp. | ||
3 | .6 | Bylaws of CMP KC Corp. | ||
3 | .7 | Certificate of Formation of CMP Houston-KC, LLC, as amended | ||
3 | .8 | Limited Liability Company Declaration of CMP Houston-KC, LLC | ||
3 | .9 | Certificate of Incorporation of CMP Merger Co. (former name of Susquehanna Pfaltzgraff Co.) | ||
3 | .10 | Bylaws of CMP Merger Co. (former name of Susquehanna Pfaltzgraff Co.) | ||
3 | .11 | Certificate of Incorporation of Susquehanna Media Co., as amended | ||
3 | .12 | Bylaws of Susquehanna Media Co., as amended | ||
3 | .13 | Articles of Incorporation of Susquehanna Radio Corp., as amended | ||
3 | .14 | Bylaws of Susquehanna Radio Corp. | ||
3 | .15 | Articles of Incorporation of Susquehanna Radio Services, Inc. |
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Exhibit No. | Description | |||
3 | .16 | Bylaws of Susquehanna Radio Services, Inc., as amended | ||
3 | .17 | Articles of Incorporation of Sunnyside Communications, Inc. | ||
3 | .18 | Code of Bylaws of Sunnyside Communications, Inc., as amended | ||
3 | .19 | Articles of Incorporation of WSBA Lico, Inc. | ||
3 | .20 | Bylaws of WSBA Lico, Inc., as amended | ||
3 | .21 | Articles of Incorporation of Radio San Francisco, Inc. | ||
3 | .22 | Bylaws of Radio San Francisco, Inc. | ||
3 | .23 | Articles of Incorporation of WVAE Lico, Inc. | ||
3 | .24 | Bylaws of WVAE Lico, Inc., as amended | ||
3 | .25 | Certificate of Organization of Susquehanna License Co., LLC | ||
3 | .26 | Limited Liability Company Declaration of Susquehanna License Co., LLC | ||
3 | .27 | Articles of Incorporation of WNNX Lico, Inc. | ||
3 | .28 | Bylaws of WNNX Lico, Inc., as amended | ||
3 | .29 | Articles of Incorporation of Radio Metroplex, Inc., as amended | ||
3 | .30 | Bylaws of Radio Metroplex, Inc. | ||
3 | .31 | Articles of Incorporation of Radio Cincinnati, Inc., as amended | ||
3 | .32 | Code of Regulations of Radio Cincinnati, Inc., as amended | ||
3 | .33 | Articles of Incorporation of KRBE Broadcasting, Inc. | ||
3 | .34 | Bylaws of KRBE Broadcasting, Inc., as amended | ||
3 | .35 | Articles of Incorporation of Radio Indianapolis, Inc. | ||
3 | .36 | Code of Bylaws of Radio Indianapolis, Inc. | ||
3 | .37 | Certificate of Incorporation of Bay Area Radio Corp. | ||
3 | .38 | Bylaws of Bay Area Radio Corp., as amended | ||
3 | .39 | Articles of Incorporation of Indianapolis Radio License Co. | ||
3 | .40 | Bylaws of Indianapolis Radio License Co., as amended | ||
3 | .41 | Articles of Incorporation of KLIF Broadcasting, Inc. | ||
3 | .42 | Bylaws of KLIF Broadcasting, Inc., as amended | ||
3 | .43 | Articles of Incorporation of Texas Star Radio, Inc., as amended | ||
3 | .44 | Bylaws of Hispanic Coalition, Inc. (former name of Texas Star Radio, Inc.) | ||
3 | .45 | Articles of Incorporation of S.C.I. Broadcasting, Inc. | ||
3 | .46 | Code of Bylaws of S.C.I. Broadcasting, Inc., as amended | ||
3 | .47 | Articles of Incorporation of KFFG Lico, Inc. | ||
3 | .48 | Bylaws of KFFG Lico, Inc., as amended | ||
3 | .49 | Articles of Incorporation of KPLX Lico, Inc. | ||
3 | .50 | Bylaws of KPLX Lico, Inc., as amended | ||
3 | .51 | Certificate of Limited Partnership of KPLX Limited Partnership | ||
3 | .52 | Amended and Restated Partnership Agreement of KPLX Limited Partnership | ||
3 | .53 | Articles of Incorporation of KPLX Radio, Inc. | ||
3 | .54 | Bylaws of KPLX Radio, Inc., as amended | ||
3 | .55 | Articles of Incorporation of WRRM Lico, Inc. | ||
3 | .56 | Bylaws of WRRM Lico, Inc., as amended | ||
3 | .57 | Articles of Incorporation of WFMS Lico, Inc. | ||
3 | .58 | Bylaws of WFMS Lico, Inc., as amended | ||
3 | .59 | Certificate of Incorporation of KNBR, Inc., as amended |
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Exhibit No. | Description | |||
3 | .60 | Bylaws of GE Subsidiary, Inc. II (former name of KNBR, Inc.) | ||
