SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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) JUNE 9, 2000
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LIBERTY LIVEWIRE CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 0-1461 13-1679856
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
900 NORTH SEWARD STREET, HOLLYWOOD, CALIFORNIA 90038
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (213) 962-4000
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THE TODD-AO CORPORATION
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(Former name or former address, if changed from last report)
Exhibit index located on page 13
LIBERTY LIVEWIRE CORPORATION
FORM 8-K
JUNE 9, 2000
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TABLE OF CONTENTS
Item 2. ACQUISITION OR DISPOSITION OF ASSETS. Page 2
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
a. Financial Statements of business acquired Page 4
b. Pro forma condensed financial information Page 5
c. Exhibit Index Page 13
1
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
This report is being filed with respect to the acquisition by Liberty
Livewire Corporation (the "Registrant") from Liberty Media Corporation
of 100% of the outstanding capital stock of Four Media Company, on
June 9, 2000. The Registrant was formerly known as The Todd-AO
Corporation. All of the information required by Item 2 of this form
with respect to such acquisition was previously reported in (i) the
Registration Statement on Form S-4 of AT&T Corp. filed May 5, 2000
(Registration No. 333-36458) (the prospectus in which constitutes the
definitive proxy statement of The Todd-AO Corporation and is deemed to
have been filed by the Registrant under Rule 14a-6 of the Securities
Exchange Act, pursuant to Rule 14a-6(j) thereof), and (ii) the
Registrant's Current Report on form 8-K filed June 13, 2000. The
following is qualified in its entirety by the more complete
descriptions of such transaction set forth in such proxy statement and
current report, which are incorporated herein by this reference.
Background:
On April 10, 2000, Liberty Media acquired 100% of the outstanding
capital stock of Four Media through the merger of D-Group Merger Corp.
with and into Four Media and certain related transactions, pursuant to
an Agreement and Plan of Merger dated December 6, 1999, among Liberty
Media, Four Media, D-Group Merger Corp. and AT&T Corp. The aggregate
consideration paid to the former holders of Four Media capital stock
in that transaction comprised 3,182,299 shares of Class A Liberty
Media Group Common Stock and $123,314,344 in cash.
On June 9, 2000, Liberty Media acquired a controlling interest in the
Registrant (then known as The Todd-AO Corporation) through the merger
(the "Todd Merger") of B-Group Merger Corp. with and into the
Registrant and certain related transactions, pursuant to an Agreement
and Plan of Merger dated December 10, 1999, as amended on March 6,
2000, among Liberty Media, the Registrant, B-Group Merger Corp. and
AT&T Corp.
2
Acquisition of Four Media by the Registrant:
On June 9, 2000, following consummation of the Todd Merger, Liberty
Media contributed to the Registrant 100% of the capital stock of Four
Media in exchange for 16,614,952 shares of the Registrant's Class B
Common Stock, pursuant to a previously reported Contribution Agreement
dated February 11, 2000 between Liberty Media and the Registrant.
Four Media is a leading provider of technical and creative services to
producers and distributors of television programming, television
commercials, feature films and other entertainment content, as well as
to owners of film and television libraries. These services include the
processing, enhancement, storage and distribution of film and video
from the point it leaves the camera until it is shown, in various
formats, to audiences around the world.
3
Item 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
a. Financial Statements of business acquired:
The audited financial statements of Four Media Company for the years
ended August 1, 1999, August 2, 1998 and August 3, 1997 are
incorporated by reference from Four Media's Annual Report on Form 10K
filed on November 11, 1999 (as amended on November 29, 1999) and
include:
(1) Report of Independent Public Accountants
(2) Consolidated Balance Sheets at August 1, 1999 and August 2,
1998
(3) Consolidated Statements of Income for the fiscal years ended
August 1, 1999, August 2, 1998 and August 3, 1997
(4) Consolidated Statements of Cash Flows for the fiscal years
ended August 1, 1999, August 2, 1998 and August 3, 1997.
