SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) MAY 22, 1996
EZ COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 0-16265 54-0829355
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
10800 MAIN STREET
FAIRFAX, VIRGINIA 22030
(Address of principal executive offices) (Zip code)
(703) 591-1000
(Registrant's telephone number, including area code)
ITEM 2.(a)
On May 22, 1996, Professional Broadcasting, Inc. ("PBI"), a wholly-owned
subsidiary of the Registrant, acquired by purchase substantially all of the
assets of radio station KYCW-FM serving Seattle, Washington, from Infinity
Broadcasting Corporation of Washington ("Infinity"). Infinity, a Delaware
corporation, is not an affiliate of the Registrant.
The assets acquired consist of items of broadcasting and technical
equipment utilized in the transmission of radio broadcast signals, Federal
Communications Commission licenses and other items of real and personal property
associated with the continuing operations of the broadcast facilities.
PBI paid cash consideration in the amount of $26,000,000 to Infinity at
closing for the acquired broadcasting assets. The purchase price was based upon
an arms length negotiation considering the potential cash flow generated by the
acquisition and consideration of the market in which the stations were located,
the registrant's existing stations in that market, management, personnel, and
the overall operation of the facilities as a going concern.
The funds utilized in completing this acquisition were provided by proceeds
from the Company's 1995 issuance of $150,000,000 of its 9 3/4% Senior
Subordinated Notes due 2005 and by the Registrant's senior lending facility with
The Chase Manhattan Bank, NA, individually and as an agent for other banks (the
"Credit Facility").
ITEM 2.(b)
The assets acquired by PBI were utilized by KYCW-FM for the purposes of
radio broadcasting. The Registrant intends to continue such use.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of KYCW-FM.
UNAUDITED
- Condensed Balance Sheet as of March 31, 1996
- Condensed Statement of Operations for the three months ended
March 31, 1996
- Condensed Statement of Cash Flows for the three months ended
March 31, 1996
- Notes to Condensed Financial Statements
AUDITED
- Report of Independent Auditors
- Statement of Assets, Liabilities and Partners' Capital as of
December 31, 1995
- Statement of Income and Expenses for the year ended December
31, 1995
- Statement of Cash Flows for the year ended December 31, 1995
- Notes to Financial Statements
(b) Pro Forma Financial Information (Unaudited)
- Pro Forma Condensed Consolidated Balance Sheet as of March 31,
1996
- Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1995
- Pro Forma Condensed Consolidated Statement of Operations for
the three months ended March 31, 1996
- Notes to Pro Forma Financial Statements
(c) Exhibits
Exhibit
Number Exhibit Title
- - ------- -------------
10.42 -- Asset Purchase Agreement, dated as of February 7, 1996 by and
between PBI and Infinity Broadcasting Corporation of Washington
relating to KYCW-FM (KYCW purchase)(15)
10.43 -- Amended and Restated Asset Purchase Agreement, dated as of March
15, 1996, by and between PBI and Infinity Broadcasting
Corporation of Washington related to KYCW-FM(15)
__________
(15) Incorporated by reference to similarly numbered exhibit in the
Company's Form 10-K as of December 31, 1995 (File No. 0-16265) originally
filed with the Securities and Exchange Commission on March 29, 1996.
