SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------------
AMENDMENT No.1 TO
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
-------------------------------
Date of Report (Date of Earliest Event Reported): November 17, 2000
Brill Media Company, LLC
(Exact name of registrant as specified in its charter)
Virginia 333-44177 52-2071822
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
420 N. W. FIFTH STREET, EVANSVILLE, INDIANA 47708
(Address of principal executive offices)
(Zip code)
Registrant's telephone number, including area code:
(812) 423-6200
This Amendment No.1 amends and supplements the current Report on Form 8-K which
was filed on December 4, 2000 by Brill Media Company, LLC.
On November 17, 2000, certain wholly-owned subsidiaries of Brill Media Company,
LLC (together with its wholly-owned subsidiaries, the "Company") paid $1,099 in
cash to acquire 100% of the membership interests of TSB IV, LLC (T4L), a
Virginia limited liability company, pursuant to an Agreement for Transfer of
Membership Interest (the "Acquisition").
Simultaneously, Mr. Alan Brill made a capital contribution of $1,099 in cash to
the Company.
Prior to the transaction, T4L had been a "managed affiliate" of the Company as
described in note 9 to the consolidated financial statements included in the
Annual Report on Form 10-K of the Company for the fiscal year ended February 29,
2000, and was indirectly owned by Mr. Alan Brill. Accordingly, the transaction
will be accounted for similar to a pooling-of-interests.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Item 7 is hereby amended by adding the following financial statements and
information:
(a) Financial Statements of Business Acquired - TSB IV, LLC
(1) Report of Independent Auditors
(2) Statements of Financial Position as of February 28 or 29, 2000, 1999,
1998
(3) Statements of Operations and Members' Deficiency for the years ended
February 28 or 29, 2000, 1999, 1998
(4) Statement of Cash Flows for the years ended February 28 or 29, 2000,
1999, 1998
(5) Notes to Financial Statements
(a)1 Financial Statements of Business Acquired - TSB IV, LLC
(1) Statements of Financial Position as of August 31, 2000 and February
29, 2000
(2) Statements of Operations and Members' Deficiency for the six months
ended August 31, 2000 and 1999
(3) Statements of Cash Flows for the six months ended August 31, 2000 and
1999
(4) Notes to Financial Statements
(b) Pro Forma Financial Information of Brill Media Company, LLC
(1) Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended February 29, 2000
(2) Notes to Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the year ended February 29, 2000
(3) Unaudited Pro Forma Condensed Consolidated Statement of Financial
Position as of August 31, 2000
(4) Notes to Unaudited Pro Forma Condensed Consolidated Statement of
Financial Position as of August 31, 2000
(5) Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the six months ended August 31, 2000
(6) Notes to Unaudited Pro Forma Condensed Consolidated Statement of
Operations for the six months ended August 31, 2000
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BRILL MEDIA COMPANY, LLC
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
Date: January 10, 2001 By /s/ ALAN R. BRILL
-----------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, AND CHIEF
EXECUTIVE OFFICER
Item 7a
Financial Statements
TSB IV, LLC
(A Limited Liability Company)
Years ended February 29, 2000 and February 28, 1999 and 1998
with Report of Independent Auditors
TSB IV, LLC
(A Limited Liability Company)
Financial Statements
Years ended February 29, 2000 and February 28, 1999 and 1998
Contents
Report of Independent Auditors...............................................1
Financial Statements
Statements of Financial Position.............................................2
Statements of Operations and Members' Deficiency.............................3
Statements of Cash Flows.....................................................4
Notes to Financial Statements................................................5
Report of Independent Auditors
Members of TSB IV, LLC
We have audited the accompanying statements of financial position of TSB IV, LLC
as of February 29, 2000 and February 28, 1999 and 1998, and the related
statements of operations and members' deficiency, and cash flows for each of the
three years in the period ended February 29, 2000. 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 in accordance with auditing standards generally accepted
in the United States. Those standards 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. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of TSB IV, LLC at February 29,
2000 and February 28, 1999 and 1998, and the results of its operations and its
cash flows for each of the three years in the period ended February 29, 2000 in
conformity with accounting principles generally accepted in the United States.
As discussed in Note 2 to the financial statements, in fiscal 2000 the Company
changed its method of accounting for start-up costs.
