SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
Annual Report Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
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For the fiscal year ended Commission File number: 0 - 13020
December 31, 1994
WESTWOOD ONE, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3980449
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
9540 Washington Boulevard, Culver City, CA 90232
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (310) 204-5000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
____________________ on which registered
_____________________
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes
X No -
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
The aggregate market value of Common Stock held by non-affiliates as
of March 1, 1995 was approximately $285 million.
As of March 1, 1995, 30,935,152 shares of Common Stock were
outstanding and 351,733 shares of Class B Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement for its
annual meeting of shareholders (which will be filed with the Commission
within 120 days of the registrant's last fiscal year end) are
incorporated in Part III of this Form 10-K.
PART I
Item 1. Business
General
Westwood One, Inc. (the "Company" or "Westwood One") is the leading
producer and distributor of nationally sponsored radio programs and is
the nation's second largest radio network.
The Company's principal source of revenue is selling radio time to
advertisers through one of its two operating divisions: Westwood One
Radio Networks and Westwood One Entertainment (the "Divisions"). The
Company generates revenue principally by its Divisions entering into
radio station affiliation agreements to obtain audience and commercial
spots and then selling the spots to national advertisers. The Company
is strategically positioned to provide a broad range of programming and
services which both deliver audience to advertisers and news, talk,
sports, and entertainment programs to radio stations.
Westwood One Radio Networks offers radio stations three traditional news
services, CNN Radio, NBC Radio Network and the Mutual Broadcasting
System, plus youth-oriented network news and entertainment programming
from The Source, in addition to eight 24-hour satellite-delivered
continuous play music formats and weekday and weekend news and
entertainment features and programs.
Westwood One Entertainment produces music, sports, talk and special
event programming. These programs include: countdown shows; music and
interview programs; live concert broadcasts; major sporting events
(principally covering the NFL, Notre Dame football and other college
football and basketball games); live, personality intensive talk shows;
and exclusive satellite simulcasts with HBO and other cable networks.
1
The Company's programs are broadcast in every radio market in the United
States measured by The Arbitron Ratings Company ("Arbitron"), the
leading rating service, as well as being broadcast internationally.
Westwood One, through its Divisions, enables national advertisers to
purchase advertising time and to have their commercial messages
broadcast on radio stations throughout the United States, reaching
demographically defined listening audiences. The Company delivers both
of the major demographic groups targeted by national advertisers: the
25 to 54-year old adult market and the 12 to 34-year-old youth market.
The Company currently sells advertising time to over 300 national
advertisers, including each of the 25 largest network radio advertisers.
Radio stations are able to obtain quality programming from Westwood One
to meet their objective of attracting larger listening audiences and
increasing local advertising revenue. Westwood One, through the
development of internal programming as well as through acquisitions, has
developed an extensive tape library of previously aired programs,
interviews, live concert performances, news and special events. The
Company uses its library as a major source of new programming,
enhancing the Company's future programming and revenue generating
capabilities.
Industry Background
Radio Broadcasting
As of January 1, 1995, there were approximately 9,750 commercial radio
stations in the United States. The radio broadcast industry, however,
remains highly fragmented with no broadcaster permitted to own more than
40 radio stations. This fragmentation is due primarily to FCC
limitations on multiple station ownership.
A radio station selects a style of programming ("format") to attract a
target listening audience and thereby attract commercial advertising
directed at that audience. There are many formats from which a station
may select, including news, talk, sports and various types of music and
entertainment programming.
The diversity in program formats has intensified competition among
stations for local advertising revenue. A radio station has two
principal ways of effectively competing for these revenues. First, it
can differentiate itself in its local market by selecting and
successfully executing a format targeted at a particular audience thus
enabling advertisers to place their commercial messages on stations
aimed at audiences with certain demographic characteristics. A station
can also broadcast special programming, sporting events or national news
product, such as supplied by Westwood One, not available to its
competitors within its format. National programming broadcast on an
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exclusive geographic basis can help differentiate a station within its
market, and thereby enable a station to increase its audience and local
advertising revenue.
Radio Advertising
Radio advertising time can be purchased on a local, regional or national
basis. Local purchases allow an advertiser to select specific radio
stations in chosen geographic markets for the broadcast of commercial
messages. However, this process can be expensive and time-consuming,
and may not permit the advertiser to select the specific program in
which its advertisements will be broadcast. Local and regional
purchases are typically best suited for an advertiser whose business or
ad campaign is in a specific geographic area. Advertising purchased
from a radio network is one method by which an advertiser targets its
commercial messages to a specific demographic audience. A national
advertising purchase can enable an advertiser to achieve its objective
with one purchase, at a lower cost per listener, and to select a
particular program environment in which its advertisements will be
broadcast.
In recent years the increase in the number of program formats has led to
more demographically specific listening audiences, making radio an
attractive, alternative medium for national advertisers. In addition,
nationally broadcast news, concerts and special event programming have
made radio an effective medium of reach (size of listening audiences) as
well as frequency (number of exposures to the target audience).
To verify audience delivery and demographic composition, specific
measurement information is available to national advertisers by
independent rating services such as Arbitron and Statistical Research,
Inc.'s RADAR. These rating services provide demographic information
such as the age and sex composition of the listening audiences.
Consequently, national advertisers can verify that their advertisements
are being heard by their target listening audience.
Business Strategy
Westwood One provides targeted radio audiences and commercial spots to
national advertisers through its recognized programming and other
network products. The Company, through its various radio networks,
produces and distributes quality programming to radio stations seeking
to increase their listening audience and improve local and national
advertising revenue. The Company sells advertising time within its
programs to national advertisers desiring to reach large listening
audiences nationwide with specific demographic characteristics.
In 1993 the Company developed and implemented a strategy to focus on its
core radio network business and to reduce debt by divesting of all other
businesses. In refocusing on its core network and radio syndication
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business, the Company has concentrated on across-the-board cost
reductions in order to improve profitability and, in February 1994, the
Company took a major step to enhance its future and ability to compete
by acquiring Unistar Radio Networks, Inc. ("Unistar") for $101,300,000
plus expenses along with the following additional matters in connection
with the acquisition:
(a) the sale by the Company to Infinity Network, Inc. ("INI"), a
wholly-owned subsidiary of Infinity Broadcasting Corporation
("Infinity"), of 5,000,000 shares of the Company's Common
Stock and a warrant to purchase up to an additional 3,000,000
shares of Common Stock at an exercise price of $3.00 per
share, for a total purchase price of $15,000,000;
(b) a Management Agreement between the Company and Infinity
pursuant to which (a) the Chief Executive Officer of
Infinity, currently Mel Karmazin, became the Chief Executive
Officer of the Company, (b) the Chief Financial Officer of
Infinity, currently Farid Suleman, became the Chief Financial
Officer of the Company and (c) Infinity began managing the
business and operations for an annual base fee of $2,000,000
(adjusted for inflation), an annual cash bonus (payable in
the event of meeting certain financial targets) and
additional warrants to acquire up to 1,500,000 shares of
common stock exercisable after the Company's common stock
reaches certain market prices per share.
(c) a Voting Agreement providing for the reconstitution of the
Board of Directors into a nine-member Board and the voting of
Norman Pattiz's shares of the Company's Common Stock and
Class B Stock and the shares of the Common Stock held by INI.
The Company financed the acquisition ($101,300,000), with a new senior
loan from a syndicate of banks in the amount of $125,000,000.
Radio Programming
The depth of Westwood One's programming has grown through internal
expansion and through acquisition. The Company produces and distributes
24-hour continuous play formats, regularly scheduled and special
syndicated programs, including exclusive live concerts, music and
interview shows, national music countdowns, lifestyle short features,
news broadcasts, talk programs, sporting events, and sports features.
The Company controls most aspects of production of its programs,
therefore being able to tailor its programs to respond to current and
4
changing listening preferences. The Company produces regularly
scheduled short-form programs (typically 5 minutes or less), long-form
programs (typically 60 minutes or longer) and 24-hour continuous play
formats. Typically, the short-form programs are produced at the
Company's in-house facilities located in Culver City, California, New
York, New York and Arlington, Virginia. The long-form programs include
shows produced entirely at the Company's in-house production facilities
and recordings of live concert performances and sports events made on
location. The 24-hour continuous play formats are produced at the
Company's facilities in Valencia, California.
Westwood One also produces and distributes special event syndicated
programs. In 1994 the Company produced and distributed numerous special
event programs, including exclusive broadcasts of the Rolling Stones
Voodoo Lounge concert tour, Sting Live, an HBO simulcast of Barbara
Streisand and an MTV simulcast of "The Eagles: Hell Freezes Over."
Westwood One believes these broadcasts have contributed to its
reputation and are an integral part of its business strategy to increase
its share of the national radio network advertising market.
Westwood One obtains most of the programming for its concert series by
recording live concert performances of prominent recording artists. The
agreements with these artists often provide the exclusive right to
broadcast the concerts worldwide over the radio (whether live or pre-
recorded) for a specific period of time. The Company may also obtain
interviews with the recording artist and retain a copy of the recording
of the concert and the interview for use in its radio programs and as
additions to its extensive tape library. The agreements provide the
artist with master recordings of their concerts and nationwide exposure
on affiliated radio stations. In certain cases the artists may receive
compensation.