INFINITY BROADCASTING CORPORATION OF WASHINGTON
CONDENSED BALANCE SHEET
March 31,
1996
----------
(unaudited)
ASSETS
CURRENT ASSETS
Cash $ 201,842
Accounts and trade receivable, less allowance of $78,245 535,960
Prepaid and other current assets 279,938
------------
TOTAL CURRENT ASSETS 1,017,740
Property, plant and equipment, at cost 1,511,000
Less accumulated depreciation 288,501
------------
1,222,499
Intangible assets, at cost 24,489,000
Less accumulated amortization 153,125
------------
24,335,875
TOTAL ASSETS $26,576,114
============
- - ----------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable $ 323,372
Deferred revenue 60,919
Other accrued expenses 157,583
------------
TOTAL CURRENT LIABILITIES 541,874
Intercompany payable to affiliate 27,071,484
STOCKHOLDERS' DEFICIT
Accumulated deficit (1,037,244)
------------
(1,037,244)
------------
$26,576,114
============
SEE NOTES TO CONDENSED FINANCIAL STATEMENTS
INFINITY BROADCASTING CORPORATION OF WASHINGTON
CONDENSED STATEMENT OF OPERATIONS
(in thousands)
Three months
ended
March 31, 1996
--------------
(unaudited)
REVENUE
Gross broadcasting revenue $ 705,018
Less: agency commissions 84,630
------------
Net broadcasting revenue 620,388
BROADCASTING EXPENSES 890,619
------------
STATION OPERATING LOSS BEFORE CORPORATE
EXPENSES, DEPRECIATION AND AMORTIZATION (270,231)
Depreciation and amortization 441,626
------------
OPERATING LOSS (711,857)
OTHER INCOME (EXPENSES)
Interest expense (325,387)
------------
NET LOSS $(1,037,244)
============
SEE NOTES TO CONDENSED FINANCIAL STATEMENTS
INFINITY BROADCASTING CORPORATION OF WASHINGTON
CONDENSED STATEMENT OF CASH FLOWS
(in thousands)
Three months
ended
March 31, 1996
--------------
(unaudited)
OPERATING ACTIVITIES
Net loss $ (1,037,244)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 441,626
Other charges not affecting cash 78,245
Net changes in operating assets and liabilities (352,269)
------------
NET CASH USED IN OPERATING ACTIVITIES (869,642)
INVESTING ACTIVITIES
Purchases of radio station (26,000,000)
------------
NET CASH USED IN INVESTING ACTIVITIES (26,000,000)
FINANCING ACTIVITIES
Increase in intercompany payable to affiliate 27,071,484
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 27,071,484
------------
INCREASE IN CASH 201,842
CASH AT BEGINNING OF PERIOD 0
------------
CASH AT END OF PERIOD $ 201,842
============
SEE NOTES TO CONDENSED FINANCIAL STATEMENTS
INFINITY BROADCASTING CORPORATION OF WASHINGTON
NOTES TO CONDENSED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Article 10 of
Regulation S-X. 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 three months ended
March 31, 1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996. For further information,
refer to the audited financial statements and footnotes thereto.
2. DESCRIPTION OF BUSINESS
In September 1995, Infinity Broadcasting Corporation ("Infinity") entered
into an agreement to acquire all of the radio station assets, excluding cash
balances, of Alliance Broadcasting, L.P., including station KYCW-FM serving
Seattle, Washington. Infinity Broadcasting Corporation of Washington (the
"Company") is a wholly-owned subsidiary of Infinity and was formed to own and
operate KYCW-FM (the "station"). The transfer of the broadcast licenses to
Infinity was effective January 1996.
3. SUBSEQUENT EVENTS
In March 1996, the Company entered into an agreement to sell
substantially all of the fixed and intangible assets of the station to
Professional Broadcasting, Incorporated ("PBI"), a wholly-owned subsidiary of
EZ Communications, Inc. ("EZ"), for $26,000,000, subject to certain
regulatory approval and certain other conditions. At the same time, PBI
began programming and marketing KYCW-FM pursuant to a local marketing
agreement. The sale was consummated in May 1996. The station's accounts
receivable and certain other assets did not convey as part of the purchase.
Audited Financial Statements
Alliance Broadcasting Rainier, L.P.
(A Partnership)
YEAR ENDED DECEMBER 31, 1995
WITH REPORT OF INDEPENDENT AUDITORS
Alliance Broadcasting Rainier, L.P.
(A Partnership)
Audited Financial Statement
Year ended December 31, 1995
CONTENTS
Report of Independent Auditors....................................... 1
Audited Financial Statements
Statement of Assets, Liabilities and Partners' Capital............... 2
Statement of Income and Expenses..................................... 3
Statement of Cash Flows.............................................. 4
Notes to Financial Statements........................................ 5-7
[LETTERHEAD]
Report of Independent Auditors
Board of Directors
EZ Communications, Inc.