(5) Notes to Consolidated Financial Statements.
The unaudited financial statements of Four Media Company for the six
months ended January 30, 2000 and January 31, 1999 are incorporated by
reference from Four Media's Form 10Q for the quarter ended January 30,
2000 filed on March 3, 2000 and include:
(1) Condensed Consolidated Balance Sheet as of January 30, 2000.
(2) Condensed Consolidated Statements of Income for the six
months ended January 30, 2000 and January 31, 1999.
(3) Condensed Consolidated Statements of Cash Flows for the six
months ended January 30, 2000 and January 31, 1999.
4
b. Pro Forma Condensed Financial Information
Liberty Livewire and Four Media Company Pro Forma Condensed
Combined Financial Statements (Unaudited):
I. Balance Sheet as of February 29, 2000
II. Statements of income for the year ended August 31, 1999 and
the six months ended February 29, 2000
III. Footnotes to Financial Statements
Liberty Livewire, formerly known as The Todd-AO Corporation
("Todd"), purchased all of the outstanding shares of The
Four Media Company ("Four Media") on June 9, 2000 in
exchange for 16,614,952 shares of Liberty Livewire's Class B
common stock. The following pro forma condensed financial
information and explanatory notes are presented to show the
estimated pro forma effect of the acquisition of Four Media
on Liberty Livewire's historical results of operations. The
acquisition is reflected in the pro forma condensed
financial information using the purchase method of
accounting.
The Pro Forma Condensed Balance Sheet as of February 29,
2000 assumes the acquisition was consummated on that date.
The Pro Forma Condensed Income Statements assume the
acquisition was consumated on September 1, 1998 as to the
twelve months ended August 31, 1999 and on September 1, 1999
for the six months ended February 29, 2000. Such Pro Forma
Condensed Financial Information is not necessarily
indicative of the financial position or results of
operations as they may be in the future or as they might
have been had the acquisition been effected on the assumed
dates.
The pro forma adjustments are based upon currently available
information and upon certain assumptions that management of
Liberty Livewire believes are reasonable. The Four Media
acquisition will be recorded based upon the estimated fair
market value of the net assets acquired at the date of
acquisition. The adjustments included in the unaudited pro
forma condensed combining financial statements represent the
Company's preliminary estimates based upon available
information. Although Liberty Livewire does not believe that
such preliminary estimates will differ significantly from
the actual adjustments, no assurance can be given.
5
The unaudited pro forma condensed combined financial
statements are based on the historical financial statements
of each of Todd and Four Media and the assumptions and
adjustments described in the accompanying notes. Liberty
Livewire believes that the assumptions on which the
unaudited pro forma financial statements are based are
reasonable. The unaudited pro forma consolidated financial
statements are provided for informational purposes only and
do not purport to represent what the Company's financial
position or results of operations actually would have been
if the foregoing transactions occurred as of the dates
indicated or what such results will be for any future
periods.
The Pro Forma Condensed Financial Information should be read
in conjunction with the historical financial statements and
the notes thereto of Todd, the audited historical financial
statements and notes thereto of Four Media, and notes to the
Pro Forma Condensed Financial Information.