January 10, 2001 Ernst & Young LLP
TSB IV, LLC
(A Limited Liability Company)
Statements of Financial Position
February 28 or 29
2000 1999 1998
-----------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 33,779 $ 76,197 $ 70,133
Accounts receivable, net of allowance for doubtful accounts in
2000 - $14,010, 1999 - $20,000, and 1998 - $7,365 279,719 321,978 254,673
Other current assets 21,938 51,684 18,395
-----------------------------------------------------
Total current assets 335,436 449,859 343,201
Property and equipment 1,920,219 1,902,206 1,827,675
Less: Accumulated depreciation 287,115 175,693 71,098
-----------------------------------------------------
Net property and equipment 1,633,104 1,726,513 1,756,577
Goodwill and FCC licenses, net of accumulated amortization in
2000 - $ 434,521, 1999 - $276,514, and 1998 - $118,506 5,885,791 6,043,798 6,201,806
Other assets, net 793 14,995 19,989
-----------------------------------------------------
$ 7,855,124 $ 8,235,165 $ 8,321,573
=====================================================
Liabilities and members' deficiency:
Current liabilities:
Amounts payable to related parties $ 464,352 $ 249,161 $ 233,249
Accounts payable 37,820 45,178 53,362
Accrued payroll and other expenses 41,066 38,779 40,278
Current maturities of long-term debt 4,011 3,124 3,047
-----------------------------------------------------
Total current liabilities 547,249 336,242 329,936
Long-term debt 6,694 10,652 13,774
Note payable to related party 12,296,834 11,215,375 9,792,375
Commitments -- -- --
Members' deficiency (4,995,653) (3,327,104) (1,814,512)
-----------------------------------------------------
$ 7,855,124 $ 8,235,165 $ 8,321,573
=====================================================
See accompanying notes.
2
TSB IV, LLC
(A Limited Liability Company)
Statements of Operations and Members' Deficiency
Years ended February 28 or 29
2000 1999 1998
----------------------------------------------------
Operating revenues:
Broadcasting $ 2,514,279 $ 2,546,905 $ 2,315,568
Agency commissions (309,789) (303,324) (309,066)
Other 14,045 12,332 21,868
----------------------------------------------------
2,218,535 2,255,913 2,028,370
Operating expenses (income):
Operating departments 1,866,829 1,914,766 1,737,334
Management fees 323,741 320,857 307,813
Time brokerage agreement fee, net -- -- 81,000
Depreciation 111,422 104,595 72,737
Amortization of goodwill, FCC licenses and other 158,380 163,002 123,218
----------------------------------------------------
2,460,372 2,503,220 2,322,102
----------------------------------------------------
Operating loss (241,837) (247,307) (293,732)
Other income (expense):
Interest - related party, net (1,411,783) (1,265,650) (1,159,609)
Interest - other, net (1,100) 365 737
Amortization of deferred financing costs -- -- (84,500)
Gain on sale of assets, net -- -- 1,812
Other, net -- -- (8,960)
----------------------------------------------------
(1,412,883) (1,385,285) (1,250,520)
----------------------------------------------------
Loss before extraordinary item and
cumulative effect of change in accounting principle (1,654,720) (1,512,592) (1,544,252)
Extraordinary item -- -- (259,915)
Cumulative effect of change in accounting principle (13,829) -- --
----------------------------------------------------
Net loss (1,668,549) (1,512,592) (1,804,167)
Members' deficiency, beginning of year (3,327,104) (1,814,512) (10,345)
----------------------------------------------------
Members' deficiency, end of year $ (4,995,653) $ (3,327,104) $ (1,814,512)
====================================================
See accompanying notes.