We have audited the accompanying statement of assets, liabilities and
partners' capital of Alliance Broadcasting Rainier, L.P. as of December 31,
1995 and the related statements of income and expenses and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides 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 Alliance Broadcasting
Rainier, L.P. at December 31, 1995 and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.
Ernst & Young LLP
May 15, 1996
Alliance Broadcasting Rainier, L.P.
(A Partnership)
Statement of Assets, Liabilities and Partners' Capital
DECEMBER 31
1995
------------
ASSETS
Current assets:
Cash $ 13,480
Accounts and trade receivable, less allowance
of $74,874 700,507
Prepaid and other current assets 113,824
------------
Total current assets 827,811
Property and equipment
Land 101,000
Broadcast equipment 694,367
Furniture, fixtures and vehicles 353,790
Computer equipment 94,267
Leasehold improvements 30,380
------------
1,273,804
Less accumulated depreciation (256,128)
------------
1,017,676
Intangible assets:
FCC license 11,161,500
Other 930,239
------------
12,091,739
Less accumulated amortization (869,829)
------------
11,221,910
------------
Total assets $13,067,397
============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $ 129,105
Other accrued expenses 204,220
------------
Total current liabilities 333,325
Intercompany payable to affiliate 4,317,287
Partners' capital:
General partner 84,168
Limited partner 8,332,617
------------
Total partners' capital 8,416,785
------------
Total liabilities and partners' capital $13,067,397
============
SEE ACCOMPANYING NOTES.
Alliance Broadcasting Rainier, L.P.
(A Partnership)
Statement of Income and Expenses
YEAR ENDED
DECEMBER 31
1995
-----------
Revenue:
Gross broadcasting revenue $ 4,309,286
Less agency commissions 647,212
-----------
Net broadcasting revenue 3,662,074
Broadcasting expenses:
Program expenses 1,064,383
Selling expenses 1,065,727
Technical expenses 186,911
Promotional expenses 576,337
General and administrative expenses 1,259,060
-----------
Total broadcasting expenses 4,152,418
-----------
Station operating loss before corporate expenses,
depreciation and amortization (490,344)
Corporate expenses (300,000)
Depreciation and amortization (766,071)
-----------
Operating loss (1,556,415)
Other (expenses) income:
Interest expense (19,041)
Interest income 4,657
Loss on sale of asset (2,499)
-----------
Net loss (1,573,298)
Partners' capital, beginning of year 9,990,083
-----------
Partners' capital, end of year $ 8,416,785
===========
SEE ACCOMPANYING NOTES.
Alliance Broadcasting Rainier, L.P.
(A Partnership)
Statement of Cash Flows
YEAR ENDED
DECEMBER 31
1995
-----------
OPERATING ACTIVITIES
Net loss $(1,573,298)
Adjustments to reconcile net loss to net cash (used in)
operating activities:
Depreciation and amortization 766,071
Bad debt expense 119,582
Loss on sale of asset 2,499
Changes in operating assets and liabilities:
Increase in accounts and trade receivable (185,080)
Increase in prepaid and other current assets (22,713)
Increase in accounts payable and other accrued expenses 9,214
------------
Net cash (used in) operating activities (883,725)
INVESTING ACTIVITIES
Purchases of property and equipment (303,810)
Net proceeds on sale of property and equipment 4,031
------------
Net cash (used in) investing activities (299,779)
FINANCING ACTIVITIES
Borrowings on intercompany payable to affiliate 1,025,785
------------
Net cash provided by financing activities 1,025,785
------------
Decrease in cash (157,719)
Cash at beginning of year 171,199
------------
Cash at end of year $ 13,480
============
SEE ACCOMPANYING NOTES.
Alliance Broadcasting Rainier, L.P.