Westwood One's syndicated programs are produced at its in-house
production facilities. The Company determines the content and style of
a program based on the target audience it wishes to reach. The Company
assigns a producer, writer, narrator or host, interviewer and other
personnel to record and produce the programs. Because Westwood One
controls the production process, it can refine the programs' content to
respond to the needs of its affiliated stations and national
advertisers. In addition, the Company can alter program content in
response to current and anticipated audience demand.
The Company produces and distributes eight 24-hour continuous play
formats providing music, news and talk programming for Country, Hot
Country, Adult Contemporary, Format 41, Oldies, AM only, Adult Rock and
Roll and the 70's formats. Using its production facilities in Valencia,
California, the Company provides all the programming for stations
5
affiliated with each of these formats. Affiliates compensate the
Company for these formats by providing the Company with a portion of
their commercial air time and, in most cases, cash fees.
The Company believes that its tape library is a valuable asset and
significantly enhances its future programming and revenue generating
capabilities. The library contains previously broadcast programs, live
concert performances, interviews, daily news programs, sports and
entertainment features, Capitol Hill hearings and other special events.
New programs can be created and developed at a low cost by excerpting
material from the library.
Affiliated Radio Stations
Westwood One's radio network business strategy addresses the programming
needs and financial limitations of radio stations. The Company offers
radio stations a wide selection of regularly scheduled and special event
syndicated programming as well as 24-hour continuous play formats.
These programs and formats are completely produced by the Company and,
therefore, the stations have no production costs. Typically, each
program is offered for broadcast by the Company exclusively to one
station in its geographic market, which assists the station in competing
for audience share in its local marketplace. In addition, except for
news programming, Westwood One's programs contain available commercial
air time that the stations may sell to local advertisers. Westwood One
typically distributes promotional announcements to the stations and
places advertisements in trade and consumer publications to further
promote the upcoming broadcast of its programs.
Westwood One's networks enter into affiliation agreements with radio
stations. In the case of news and current events programming, the
agreements commit the station to broadcast only the advertisements
associated with these programs and allows the station flexibility to
have the news headlined by their newscasters. The other affiliation
agreements require a station to broadcast the Company's programs and to
use a portion of the program's commercial slots to air national
advertisements and any related promotional spots. With respect to the
24-hour formats, the Company, in most cases, also receives a fee from
the affiliated stations for the right to broadcast the formats. Radio
stations in the top 200 national markets may also receive compensation
for airing national advertising associated with the Company's news and
current events programming.
Affiliation agreements specify the number of times and the approximate
time of day each program and advertisement may be broadcast. Westwood
One requires that each station complete and promptly return to the
Company an affidavit (proof-of-performance) that verifies the time of
each broadcast. Affiliation agreements for Westwood One's entertainment
programming are non-cancelable for 26 weeks and are automatically
6
renewed for subsequent 26-week periods, if not canceled 30 days prior to
the end of the existing contract term. Affiliation agreements for
Westwood One's news and current events programming generally run for a
period of at least one year, are automatically renewable for subsequent
periods and are cancelable by either the Company or the station upon 90
days' notice.
The Company has a number of people responsible for station relations and
marketing its programs to radio stations. Station relationships are
managed geographically to allow the marketing staff to concentrate on
specific geographical regions. This enables the Company's staff to
develop and maintain close, professional relationships with radio
station personnel and to provide them with quick programming assistance.
National Advertisers
Westwood One provides national advertisers with a cost-effective way to
communicate their commercial messages to large listening audiences
nationwide that have specific demographic characteristics. An
advertiser can obtain both frequency (number of exposures to the target
audience) and reach (size of listening audience) by purchasing
advertising time in the Company`s programs. By purchasing time in
programs directed to different formats, advertisers can be assured of
obtaining high market penetration and visibility as their commercial
messages will be broadcast on several stations in the same market at the
same time. The Company supports its national sponsors with promotional
announcements and advertisements in trade and consumer publications.
This support promotes the upcoming broadcasts of Company programs and is
designed to increase the advertisers' target listening audience.
The Company sells its commercial time to advertisers either as "bulk" or
"flighted" purchases. Bulk purchases are long-term contracts (26 to 52
weeks) that are sold "up-front" (early advertiser commitments for
national broadcast time). Flighted purchases are contracts for a
specific, short-term period of time (one to six weeks) that are sold at
or above prevailing market prices. The Company's strategy for growth in
advertising revenue is to increase the amount of advertising time sold
on the usually more profitable flighted basis, to increase revenue of
the non-RADAR rated programs, and to increase audience size for news,
talk and current events programming.
Competition
The Company operates in a very competitive environment. In marketing
its programs to national advertisers, the Company directly competes with
other radio networks as well as with smaller independent radio
syndication producers and distributors. In addition, Westwood One
competes for advertising revenue with network television, cable
television, print and other forms of communications media. The Company
believes that the high quality of its programming and the strength of
7
its station relations and advertising sales forces enable it to compete
effectively with other forms of communication media. Westwood One
markets its programs to radio stations, including affiliates of other
radio networks, that it believes will have the largest and most
desirable listening audience for each of its programs. The Company
often has different programs airing on a number of stations in the same
geographic market at the same time. The Company believes that in
comparison with any other independent radio syndication producer and
distributor or radio network it has a larger and more diversified
selection of programming from which national advertisers and radio
stations may choose. In addition, the Company both produces and
distributes programs, thereby enabling it to respond more effectively to
the demands of advertisers and radio stations.
The increase in the number of program formats has led to increased
competition among local radio stations for audience. As stations
attempt to differentiate themselves in an increasingly competitive
environment, their demand for quality programming available from outside
programming sources increases. This demand has been intensified by high
operating and production costs at local radio stations and increased
competition for local advertising revenue.
Government Regulation
Radio broadcasting and station ownership are regulated by the FCC.
Westwood One, as a producer and distributor of radio programs, is not
subject to regulation by the FCC.
Employees
On February 15, 1995, Westwood One had 414 full-time employees,
including a domestic advertising sales force of 46 people. In addition,
the Company maintains continuing relationships with approximately 50
independent writers, program hosts, technical personnel and producers.
Certain employees at the Mutual Broadcasting System, NBC Radio Networks,
and Unistar Radio Networks are covered by collective bargaining
agreements. The Company believes relations with its employees and
independent contractors are good.
Item 2. Properties
The Company owns a 7,600 square-foot building in Culver City, California
in which its production facilities are located; a 14,000 square-foot
building and an adjacent 10,000 square-foot building in Culver City,
California which contains administrative, sales and marketing offices,
and storage space; and a 7,700 square-foot unoccupied building in Culver
City. In addition, the Company leases offices in New York; Chicago;
Detroit; Dallas; Arlington, Virginia and Valencia, California.
8
The Company believes that its facilities are more than adequate for its
current level of operations.
Item 3. Legal Proceedings
- None -
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's shareholders during
the fourth quarter of the year ended December 31, 1994.
9
PART II
Item 5. Market for Registrant's Common Stock and Related Shareholder
Matters
On March 1, 1995 there were approximately 370 holders of record of the
Company's Common Stock, several of which represent "street accounts" of
securities brokers. Based upon the number of proxies requested by brokers
in conjunction with its shareholders' meeting on August 18, 1994, the
Company estimates that the total number of beneficial holders of the
Company's Common Stock exceeds 4,500.
The Company's Common Stock has been traded in the over-the-counter market
under the NASDAQ symbol WONE since the Company's initial public offering on
April 24, 1984. The following table sets forth the range of high and low
last sales prices on the NASDAQ/National Market System, as reported by
NASDAQ, for the Common Stock for the calendar quarters indicated.
1994 High Low
---- ---- ---
First Quarter 10 1/2 7 5/8
Second Quarter 8 7/8 7 1/8
Third Quarter 11 3/8 7 11/16
Fourth Quarter 11 1/4 7 5/8
1993
----
First Quarter 2 5/8 1 19/32
Second Quarter 3 1/16 2 3/8
Third Quarter 3 1/8 2 3/8
Fourth Quarter 9 1/4 2 9/16
No cash dividend was paid on the Company's stock during 1994 or 1993, and
the payment of dividends is restricted by the terms of The Loans.