3
TSB IV, LLC
(A Limited Liability Company)
Statements of Cash Flows
Years ended February 28 or 29
2000 1999 1998
----------------------------------------------------
Operating activities
Net loss $(1,668,549) $(1,512,592) $(1,804,167)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 269,802 267,597 195,955
Amortization of deferred financing costs -- -- 84,500
Management fees accrual 213,741 200,857 10,813
Related party interest accrual (3,001) (193,967) 187,380
Additional interest accrual -- -- 337,778
Extraordinary item -- -- 259,915
Cumulative effect of change in accounting principle 13,829 -- --
Gain on sale of assets, net -- -- (1,812)
Changes in operating assets and liabilities, net of the
effect of the acquisition:
Accounts receivable 42,259 (67,305) (131,777)
Other current assets 29,746 (33,289) (16,541)
Accounts payable (7,358) (8,184) (125,483)
Other accrued expenses 2,287 (1,499) 17,807
----------------------------------------------------
Net cash used in operating activities (1,107,244) (1,348,382) (985,632)
Investing activities
Change in restricted cash -- -- 800,219
Purchase of property and equipment (18,012) (74,531) (24,738)
Purchase of radio station -- -- (8,000,000)
Proceeds from sale of assets -- -- 11,419
Increase in other assets -- (3) (128,832)
----------------------------------------------------
Net cash used in investing activities (18,012) (74,534) (7,341,932)
Financing activities
Increase in amounts and note payable to
related parties 1,085,909 1,432,025 8,976,462
Payment of deferred financing costs and other -- -- (235,004)
Principal payments on long-term obligations (3,071) (3,045) (9,456,974)
Proceeds from long-term borrowings -- -- 9,095,890
----------------------------------------------------
Net cash provided by financing activities 1,082,838 1,428,980 8,380,374
----------------------------------------------------
Net increase (decrease) in cash and cash equivalents (42,418) 6,064 52,810
Cash and cash equivalents at beginning of year 76,197 70,133 17,323
----------------------------------------------------
Cash and cash equivalents at end of year $ 33,779 $ 76,197 $ 70,133
====================================================
Supplemental disclosures of cash flow information:
Interest paid $ 1,414,256 $ 1,267,480 $ 967,067
See accompanying notes.
4
TSB IV, LLC
(A Limited Liability Company)
Notes to Financial Statements
Years ended February 29, 2000 and February 28, 1999 and 1998
1. Basis of Presentation and Business
The financial statements include the accounts of TSB IV, LLC (the Company) which
is owned indirectly by Alan R. Brill (Mr. Brill). The Company owns and operates
a radio station in the Evansville, Indiana/Henderson, Kentucky market.
The Company was organized on December 18, 1996 as a limited liability company
under the laws of the state of Virginia and has a term of 50 years.
2. Significant Accounting Policies
Cash Equivalents
The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.
Property and Equipment
Property and equipment are stated at cost. Depreciation is provided under the
straight-line method over the estimated useful lives of the various assets as
follows:
Buildings and improvements 10 to 40 years
Towers and antennae 13 to 20 years
Broadcast equipment 3 to 13 years
Furniture and fixtures 3 to 10 years
Intangible Assets
Goodwill and FCC licenses are being amortized as required by generally accepted
accounting principles. Amortization is calculated on the straight-line basis
over a period of 40 years.
5
2. Significant Accounting Policies (continued)
Long-Lived Assets
The Company annually considers whether indicators of impairment of long-lived
assets held for use (including intangibles) are present. If such indicators are
present, the Company determines whether the sum of the estimated undiscounted
future cash flows is less than their carrying amounts. The Company recognizes
any impairment loss based on the excess of the carrying amount of the assets
over their fair value. No impairment loss has been recognized during the three
years ended February 29, 2000.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Revenue Recognition
The Company recognizes revenue when an ad is aired.
Advertising
Advertising costs are expensed as incurred and totaled $349,391, $278,561 and
$288,985 for the years ended February 29, 2000 and February 28, 1999 and 1998,
respectively.
Comprehensive Income
Net loss for the three years in the period ended February 29, 2000 is the same
as comprehensive loss.
Recently Issued Accounting Standards
The Company adopted AcSEC Statement of Position 98-5 "Reporting on the Costs of
Start-Up Activities" in the first quarter of fiscal 2000 and wrote-off, as
required, $13,829 of previously capitalized start-up costs as a cumulative
effect of change in accounting principle. All future start-up or preopening
costs will be expensed as incurred.
6
3. Acquisitions and Dispositions
In January 1997, the Company entered into a contract to purchase the assets of a
radio station located in Evansville, Indiana/Henderson, Kentucky for $8,000,000
in cash. The Company further contracted to lease the programming of the radio
station from the seller under a Time Brokerage Agreement (TBA) beginning in
February 1997, for $31,000 per month, until transfer of the FCC license in May
1997.
Accordingly, the accompanying financial statements also reflect the operations
of the station pursuant to the TBA arrangement through the purchase date. The
acquisition in May 1997, has been accounted for as a purchase effective on such
date.