(A Partnership)
Notes to Financial Statements
1. ORGANIZATION
Alliance Broadcasting Rainier, L.P. ("Rainier") was formed as a limited
partnership in June, 1994 for the purpose of acquiring the broadcast license
and certain fixed assets of radio station "KYCW-FM" in Seattle, Washington.
Rainier's 1% general partner, Alliance Broadcasting Management, Inc.
("ABMI"), is a corporation wholly owned by Rainier's 99% limited partner,
Alliance Broadcasting, L.P. ("Alliance").
Rainier maintains its accounting records and prepares its financial
statements in conformity with generally accepted accounting principles.
Financial statements prepared on this basis require the use of management's
estimates.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUE RECOGNITION
Revenue from the sale of air time is recognized at the time the program or
advertisement is broadcast. Agency commissions are deducted from gross
revenue, reflecting the net amount due to the station.
ADVERTISING EXPENSES
Rainier expense advertising costs as they are incurred.
PROPERTY AND EQUIPMENT
Property and equipment are stated on the basis of cost. Depreciation is
computed using the straight-line method over the estimated useful lives of
the related assets, ranging from five to ten years for broadcasting equipment
and furniture and other equipment. Expenditures for maintenance and repairs
are charged to operations as incurred.
Alliance Broadcasting Rainier, L.P.
(A Partnership)
Notes to Financial Statements (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
INTANGIBLE ASSETS
Intangible assets are stated on the basis of cost and are amortized using the
straight-line method. Goodwill and broadcast licenses are amortized over 25
years, and other assets are amortized over five years. The periods of
amortization and the carrying value of intangible assets are evaluated
annually to determine whether circumstances warrant their revision.
TRADE RECEIVABLES AND DEFERRED INCOME
In the course of business, Rainier trades air time for goods and services used
principally for promotional sales and other business activities. These
transactions are recorded at the estimated fair value of the merchandise or
services received. Revenue from barter transactions is recognized as income
when advertisements are broadcast, and merchandise or services are charged to
expense when used.
3. RELATED PARTY TRANSACTIONS
During 1995, Rainier's limited partner, Alliance, provided certain services
to the station including management, legal, accounting, insurance, and other
corporate services. The station was charged $300,000 for these corporate
services. In the opinion of management, these charges have been made on a
basis which is reasonable; however, they are not necessarily indicative of
the level of expenses which might have been incurred by Rainier on a
stand-alone basis.
Substantially all cash receipts are remitted to Alliance net of any needed
cash draws. There are no terms of settlement or interest expense associated
with this intercompany account. The amount due to/from affiliate is
classified as a current asset or liability, as the case may be.
4. INCOME TAXES
The Partners, ABMI and Alliance, are individually responsible for federal and
state income taxes on Partnership income or loss. Accordingly, no income tax
provision has been made in the financial statements.
Alliance Broadcasting Rainier, L.P.
(A Partnership)
Notes to Financial Statements (continued)
5. COMMITMENTS
Rainier leases office and storage space which includes escalation clauses
based on the cost of living index and reimbursement clauses for the tenant's
pro-rata share of real estate taxes and operating expenses. The operating
lease includes renewal provisions which may be exercised at the option of the
Partnership.
Future minimum payments under the noncancelable operating lease at December
31, 1995 is approximately as follows:
1996 $206,600
1997 212,800
1998 17,700
--------
$437,100
========
Rent expense for 1995 totaled approximately $200,600.
6. SUBSEQUENT EVENTS
In September 1995, Alliance entered into an agreement to sell the radio
station assets, excluding cash balances, of its broadcast subsidiaries
(including Rainier) to Infinity Broadcast Corporation ("Infinity") for $275
million. The transfer of Rainier's license to Infinity was effective January,
1996.
In March 1996, Infinity entered into an agreement to sell substantially all
of the fixed and intangible assets of Rainier to Professional Broadcasting,
Incorporated ("PBI"), a wholly-owned subsidiary of EZ Communications, Inc.
("EZ"), for $26,000,000, subject to certain regulatory approval and other
conditions. The sale is expected to be consummated in May, 1996. At the same
time, PBI began programming and marketing KYCW-FM pursuant to a local
marketing agreement ("LMA"). The station's accounts receivable and certain
other assets will not convey as part of the purchase.