10
Item 6. Selected Financial Data
(In thousands except per share data)
The table below summarizes selected consolidated financial data of the
Company for each of the last five fiscal years:
OPERATING RESULTS FOR YEAR ENDED:
November 30,
December 31, ______________________________________
1994 1993 1992 1991 1990
____ ____ ____ ____ ____
NET REVENUES $136,340 $84,014 $86,376 $93,170 $92,389
DEPRECIATION AND AMORTIZATION 18,160 16,384 19,661 22,055 22,856
OPERATING INCOME (LOSS) 5,982 (2,191) (18,700) (5,931) (9,309)
(LOSS) FROM CONTINUING OPERATIONS (2,730) (8,682) (21,397) (10,004) (12,915)
(LOSS) FROM DISCONTINUED OPERATIONS - (15,227) (2,721) (6,778) (5,260)
(LOSS) BEFORE EXTRAORDINARY ITEM (2,730) (23,909) (24,118) (16,782) (18,175)
EXTRAORDINARY GAIN (LOSS) (590) - - 25,618 -
NET INCOME (LOSS) ($3,320) ($23,909) ($24,118) $8,836 ($18,175)
INCOME (LOSS) PER SHARE:
Primary:
Continuing Operations ($ .09) ($ .57) ($ 1.44) ($ .67) ($ .89)
Discontinued Operations - ( 1.01) ( .18) ( .46) ( .36)
-------- -------- --------- -------- --------
(Loss) Before Extraordinary Item ( .09) ( 1.58) ( 1.62) ( 1.13) ( 1.25)
Extraordinary Item ( .02) - - 1.73 -
-------- -------- --------- -------- --------
Net Income (Loss) ($ .11) ($ 1.58) ($ 1.62) $ .60 ($ 1.25)
======== ======== ========= ======== ========
Fully diluted:
Continuing Operations ($ .09) ($ .57) ($ 1.44) ($ .30) ($ .89)
Discontinued Operations - ( 1.01) ( .18) ( .28) ( .36)
-------- -------- --------- -------- --------
(Loss) Before Extraordinary Item ( .09) ( 1.58) ( 1.62) ( .58) ( 1.25)
Extraordinary Item ( .02) - - 1.06 -
-------- -------- --------- -------- --------
Net Income (Loss) ($ .11) ($ 1.58) ($ 1.62) $ .48 ($ 1.25)
======== ======== ========= ======== ========
BALANCE SHEET DATA AT:
November 30,
December 31, ______________________________________
1994 1993 1992 1991 1990
---- ---- ---- ---- ----
CURRENT ASSETS $46,157 $32,987 $51,091 $46,126 $54,312
WORKING CAPITAL 7,685 (1,503) (11,942) 10,200 28,676
TOTAL ASSETS 260,112 152,067 295,740 322,561 343,783
LONG-TERM DEBT 115,443 51,943 146,622 169,083 214,342
TOTAL SHAREHOLDERS' EQUITY 95,454 55,151 75,204 98,765 89,496
[FN]
- - -------------------------------------
Effective December 1, 1993, the Company changed its method of accounting for
capitalized station affiliation agreements to expense the costs as incurred.
The effect of this change in accounting method does not materially affect the
comparability of the information reflected herein.
Results for the year ended December 31, 1994 include Unistar from the time it
was acquired in February 1994.
No cash dividend was paid on the Company's common stock during the periods
presented above.
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Item 7.Management's Discussion and Analysis of Financial
Condition and Results of Operations
(In thousands except for share and per share amounts)
In August 1994, the Company changed its fiscal year end from November 30 to
December 31 effective with the fiscal year ending December 31, 1994.
Accordingly, in the following discussion "1994" will refer to the calendar
year 1994, "1993" will refer to the fiscal year ended November 30, 1993 and
"1992" will refer to the fiscal year ended November 30, 1992.
On February 3, 1994 the Company completed the acquisition of all of the
issued and outstanding capital stock of the Unistar Radio Networks, Inc.
("Unistar"). The acquisition was accounted for as a purchase, and
accordingly, the operating results of Unistar are included with those of the
Company from the date of acquisition.
Effective December 1, 1993, the Company changed its method of accounting for
capitalized station affiliation agreements and income taxes. In order to
conform to predominate current industry practice, capitalized station
affiliation agreements will be expensed as incurred. The cumulative effect
of the change in accounting for station affiliation expenses in December
1993 was an expense of $4,344, or $.23 per share. SFAS No. 109 "Accounting
for Income Taxes" was adopted by the Company in December 1993. The Company
elected not to restate prior year's financial statements. Adopting SFAS No.
109 did not affect the December 1993 or current period results.
In 1993, the Company classified the results of operations from Radio &
Records and its Los Angeles and New York radio stations as discontinued
operations. The Company disposed of these assets during 1993.
RESULTS OF OPERATIONS
Westwood One derives substantially all of its revenue from the sale of
advertising time to advertisers. Net revenues increased 62% to $136,340 in
1994 from $84,014 in 1993 and decreased 3% in 1993 from $86,376 in 1992. The
increase in 1994 net revenues was primarily a result of the purchase of
Unistar in February 1994. The decrease in 1993 net revenues was attributed
to the non-recurrence of the Company's exclusive radio coverage of the 1992
Summer Olympics, partially offset by net revenue growth associated with an
overall increase in the network radio marketplace.
Operating costs and expenses excluding depreciation and amortization
increased 61% to $105,389 in 1994 from $65,353 in 1993 and decreased 15% in
1993 from $77,335 in 1992. The 1994 increase was primarily attributable to
the purchase of Unistar and higher programming expenses resulting from the
production of additional programs. The 1993 decrease was primarily due to
cost reduction programs associated with affiliate compensation, programming,
news and related staff expenses, and the non-recurrence of the 1992 Summer
Olympics.
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Depreciation and amortization increased 11% to $18,160 in 1994 from $16,384
in 1993 and decreased 17% in 1993 from $19,661 in 1992. The increase in
1994 was primarily a result of the purchase of Unistar, partially offset by
lower amortization of production costs and lower amortization as a result of
the Company's December 1, 1993 change in its method of accounting for
capitalized station affiliation agreements. The reduction in 1993 was
primarily due to lower amortization of production costs and lower write-
offs resulting from fewer terminated station affiliation agreements.
Corporate general and administrative expenses decreased 1% to $4,404 in 1994
from $4,468 in 1993 and decreased 26% in 1993 from $6,017 in 1992. The
nominal decrease in 1994 is a result of across-the-board expense cuts,
partially offset by fees attributable to the Infinity Management Agreement.
The decrease in 1993 was attributable to across-the-board expense cuts and
the non-recurrence of a 1992 one-time charge for a vested benefit related
to an executive officer's employment contract.
As a result of the purchase of Unistar, the Company accrued restructuring
costs of $2,405 in the first quarter of 1994 principally relating to the
consolidation of certain facilities and operations. Approximately $2,100
of these costs were paid in 1994, with the balance scheduled to be paid in
1995.
Severance and termination expenses of $2,063 in 1992 were principally due to
management changes implemented to achieve future efficiencies.
Operating income increased $8,173 to $5,982 in 1994 from an operating loss
of $2,191 in 1993 and the 1993 operating loss decreased 88% from $18,700 in
1992. The significant improvement in 1994 is attributable to the acquisition
of Unistar and cost savings resulting from operating synergies from the
Unistar acquisition, partially offset by higher depreciation and
amortization expense as a result of the Unistar acquisition. The 1993
improvement was primarily due to extensive cost reduction programs and the
non-recurrence of prior year severance and termination expenses, partially
offset by the non-recurrence of profit from the 1992 Summer Olympics.
Interest expense was $8,802, $6,551 and $5,562 in 1994, 1993 and 1992,
respectively. The 1994 increase is principally attributable to higher debt
levels as a result of the acquisition of Unistar, partially offset by the
elimination of interest expense on the Company's 9% Senior Debentures due to
their conversion to Common Stock.
Other income is principally comprised of investment income. The other
expense of $301 in 1992 was due principally to a provision to write-down a
parcel of real estate that was held for sale to its net realizable value,
partially offset by investment income.
Equity in net loss of an unconsolidated subsidiary represents the Company's
share of the operating performance of WNEW-AM, which was sold in August
1992.
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Loss on the sale of an unconsolidated subsidiary of $6,536 in 1992 represents
the provision for the sale of WNEW-AM, which closed on December 15, 1992.
Loss from continuing operations decreased 69% to $2,730 ($.09 per share) from
$8,682 ($.57 per share) in 1993 and 59% in 1993 from $21,397 ($1.44 per
share) in 1992.
Loss on discontinued operations, net of income tax benefit, was $3,140 in
1993 and $2,721 in 1992. The 1993 loss represents the operating performance
of discontinued operations through March 1, 1993.
The $12,087 provision for loss on disposal of discontinued operations
included estimated future costs and operating results of the discontinued
assets from March 1, 1993 until the date of disposition.
In connection with the refinancing of its senior debt facility, the Company
recorded an extraordinary loss of $590 ($.02 per share).
The net loss decreased 86% to $3,320 ($.11 per share) in 1994 from $23,909
($1.58 per share) in 1993 and 1% in 1993 from $24,118 ($1.62 per share) in
1992.
Weighted average shares outstanding increased 94% to 29,414 in 1994 from
15,153 in 1993 and 2% in 1993 from 14,906 in 1992. The 1994 increase in
weighted average shares is primarily attributable to the conversion of its 9%
Senior Debentures into approximately 8,864 shares of Common Stock and the
sale of 5,000 shares of Common Stock to a subsidiary of Infinity.
Liquidity and Capital Resources
At December 31, 1994, the Company's cash and cash equivalents were $2,439, a
decrease of $1,429 from November 30, 1993. In addition, the Company had
available borrowings under its Loans of $15,000.