The purchase price was allocated as follows:
Property and equipment $ 1,800,000
Goodwill and FCC license 6,200,000
------------
$ 8,000,000
============
4. Property and Equipment
Property and equipment consists of the following:
February 28 or 29
2000 1999 1998
-------------------------------------------------
Land $ 200,000 $ 200,000 $ 200,000
Buildings and improvements 254,500 251,000 251,000
Towers and antennae 852,871 851,833 851,833
Broadcast equipment 457,136 453,952 402,615
Furniture and fixtures 155,712 145,421 122,227
-------------------------------------------------
$1,920,219 $1,902,206 $1,827,675
=================================================
6. Income Taxes
The Company is a limited liability company whose taxable income or loss for
federal and state income tax purposes is ultimately passed through to Mr. Brill.
Accordingly, the financial statements include no provision for federal or state
income taxes.
7
7. Long-Term Debt
Long-term debt consists of a purchase money note to a bank payable monthly which
matures in September 2002.
Aggregate maturities of long-term obligations during the next three years are as
follows:
Fiscal Year Amount
----------------------------
2001 $ 4,011
2002 4,104
2003 2,590
In March 2000, the Company entered into a capital lease for equipment totaling
$262,500 with a related company for $4,589 per month and maturing February 2007.
8. Commitments and Contingencies
The Company leases certain equipment. Rent expense for fiscal 2000, 1999 and
1998 was $9,421, $6,549 and $5,693, respectively. At February 29, 2000 the
Company had no operating leases that have initial or remaining noncancelable
terms in excess of one year.
In March 2000, the Company began leasing studio and administrative offices from
a related party for $5,333 per month plus reimbursement of common operating
costs.
9. Transactions With Related Parties
In addition to the related party transactions discussed in Notes 7 and 8, the
Company had the following related party transactions.
Brill Media Company, LP (BMCLP), owned indirectly by Mr. Brill, is a group
executive management operation which provides supervisory activities and certain
corporate-wide administrative services to the Company. BMCLP earns a fee, paid
monthly as permitted, based on a percentage of revenue under standard
contractual arrangements. In addition, a wholly-owned subsidiary of Brill Media
Company, LLC (together with its wholly-owned subsidiaries, BMCLLC), a related
company, provided certain management services to the Company for which it
received management fees of $10,000 per month.
8
9. Transactions With Related Parties (continued)
The Company incurred management fees to BMCLP and BMCLLC in fiscal 2000, 1999
and 1998 of $323,741, $320,857 and $307,813, respectively. At February 29, 2000
and February 28, 1999 and 1998, $448,293, $234,552 and $33,695 of management
fees are unpaid, non-interest-bearing, and are included in amounts payable to
related parties in the accompanying statements of financial position.
At February 29, 2000, February 28, 1999 and February 28, 1998, the unsecured
note payable to BMCLLC totaled $12,296,834, $11,215,375, and $9,792,375
respectively. The note bears interest at 12%, payable semi-annually. Principal
and any outstanding accrued interest is due November 2003. This note replaced
the third party borrowings used to purchase the radio station. As part of this
transaction, deferred financing costs associated with the original third party
financing were written off in the amount of $259,915 and are included in the
accompanying statement of operations as an extraordinary item.
Amounts due to related parties at February 29, 2000 and February 28, 1999 also
include other operating payables of $16,059 and $14,609 respectively. Amounts
due to related parties at February 28, 1998 include other operating payables of
$5,616, and accrued interest payable of $193,938.
10. Subsequent Events
On November 17, 2000, certain wholly-owned subsidiaries of Brill Media Company,
LLC paid $1,099 in cash to acquire 100% of the membership interests of the
Company pursuant to an Agreement for Transfer of Membership Interest.
A subsidiary of Brill Media Company, LLC was the holder of the note payable
discussed in Note 9.