6
LIBERTY LIVEWIRE
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(IN THOUSANDS)
ASSETS
HISTORICAL
------------------------------------- PRO FORMA PRO FORMA LIBERTY
TODD AS OF FOUR MEDIA ADJUSTMENTS ADJUSTMENTS PRO FORMA LIVEWIRE
FEBRUARY AS OF JANUARY TODD FOUR MEDIA RECLASS. COMBINED
29, 2000 30, 2000 SUBTOTAL ACQUISITION ACQUISITION (6) PRO FORMA
--------------------------------------------- ------------ ------------- ---------- ---------
Cash and marketable
securities $ 10,064 $ 5,353 $15,417 $ 15,417
Trade accounts
receivable 22,828 43,142 65,970 65,970
Other current assets 5,005 5,937 10,942 (755) 10,187
--------------------------------------------- ------------ ------------- ---------- ---------
Total current assets 37,897 54,432 92,329 0 0 (755) 91,574
Property and
equipment, net 79,537 187,473 267,010 267,010
Goodwill, net 33,185 87,258 120,443 (19,911)(2) (87,258)(2) 354,846
82,365 (1) 259,207 (1)
Deferred income taxes 8,582 8,582 (2,499) 6,083
Other assets 7,105 9,399 16,504 16,504
--------------------------------------------- ------------ ------------- ---------- ---------
Total assets $157,724 $347,144 $504,868 $ 62,454 $171,949 $(3,254) $736,017
============================================= ============ ============= ========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and
accrued expenses $ 16,063 $ 22,546 $ 38,609 $ 38,609
Other current
liabilities 2,177 12,414 14,591 14,591
--------------------------------------------- ------------ ------------- ---------- ---------
Total current
liabilities 18,240 34,960 53,200 0 0 0 53,200
Long term debt and
capital lease
obligations 61,866 180,276 242,142 242,142
Other liabilities 8,231 2,173 10,404 (3,674)(3) (3,254) 3,476
--------------------------------------------- ------------ ------------- ---------- ---------
Total liabilities 88,337 217,409 305,746 (3,674) 0 (3,254) 298,818
Stockholders' equity
Common stock 108 196 304 17 (5) (196)(4) 125
Additional paid in
capital 47,306 112,688 159,994 66,111 (5) 301,684 (5) 437,074
21,973 (4) (112,688)(4)
Treasury stock (47) (47) 47 (4) 0
Retained earnings 21,997 18,274 40,271 (21,997)(4) (18,274)(4) 0
Accumulated other
comprehensive income
(loss) 23 (1,423) (1,400) (23)(4) 1,423 (4) 0
--------------------------------------------- ------------ ------------- ---------- ---------
Total stockholders'
equity 69,387 129,735 199,122 66,128 171,949 0 437,199
--------------------------------------------- ------------ ------------- ---------- ---------
Total liabilities and
stockholders' equity $157,724 $347,144 $504,868 $ 62,454 $171,949 $(3,254) $736,017
============================================= ============ ============= ========== =========
7
LIBERTY LIVEWIRE
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
HISTORICAL
-----------------------------------------
TODD FOUR MEDIA
FOR THE FOR THE PRO FORMA PRO FORMA LIBERTY
YEAR ENDED YEAR ENDED ADJUSTMENTS ADJUSTMENTS LIVEWIRE
AUGUST AUGUST TODD FOUR MEDIA COMBINED
31, 1999 1, 1999 SUBTOTAL ACQUISITION ACQUISITION PRO FORMA
--------------------------------------------------------------- -------------- -----------
Revenues $118,517 $196,984 $315,501 $ 0 $ 0 $315,501
Operating, selling,
general and
administrative expenses 96,890 150,884 247,774 2,196 (4) 249,970
Depreciation and
amortization 12,829 27,476 40,305 4,118 (1) 12,960 (1) 53,647
(745)(1) (2,991)(1)
Other operating expenses 2,282 0 2,282 2,282
--------------------------------------------------------------- -------------- -----------
Operating income 6,516 18,624 25,140 (5,569) (9,969) 9,602
Interest expense, net of
interest income 3,617 12,753 16,370 (380)(2) 15,990
Other expense (income) 413 933 1,346 1,346
--------------------------------------------------------------- -------------- -----------
Income (loss) before
income taxes 2,486 4,938 7,424 (5,189) (9,969) (7,734)
Provision for income
taxes 880 0 880 0 0 880
--------------------------------------------------------------- -------------- -----------
Income (loss) from
continuing operations $ 1,606 $ 4,938 $ 6,544 $(5,189) $(9,969) $ (8,614)
=============================================================== ============== ===========
Income from continuing
operations per share:
Basic $ 0.17 $ (0.32)
Diluted $ 0.16 $ (0.32)
Weighted average shares
(3):
Basic 9,570 26,802
Diluted 9,833 26,802
8
LIBERTY LIVEWIRE
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)
HISTORICAL
-----------------------------------------
TODD FOUR MEDIA