For 1994, net cash from operating activities was $2,445, an increase of
$4,739 from 1993. The increase was primarily attributable to higher cash
flow from operations and an increase in accounts payable due to the Unistar
acquisition, partially offset by an increase in accounts receivable resulting
principally from the Unistar acquisition. Net cash used by investing
activities was $111,731 principally due to the purchase of Unistar.
Consequently, cash used before financing activities was $109,286.
In the first quarter of 1994, the Company entered into a new senior loan
agreement with a syndicate of banks which was comprised of a $15,000
revolving facility and $110,000 in term loans which mature on November 30,
2001. In addition, the Company sold 5,000 shares of Common Stock and a
warrant to purchase up to an additional 3,000 shares of Common Stock at an
exercise price of $3.00 per share (subject to certain vesting conditions) to
a subsidiary of Infinity for $15,000. Proceeds from the loans and Common
14
Stock sale were used to finance the acquisition of Unistar ($101,300), repay
borrowings outstanding under its previous senior debt agreement ($8,841) and
for working capital. In addition, from December 1993 through March 1994,
holders of approximately $31,058 of the Company's 9% Senior Debentures
converted their debentures to approximately 8,864 shares of Common Stock.
In August 1994, the Company prepaid $5,000 on its term loans which mature on
November 30, 2001. At December 31, 1994, the outstanding balance of the
Company's term loans were $105,000. In January 1995, the Company prepaid an
additional $2,500 on its term loans. As a result, the Company's next
scheduled principal repayment of $2,500 is due in November 1995.
Management believes that the Company's cash, available borrowings and
anticipated cash flow from operations will be sufficient to finance current
and forecasted operations over the next 12 months.
Item 8. Financial Statements and Supplementary Data
The Consolidated Financial Statements and the related notes and schedules of
the Company are indexed on page F-1 of this Report, and attached hereto as
pages F-1 through F-17 and by this reference incorporated herein.
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
15
PART III
Item 10. Directors and Executive Officers of the Registrant
This information is incorporated by reference to the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after the end of the Company's fiscal year.
Item 11. Executive Compensation
This information is incorporated by reference to the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after the end of the Company's fiscal year.
Item 12. Security Ownership of Certain Beneficial Owners and Management
This information is incorporated by reference to the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after then end of the Company's fiscal year.
Item 13. Certain Relationships and Related Transactions
This information is incorporated by reference to the Company's
definitive proxy statement to be filed pursuant to Regulation 14A not later
than 120 days after the end of the Company's fiscal year.
16
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Documents filed as part of this Report on Form 10-K
1. Financial statements and schedules to be filed thereunder are indexed
on page F-1 hereof.
2. Exhibits
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
3.1 Certificate of Incorporation of Registrant. (1)
3.2 Agreement of Merger. (1)
3.3 Certificate of Amendment of Certificate of Incorporation, as filed on October 10, 1986. (2)
3.4 Certificate of Amendment of Certificate of Incorporation, as filed on October 9, 1986. (3)
3.5 Certificate of Amendment of Certificate of Incorporation, as filed on March 23, 1987. (3)
3.6 Certificate of Correction of Certificate of Amendment, as filed on March 31, 1987 at
10:00 a.m. (3)
3.7 Certificate of Correction of Certificate of Amendment, as filed on March 31, 1987 at
10:01 a.m. (3)
3.8 Bylaws of Registrant as currently in effect.
4 Form of Indenture for 6 3/4% Convertible Subordinated Debentures (including the form of
the Debenture). (2)
4.1 Warrant Agreement dated August 27, 1990 between Registrant and Security Pacific
National Bank, as Warrant Agent. (7)
*10.1 Employment Agreement and Registration Rights Agreement, dated October 18, 1993,
between Registrant and Norman J. Pattiz. (13)
*10.2 First Amendment to Employment Agreement, dated January 26, 1994 between Registrant
and Norman J. Pattiz. (13)
*10.3 Second Amendment to Employment Agreement, dated February 2, 1994, between
Registrant and Norman J. Pattiz.
*10.4 Employment Agreement, dated April 19, 1990, between Unistar Communications Group,
Inc., Unistar Radio Networks, Inc. and William J. Hogan.
*10.5 Employment Agreement, dated June 1, 1992, between Registrant and Gregory P.
Batusic. (11)
*10.6 Employment Agreement, dated August 30, 1993, between Registrant and Eric R. Weiss.
(13)
10.7 Form of Indemnification Agreement Between Registrant and its Directors and Executive
Officers. (4)
10.8 Credit Agreement, dated February 1, 1994, between Registrant and The Chase
Manhattan Bank (National Association) and Co-Agents.
10.9 Amendment No. 1 to the Credit Agreement, dated August 12, 1994, between Registrant
and The Chase Manhattan Bank (National Association) and Co-Agents.
10.10 Amendment No. 2 to the Credit Agreement, dated August 31, 1994, between Registrant
and The Chase Manhattan Bank (National Association) and Co-Agents.
10.11 Amendment No. 3 to the Credit Agreement, dated February 23, 1995, between Registrant
and The Chase Manhattan Bank (National Association) and Co-Agents.
10.12 Purchase Agreement dated as of August 24, 1987, between Registrant and National
Broadcasting Company, Inc. (5)
10.13 Stock Purchase Agreement, dated November 4, 1993, between Registrant and Unistar
Communications Group, Inc., Unistar Radio Network, Inc., and Infinity Broadcasting
Corporation. (12)
10.14 Securities Purchase Agreement, dated November 4, 1993, between Registrant and
Infinity Network, Inc. (12)
*10.15 Management Agreement, dated as of February 4, 1994, between Registrant and Infinity
Broadcasting Corporation. (12)
*10.16 Voting Agreement, dated as of February 4, 1994, among Registrant, Infinity Network, Inc.,
Infinity Broadcasting Corporation and Norman J. Pattiz. (12)
10.17 Westwood One, Inc. 1989 Stock Incentive Plan. (10)
10.18 Amendments to the Westwood One, Inc. Amended 1989 Stock Incentive Plan. (14)
10.19 Lease, dated July 19, 1989, between First Ball Associates Limited Partnership and
Westwood One, Inc., relating to Arlington, Virginia offices. (6)
10.20 Lease, dated June 18, 1990, between Broadway 52nd Associates and Unistar
Communications Group, Inc. relating to New York, New York offices.
10.21 Lease, dated December 18, 1991, between Valencia Paragon Associates, Ltd., and
Unistar Communications Group, Inc. relating to Valencia, California offices.
10.22 Digital Audio Transmission Service Agreement, dated June 5, 1990, between Registrant
and GE American Communications, Inc. (8)
10.23 Transmission Service Agreement, dated May 28, 1993, between IDB Communications
Group, Inc. and Unistar Radio Networks, Inc.
10.24 Stipulation of Settlement of Class Action Law Suit. (6)
10.25 Agreement for Cancellation of Loan Documents, Guarantees and Securities Purchase
Documents, dated as of November 19, 1993 between Registrant, Westwood One Stations
Group, Inc., Westwood One Stations-LA, Inc., Radio & Records, Inc. and Westinghouse
Electric Corporation. (13)
22 List of Subsidiaries
24 Consent of Independent Accountants
27 Financial Data Schedule
[FN]
**********************
* Indicates a management contract or compensatory plan.
(1) Filed as an exhibit to Registrant's registration statement on Form S-1
(File Number 2-98695) and incorporated herein by reference.
(2) Filed as an exhibit to Registrant's registration statement on Form S-1
(Registration Number 33-9006) and incorporated herein by reference.
(3) Filed as an exhibit to Registrant's Form 8 dated March 1, 1988 (File
Number 0-13020), and incorporated herein by reference.
(4) Filed as part of Registrant's September 25, 1986 proxy statement (File
Number 0-13020) and incorporated herein by reference.
(5) Filed an exhibit to Registrant's current report on Form 8-K dated
September 4, 1987 (File Number 0-13020) and incorporated herein by
reference.
(6) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1989 (File Number 0-13020) and incorporated
herein by reference.
(7) Filed as an exhibit to Registrant's Quarterly report on Form 10-Q for the
quarter ended August 31, 1990 (File Number 0-13020) and incorporated herein
by reference.
(8) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1990 (File Number 0-13020) and incorporated
herein by reference.
(9) Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1991 (File Number 0-13020) and incorporated
herein by reference.
(10)Filed as part of Registrant's March 27, 1992 proxy statement (File Number
0-13020) and incorporated herein by reference.
(11)Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1992 (File Number 0-13020) and incorporated
herein by reference.
(12)Filed as part of Registrant's January 7, 1994 proxy statement (File Number
0-13020) and incorporated herein by reference.
(13)Filed as an exhibit to Registrant's Annual Report on Form 10-K for the
fiscal year ended November 30, 1993 (File Number 0-13020) and incorporated
herein by reference.
(14)Filed as an exhibit to Registrant's July 20, 1994 proxy statement (File
Number 0-13020) and incorporated herein by reference.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the fourth quarter of fiscal
1994.
17
SIGNATURES
Pursuant to the requirements of Section13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
WESTWOOD ONE, INC.
