<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 333-95297
---------------------------
BENEDEK COMMUNICATIONS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------------------
DELAWARE 36-4076007
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
------------------------
STEWART SQUARE, SUITE 210
308 WEST STATE STREET, ROCKFORD, ILLINOIS 61101
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (815) 987-5350
---------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No ___
----
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: 7,030,000 shares of common
stock, $0.01 par value, were outstanding at November 1, 1996.
-1-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION
FORM 10-Q TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM
NUMBER
PART I- FINANCIAL STATEMENTS
<S> <C>
Item 1. FINANCIAL STATEMENTS
Introductory Comments ....................................................... 3
Benedek Communications Corporation and Subsidiary
Consolidated Balance Sheets as of December 31, 1995 and September 30, 1996 . 4
Consolidated Statements of Operations for the Three Months and Nine Months
Ended September 30, 1995 and 1996 ........................................... 5
Consolidated Statement of Stockholder's (Deficit) for the Nine Months Ended
September 30, 1996 ........................................................ 6
Consolidated Statements of Cash Flows for the Nine Months Ended September 30,
1995 and 1996 ............................................................. 7
Notes to Consolidated Financial Statements .................................. 9
Item 2. MANAGEMENT'S D17CUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ......................................... 17
PART II - OTHER INFORMATION
Item 6. Exhibits and reports on Form 8K ............................................. 28
SIGNATURES .......................................................................... 31
</TABLE>
-2-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Introductory Comments:
The Financial Statements included herein have been prepared by Benedek
Communications Corporation without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been omitted pursuant to
such rules and regulations.
-3-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
1995 1996
---- ----
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ......................... $ 9,668,331 $ 5,178,512
Accounts receivable, net .......................... 12,529,696 19,530,386
Current portion of program broadcast rights ....... 1,575,325 5,237,707
Prepaid expenses .................................. 576,697 1,452,114
------------- -------------
Total current assets ........................... 24,350,049 31,398,719
------------- -------------
Property and Equipment ............................ 20,035,715 87,254,038
------------- -------------
Intangible Assets ................................. 60,420,617 357,833,262
------------- -------------
Other Assets:
Deferred loan costs ............................... 5,625,261 13,206,847
Program broadcast rights, less current portion .... 687,320 2,399,652
Advance to affiliate .............................. 3,000,000 --
Acquisition costs ................................. 225,359 --
Other ............................................. 109,000 774,363
------------- -------------
9,646,940 16,380,862
------------- -------------
$ 114,453,321 $ 492,866,881
============= =============
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current Liabilities:
Current maturities of notes and leases payable ....... $ 318,077 $ 9,074,052
Current maturities of program broadcast rights payable 2,042,643 6,525,990
Accounts payable and accrued expenses ................ 7,824,296 8,617,963
Deferred revenue ..................................... 500,000 689,094
Due to sellers ....................................... -- 379,819
------------- -------------
Total current liabilities ......................... 10,685,016 25,286,918
------------- -------------
Long-Term Liabilities:
Notes and capital leases payable ..................... 135,448,948 348,753,814
Program broadcast rights payable ..................... 632,444 1,951,859
Deferred revenue ..................................... 4,250,000 4,360,159
Deferred income taxes ................................ -- 55,474,000
------------- -------------
140,331,392 410,539,832
------------- -------------
Senior Redeemable Preferred Stock .................... -- 54,009,638
------------- -------------
Junior Redeemable Preferred Stock .................... -- 46,133,304
------------- -------------
Stockholder's Deficit:
Common stock ......................................... 70,300 70,300
Additional paid-in capital ........................... 2,253,229 (32,984,915)
Accumulated equity (deficit) ......................... (38,886,616) (10,188,196)
------------- -------------
(36,563,087) (43,102,811)
------------- -------------
$ 114,453,321 $ 492,866,881
============= =============
</TABLE>
-4-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- -----------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues ............................... $ 12,191,053 $ 29,786,193 $ 36,249,711 $ 59,901,221
------------ ------------ ------------ ------------
Operating expenses:
Selling, technical and
program expenses ........................... 5,342,943 14,337,337 15,387,649 27,878,366
General and administrative ................. 1,975,322 4,983,063 5,767,239 9,676,914
Depreciation and amortization .............. 1,415,123 7,776,513 3,539,627 11,845,806
Corporate .................................. 417,980 693,375 1,115,739 1,780,809
------------ ------------ ------------ ------------
9,151,368 27,790,288 25,810,254 51,181,895
------------ ------------ ------------ ------------
OPERATING INCOME ........................... 3,039,685 1,995,905 10,439,457 8,719,326
------------ ------------ ------------ ------------
FINANCIAL INCOME (EXPENSE)
Interest expense:
Cash interest .................... (4,028,327) (6,854,643) (11,128,222) (15,734,623)
Other interest ................... (148,908) (3,442,437) (485,914) (4,540,950)
------------ ------------ ------------ ------------
(4,177,235) (10,297,080) (11,614,136) (20,275,573)
Interest income ....................... 121,999 34,621 331,690 247,054
------------ ------------ ------------ ------------
(4,055,236) (10,262,459) (11,282,446) (20,028,519)
------------ ------------ ------------ ------------
NET (LOSS) BEFORE INCOME
TAX BENEFIT AND EXTRA-
ORDINARY ITEM .............................. (1,015,551) (8,266,554) (842,989) (11,309,193)
Income tax benefit ......................... -- 3,077,679 -- 3,077,679
------------ ------------ ------------ ------------
NET (LOSS) BEFORE EXTRA-