3 | .61 | Articles of Incorporation of Indy Lico, Inc. | ||
3 | .62 | Bylaws of Indy Lico, Inc., as amended | ||
3 | .63 | Articles of Incorporation of KRBE Lico, Inc. | ||
3 | .64 | Bylaws of KRBE Lico, Inc., as amended | ||
3 | .65 | Articles of Incorporation of KNBR Lico, Inc. | ||
3 | .66 | Bylaws of KNBR Lico, Inc., as amended | ||
3 | .67 | Articles of Incorporation of KLIF Lico, Inc. | ||
3 | .68 | Bylaws of KLIF Lico, Inc., as amended | ||
3 | .69 | Articles of Incorporation of KLIF Radio, Inc. | ||
3 | .70 | Bylaws of KLIF Radio, Inc., as amended | ||
3 | .71 | Certificate of Limited Partnership of KRBE Limited Partnership | ||
3 | .72 | Amended and Restated Agreement of Limited Partnership of KRBE Limited Partnership | ||
3 | .73 | Articles of Incorporation of KRBE Radio, Inc., as amended | ||
3 | .74 | Bylaws of KRBE Radio, Inc. | ||
3 | .75 | Certificate of Limited Partnership of KLIF Broadcasting Limited Partnership | ||
3 | .76 | Amended and Restated Agreement of Limited Partnership of KLIF Broadcasting Limited Partnership | ||
4 | .1 | Indenture, dated May 5, 2006, among CMP Susquehanna Corp., the Guarantors party thereto, and Wells Fargo Bank, National Association, as trustee | ||
4 | .2 | Registration Rights Agreement, dated May 5, 2006, among CMP Susquehanna Corp., the Guarantors party thereto, and the initial purchasers of the Notes | ||
5 | .1 | Opinion of Jones Day | ||
5 | .2 | Opinion of Krieg DeVault | ||
5 | .3 | Opinion of Kolesar & Leatham, Chtd. | ||
10 | .1 | Credit Agreement, dated as of May 5, 2006, among CMP Susquehanna Corp., CMP Susquehanna Radio Holdings Corp., Deutsche Bank Trust Company Americas, as administrative agent, and the other lenders party thereto | ||
10 | .2 | Guarantee Agreement, dated as of May 5, 2006, among CMP Susquehanna Radio Holdings Corp., CMP Susquehanna Corp., the subsidiaries of CMP Susquehanna Corp. identified therein and Deutsche Bank Trust Company Americas, as administrative agent | ||
10 | .3 | Security Agreement, dated as of May 5, 2006, among CMP Susquehanna Radio Holdings Corp., CMP Susquehanna Corp., the subsidiaries of CMP Susquehanna Corp. identified therein and Deutsche Bank Trust Company Americas, as collateral agent | ||
10 | .4 | Management Agreement, dated as of May 3, 2006, by and between CMP Susquehanna Holdings Corp. and Cumulus Media Inc. | ||
10 | .5 | Agreement and Plan of Merger, dated as of October 31, 2005, among CMP Susquehanna Corp., CMP Merger Co., Susquehanna Pfaltzgraff Co. and the Stockholders’ Representative | ||
10 | .6 | Asset Purchase Agreement, dated as of October 31, 2005, among CMP KC Corp, 1051FM, LLC, Susquehanna Kansas City Partnership and Susquehanna Radio Corp. | ||
12 | .1 | Computation of Ratios | ||
21 | .1 | Subsidiaries | ||
23 | .1 | Consent of Jones Day (included as part of Exhibit 5.1) | ||
23 | .2 | Consents of KPMG LLP | ||
23 | .3 | Consent of Krieg DeVault (included as part of Exhibit 5.2) | ||
23 | .4 | Consent of Kolesar & Leatham, Chtd. (included as part of Exhibit 5.3) | ||
24 | .1 | Powers of Attorney (included in signature pages of this registration statement) |
II-8
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Exhibit No. | Description | |||
25 | .1 | Form T-1 Statement of Eligibility | ||
99 | .1 | Form of Letter of Transmittal | ||
99 | .2 | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees | ||
99 | .3 | Form of Letter to Clients | ||
99 | .4 | Form of Notice of Guaranteed Delivery |
Item 22. | Undertakings. |
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By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 | ||||
/s/ John Connaughton | Director | June 6, 2007 | ||||
/s/ Michael Goody | Director | June 6, 2007 | ||||
/s/ Holcombe T. Green, Jr. | Director | June 6, 2007 |