9
TSB IV, LLC
(A Limited Liability Company)
Financial Statements
Contents
Statements of Financial Position...............................................1
Statements of Operations and Members' Deficiency...............................2
Statements of Cash Flows.......................................................3
Notes to Financial Statements..................................................4
TSB IV, LLC
(A Limited Liability Company)
Statements of Financial Position
August 31 February 29
2000 2000
---------------------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 61,828 $ 33,779
Accounts receivable, net 283,706 279,719
Other current assets 36,792 21,938
---------------------------------------
Total current assets 382,326 335,436
Property and equipment 1,863,183 1,920,219
Less: Accumulated depreciation 326,043 287,115
---------------------------------------
Net property and equipment 1,537,140 1,633,104
Goodwill and FCC licenses, net 5,807,393 5,885,791
Other assets, net 2,090 793
---------------------------------------
$ 7,728,949 $ 7,855,124
=======================================
Liabilities and members' deficiency
Current liabilities:
Amounts payable to related parties $ 1,074,216 $ 464,352
Accounts payable 43,716 37,820
Accrued payroll and other expenses 38,212 41,066
Current maturities of long-term debt 42,925 4,011
---------------------------------------
Total current liabilities 1,199,069 547,249
Long-term debt 255,761 6,694
Note payable to related party 12,371,834 12,296,834
Members' deficiency (6,097,715) (4,995,653)
---------------------------------------
$ 7,728,949 $ 7,855,124
=======================================
See accompanying notes.
1
TSB IV, LLC
(A Limited Liability Company)
Statements of Operations and Members' Deficiency
(Unaudited)
Six Months Ended August 31
2000 1999
-------------------------------
Revenues $ 970,493 $ 1,207,958
Operating expenses:
Operating departments 867,253 876,929
Management fees 148,314 170,079
Depreciation 79,208 55,344
Amortization 79,190 79,190
-------------------------------
1,173,965 1,181,542
-------------------------------
Operating income (loss) (203,472) 26,416
Other income (expense):
Interest - related party, net (780,438) (693,605)
Interest - other, net (4,611) (916)
Loss on sale of assets, net (113,541) --
-------------------------------
(898,590) (694,521)
-------------------------------
Loss before cumulative effect of change in
accounting principle (1,102,062) (668,105)
Cumulative effect of change in accounting
principle -- 13,829
-------------------------------
Net loss (1,102,062) (681,934)
Members' deficiency, beginning of period (4,995,653) (3,327,104)
-------------------------------
Members' deficiency, end of period $(6,097,715) $(4,009,038)
===============================
See accompanying notes.
2
TSB IV, LLC
(A Limited Liability Company)
Statements of Cash Flows
(Unaudited)
Six Months Ended August 31
2000 1999
-----------------------------------
Operating activities
Net loss $(1,102,062) $ (681,934)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 158,398 134,534
Management fees accrual 78,314 110,080
Related party interest accrual 391,572 30
Loss on sale of assets, net 113,541 --
Cumulative effect of change in accounting principle -- 13,829
Changes in operating assets and liabilities:
Accounts receivable (3,987) (73,938)
Other current assets (14,854) 36,912
Accounts payable 5,896 17,623
Other accrued expenses (2,854) 19,139
-----------------------------------
Net cash used in operating activities (376,036) (423,725)
Investing activities
Purchase of property and equipment (13,229) (13,884)
Proceeds from sale of assets 223,271 --
Increase in other assets (2,090) --
-----------------------------------
Net cash provided by (used in) investing activities 207,952 (13,884)
Financing Activities
Increase in amounts and note payable to related parties 214,978 491,578
Principal payments on long-term obligations (18,845) (1,640)
-----------------------------------
Net cash provided by financing activities 196,133 489,938
-----------------------------------
Net increase in cash and cash equivalents 28,049 52,329
Cash and cash equivalents at beginning of period 33,779 76,197
-----------------------------------
Cash and cash equivalents at end of period $ 61,828 $ 128,526
===================================
See accompanying notes.
3
TSB IV, LLC
(A Limited Liability Company)
Notes to the Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements include the accounts
of TSB IV, LLC (the Company), which is indirectly owned by Alan R. Brill.
These statements have been prepared in accordance with generally accepted
accounting principles for interim financial information. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments, consisting of normal recurring
accruals, considered necessary for a fair presentation have been included.
Operating results for the six-month period ended August 31, 2000 are not
necessarily indicative of the results that may be expected for the year
ending February 28, 2001. For further information, refer to the audited
financial statements for the year ended February 29, 2000.
2. Transactions with Related Parties
During the first six months of fiscal 2001, the Company entered into a
capital lease for equipment totaling $262,500 with a related company
payable at $4,589 per month, maturing February 2007.
In addition, the Company leases studio space and administrative
offices from related party for $5,333 per month, plus reimbursement of
common operating costs.
3. Subsequent Events
On November 17, 2000, certain wholly-owned subsidiaries of Brill Media
Company, LLC paid $1,099 in cash to acquire 100% of the membership
interests of the Company pursuant to an Agreement for Transfer of
Membership Interest.
