SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K(A)
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: October 23, 1997
JACOR COMMUNICATIONS, INC.
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-12404 31-0978313
(Commission File No.) (IRS Employer Identification No.)
50 East RiverCenter Boulevard
12th Floor
Covington, KY 41011
(606) 655-2267
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
In December 1997, Citicasters Co., an indirect wholly-owned subsidiary
of Jacor Communications, Inc. (the "Company" or "Jacor"), signed an Agreement
of Sale to acquire the assets of 17 radio stations from Nationwide
Communications Inc. ("NCI" or "Nationwide") and its affiliated entities for
a purchase price of approximately $620 million in cash. The Company closed
this transaction on August 10, 1998.
The Company has previously reported on this transaction in its Form 8-Ks
filed by the Company on November 4, 1997 and January 5, 1998, as amended on
January 20, 1998 and April 30, 1998, respectively, which filed audited
financial statements for NCI and unaudited pro forma financial information
for this transaction. This amendment is being filed to include NCI's
unaudited financial statements for the six months ended June 30, 1998 and
unaudited pro forma financial information for the six months ended June 30,
1998.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired
Nationwide Communications Inc.
Unaudited Combined Balance Sheet as of June 30, 1998.
2
Unaudited Combined Statement of Earnings for the six months ended
June 30, 1998.
Unaudited Combined Statement of Cash Flows for the six months ended
June 30, 1998.
Notes to Unaudited Combined Financial Statements
(b) Pro Forma Financial Information
Unaudited Pro Forma Condensed Consolidated Statement of Operations
for the six months ended June 30, 1998.
Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
June 30, 1998.
3
Notes to Unaudited Pro Forma Financial Information.
(c) Exhibits
2.1 Agreement of Sale dated December 19, 1997 by and between
Nationwide Mutual Insurance Company, Employers Insurance of
Wausau, Nationwide Communications Inc., San Diego Lotus Corp.,
The Beak and Wire Corporation, Citicasters Co. and Jacor
Communications Company (omitting schedules and exhibits not
deemed material).*
99.1 Press Release dated October 13, 1997.*
99.2 Press Release dated October 23, 1997.*
99.3 Press Release dated October 27, 1997.*
99.4 Press Release dated August 10, 1998.
* Previously filed.
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.
JACOR COMMUNICATIONS, INC.
August 14, 1998 By: /s/ R. Christopher Weber
-----------------------------------
R. Christopher Weber, Senior Vice President
and Chief Financial Officer
4
Item 7(a)
NATIONWIDE COMMUNICATIONS
(Broadcast Operations of
Nationwide Mutual Insurance Company)
------------------------------------
Unaudited Combined Financial Statements
For the six months ended June 30, 1998
NATIONWIDE COMMUNICATIONS
(Broadcast Operations of Nationwide Mutual Insurance Company)
Combined Balance Sheet
June 30, 1998
(unaudited)
Assets
------
Current assets:
Cash and cash equivalents $ 12,694,806
Accounts receivable, net of allowance for doubtful accounts 24,402,703
Notes receivable, current portion 976,054
Deferred income taxes 834,811
Assets held for sale 44,667,939
Prepaid expenses 920,897
--------------
Total current assets 84,497,210
--------------
Property and equipment, net 17,644,399
Broadcast licenses and other intangibles, net 247,116,895
Notes receivable, excluding current portion 4,408,622
Other assets 2,887,557
--------------
Total assets $ 356,554,683
--------------
--------------
Liabilities and Division Equity
-------------------------------
Current liabilities:
Advances from Parent $ 92,000,000
Accounts payable 783,568
Accrued compensation and benefits 1,997,506
Accrued expenses and other current liabilities 856,086
Accrued professional fees 560,135
Accrued property and sales tax 296,177
Income taxes payable 5,047,313
--------------
Total current liabilities 101,540,785
--------------
Deferred compensation 2,473,379
Accrued retirement benefits 2,883,133
Deferred income taxes 15,282,171
--------------
Total liabilities 122,179,468
--------------
Division equity:
Paid-in capital 12,510,000
Contributed capital for combined radio station 22,500,000
Retained earnings 199,365,215
--------------
Total division equity 234,375,215
--------------
Total liabilities and division equity $ 356,554,683
--------------
--------------
See accompanying notes to unaudited combined financial statements.