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Signature | Title | Date | ||||
/s/ Ian Loring | Director | June 6, 2007 | ||||
/s/ Soren Oberg | Director | June 6, 2007 | ||||
/s/ David M. Tolley | Director | June 6, 2007 | ||||
/s/ Kent R. Weldon | Director | June 6, 2007 |
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By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 | ||||
/s/ John Connaughton | Director | June 6, 2007 | ||||
/s/ Michael Goody | Director | June 6, 2007 | ||||
/s/ Holcombe T. Green, Jr. | Director | June 6, 2007 | ||||
/s/ Ian Loring | Director | June 6, 2007 |
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Signature | Title | Date | ||||
/s/ Soren Oberg | Director | June 6, 2007 | ||||
/s/ David M. Tolley | Director | June 6, 2007 | ||||
/s/ Kent R. Weldon | Director | June 6, 2007 |
II-14
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By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Manager (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
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Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Manager (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-16
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
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Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
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Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-19
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
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Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
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Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-22
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-23
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-24
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Manager (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-25
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-26
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-27
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-28
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-29
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-30
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
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Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-32
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-33
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-34
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-35
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-36
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-37
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Manager (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-38
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-39
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-40
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-41
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-42
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-43
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-44
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-45
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-46
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-47
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Manager (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-48
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
II-49
Table of Contents
By: | /s/ Martin R. Gausvik |
Signature | Title | Date | ||||
/s/ Lewis W. Dickey, Jr. | Chairman, President, Chief Executive Officer and Manager (Principal Executive Officer) | June 6, 2007 | ||||
/s/ Martin R. Gausvik | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | June 6, 2007 |
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Table of Contents