A subsidiary of Brill Media Company, LLC is the holder of the note
payable to a related party as further discussed in Note 9 to the Company's
audited financial statements for the year ended February 29, 2000.
4
BRILL MEDIA COMPANY, LLC
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements
give effect to the acquisition (the "Acquisition") of TSB IV, LLC by certain
wholly owned subsidiaries of Brill Media Company, LLC (the "Company"). The
Company has accounted for the Acquisition similar to a pooling-of-interests due
to the related party nature of the transaction.
The unaudited pro forma condensed consolidated statement of financial position
gives effect to the Aquisition as if it occurred on August 31, 2000. The
unaudited pro forma condensed consolidated statements of operations for the year
ended February 29, 2000 and six months ended August 31, 2000 give effect to the
Acquisition as if it had occurred on March 1, 1999.
The pro forma adjustments are based on available information and certain
assumptions that the Company believes are reasonable under the circumstances.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with the separate historical financial statements of TSB IV,
LLC and Brill Media Company, LLC, and related notes thereto included in this
Report, in the Quarterly Report on Form 10Q of the Company for the quarter ended
August 31, 2000 and in the Annal Report on Form 10K of the Company for the year
ended February 29, 2000.
The unaudited pro forma condensed consolidated financial statements are not
necessarily indicative of the actual results of operations or financial position
that would have occurred had the acquisition by Brill Media Company, LLC of TSB
IV, LLC occurred on the dates indicated nor are they necessarily indicative of
future operating results or financial position and are not intended to be a
projection of future results or trends.
1
BRILL MEDIA COMPANY, LLC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATONS
YEAR ENDED FEBRUARY 29, 2000
Company TSB IV, LLC Pro forma
Historical Historical Adjustments Pro forma
------------------------------------------------------------------
Revenues $ 42,819,239 $ 2,218,535 $ (120,000)A $ 44,917,774
Operating expenses:
Operating departments 31,861,558 1,866,829 -- 33,728,387
Incentive plan 276,300 -- -- 276,300
Management fees 2,681,161 323,741 (120,000)A 2,884,902
Time brokerage agreement fees, net 19,742 -- -- 19,742
Consulting 24,990 -- -- 24,990
Depreciation 1,610,411 111,422 -- 1,721,833
Amortization 1,441,164 158,380 -- 1,599,544
------------------------------------------------------------------
37,915,326 2,460,372 (120,000) 40,255,698
------------------------------------------------------------------
Operating income (loss) 4,903,913 (241,837) -- 4,662,076
Other income (expense):
Interest - managed affiliates 2,302,002 -- (1,411,783)B 890,219
Interest - related parties, net 291,586 (1,411,783) 1,411,783 B 291,586
Interest - other, net (14,410,027) (1,100) -- (14,411,108)
Amortization of deferred financing costs (1,150,948) -- -- (1,150,948)
Gain on sale of assets, net 6,038,027 -- -- 6,038,027
Other, net (167,567) -- -- (167,586)
------------------------------------------------------------------
(7,096,927) (1,412,883) -- (8,509,810)
------------------------------------------------------------------
Loss before income taxes and cumulative effect of
change in accounting principle (2,193,014) (1,654,720) -- (3,847,734)
Income tax provision 332,543 -- -- 332,543
------------------------------------------------------------------
Loss before cumulative effect of change in accounting
principle (2,525,557) (1,654,720) -- (4,180,277)
Cumulative effect of change in accounting principle 150,979 13,829 -- 164,808
------------------------------------------------------------------
Net loss $ (2,676,536) $ (1,668,549) $ -- $ (4,345,085)
==================================================================
See accompanying notes.
2
BRILL MEDIA COMPANY, LLC
NOTES TO THE UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 29, 2000
(A) To reflect the elimination of management fees paid by TSB IV, LLC to a
wholly owned subsidiary of the Company in the amount of $10,000 per month.
(B) To reflect the elimination of interest expense on a note payable by TSB IV,
LLC to a wholly owned subsidiary of the Company.