NATIONWIDE COMMUNICATIONS
(Broadcast Operations of Nationwide Mutual Insurance Company)
Combined Statement of Earnings
For the six months ended June 30, 1998
(unaudited)
Broadcast revenues $ 57,845,221
Less agency commissions 7,674,300
-------------
Net revenues 50,170,921
Broadcast operating expenses 39,622,944
Depreciation and amortization 5,044,017
Corporate general and administrative expenses 1,405,576
-------------
Operating income 4,098,384
-------------
Interest income 460,934
Interest expense (9,168)
Other expense, net (4,237)
-------------
Nonoperating income, net 447,529
-------------
Income before taxes 4,545,913
Income tax expense 1,545,610
-------------
Net income $ 3,000,303
-------------
-------------
See accompanying notes to unaudited combined financial statements.
NATIONWIDE COMMUNICATIONS
(Broadcast Operations of Nationwide Mutual Insurance Company)
Combined Statement of Cash Flows
Six months ended June 30, 1998
(unaudited)
Cash flows from operating activities:
Net income $ 3,000,303
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 5,044,017
Provision for doubtful accounts receivable (136,636)
Deferred income taxes 119,687
Changes in assets and liabilities, net of effects of acquisitions and
disposals:
Accounts receivable (1,297,804)
Prepaid expenses and other assets 746,462
Accounts payable (1,596,123)
Accrued expenses and other liabilities (1,373,042)
Income taxes payable 1,371,313
------------
Net cash provided by operating activities 5,878,177
------------
Cash flows from investing activities:
Additions to property and equipment (1,351,986)
------------
Net cash used by investing activities (1,351,986)
------------
Cash flows from financing activities:
Repayments of long-term debt (500,000)
------------
Net cash used by financing activities (500,000)
------------
Net increase in cash and cash equivalents 4,026,191
Cash and cash equivalents at beginning of period 8,668,615
------------
Cash and cash equivalents at end of period $ 12,694,806
------------
------------
See accompanying notes to unaudited combined financial statements.
NATIONWIDE COMMUNICATIONS
(Broadcast Operations of Nationwide Mutual Insurance Company)
Notes to Unaudited Combined Financial Statements
(1) SUBSEQUENT EVENT
On August 10, 1998, Nationwide completed the sale of substantially all of
its radio station assets (exclusive of cash, cash equivalents, accounts
receivable and notes receivable) to Citicasters Co., a wholly owned
subsidiary of Jacor, for $620 million.
(2) FINANCIAL STATEMENTS
The financial statements included herein have been prepared by Nationwide,
without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Although certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, Nationwide
believes that the disclosures are adequate to make the information
presented not misleading and reflect all adjustments (consisting only of
normal recurring adjustments) which are necessary for a fair
presentation of results of operations for such period. It is suggested
that these financial statements be read in conjunction with the combined
financial statements for the year ended December 31, 1997 and the notes
thereto, previously filed in Jacor's form 8-K, as amended on April 30,
1998.
ITEM 7(b)
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma financial information, which is based
on the historical financial statements of Jacor and Nationwide, has been
prepared to illustrate the effects of the Nationwide acquisition, the
disposition of certain radio stations in San Diego, and the related financing.
The pro forma financial information does not give effect to certain radio
station exchange transactions described in exhibit 99.4 to this current
report. In management's opinion, the value of the assets are considered to be
equal and such transactions would have an immaterial impact on this pro forma
financial information.
The unaudited pro forma condensed consolidated statement of operations
for the six months ended June 30, 1998 gives effect to the Nationwide
acquisition and the San Diego dispositions as if such transactions had been
completed January 1, 1998. The unaudited pro forma condensed consolidated
balance sheet as of June 30, 1998 has been prepared as if the Nationwide
acquisition and the San Diego dispositions had been completed on June 30, 1998.
The Nationwide acquisition will be accounted for using the purchase
method of accounting. The total purchase costs of the Nationwide acquisition
will be allocated to the tangible and intangible assets and liabilities
acquired based upon their respective fair values. The allocation of the
aggregate purchase price reflected in the Unaudited Pro Forma Financial
Information is preliminary. The final allocation of the purchase price will
be contingent upon the receipt of final appraisals of the acquired assets.
The Unaudited Pro Forma Financial Information is not necessarily indicative
of either future results of operations or the results that might have
occurred if the foregoing transactions had been consummated on the indicated
dates.
The Unaudited Pro Forma Financial Information should be read in
conjunction with Jacor's unaudited Consolidated Financial Statements and
notes thereto included in Jacor's Quarterly Report on Form 10-Q and
Nationwide's unaudited Combined Financial Statements and notes thereto
included in this Current Report on Form 8-K(A).
