8-K
UNITED STATES
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): April 10, 2009
EMMIS COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA
(State of incorporation or organization)
0-23264
(Commission file number)
35-1542018
(I.R.S. Employer
Identification No.)
ONE EMMIS PLAZA
40
MONUMENT CIRCLE
SUITE 700
INDIANAPOLIS, INDIANA 46204
(Address of principal executive offices)
(317) 266-0100
(Registrants Telephone Number,
Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
TABLE OF CONTENTS
ITEM 2.02. Results of Operations and Financial Condition.
Emmis Communications Corporation (the Company) today released selected unaudited financial
information for its fourth fiscal quarter and full year ended February 28, 2009. The Company
expects to file its Form 10-K for the year ended February 28, 2009 on or about May 14, 2009.
In its fourth quarter the Company recorded a restructuring charge of $4.2 million related to
severance costs associated with headcount reductions as discussed in our Form 8-K filed March 6.
The Company also recorded a $163.2 million non-cash impairment charge principally related to the
companys broadcasting licenses and goodwill.
The Companys national representation firm guaranteed a minimum amount of national sales for
the year ended February 28, 2009. The Company accrued $4.0 million and $10.2 million in the three
months and full year ended February 28, 2009, respectively. The Company accrued $3.7 million in the
fourth quarter of the prior year related to the fiscal 2008 guarantee. All amounts related to these
guarantees have been collected. The national representation firm has not guaranteed any amounts
beyond February 28, 2009.
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Three months ended February 28 (29), |
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Twelve months ended February 28 (29), |
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Unaudited |
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Unaudited |
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2009 |
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2008 |
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2009 |
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2008 |
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OPERATING DATA: |
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Net revenues: |
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Domestic Radio |
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$ |
38,670 |
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$ |
48,813 |
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$ |
202,888 |
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$ |
224,957 |
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International Radio |
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12,464 |
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13,327 |
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47,995 |
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41,163 |
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Publishing |
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17,359 |
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23,309 |
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82,990 |
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91,939 |
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Total net revenues |
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68,493 |
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85,449 |
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333,873 |
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358,059 |
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Station operating expenses excluding
depreciation and amortization expense: |
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Domestic Radio |
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34,109 |
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38,298 |
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147,971 |
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160,574 |
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International Radio |
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8,976 |
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8,116 |
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32,778 |
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27,866 |
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Publishing |
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18,340 |
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20,796 |
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76,322 |
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78,258 |
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Total station operating expenses excluding
depreciation and amortization expense |
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61,425 |
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67,210 |
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257,071 |
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266,698 |
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Noncash contract termination fee |
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15,252 |
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Corporate expenses excluding depreciation
and amortization expense |
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4,081 |
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5,571 |
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18,503 |
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20,883 |
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Depreciation and amortization |
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2,259 |
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3,633 |
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14,338 |
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14,389 |
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Restructuring charge |
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4,208 |
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4,208 |
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Impairment loss |
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163,243 |
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21,225 |
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373,408 |
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21,225 |
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(Gain) Loss on disposal of assets |
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11 |
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14 |
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(104 |
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Operating income (loss) |
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(166,734 |
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(12,190 |
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(333,669 |
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19,716 |
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Noncash compensation by segment: |
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Domestic Radio |
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$ |
325 |
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$ |
433 |
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$ |
1,772 |
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$ |
2,019 |
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Publishing |
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118 |
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131 |
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767 |
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855 |
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Corporate |
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767 |
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1,110 |
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3,283 |
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4,326 |
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Total |
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$ |
1,210 |
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$ |
1,674 |
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$ |
5,822 |
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$ |
7,200 |
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Restructuring charge by segment: |
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Domestic Radio |
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$ |
1,521 |
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$ |
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$ |
1,521 |
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$ |
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Publishing |
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599 |
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599 |
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Corporate |
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2,088 |
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2,088 |
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Total |
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$ |
4,208 |
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$ |
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$ |
4,208 |
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$ |
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In February 2009, a subsidiary of the Company signed an agreement to sell our corporate
aircraft for $9.1 million. The transaction is expected to close the week of April 13, 2009.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement
On April 10, 2009, Emmis Operating Company (EOC), a wholly owned subsidiary of Emmis
Communications Corporation (the Company), borrowed $71.2 million under the revolving credit loan
of its Amended and Restated Revolving Credit and Term Loan Agreement, dated as of November 2, 2006
by and among EOC, Emmis, the financial institutions identified therein from time to time as
lenders, Bank of America, N.A., as administrative agent, Deutsche Bank Trust Company Americas, as
syndication agent, General Electric Capital Corporation, Coöperatieve Centrale
Raiffeisen-Boerenleenbank B.A., Rabobank Nederland, New York Branch, and SunTrust Bank, as
co-documentation agents, and Banc of America Securities LLC and Deutsche Bank Securities Inc. as
joint lead arrangers and joint book managers, as amended by that certain First Amendment and
Consent to Amended and Restated Revolving Credit and Term Loan Agreement, dated March 3, 2009 (the
credit facility). The borrowing, coupled with outstanding revolver credit loan borrowings and
letters of credit, uses up the entire $75 million available to EOC under the revolving credit loan.