March 31, 1995 By FARID SULEMAN
_______________________
Farid Suleman
Director, Secretary and
Chief Financial Officer
Pursuant to the requirements of the Security Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Signature Title Date
Principal Executive Officer:
MEL A. KARMAZIN
_______________ Director, President and March 31, 1995
Mel A. Karmazin Chief Executive Officer
Principal Financial Officer and
Chief Accounting Officer:
FARID SULEMAN
_______________ Director, Secretary and March 31, 1995
Farid Suleman Chief Financial Officer
Additional Directors:
NORMAN J. PATTIZ
___________________ Chairman of the Board of March 31, 1995
Norman J. Pattiz Directors
DAVID L. DENNIS
_________________ Director March 31, 1995
David L. Dennis
GERALD GREENBERG
_________________ Director March 31, 1995
Gerald Greenberg
PAUL G. KRASNOW
________________ Director March 31, 1995
Paul G. Krasnow
ARTHUR E. LEVINE
________________
Director March 31, 1995
Arthur E. Levine
JOSEPH B. SMITH
________________ Director March 31, 1995
Joseph B. Smith
18
WESTWOOD ONE, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
Page
____
1. Consolidated Financial Statements
--Report of Independent Accountants F-2
--Consolidated Balance Sheets at December 31, 1994
and November 30, 1993 F-3
--Consolidated Statements of Operations for the years
ended December 31, 1994, November 30, 1993 and
1992 and the month ended December 31, 1993 F-4
--Consolidated Statements of Shareholders'
Equity for the years ended December 31, 1994,
November 30, 1993 and 1992 and the month ended
December 31, 1993 F-5
--Consolidated Statements of Cash Flows for the
years ended December 31, 1994, November 30, 1993
and 1992 and the month ended December 31, 1993 F-6
--Notes to Consolidated Financial Statements F-7 - F16
2. Financial Statement Schedules:
IX. --Short-term Borrowings F-17
All other schedules have been omitted because they are not
applicable, the required information is immaterial, or the required
information is included in the consolidated financial statements or notes
thereto.
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of Westwood One, Inc.
In our opinion, the consolidated financial statements listed in the index to
consolidated financial statements and financial statement schedules on page
F-1 present fairly, in all material respects, the financial position of
Westwood One, Inc. and its subsidiaries at December 31, 1994, November 30,
1993 and 1992, and the results of their operations and their cash flows for
the year ended December 31, 1994, the one month ended December 31, 1993 and
for each of the two fiscal years in the period ended November 30, 1993, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in the Notes to Consolidated Financial Statements, effective
December 1, 1993 the Company changed its accounting policy for capitalized
station affiliation agreements and adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes".
PRICE WATERHOUSE LLP
Century City, California
February 24, 1995
F-2
WESTWOOD ONE, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
December 31, November 30,
1994 1993
-------- ------
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 2,439 $ 3,868
Accounts receivable, net of allowance for doubtful
accounts of $1,645 (1994) and $959 (1993) 37,631 19,480
Programming costs and rights 3,129 6,849
Other current assets 2,958 2,790
-------- -------
Total Current Assets 46,157 32,987
PROPERTY AND EQUIPMENT, NET 16,748 15,984
INTANGIBLE ASSETS, NET 191,287 90,745
OTHER ASSETS 5,920 12,351
-------- -------
TOTAL ASSETS $260,112 $152,067
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 15,325 $ 11,570
Accrued expenses and other liabilities 12,947 12,838
Amounts payable to affiliates 5,200 1,876
Current maturities of long-term debt 5,000 1,558
Short-term borrowings - 6,648
-------- --------
Total Current Liabilities 38,472 34,490
LONG-TERM DEBT 115,443 51,943
OTHER LIABILITIES 10,743 10,483
-------- --------
TOTAL LIABILITIES 164,658 96,916
-------- --------
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Preferred stock: authorized 10,000,000 shares, none outstanding - -
Common stock, $.01 par value: authorized, 117,000,000 shares;
issued and outstanding, 30,652,652 (1994) and 15,978,758 (1993) 307 160
Class B stock, $.01 par value: authorized, 3,000,000 shares:
issued and outstanding, 351,733 (1994 and 1993) 4 4
Additional paid-in capital 159,727 110,547
Accumulated deficit (64,584) (55,560)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 95,454 55,151
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $260,112 $152,067
======= =======
See accompanying notes to consolidated financial statements.
F-3
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Year Ended
Year Ended Month Ended November 30,
December 31, December 31, ------------------
1994 1993 1993 1992
---- ---- ---- ----
GROSS REVENUES $158,780 $ 6,887 $98,357 $101,290
Less Agency Commissions 22,440 970 14,343 14,914
-------- -------- ------- --------
NET REVENUES 136,340 5,917 84,014 86,376
-------- -------- ------- --------
Operating Costs and Expenses Excluding
Depreciation and Amortization 105,389 5,411 65,353 77,335
Depreciation and Amortization 18,160 1,243 16,384 19,661
Corporate General and Administrative Expenses 4,404 245 4,468 6,017
Restructuring Costs 2,405 - - -
Severance and Termination Expenses - - - 2,063
-------- -------- -------- --------
130,358 6,899 86,205 105,076
-------- -------- -------- --------
OPERATING INCOME (LOSS) 5,982 (982) (2,191) (18,700)
Interest Expense 8,802 381 6,551 5,562
Other (Income) Expense (290) (3) (60) 301
Equity in Net Loss of Unconsolidated Subsidiary - - - 789
Loss on Sale of Unconsolidated Subsidiary - - - 6,536
-------- --------- -------- --------
(LOSS) BEFORE INCOME TAXES, DISCONTINUED
OPERATIONS, EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (2,530) (1,360) (8,682) (31,888)
INCOME TAXES 200 - - (10,491)
-------- -------- -------- --------
(LOSS) FROM CONTINUING OPERATIONS (2,730) (1,360) (8,682) (21,397)
(LOSS) ON DISCONTINUED OPERATIONS, NET
OF INCOME TAX BENEFIT - - (3,140) (2,721)
PROVISION FOR (LOSS) ON DISPOSAL OF
DISCONTINUED OPERATIONS - - (12,087) -
-------- -------- -------- --------
(LOSS) BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (2,730) (1,360) (23,909) (24,118)
EXTRAORDINARY ITEM - (LOSS) ON RETIREMENT OF DEBT (590) - - -
CUMULATIVE EFFECT OF ACCOUNTING CHANGE - (4,344) - -
-------- --------- -------- ---------
NET (LOSS) ($3,320) ($ 5,704) ($23,909) ($24,118)
======== ========= ========= =========
(LOSS) PER SHARE:
Continuing Operations ($ .09) ($ .07) ($ .57) ($ 1.44)
Discontinued Operations - - ( 1.01) ( .18)
-------- --------- --------- ---------
(Loss) Before Extraordinary Item and Cumulative
Effect of Accounting Change ( .09) ( .07) ( 1.58) ( 1.62)
Extraordinary Item ( .02) - - -
-------- --------- --------- ---------
( .11) ( .07) ( 1.58) ( 1.62)
Cumulative Effect of Accounting Change - ( .23) - -
-------- --------- --------- ---------
Net (Loss) ($ .11) ($ .30) ($ 1.58) ($ 1.62)
======== ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING 29,414 19,051 15,153 14,906
======== ========= ========= =========
Pro Forma Amounts Assuming the New Accounting
Method is Applied Retroactively:
(Loss) Before Extraordinary Item ($2,730) ($ 1,360) ($23,142) ($23,280)
Net (Loss) ( 3,320) ( 1,360) ( 23,142) ( 23,280)
(Loss) Per Share:
(Loss) Before Extraordinary Item ($ .09) ($ .07) ($ 1.53) ($ 1.56)
Net (Loss) ( .11) ( .07) ( 1.53) ( 1.56)
See accompanying notes to consolidated financial statements.