Exhibit No. | Description | |||
3 | .1 | Certificate of Incorporation of CMP Susquehanna Radio Holdings Corp., as amended | ||
3 | .2 | Bylaws of CMP Susquehanna Guarantor Corp. (former name of CMP Susquehanna Radio Holdings Corp.) | ||
3 | .3 | Certificate of Incorporation of CMP Susquehanna Corp. | ||
3 | .4 | Bylaws of CMP Susquehanna Corp. | ||
3 | .5 | Certificate of Incorporation of CMP KC Corp. | ||
3 | .6 | Bylaws of CMP KC Corp. | ||
3 | .7 | Certificate of Formation of CMP Houston-KC, LLC, as amended | ||
3 | .8 | Limited Liability Company Declaration of CMP Houston-KC, LLC | ||
3 | .9 | Certificate of Incorporation of CMP Merger Co. (former name of Susquehanna Pfaltzgraff Co.) | ||
3 | .10 | Bylaws of CMP Merger Co. (former name of Susquehanna Pfaltzgraff Co.) | ||
3 | .11 | Certificate of Incorporation of Susquehanna Media Co., as amended | ||
3 | .12 | Bylaws of Susquehanna Media Co., as amended | ||
3 | .13 | Articles of Incorporation of Susquehanna Radio Corp., as amended | ||
3 | .14 | Bylaws of Susquehanna Radio Corp. | ||
3 | .15 | Articles of Incorporation of Susquehanna Radio Services, Inc. | ||
3 | .16 | Bylaws of Susquehanna Radio Services, Inc., as amended | ||
3 | .17 | Articles of Incorporation of Sunnyside Communications, Inc. | ||
3 | .18 | Bylaws of Sunnyside Communications, Inc., as amended | ||
3 | .19 | Articles of Incorporation of WSBA Lico, Inc. | ||
3 | .20 | Bylaws of WSBA Lico, Inc., as amended | ||
3 | .21 | Articles of Incorporation of Radio San Francisco, Inc. | ||
3 | .22 | Bylaws of Radio San Francisco, Inc. | ||
3 | .23 | Articles of Incorporation of WVAE Lico, Inc. | ||
3 | .24 | Bylaws of WVAE Lico, Inc., as amended | ||
3 | .25 | Certificate of Organization of Susquehanna License Co., LLC | ||
3 | .26 | Limited Liability Company Declaration of Susquehanna License Co., LLC | ||
3 | .27 | Articles of Incorporation of WNNX Lico, Inc. | ||
3 | .28 | Bylaws of WNNX Lico, Inc., as amended | ||
3 | .29 | Articles of Incorporation of Radio Metroplex, Inc., as amended | ||
3 | .30 | Bylaws of Radio Metroplex, Inc. | ||
3 | .31 | Articles of Incorporation of Radio Cincinnati, Inc., as amended | ||
3 | .32 | Code of Regulations of Radio Cincinnati, Inc., as amended | ||
3 | .33 | Articles of Incorporation of KRBE Broadcasting, Inc. | ||
3 | .34 | Bylaws of KRBE Broadcasting, Inc., as amended | ||
3 | .35 | Articles of Incorporation of Radio Indianapolis, Inc. | ||
3 | .36 | Code of Bylaws of Radio Indianapolis, Inc. | ||
3 | .37 | Certificate of Incorporation of Bay Area Radio Corp. | ||
3 | .38 | Bylaws of Bay Area Radio Corp., as amended | ||
3 | .39 | Articles of Incorporation of Indianapolis Radio License Co. | ||
3 | .40 | Bylaws of Indianapolis Radio License Co., as amended | ||
3 | .41 | Articles of Incorporation of KLIF Broadcasting, Inc. | ||
3 | .42 | Bylaws of KLIF Broadcasting, Inc., as amended |
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Table of Contents
Exhibit No. | Description | |||
3 | .43 | Articles of Incorporation of Texas Star Radio, Inc., as amended | ||
3 | .44 | Bylaws of Hispanic Coalition, Inc. (former name of Texas Star Radio, Inc.) | ||
3 | .45 | Articles of Incorporation of S.C.I. Broadcasting, Inc. | ||
3 | .46 | Code of Bylaws of S.C.I. Broadcasting, Inc., as amended | ||
3 | .47 | Articles of Incorporation of KFFG Lico, Inc. | ||
3 | .48 | Bylaws of KFFG Lico, Inc., as amended | ||
3 | .49 | Articles of Incorporation of KPLX Lico, Inc. | ||
3 | .50 | Bylaws of KPLX Lico, Inc., as amended | ||
3 | .51 | Certificate of Limited Partnership of KPLX Limited Partnership | ||
3 | .52 | Amended and Restated Partnership Agreement of KPLX Limited Partnership | ||
3 | .53 | Articles of Incorporation of KPLX Radio, Inc. | ||
3 | .54 | Bylaws of KPLX Radio, Inc., as amended | ||