FOR THE SIX FOR THE SIX PRO FORMA PRO FORMA LIBERTY
MONTHS ENDED MONTHS ENDED ADJUSTMENTS ADJUSTMENTS LIVEWIRE
FEBRUARY JANUARY TODD FOUR MEDIA COMBINED
29, 2000 31, 2000 SUBTOTAL ACQUISITION ACQUISITION PRO FORMA
--------------------------------------------------------------- -------------- -----------
Revenues $64,675 $117,624 $182,299 $ 0 $ 0 $182,299
Operating, selling,
general and
administrative expenses 52,344 86,936 139,280 372 (4) 139,652
Depreciation and
amortization 7,298 16,102 23,400 2,059 (1) 6,480 (1) 29,836
(414)(1) (1,689)(1)
Other operating expenses 1,409 0 1,409 1,409
--------------------------------------------------------------- -------------- -----------
Operating income 3,624 14,586 18,210 (2,017) (4,791) 11,402
Interest expense, net of
interest income 2,498 7,042 9,540 (128)(2) 9,412
Other expense (income) 277 (10) 267 267
--------------------------------------------------------------- -------------- -----------
Income (loss) before
income taxes 849 7,554 8,403 (1,889) (4,791) 1,723
Provision for income
taxes 284 3,220 3,504 0 0 3,584
--------------------------------------------------------------- -------------- -----------
Income (loss) from
continuing operations $ 565 $ 4,334 $ 4,899 $ (1,889) $(4,791) $ (1,781)
=============================================================== ============== ===========
Income from continuing
operations per share:
Basic $ 0.06 $ (0.07)
Diluted $ 0.05 $ (0.07)
Weighted average shares
(3):
Basic 10,167 26,756
Diluted 10,508 26,756
9
LIBERTY LIVEWIRE
FOOTNOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF FEBRUARY 29, 2000
(1) Represents the allocations of the respective purchase prices to tangible
and intangible assets. Such allocations reflect the estimated fair value of
the assets and liabilities acquired directly by Liberty Media Group based
on information available at the time of preparation of the accompanying
condensed combined pro forma financial balance sheet. Such allocation will
be adjusted upon the final determination of such fair values; however,
actual valuations and allocations may differ from those reflected herein.
The Liberty Media Group originally acquired 60% of the equity of Todd and
100% of the equity of Four Media. The Liberty Media Group has caused Todd
to acquire 100% of the common stock of Four Media in exchange for more
newly issued shares of New Todd Class B common stock. The adjustments to
reflect the preliminary estimate of goodwill reflect Liberty's purchase
accounting. The additional interests obtained by the Liberty Media Group
through the post merger business combination are accounted for at
historical cost as they are deemed to be transactions with entities under
common control. Goodwill in connection with the purchase of Todd and Four
Media are calculated as follows (in thousands, except per share amounts):
TODD
Class A Liberty Media Group tracking shares (LMGa) issued to
stockholders of Todd (prior to 2 for
1 stock split on 6/9/2000) 2,665
LMGa share price based on the average closing price a few days before
and after the merger was agreed to and announced (7/30/99) $36.89
------------
Value of LMGa shares issued $98,314
Value of LMGa options to be issued to option holders of Todd $7,977
Total consideration paid by Liberty $106,291
Estimate fair value of net identifiable assets acquired ($23,926)
------------
Preliminary estimate of goodwill $82,365
============
10
FOUR MEDIA
Class A Liberty Media Group tracking shares (LMGa) issued to
stockholders of Four Media 3,179
LMGa share price based on the average closing price a few days before
and after the merger was agreed to and announced $37.91
----------
Value of LMGa shares issued $120,515
Total Four Media common shares
outstanding 19,711
Agreed upon cash price per share to be paid by Liberty Media $6.25
----------
Cash consideration paid to stockholders of Four Media $123,193
----------
Preliminary consideration paid by Liberty $243,708
Value of warrants exchanged for LMGa warrants $5,856
Value of LMGa options to be issued to option holders of Four Media $52,120
----------
Total consideration paid by Liberty and contributed to Todd in exhange
for 16,589 New Todd Class B common shares $301,684
Estimate fair value of net identifiable assets acquired ($42,477)
----------
Preliminary estimate of goodwill $259,207
==========
(2) Represents the elimination of historical goodwill relating to the acquired
interest that is reversed in purchase accounting.