F-4
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands)
Common Stock Class B Stock Additional Treasury Stock
------------ ------------- Paid-in Accumulated --------------
Shares Amount Shares Amount Capital (Deficit) Shares Amount
------ ------ ------ ------- ------- --------- ------ ------
BALANCE AT NOVEMBER 30, 1991 ............... 14,594 $146 352 $4 $106,854 ($7,533) 53 $706
Net loss for fiscal 1992 ................... - - - - - (24,118) - -
Amortization of deferred compensation....... - - - - 281 - - -
Issuance of treasury stock to 401-K plan.... - - - - (591) - (53) (706)
Issuance of common stock under
stock option plans......................... 2 - - - 5 - - -
Conversion of Senior Debentures to
common stock............................... 25 - - - 88 - - -
Common stock issued as compensation
to an officer.............................. 42 1 - - 67 - - -
------- ---- ----- ----- ------- ------ ---- -----
BALANCE AT NOVEMBER 30, 1992 ............... 14,663 147 352 4 106,704 (31,651) - -
Net loss for fiscal 1993.................... - - - - - (23,909) - -
Amortization of deferred compensation....... - - - - 281 - - -
Issuance of common stock under
stock option plans......................... 680 7 - - 1,381 - - -
Conversion of Senior Debentures to
common stock .............................. 591 6 - - 2,062 - - -
Issuance of common stock to 401-K plan...... 46 - - - 119 - - -
------- ---- ----- ----- ------- ------ ---- -----
BALANCE AT NOVEMBER 30, 1993 ............... 15,980 160 352 4 110,547 (55,560) - -
Net loss for December 1993.................. - - - - - (5,704) - -
Issuance of common stock under
stock option plans......................... 179 2 - - 366 - - -
Conversion of Senior Debentures to
common stock .............................. 3,542 35 - - 12,530 - - -
------- ---- ----- ----- ------- ------ ---- -----
BALANCE AT DECEMBER 31, 1993 ............... 19,701 197 352 4 123,443 (61,264) - -
Net loss for 1994 .......................... - - - - - (3,320) - -
Issuance of common stock and
warrants................................... 5,000 50 - - 15,933 - - -
Issuance of common stock under
stock option plans......................... 629 7 - - 1,169 - - -
Conversion of Senior Debentures to
common stock .............................. 5,322 53 - - 19,170 - - -
Issuance of common stock to 401-K plan...... 1 - - - 12 - - -
------- ---- ----- ----- ------- ------ ---- -----
BALANCE AT DECEMBER 31, 1994 ............... 30,653 $307 352 $4 $159,727 ($64,584) - -
======= ===== ===== ===== ======= ======= ==== =====
See accompanying notes to consolidated financial statements.
F-5
WESTWOOD ONE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended
Year Ended Month Ended November 30,
December 31, December 31, --------------
1994 1993 1993 1992
---- ---- ---- ----
CASH FLOW FROM OPERATING ACTIVITIES:
Net loss ($3,320) ($5,704) ($23,909) ($24,118)
Adjustments to reconcile net loss to net cash provided by operating
activities before cash payments related to extraordinary item:
Depreciation and amortization:
Programming costs and rights 8,072 752 9,721 12,536
Intangible assets 6,667 253 4,079 6,489
Property and equipment 3,238 238 2,111 3,198
Capitalized station affiliation agreements - - 1,461 1,383
Other 183 - - -
Extraordinary item - loss on retirement of debt 590 - - -
Cummulative effect of accounting change - 4,344 - -
Loss on disposal of discontinued operations - - 12,087 -
Equity in loss of unconsolidated subsidiary - - - 789
Loss on sale of unconsolidated subsidary - - - 6,536
Deferred income taxes - - - (11,622)
Write-down and provision for loss on assets - - - 1,000
Other, including capitalized programming costs and rights (677) 11 (3,625) (4,719)
Changes in assets and liabilities:
Decrease (increase) in accounts receivable (19,191) 1,088 (2,239) 6,965
Decrease (increase) in prepaid assets (377) (197) 209 1,124
Increase (decrease) in accounts payable, accrued liabilities
and amounts payable to affiliates 7,510 (95) (2,189) 4,041
-------- ------- -------- ------
Net cash provided by (used for) operating activities before cash
payments related to extraordinary item 2,695 690 (2,294) 3,602
Cash payments related to extraordinary item (250) - - -
-------- ------- -------- ------
Net Cash Provided By (Used For) Operating Activities 2,445 690 (2,294) 3,602
-------- ------- -------- ------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of companies (Unistar in 1994) (108,181) (72) (1,217) (1,878)
Capital expenditures (1,487) (296) (2,270) (1,192)
Proceeds (cash payments) related to sales of discontinued operations (576) (229) 88,062 -
Proceeds (cash payments) related to sale of unconsolidated subsidary - - 10,372 (1,680)
Capitalized station affiliation agreements - - (694) (545)
Proceeds related to sale of property and equipment - - 853 -
Other (principally deferred financing costs in 1994) (1,487) (82) (268) (397)
-------- ------- -------- -------
Net Cash Provided By (Used For) Investing Activities (111,731) (679) 94,838 (5,692)
-------- ------- -------- -------
CASH PROVIDED (USED) BEFORE
FINANCING ACTIVITIES (109,286) 11 92,544 (2,090)
-------- ------- -------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Debt repayments (14,515) (4,133) (104,071) (2,306)
Borrowings under debt arrangements 110,000 - 7,000 9,288
Issuance of common stock 16,126 368 1,507 -
Issuance of subordinated debentures - - 433 853
-------- ------- -------- -------
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES 111,611 (3,765) (95,131) 7,835
-------- ------- -------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,325 (3,754) (2,587) 5,745
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 114 3,868 6,455 710
-------- ------- --------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,439 $114 $3,868 $6,455
======== ======= ========= =======
See accompanying notes to consolidated financial statements.
F-6
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
NOTE 1 - Summary of Significant Accounting Policies:
Principles of Consolidation
The consolidated financial statements include the accounts of all wholly-owned
subsidiaries.
Revenue Recognition
Revenue is recognized when commercial advertisements are broadcast.
Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity
of less than three months to be cash equivalents. The carrying amount of cash
equivalents approximates fair value because of the short maturity of these
instruments.
Depreciation
Depreciation is computed using the straight line method over the estimated
useful lives of the assets.
Programming Costs and Rights
The Company defers a portion of its costs for recorded library material and
produced radio entertainment programs with a life of longer than a year.
Recorded library material includes previously broadcast programs, live
concert performances, interviews, news and special events. Programming costs
and rights ("Production costs") are amortized using the straight line method
over the period of expected benefit, not to exceed five years. The current
portion of deferred production costs represents the portion to be amortized
over the next twelve months.
Measurement of Intangible Asset Impairment
The Company periodically evaluates the carrying value of Intangible Assets.
The Company considers the ability to generate positive broadcast cash flow
(based on the consolidated statement of operations, calculated by subtracting
from net revenue, operating costs and expenses excluding depreciation and
amortization) as the key factor in determining whether the assets have been
impaired. To date, the Company has not experienced an impairment in any of
its intangible assets.
Income Taxes
Effective December 1, 1993, the Company implemented Statement of Financial
Accounting Standards No. 109 (FAS 109), "Accounting for Income Taxes" which
requires the use of the asset and liability method of financial accounting
and reporting for income taxes. Under FAS 109, deferred income taxes reflect
the tax impact of temporary differences between the amount of assets and
liabilities recognized for financial reporting purposes and the amounts
recognized for tax purposes.
Earnings (Loss) per Share
Net income (loss) per share is based on the weighted average number of common
shares and common equivalent shares (where inclusion of such equivalent shares
would not be anti-dilutive) outstanding during the year.
F-7
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Reclassification
Financial statements for all prior periods have been reclassified to conform
to the 1994 presentation.
NOTE 2 - Accounting Change:
Effective December 1, 1993, the Company changed its method of accounting for
capitalized station affiliation agreements to expense these costs as incurred.
The Company believes this method is preferable and conforms to the
predominant current industry practice, including Unistar. Accordingly, the
Company recognized the cumulative effect of the change as of December 1, 1993.
The non-cash charge to earnings was an expense of $4,344, or $.23 per share
and has been reflected in the financial statements for the month of December
1993.
NOTE 3 - Change in Fiscal Year:
In the third quarter of 1994, the Company changed its fiscal year end from
November 30 to December 31 effective with the fiscal year ending December 31,
1994. The accompanying financial statements include audited statements of
operations, shareholders' equity and cash flows for the one month transition
period ended December 31, 1993.
NOTE 4 - Acquisition of Unistar Radio Networks, Inc.:
On February 3, 1994, the Company completed the acquisition of all of the
issued and outstanding capital stock of Unistar Radio Networks, Inc.
("Unistar"). The acquisition was accounted for as a purchase. Accordingly,
the operating results of Unistar are included with those of the Company from
the date of acquisition. Based on management's estimates, the purchase price
has been allocated to the fair value of assets and liabilities acquired. The
excess of cost over net assets of acquired company resulting from the
transaction is being amortized over 40 years.
The pro forma unaudited combined condensed results of operations of the
Company and Unistar for the years ended December 31, 1994 and November 30,
1993 (presented as though the combination had occurred on December 1, 1992
after giving effect to certain pro forma adjustments) are as follows:
December 31, November 30,
1994 1993
---- ----
Net Revenues $140,403 $141,687
(Loss) from Continuing Operations ( 809) (4,301)
(Loss) Per Share from Continuing Operations ( $.03) ( $.15)
The foregoing pro forma results of operations principally reflect adjusting
historical interest expense, depreciation and amortization, the sale of 5,000
newly issued shares of common stock to a subsidiary of Infinity and
restructuring costs based on the transaction being completed at the beginning
of the periods presented. No adjustments were made to historical results for
potential cost reductions due to the elimination of duplicate facilities and
costs resulting from the acquisition of Unistar. However, 1994 pro forma
results reflect the benefit of cost reductions to the extent that they have
been realized.