However, EOC is permitted to repay and subsequently re-borrow amounts under the revolving credit
loan, subject to the terms and conditions set forth in the credit facility.
All outstanding amounts under the credit facility bear interest, at the option of EOC, at a
rate equal to the Eurodollar Rate or an alternative base rate (as defined in the credit facility)
plus a margin. The margin over the Eurodollar Rate or the alternative base rate varies under the
revolver (ranging from 0% to 2.25%), depending on EOCs ratio of debt to consolidated operating
cash flow, as defined in the credit facility. Interest is due on a calendar quarter basis under the
alternative base rate and at least every three months under the Eurodollar Rate. The revolving
credit loan matures on November 2, 2012.
Borrowing under the credit facility depends upon our continued compliance with certain
operating covenants and financial ratios, including leverage and fixed charge coverage as
specifically defined. The operating covenants and other restrictions with which we must comply
include, among others, restrictions on additional indebtedness, incurrence of liens, engaging in
businesses other than our primary business, paying certain dividends, redeeming or repurchasing
capital stock of Emmis, acquisitions and asset sales. The credit facility provides that an event of
default will occur if there is a change of control of the Company, as defined. The payment of
principal, premium and interest under the credit facility is fully and unconditionally guaranteed,
jointly and severally, by the Company and most of its existing wholly-owned domestic subsidiaries.
Substantially all of EOCs assets, including the stock of most of EOCs wholly-owned, domestic
subsidiaries, are pledged to secure the credit facility.
Item 7.01. Regulation FD Disclosure.
Emmis Communications Corporation (the Company) has engaged Blackstone Advisory Services L.P.
to provide financial advisory services as the Company explores a possible amendment to the credit
facility or a possible restructuring of certain of its liabilities.
The advertising environment remains incredibly challenging, particularly for traditional media
like radio broadcasting and publishing. Our domestic radio revenues in March finished down 26% as
compared to same period of the prior year. As of April 10, 2009, our domestic radio revenues for
April were pacing down 32% and for May were pacing down 37%. Pacing information for the month of
March strengthened throughout the month as advertising is generally being purchased by our clients
much later in the current year than it was purchased in the prior year. Our publishing business is
seeing trends similar to our domestic radio business. Our international radio division is expecting
first quarter revenues on a percentage basis to be down high-teens in local currency, but the
strengthening of the US dollar will adversely impact results.
Note: Certain statements included in this report which are not statements of historical fact,
including but not limited to those identified with the words expect, will or look are
intended to be, and are, by this Note, identified as forward-looking statements, as defined in
the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results, performance or
achievements of the Company to be materially different from any future result, performance or
achievement expressed or implied by such forward-looking statement. Such factors include, among
others:
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general economic and business conditions; |
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fluctuations in the demand for advertising and demand for different
types of advertising media; |
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our ability to service our outstanding debt; |
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increased
competition in our markets and the broadcasting industry; |
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our ability
to attract and secure programming, on-air talent, writers and
photographers; |
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inability to obtain (or to obtain timely) necessary approvals for purchase or sale
transactions or to complete the transactions for other reasons generally beyond our control; |
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increases in the costs of programming, including on-air talent; |
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inability to grow through suitable acquisitions; |
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changes in audience measurement systems |
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new or changing regulations of the Federal Communications Commission or other governmental
agencies; |
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competition from new or different technologies; |
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war, terrorist acts or political
instability; and |
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other factors mentioned in documents filed by the Company with the Securities and Exchange
Commission. |
The Company does not undertake any obligation to publicly update or revise any forward-looking
statements because of new information, future events or otherwise
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, thereunto duly authorized.
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EMMIS COMMUNICATIONS CORPORATION
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Date: April 13, 2009 |
By: |
/s/ J. Scott Enright
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J. Scott Enright, Executive Vice President, |
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General Counsel and Secretary |
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