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Six Months ended June 30, 1998
(in thousands, except per share amounts)
Nationwide Acquisition Total
Historical Historical Pro Forma Pro Forma Combined
Jacor Nationwide Adjustments Adjustments Pro Forma
---------- ---------- ----------- ----------- ---------
Net revenue $325,864 $ 50,171 $ (2,673) (c) $373,362
Broadcast operating expenses 228,100 39,623 $ (738) (a) (9,573) (c) 257,412
Depreciation and amortization 56,283 5,044 299 (b) 2,767 (d) 64,393
Corporate general and
administrative expenses 8,174 1,406 (1,406) (c) 8,174
--------- --------- ---------- --------- ---------
Operating income 33,307 4,098 439 5,539 43,383
Interest expense (49,037) (9) (11,719) (e) (60,765)
Other income, net 8,754 457 9,211
--------- --------- ---------- --------- ---------
(Loss) income before
income taxes (6,976) 4,546 439 (6,180) (8,171)
--------- --------- ---------- --------- ---------
Income tax credit (expense) 5,100 (1,546) 2,472 (f) 6,026
--------- --------- ---------- --------- ---------
Net (loss) income ($1,876) $3,000 $ 439 ($3,708) ($2,145)
--------- --------- ---------- --------- ---------
--------- --------- ---------- --------- ---------
Loss per common share ($0.04) ($0.04)
Number of common shares
used in per share
computations 49,696 49,696
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(IN THOUSANDS)
Nationwide Disposal
Historical Station of Pro Forma
Jacor Acquisition San Diego Combined
---------- ---------- ----------- -----------
Current Assets:
Cash $ 314,842 ($342,000)(h) $ 65,000 (i) $ 37,842
Accounts Receivable 162,991 162,991
Prepaid Expenses and Other
Current Assets 45,083 45,083
---------- ---------- ---------- ----------
Total Current Assets 522,916 (342,000) 65,000 245,916
Property and Equipment, net 216,777 28,000 (g) (2,000) (i) 242,777
Intangible Assets, net 2,144,639 604,000 (g) (63,000) (i) 2,685,639
Other Assets 86,730 86,730
---------- ---------- ---------- ----------
Total Assets $2,971,062 $290,000 $ 0 $3,261,062
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Current Liabilities:
Accounts Payable, Accrued
Liabilities and Other
Current Liabilities $ 105,610 $ 105,610
---------- ---------- ---------- ----------
Total Current Liabilities 105,610 0 0 105,610
Long-term debt 939,555 $290,000 (h) 1,229,555
Liquid Yield Option Notes 298,628 298,628
Other Liabilities 117,874 117,874
Deferred tax liability 343,184 343,184
Shareholders' Equity:
Common Stock 510 510
Additional Paid-In Capital 1,114,769 1,114,769
Common Stock Warrants 31,500 31,500
Retained Earnings 19,432 19,432
---------- ---------- ---------- ----------
Total Shareholders' Equity 1,166,211 0 0 1,166,211
Total Liabilities and ---------- ---------- ---------- ----------
Shareholders' Equity $2,971,062 $290,000 $ 0 $3,261,062
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
JACOR COMMUNICATIONS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
(a) The adjustment represents the elimination of time brokerage agreement fees.
(b) The adjustment reflects the additional depreciation and amortization
expense resulting from the allocation of Nationwide's purchase price of
KXGL in San Diego.
(c) The adjustments represent revenue and expense eliminations from the
divestitures of two San Diego stations and estimated expense savings
of $6,619 for the six months ended June 30, 1998. Expense savings will
result from the elimination of redundant broadcast operating expenses
arising from the operation of multiple stations in broadcast areas,
changes in benefit plan and compensation structures to conform with
Jacor's and the elimination of Nationwide's corporate office function.
Estimated savings are as follows:
Six months ended
June 30, 1998
-----------------
Corporate general and administrative................... $ 1,406
Benefit Plan expenses.................................. 1,425
Commissions............................................ 338
Promotion and programing............................... 1,250
Personnel reductions................................... 1,600
Other.................................................. 600
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$ 6,619
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(d) The adjustment reflects the additional depreciation and amortization
expense resulting from the allocation of Jacor's purchase price to the
assets acquired including an increase in property and equipment and
identifiable intangible assets to their estimated fair market values.
(e) The adjustment reflects additional interest expense related to
additional borrowings under the Credit Facility and previously completed
debt offerings in February 1998 to finance, in part, the acquisition of
Nationwide.
(f) To provide for the tax effect of pro forma adjustments.
(g) The adjustment represents the allocation of Jacor's purchase price for
Nationwide, including estimated expenses of $12,000, to the estimated fair
value of the assets acquired and the recording of goodwill associated with
the acquisition.
(h) The adjustments represent the incremental utilization of cash and
borrowings under the Credit Facility to finance the acquisition of
Nationwide's radio stations.
(i) The adjustments represent the cash received for the sale of two San
Diego stations for $65,000 and the disposition of the related assets.