F-8
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 5 - Property and Equipment:
Property and equipment is recorded at cost and is summarized as follows at:
December 31, November 30,
1994 1993
---- ----
Land . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,378 $ 3,378
Recording and studio equipment . . . . . . . . . . . . 15,813 15,433
Buildings and leasehold improvements . . . . . . . . . 7,573 6,577
Furniture and equipment . . . . . . . . . . . . . . . 5,664 4,007
Transportation equipment . . . . . . . . . . . . . . . 690 721
Construction-in-progress . . . . . . . . . . . . . . . - 180
------- -------
33,118 30,296
Less: Accumulated depreciation and amortization . . . 16,370 14,312
------- -------
Property and equipment, net . . . . . . . . . $16,748 $15,984
======= =======
NOTE 6 - Intangible Assets:
Intangible assets are summarized as follows at:
December 31, November 30,
1994 1993
---- ----
Goodwill, less accumulated amortization of $16,334
(1994) and $12,127 (1993) . . . . . . . . . . . . . $153,205 $64,947
Acquired station affiliation agreements, less
accumulated amortization of $3,382 (1994)
and $1,851 (1993) . . . . . . . . . . . . . . . . . 21,025 8,156
Other intangible assets, less accumulated
amortization of $4,543 (1994) and $3,958
(1993) . . . . . . . . . . . . . . . . . . . . . . . 17,057 17,642
-------- -------
Intangible assets, net . . . . . . . . . . . . $191,287 $90,745
========= =======
Goodwill represents the excess of the cost of purchased businesses over the
fair value of their net assets at the date of acquisition.
Station affiliation agreements are comprised of values assigned to agreements
acquired as part of the purchase of radio networks and are amortized using an
accelerated method over 40 years. Intangible assets, except for acquired
station affiliation agreements, are amortized on a straight-line basis over
40 years.
F-9
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 7 - Debt:
Long-term debt consists of the following at:
December 31, November 30,
1994 1993
---- ----
Term Loans . . . . . . . . . . . . . . . . . . . . . . . $105,000 -
6 % Convertible Subordinated Debentures maturing 2011 . . 15,443 $15,443
Term Notes . . . . . . . . . . . . . . . . . . . . . . . - 7,000
9% Convertible Senior Subordinated Debentures maturing
2002 . . . . . . . . . . . . . . . . . . . . . . . . . . - 31,058
------- -------
120,443 53,501
Less current maturities . . . . . . . . . . . . . . . . . 5,000 1,558
------- -------
$115,443 $51,943
======== =======
The Company's senior loan agreement with a syndicate of banks provides for
$110,000 in term loans ("Term Loans") and a $15,000 revolving facility
("Revolver") which mature on November 30, 2001 (referred to collectively as
"The Loans"). Interest is payable at the prime rate plus an applicable
margin of up to 1.5% or LIBOR plus an applicable margin of up to 2.5%, at
the Company's option. Based on the Company's Total Debt Ratio, the applicable
margins may be reduced to as low as .5% for prime rate loans and 1.5% for
LIBOR loans. At December 31, 1994, the applicable margins were 1.0% and 2.0%,
respectively. Principal on the Term Loans is payable quarterly starting
February 28, 1995, however in 1994, the Company prepaid the quarterly
installments due on February 28, 1995 and May 31, 1995 resulting in a
December 31, 1994 balance of $105,000. The Loans are secured by substantially
all the Company's assets and contain covenants relating to dividends, liens,
indebtedness, capital expenditures and interest coverage and leverage ratios.
As a matter of policy, the Company does not engage in derivative trading,
however as part of The Loans, the Company is required to enter into interest
rate protection agreements. Accordingly, the Company has entered into two
interest rate protection agreements under which the Company's interest rate
on $50,000 of borrowings under The Loans will not exceed 8% (based on the
current margin). The agreements are effective from July and August 1995 thru
July and August 1996, with each covering $25,000 of borrowings. At
December 31, 1994, the Company did not have any borrowings outstanding under
the Revolver.
The 6 3/4% Convertible Subordinated Debentures ("Debentures") are unsecured
and subordinated in right of payment to senior indebtedness. Interest on the
Debentures is payable semiannually on April 15 and October 15. The Debentures
are convertible at any time prior to maturity, unless previously redeemed,
into shares of common stock of the Company at the conversion price of $24.58
per share, subject to adjustment upon the occurrence of certain events.
F-10
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During 1994, the Company repaid the Term Notes which were outstanding at the
beginning of the year ($7,000). In addition, the 9% Convertible Senior
Subordinated Debentures, which were outstanding on November 30, 1993, were
converted into approximately 8,864,000 shares of common stock.
The aggregate maturities of long-term debt for the next five fiscal years and
thereafter, pursuant to the Company's debt agreements as in effect at
December 31, 1994, are as follows:
Year
----
1995 . . . . . . . . $ 5,000
1996 . . . . . . . . 15,000
1997 . . . . . . . . 15,000
1998 . . . . . . . . 20,000
1999 . . . . . . . . 20,000
Thereafter . . . . . 45,443
--------
$120,443
========
With the exception of the Company's Debentures, the fair value of short and
long-term debt approximates its carrying value. The fair value of the
Debentures at December 31, 1994 was approximately $10,350, based on its quoted
market price.
NOTE 8 - Shareholders' Equity:
The authorized capital stock of the Company consists of Common stock, Class B
stock and Preferred stock. Common stock is entitled to one vote per share
while Class B stock is entitled to 50 votes per share.
In connection with the Company's purchase of Unistar, the Company sold 5
million shares of common stock and a warrant to purchase up to an additional
3 million shares of common stock at an exercise price of $3.00 per share
(subject to certain vesting conditions) to a wholly-owned subsidiary of
Infinity Broadcasting Corporation for $15,000.
In December 1992, the Company's Board of Directors authorized the issuance of
41,500 shares of common stock to an officer of the Company for services
performed in fiscal 1992.
As part of a settlement relating to class action lawsuits filed against the
Company, it issued warrants to purchase 3,000,000 shares of the Company's
common stock at $17.25 per share. The warrants expire on September 4, 1997.
Warrants not exercised may be redeemable under certain circumstances at $1.00
per warrant.
F-11
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 9 - Stock Options:
The Company has stock option plans established in 1989 which provide for the
granting of options to directors, officers and key employees to purchase stock
at its market value on the date the options are granted. There are 4,800,000
shares authorized under the 1989 Plan, as amended. Options granted generally
become exercisable after one year in 25% increments per year and expire within
ten years from the date of grant. The 1989 Plan will remain in existence for
10 years or until otherwise terminated by the Board of Directors.
Information concerning options outstanding under the Plans is as follows for
the year ended:
December 31, November 30,
1994 1993
---- ----
Shares authorized under option plans at end
of period . . . . . . . . . . . . . . . . . 4,800,000 2,800,000
Exercisable at end of period . . . . . . . . 608,750 734,750
-at exercise prices per share . . . . . . . $1.63-$5.38 $1.63-$9.13
Exercised during the period . . . . . . . . . 629,000 679,500
-at exercise prices per share . . . . . . . $1.63-$3.00 $2.00-$2.75
Granted during the period . . . . . . . . . . 630,000 745,000
-at exercise prices per share . . . . . . . $7.50-$9.75 $1.63-$5.38
Canceled during the period . . . . . . . . . 91,875 141,250
Expired during the period . . . . . . . . . . 50,000 171,000
Available for new stock options at end of
period . . . . . . . . . . . . . . . . . . . 1,632,125 170,250
As part of a Management Agreement between the Company and Infinity Broadcasting
Corporation ("Infinity"), a subsidiary of Infinity was given warrants to acquire
up to 1,500,000 shares of common stock at prices ranging between $3.00 and $5.00
per share, subject to adjustment, which are exercisable after the Company's
common stock reaches certain market prices per share. At December 31, 1994,
500,000 warrants were exercisable at $3.00 per share.
F-12
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
On December 1, 1986, the Chairman of the Board was granted options not covered
by the Plans to acquire 525,000 shares of common stock, which vested ratably
over a seven-year term or immediately upon a change in control of the Company.
The options became exercisable at the fair market value of the common stock,
as defined, on the date of vesting. At December 31, 1994, all the options
granted are exercisable at exercise prices ranging from $1.67 to $16.31 per
share.
NOTE 10 - Income Taxes:
Effective December 1, 1993, the Company changed its method of accounting for
income taxes as required by FAS109. As permitted under the new rules, prior
year financial statements have not been restated, and adoption of FAS109 did
not affect reported earnings.