EZ COMMUNICATIONS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited condensed consolidated pro forma financial statements
set forth the pro forma results of operations and financial condition for the
purchase of substantially all of the fixed and intangible assets of radio
station KYCW-FM serving Seattle, Washington from Infinity Broadcasting
Corporation of Washington on May 22, 1996, under the purchase method of
accounting. The following unaudited pro forma condensed consolidated balance
sheet gives effect to the acquisition as if the foregoing had occurred on
March 31, 1996. The unaudited pro forma condensed consolidated statements of
operations for the year ended December 31, 1995 and the three months ended
March 31, 1996 give effect to (i) the purchase and (ii) the Company's
issuance of $150,000,000 of its 9 3/4% Senior Subordinated Notes due 2005
(the "Notes") which closed in November, 1995, as if the foregoing had
occurred at the beginning of the periods presented.
These unaudited pro forma condensed consolidated financial statements may not
be indicative of the results that actually would have occurred if the
transactions described above had been completed as of the dates indicated
above or that may be attained in the future. The unaudited pro forma
condensed consolidated financial statements should be read in conjunction
with the historical consolidated financial statements of Alliance
Broadcasting Rainier, L.P. and related notes thereto included elsewhere
herein or delivered with this Form 8-K, the Company's audited consolidated
financial statements and notes thereto and the Annual Report on Form 10-K for
the year ended December 31, 1995 and the Company's Form 10-Q for the three
months ended March 31, 1996.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(DOLLARS IN THOUSANDS)
Pro Forma Adjustments
--------------------- Company
For the Pro Forma
As Kansas City Condensed
Reported Acquisition Consolidated
-------- ----------- ------------
ASSETS
Cash $ 24,315 $(18,500)(1) $ 5,815
Accounts receivable, net 14,136 $ 14,136
Other current assets 5,011 5,011
-----------------------------------------
Total current assets 43,462 (18,500) 24,962
Property, plant & equipment 43,766 2,500 (1) 46,266
Less accumulated depreciation (22,011) (22,011)
-----------------------------------------
21,755 2,500 24,255
Intangible assets 165,745 23,500 (1) 189,245
Less accumulated amortization (17,212) (17,212)
-----------------------------------------
148,533 23,500 172,033
Other assets 6,884 6,884
-----------------------------------------
Total assets $220,634 $ 7,500 $228,134
=========================================
Liabilities & Shareholders' Equity
Current liabilities $ 11,083 $ 11,083
Long-term debt:
Credit Facility 0 $ 7,500 (1) 7,500
Kansas City Note Payable 13,000 13,000
Senior Subordinated Notes 148,857 148,857
-----------------------------------------
Total long-term debt 161,857 7,500 169,357
Other liabilities 7,767 7,767
-----------------------------------------
Total liabilities 180,707 7,500 188,207
Shareholders' equity 39,927 39,927
-----------------------------------------
Total liabilities and
Shareholders' equity $220,634 $ 7,500 $228,134
=========================================
SEE ACCOMPANYING NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
FOR THE YEAR ENDED DECEMBER 31, 1995
Pro Forma Adjustments
---------------------
For the
Acquisition Company
of Station Pro Forma
For the KYCW-FM Condensed
As Reported Notes Seattle Consolidated
----------- ------- ----------- ------------
Gross revenue $ 95,642 $ $ 4,309 (2) $ 99,951
Less: agency commissions 11,974 647 (2) 12,621
---------------------------------------------------------------
Net revenue 83,668 3,662 87,330
Broadcasting expenses 55,652 4,152 (2) 59,804
---------------------------------------------------------------
Station operating income 28,016 (490) 27,526
Corporate expenses 3,556 3,556
Depreciation and amortization 6,757 $ 458 (4) 838 (2) 8,053
---------------------------------------------------------------
Operating income 17,703 (458) (1,328) 15,917
Other income (expense)
Interest expense, net (10,799) (3,826)(5) (14,625)
Other income and expenses, net (685) (685)