(3) Represents the adjustment of other liabilities to estimated fair value.
(4) The adjustments to stockholders' equitiy reflect the elimination of
pre-existing amounts of the respective acquisitions of common stock,
additional paid in capital, retained earnings and treasury stock accounts.
(5) The pro forma adjustments to common stock and additional paid in capital
also reflect 16.6 million shares of New Todd Class B common stock issued to
Liberty Media Group as a result of the Four Media business combination.
(6) Represents the reclassification of deferred tax assets and liabilities.
11
LIBERTY LIVEWIRE
FOOTNOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 29, 2000 AND YEAR ENDED AUGUST 31, 2000
(1) Represents the amortization of goodwill resulting from the preliminary
allocation of the excess purchase consideration over the fair value of the
net assets acquired. For pro forma purposes, these amounts are amortized
over a period of 20 years. In addition, the adjustments reflect the
elimination of historical goodwill relating to the acquired interest
reversed in purchase accounting.
(2) Represents the elimination of interest expense associated with the
convertible debentures converted into common shares.
(3) The following information reconciles the number of shares used to compute
historical basic and diluted earnings per share to pro forma basic and
diluted earnings per share (in thousands):
Six months ended Year ended
February 29, 2000 August 31, 1999
------------------------------------------------------------------------
BASIC DILUTED BASIC DILUTED
----------- ----------- ----------- -----------
Weighted average number of shares of
common
stock and potential
shares of common stock -
historical 10,167 10,508 9,570 9,833
Common shares issued to Liberty Media
Group
in the Four Media
contribution 16,589 16,589 16,589 16,589
Common shares issued on conversion of
Todd's convertible debentures 643 643
------------------------------------------------------------------------
Weighted average number of shares of
common
stock and potential
shares of common stock -
pro forma 26,756 27,097 26,802 27,065
========================================================================
The effect of potentially dilutive shares has been excluded from the pro
forma loss per share calculation in the accompanying pro forma condensed
combined statements of operation for the six months ended February 29, 2000
and the year ended August 31, 1999 since their effect is anti-dilutive.
(4) Represents the elimination of amortization of deferred gains associated
with sales leaseback deferred credits eliminated in the pro forma balance
sheet.
12
b. Exhibits
The following exhibits are filed with this current report on Form 8-K:
EXHIBIT NO. EXHIBIT
1 Contribution Agreement Pursuant to
Livewire Contribution Agreement dated as
of June 9, 2000 by and between Liberty
Media Corporation and Liberty Livewire
Corporation.
2 The Post-Merger Business Combinations
Agreement, dated as of February 11,
2000, by and between Liberty Media
Corporation and The Todd-AO
Corporation is incorporated by
reference to Liberty Media
Corporation's Schedule 13D/A filed
with the Commission on June 7, 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
LIBERTY LIVEWIRE CORPORATION
(Registrant)
/s/ JEFFREY J. MARCKETTA
-------------------------------
Jeffrey J. Marcketta
Chief Financial Officer
AUGUST 1, 2000
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Date
13