The Company has approximately $90,000 of available U.S. net operating loss
carryforwards for tax purposes. Utilization of the carryforwards is dependent
upon future taxable income and they begin to expire in 2002. As a result of
the Company's prior and pending debt and equity transactions, some of the
Federal net operating losses may be subject to certain limitations. For
financial purposes, a valuation allowance of $27,781 has been recorded to
offset the deferred tax assets related to those carryforwards.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities on the Company's
balance sheet and the amounts used for income tax purposes. Significant
components of the Company's deferred tax assets and liabilities at December 31,
1994 follow:
Deferred tax liabilities:
Affiliation agreements . . . . . . $ 9,143
Programming costs and rights . . . 2,186
Depreciation . . . . . . . . . . . 1,189
Other . . . . . . . . . . . . . . 351
------
Total deferred tax liabilities . 12,869
Deferred tax assets:
Net operating loss . . . . . . . . 32,650
Accrued liabilities and reserves . 6,953
Tax credits (AMT and ITC) . . . . 1,047
------
Total deferred tax assets . . . . 40,650
------
Valuation allowance . . . . . . . . 27,781
------
Total deferred income taxes $ -
=======
F-13
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The components of the provision (benefit) for income taxes related to
continuing operations is summarized as follows:
Year Ended
---------------------------------
December 31, November 30,
Current payable: 1994 1993 1992
---- ---- ----
Federal . . . . . . . . . . . . . $ 70 $ - $ -
State . . . . . . . . . . . . . . 130 - 26
-------- ------ --------
200 - 26
-------- ------ --------
Deferred:
Federal . . . . . . . . . . . . . - - (9,520)
State . . . . . . . . . . . . . . - - (2,102)
-------- ------ --------
- - (11,622)
-------- ------ --------
Total expense (benefit) for income
taxes . . . . . . . . . . . . . 200 - (11,596)
Less amount allocated to discontinued
operations . . . . . . . . . . - - 1,105
-------- ------ --------
Expense (benefit) allocated to
continuing operations . . . . . $ 200 $ - $(10,491)
======== ======= ========
The deferred tax benefits recorded for the year ended November 30, 1992, are
attributable to the reversal of deferred taxes for timing differences, provided
for in earlier years.
Note 11 - Related Party Transactions:
In connection with the acquisition of Unistar, the Company sold 5,000,000
shares of the Company's common stock and a warrant to purchase up to an
additional 3,000,000 shares to a subsidiary of Infinity (See Note 8) and
entered into a Management Agreement with Infinity. Pursuant to the Management
Agreement, the Company paid or accrued expenses aggregating $1,849 to Infinity
in 1994.
In addition, several of Infinity's radio stations are affiliated with the
Company's radio networks and the Company purchases several programs from
Infinity. During 1994 the Company incurred expenses aggregating approximately
$12,159 for Infinity affiliations and programs.
NOTE 12 - Restructuring Costs:
As a result of the Company's February 1994 acquisition of Unistar, the Company
consolidated certain facilities and operations. Accordingly, the Company
recorded an expense of approximately $2,405 for the estimated restructuring
charges, including the costs of facility consolidations, eliminating programs,
employee separations, relocations and related costs.
F-14
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 13 - Commitments and Contingencies:
The Company has various non-cancelable, long-term operating leases for office
space and equipment. In addition, the Company is committed under various
contractual agreements to pay for talent, broadcast rights, research, certain
digital audio transmission services and the Management Agreement with Infinity.
The approximate aggregate future minimum obligations under such operating
leases and contractual agreements for the five years after December 31, 1994,
are set forth below:
Year
----
1995 . . . . . . . . . . . . . $21,389
1996 . . . . . . . . . . . . . 20,292
1997 . . . . . . . . . . . . . 14,725
1998 . . . . . . . . . . . . . 12,235
1999 . . . . . . . . . . . . . 10,258
------
$78,899
======
NOTE 14 - Supplemental Cash Flow Information:
Supplemental Information on cash flows, including amounts from discontinued
operations, and non-cash transactions is summarized as follows:
Year Ended
-----------------------------------
November 30,
December 31, -----------------------
1994 1993 1992
---- ---- ----
Cash paid (received) for:
Interest . . . . . . . . . . . . . $ 7,763 $16,580 $17,083
Income taxes . . . . . . . . . . . 125 31 (176)
Non-cash investing and financing activities:
Conversion of Senior Debentures
to common stock . . . . . . . . 19,223 2,068 89
Disposition of discontinued operations:
Debt exchanged . . . . . . . . - 19,724 -
Accrued interest exchanged . . - 198 -
Accounts receivable exchanged - (448) -
For the one month ended December 31, 1993, $12,565 of Senior Debentures were
converted to common stock.
F-15
WESTWOOD ONE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 15 - Discontinued Operations:
At the end of the Company's first fiscal quarter of 1993, the Company
classified the results of operations from Radio & Records and its Los Angeles
(KQLZ-FM) and New York (WYNY-FM) radio stations as discontinued operations.
These three businesses collateralized the Company's 16% Debentures and
Revolving Credit Facility with Westinghouse Electric Corporation ("WEC"). In
June 1993 the Company completed the sales of its Los Angeles and New York
radio stations, and used the net proceeds from the sales to retire the
Company's 16% Debentures and reduce the outstanding balance of its Revolving
Credit Facility. On November 1, 1993, WEC acquired the outstanding stock of
Radio & Records and the net assets of Westwood One Stations Group for the
outstanding balance of the Revolving Credit Facility, accrued interest and
any other potential claims. Accordingly, the historical net loss of the
Company's owned-and-operated radio stations and Radio & Records have been
reported separately from continuing operations, and the prior periods have
been restated (including an allocation of interest of $7,043 and $12,273 for
fiscal 1993 and 1992 respectively).
The Company made a provision for the loss on the disposition of these assets
including estimated future costs and operating results from March 1, 1993
until the date of disposition, of $12,087. Revenue from discontinued
operations for fiscal 1993 and 1992 were $22,282 and $36,443, respectively.
NOTE 16 - Quarterly Results of Operations (unaudited):
The following is a tabulation of the unaudited quarterly results of operations.
The quarterly results are presented for the years ended December 31, 1994 and
November 30, 1993.
(In thousands, except per share data)
First Second Third Fourth For the
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -------
1994
----
Net revenues . . . . . . . . . . . . . . . . . . . . $26,052 $36,151 $36,491 $37,646 $136,340
Operating income (loss) . . . . . . . . . . . . . . . (5,622) 4,341 4,010 3,253 5,982
Income (loss) before extraordinary item . . . . . . . (7,416) 2,183 1,658 845 (2,730)
Net income (loss) . . . . . . . . . . . . . . . . . . (8,006) 2,183 1,658 845 (3,320)
Income (loss) per share:
Before extraordinary item . . . . . . . . . . . . . (.29) 0.07 0.05 0.02 (0.09)
Net income (loss) . . . . . . . . . . . . . . . . $ (.32) $ 0.07 $ 0.05 $ 0.02 $ (0.11)
1993
----
Net revenues . . . . . . . . . . . . . . . . . . . . $17,137 $21,207 $21,732 $23,938 $84,014
Operating income (loss) . . . . . . . . . . . . . . . (4,291) 319 973 808 (2,191)
(Loss) from continuing operations . . . . . . . . . . (6,072) (1,303) (580) (727) (8,682)
Net (loss) . . . . . . . . . . . . . . . . . . . . . (9,212) (1,303) (9,080) (4,314) (23,909)
(Loss) per share:
From continuing operations . . . . . . . . . . . . (0.40) (0.09) (0.04) (0.04) (0.57)
Net (loss) . . . . . . . . . . . . . . . . . . . . $ (0.61) $ (0.09) $ (0.60) $ (0.28) $ (1.58)
The following is a tabulation of the unaudited quarterly results of operations
for each of the quarters for the fiscal year ended December 31, 1993. As a
result of restating the quarterly periods, the effect of accounting change is
presented as if the change was made as of the beginning of the year.
First Second Third Fourth For the
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- --------
Net revenues . . . . . . . . . . . . . . . . . . . . $18,086 $22,023 $22,611 $22,183 $84,903
Operating income (loss) . . . . . . . . . . . . . . . (3,068) 1,378 1,040 62 (588)
(Loss) from continuing operations . . . . . . . . . . (4,885) (227) (494) (1,348) (6,954)
(Loss) before cumulative effect of accounting change (7,117) (227) (8,994) (4,935) (21,273)
Income (loss) per share:
From continuing operations . . . . . . . . . . . . (0.33) (0.02) (0.03) (0.08) (0.45)
Before cumulative effect of accounting change . . . $ (0.47) $ (0.02) $ (0.60) $ (0.29) $ (1.37)
F-16
WESTWOOD ONE, INC.
SCHEDULE IX
CONSOLIDATED SHORT-TERM BORROWINGS
(In thousands)
MAXIMUM AVERAGE WEIGHTED
AMOUNT AMOUNT AVERAGE
CATEGORY OF WEIGHTED OUT- OUT- INTEREST
AGGREGATE BALANCE AT AVERAGE STANDING STANDING RATE
SHORT-TERM END OF INTEREST DURING THE DURING THE DURING THE
BORROWINGS PERIOD RATE PERIOD PERIOD PERIOD
- - ----------- ---------- -------- ---------- ---------- ----------
Year ended
December 31, 1994:
Note payable $ - - $2,657 $ 139 8.4%
Year ended
November 30, 1993:
Note payable 6,448 8.3% 7,248 4,399 8.2
Year ended
November 30, 1992:
Note payable 6,800 8 6,800 3,948 7.5
Notes: Short-term borrowings during the years covered by this schedule consist
of loans made under various established credit lines. The average amount
outstanding during each period was computed by dividing the average outstanding
principal balance by 365 days. The weighted average interest rate during each
period was computed by dividing the actual interest expense on such borrowings
by the average amount outstanding during that period.
F-17