---------------------------------------------------------------
Income (loss) before taxes and extraordinary item 6,219 (4,284) (1,328) 607
Federal and state income tax (expense)/benefit (2,975) 1,499 (6) 465 (6) (1,011)
---------------------------------------------------------------
Income (loss) before extraordinary item 3,244 (2,785) (863) (404)
Extraordinary loss, net (1,001) (1,001)
---------------------------------------------------------------
Net income (loss) $ 2,243 $ (2,785) $ (863) $ (1,405)
===============================================================
FOR THE TREE MONTHS ENDED MARCH 31, 1996
Pro Forma Adjustments
---------------------
For the
Acquisition Company
of Station Pro Forma
KYCW-FM Condensed
As Reported Seattle Consolidated
----------- ----------- ------------
Gross revenue $ 22,157 $ 705 (2) $ 22,862
Less: agency commissions 2,784 85 (2) 2,869
---------------------------------------------------------------
Net revenue 19,373 620 19,993
Broadcasting expenses 14,360 891 (2) 15,251
---------------------------------------------------------------
Station operating income 5,013 (271) 4,742
Corporate expenses 913 913
Depreciation and amortization 2,142 210 (2) 2,352
---------------------------------------------------------------
Operating income 1,958 (481) 1,477
Other income (expense)
Interest expense, net (4,039) (169)(3) (4,208)
Other income and expenses, net 149 149
---------------------------------------------------------------
Loss before taxes and extraordinary item (1,932) (650) (2,582)
Federal and state income tax (expense)/benefit 563 228 (6) 791
---------------------------------------------------------------
Net (loss) $ (1,369) $ (423) $ (1,792)
===============================================================
EZ COMMUNICATIONS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(1) Adjusted to reflect the acquisition of station KYCW-FM Seattle as
if it had occurred on March 31, 1996. The acquisition will be accounted for
using the purchase method of accounting. The Company estimates that the
purchase price of approximately $26,000,000 will be allocated as follows (in
thousands):
Broadcast equipment $ 2,500
Goodwill and broadcast license 23,500
-------
$26,000
The adjustments reflect the funding of the purchase price with approximately
$18,500,000 of proceeds from the November 1995 sale of $150,000,000 of the
Company's 9 3/4% Senior Subordinated Notes due 2005 (the "Notes") and
$7,500,000 from borrowings under the Company's Senior Credit Facility.
(2) Adjusted for the May 1996 acquisition of station KYCW-FM Seattle
(the Company began programming and marketing the station effective March 1996
pursuant to the terms of a local marketing agreement ("LMA")). This
adjustment reflects revenue and broadcasting expenses of the acquired station
from the beginning of the period presented to the date of the commencement of
the LMA and pro forma depreciation and amortization (assuming useful lives of
ten years for broadcast equipment and 40 years for goodwill and broadcast
licenses), based on the allocated purchase prices of these stations, from the
beginning of the period presented to the date of the acquisition.
(3) Represents additional interest expense of $169,000 on increased
outstanding debt of $7,500,000 relating to the acquisition of KYCW-FM
assuming an average interest rate of 9%.
(4) Adjusted to reflect the amortization of offering costs of
$5,000,000 over the term of the Notes.
(5) Represents adjustment to increase interest expense associated with
the Notes as if they were issued at the beginning of the period presented.
The following table presents a detail of the pro forma interest expense (in
thousands):
Year
Ended
December 31,
1995
------------
Pro forma interest expense
--------------------------
For the Notes $ 14,625
Less: aggregate historical
interest expense (10,799)
---------
Pro forma adjustment $ 3,826
=========
(6) Assumes an effective tax rate of 35%.
SIGNATURES
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 hereunto duly authorized.
Dated: June 6, 1996 EZ COMMUNICATIONS, INC.
By: Ronald H. Peele, Jr.
-----------------------------
Ronald H. Peele, Jr.
Chief Financial Officer and
Chief Accounting Officer