3
BRILL MEDIA COMPANY, LLC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
AUGUST 31, 2000
Company TSB IV, LLC Pro forma
Historical Historical Adjustments Pro forma
----------------------------------------------------------------------
Assets
Current assets:
Cash and cash equivalents $ 10,654,037 $ 61,828 $ -- $ 10,715,867
Accounts receivable, net 6,330,483 283,706 -- 6,614,189
Interest receivable on notes from managed affiliates 613,333 -- (379,036)A 234,297
Inventories 438,570 -- -- 438,570
Other current assets 750,571 36,792 -- 787,361
----------------------------------------------------------------------
Total current assets 18,786,994 382,326 (379,036)A 18,790,284
Notes receivable from managed affiliates 20,000,000 -- (12,371,834)B 7,628,166
Property and equipment 29,056,410 1,863,183 -- 30,919,593
Less: Accumulated depreciation 10,290,909 326,043 -- 10,616,952
----------------------------------------------------------------------
Net property and equipment 18,765,501 1,537,140 -- 20,302,641
Goodwill and FCC licenses, net 15,288,019 5,807,393 -- 21,095,412
Covenants not to compete, net 2,631,509 -- -- 2,631,509
Other assets, net 5,365,723 2,090 -- 5,367,813
Amounts due from related parties 5,751,104 -- -- 5,751,104
----------------------------------------------------------------------
$ 86,588,850 $ 7,728,949 $ (12,750,870) $ 81,566,929
======================================================================
Liabilities and members' deficiency
Current liabilities:
Amounts payable to related parties $ 1,116,525 $ 1,074,216 $ (379,036)A $ 1,811,705
Accounts payable 1,540,030 43,716 -- 1,583,746
Accrued payroll and related expenses 1,203,323 38,212 -- 1,241,535
Accrued interest 2,780,275 -- -- 2,780,275
Other accrued expenses 174,307 -- -- 174,307
Current maturities of long-term obligations 1,355,657 42,925 -- 1,398,582
----------------------------------------------------------------------
Total current liabilities 8,170,117 1,199,069 (379,036) 8,990,150
Long-term notes and other obligations 136,079,179 255,761 -- 136,334,940
Note payable to related party -- 12,371,834 (12,371,834)B --
Members' deficiency (57,660,446) (6,097,715) -- (63,758,161)
----------------------------------------------------------------------
$ 86,588,850 $ 7,728,949 $ (12,750,870) $ 81,566,929
======================================================================
4
BRILL MEDIA COMPANY, LLC
NOTES TO THE UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
AUGUST 31, 2000
(A) To reflect the elimination of related party interest.
(B) To reflect the elimination of a related party note.
5
BRILL MEDIA COMPANY, LLC
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATONS
SIX MONTHS ENDED AUGUST 31, 2000
Company TSB IV, LLC Pro forma
Historical Historical Adjustments Pro forma
------------------------------------------------------------------------
Revenues $ 22,863,817 $ 970,493 $ (101,729)AB $ 22,936,039
Operating expenses:
Operating departments 16,892,155 867,253 (41,729)A 17,801,137
Management fees 1,417,942 148,314 (60,000)B 1,626,256
Depreciation 895,731 79,208 -- 974,939
Amortization 702,408 79,190 -- 781,598
------------------------------------------------------------------------
19,908,236 1,173,965 (101,729) 21,183,930
------------------------------------------------------------------------
Operating income (loss) 2,955,581 (203,472) -- 2,752,109
Other income (expense):
Interest - managed affiliates 1,226,667 -- (756,731)C 469,936
Interest - related parties, net 100,748 (780,441) 756,731 C 77,041
Interest - other, net (7,535,404) (4,611) -- (7,540,015)
Amortization of deferred financing costs (446,614) -- -- (446,614)
Loss on sale of assets, net (17,296) (113,541) -- (130,837)
Other, net (80,113) -- (80,113)
------------------------------------------------------------------------
(6,752,012) (898,590) -- (7,650,602)
------------------------------------------------------------------------
Loss before income taxes (3,796,431) (1,102,062) -- (4,898,493)
Income tax provision 94,877 -- -- 94,877
------------------------------------------------------------------------
Net loss $ (3,891,308) $ (1,102,062) $ -- $ (4,993,370)
========================================================================
See accompanying notes.
6
BRILL MEDIA COMPANY, LLC
NOTES TO THE UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 2000
(A) To eliminate the rent for studio space and related occupancy expenses paid
by TSB IV, LLC to the Company.
(B) To reflect the elimination of management fees paid by TSB IV, LLC to the
Company in the amount of $10,000 per month.
(C) To reflect the elimination of interest expense on the related party note.
7