3 | .55 | Articles of Incorporation of WRRM Lico, Inc. | ||
3 | .56 | Bylaws of WRRM Lico, Inc., as amended | ||
3 | .57 | Articles of Incorporation of WFMS Lico, Inc. | ||
3 | .58 | Bylaws of WFMS Lico, Inc. | ||
3 | .59 | Certificate of Incorporation of KNBR, Inc., as amended | ||
3 | .60 | Bylaws of GE Subsidiary, Inc. II (former name of KNBR, Inc.) | ||
3 | .61 | Articles of Incorporation of Indy Lico, Inc. | ||
3 | .62 | Bylaws of Indy Lico, Inc., as amended | ||
3 | .63 | Articles of Incorporation of KRBE Lico, Inc. | ||
3 | .64 | Bylaws of KRBE Lico, Inc., as amended | ||
3 | .65 | Articles of Incorporation of KNBR Lico, Inc. | ||
3 | .66 | Bylaws of KNBR Lico, Inc., as amended | ||
3 | .67 | Articles of Incorporation of KLIF Lico, Inc. | ||
3 | .68 | Bylaws of KLIF Lico, Inc., as amended | ||
3 | .69 | Articles of Incorporation of KLIF Radio, Inc. | ||
3 | .70 | Bylaws of KLIF Radio, Inc., as amended | ||
3 | .71 | Certificate of Limited Partnership of KRBE Limited Partnership | ||
3 | .72 | Amended and Restated Agreement of Limited Partnership of KRBE Limited Partnership | ||
3 | .73 | Articles of Incorporation of KRBE Radio, Inc. | ||
3 | .74 | Bylaws of KRBE Radio, Inc. | ||
3 | .75 | Certificate of Limited Partnership of KLIF Broadcasting Limited Partnership | ||
3 | .76 | Amended and Restated Agreement of Limited Partnership of KLIF Broadcasting Limited Partnership | ||
4 | .1 | Indenture, dated May 5, 2006, among CMP Susquehanna Corp., the Guarantors party thereto, and Wells Fargo Bank, National Association, as trustee | ||
4 | .2 | Registration Rights Agreement, dated May 5, 2006, among CMP Susquehanna Corp., the Guarantors party thereto, and the initial purchasers of the Notes | ||
5 | .1 | Opinion of Jones Day | ||
5 | .2 | Opinion of Krieg DeVault | ||
5 | .3 | Opinion of Kolesar & Leatham, Chtd. | ||
10 | .1 | Credit Agreement, dated as of May 5, 2006, among CMP Susquehanna Corp., CMP Susquehanna Radio Holdings Corp., Deutsche Bank Trust Company Americas, as administrative agent, and the other lenders party thereto |
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Table of Contents
Exhibit No. | Description | |||
10 | .2 | Guarantee Agreement, dated as of May 5, 2006, among CMP Susquehanna Radio Holdings Corp., CMP Susquehanna Corp., the subsidiaries of CMP Susquehanna Corp. identified therein and Deutsche Bank Trust Company Americas, as administrative agent | ||
10 | .3 | Security Agreement, dated as of May 5, 2006, among CMP Susquehanna Radio Holdings Corp., CMP Susquehanna Corp., the subsidiaries of CMP Susquehanna Corp. identified therein and Deutsche Bank Trust Company Americas, as collateral agent | ||
10 | .4 | Management Agreement, dated as of May 3, 2006, by and between CMP Susquehanna Holdings Corp. and Cumulus Media Inc. | ||
10 | .5 | Agreement and Plan of Merger, dated as of October 31, 2005, among CMP Susquehanna Corp., CMP Merger Co., Susquehanna Pfaltzgraff Co. and the Stockholders’ Representative | ||
10 | .6 | Asset Purchase Agreement, dated as of October 31, 2005, among CMP KC Corp, 1051FM, LLC, Susquehanna Kansas City Partnership and Susquehanna Radio Corp. | ||
12 | .1 | Computation of Ratios | ||
21 | .1 | Subsidiaries | ||
23 | .1 | Consent of Jones Day (included as part of Exhibit 5.1) | ||
23 | .2 | Consents of KPMG LLP | ||
23 | .3 | Consent of Krieg DeVault (included as part of Exhibit 5.2) | ||
23 | .4 | Consent of Kolesar & Leatham, Chtd. (included as part of Exhibit 5.3) | ||
24 | .1 | Powers of Attorney (included in signature pages of this registration statement) | ||
25 | .1 | Form T-1 Statement of Eligibility | ||
99 | .1 | Form of Letter of Transmittal | ||
99 | .2 | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees | ||
99 | .3 | Form of Letter to Clients | ||
99 | .4 | Form of Notice of Guaranteed Delivery |
II-53