ORDINARY ITEM .............................. (1,015,551) (5,188,875) (842,989) (8,231,514)
Extraordinary item:
Gain on early extinguishment
of debt .................................... -- -- 6,863,762 --
------------ ------------ ------------ ------------
NET INCOME (LOSS) .......................... $ (1,015,551) $ (5,188,875) $ 6,020,773 $ (8,231,514)
============ ============ ============ ============
</TABLE>
-5-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDER'S (DEFICIT)
Nine Months Ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Additional
Common Paid-In Accumulated
Stock Capital (Deficit) Total
----- ------- --------- -----
<S> <C> <C> <C> <C>
Balance at December 31, 1995 .......... $ 70,300 $ 2,253,229 $(38,886,616) $(36,563,087)
Allocation of proceeds from sale of
redeemable senior preferred stock
to initial warrants ................... -- 9,000,000 -- 9,000,000
Financing costs related to the sale of
redeemable preferred stock ............ -- (3,165,267) -- (3,165,267)
Reclassification of accumulated deficit
due to change in income tax status .... -- (41,072,877) 41,072,877 --
Dividends payable on redeemable
preferred stock ....................... -- -- (4,142,943) (4,142,943)
Net (loss) ............................ -- (8,231,514) -- (8,231,514)
------------ ------------ ------------ ------------
Balance at September 30, 1996 ......... $ 70,300 $(32,984,915) $(10,188,196) $(43,102,811)
============ ============ ============ ============
</TABLE>
-6-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1995 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Cash Flows From Operating Activities
Net income (loss) ....................................................... $ 6,020,773 $ (8,231,514)
Adjustments to reconcile net income (loss) to net cash (used in)
provided by operating activities:
Amortization of program broadcast rights ................................ 1,619,464 2,832,189
Depreciation and amortization ........................................... 2,288,671 8,249,682
(Gain) on early extinguishment of debt .................................. (6,863,762) --
Amortization of intangibles and deferred loan costs .................... 1,720,387 4,415,386
Amortization of note discount ........................................... -- 3,752,112
(Gain) on sale of property and equipment ................................ (13,707) (34,862)
Payment of deferred and contingent interest ............................. (4,405,746) --
Payment of prepayment premiums .......................................... (2,748,896) --
Other ................................................................... 31,691 --
Change in assets and liabilities, net of effects of station acquisitions:
Receivables ............................................................. (952,661) 3,913,941
Due from sellers ........................................................ -- 2,821,334
Prepaid expenses ........................................................ (247,071) (307,649)
Payments on program broadcast rights payable ............................ (1,574,133) (1,896,086)
Accounts payable and accrued expenses ................................... 1,106,017 (3,001,126)
Deferred income ......................................................... -- (423,158)
Contingent and deferred interest payable ................................ 567,533 --
Deferred income taxes ................................................... -- (3,085,982)
------------- -------------
Net cash provided by (used in) operating activities ..................... (3,451,440) 9,004,267
------------- -------------
Cash Flows From Investing Activities
Purchase of property and equipment ...................................... (856,537) (2,644,579)
Proceeds from sale of equipment ......................................... 70,162 187,300
Payment for acquisition of stations, net of cash ........................ (26,686,909) (321,848,468)
Reimbursement for equipment purchases ................................... -- 79,198
Purchase of securities .................................................. -- (663,937)
Other ................................................................... 10,665 3,616
------------- -------------
Net cash (used in) investing activities ................................. (27,462,619) (324,886,870)
------------- -------------
Cash Flows From Financing Activities
Principal payments on notes, including capital lease payables ........... (96,254,583) (249,726)
Proceeds from issuance of redeemable preferred stock .................... -- 105,000,000
Proceeds from long term borrowing ....................................... 135,000,000 218,178,200
Payment of debt acquisition costs ....................................... (5,646,723) (11,535,690)
------------- -------------
Net cash provided by financing activities .............................. 33,098,694 311,392,784
------------- -------------
Net increase (decrease) in cash and cash equivalents .................... 2,184,635 (4,489,819)
Cash and cash equivalents:
Beginning ............................................................... 4,617,242 9,668,331
------------- -------------
ENDING .................................................................. $ 6,801,877 $ 5,178,512
============= =============
</TABLE>
-7-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
Nine Months Ended September 30, 1995 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for interest .................................... $ 13,630,495 $ 19,450,026
============= =============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Acquisition of program broadcast rights ....................... $ 2,113,646 $ 3,679,322
Note payable and capital lease obligation incurred for purchase
of equipment .................................................. 197,288 380,253
Equipment acquired by barter transactions ..................... 306,221 62,555
Dividends accrued on redeemable preferred stock ............... $ -- $ 4,142,943
============= =============
Acquisitions of stations:
Cash purchase price ........................................... $ 26,686,909 $ 321,848,468
============= =============
Net working capital acquired, net of cash $535,810 in 1996 .... $ 7,565 $ 9,840,537
Property and equipment acquired at fair market value .......... 7,533,196 72,533,059
Intangible assets acquired .................................... 21,283,326 301,351,989
Deferred income taxes assumed ................................. -- (58,872,778)
Other, net .................................................... (137,178) 221,020
------------- -------------
28,686,909 325,073,827
Less: Application of deposit ................................. (2,000,000) (3,225,359)
------------- -------------
$ 26,686,909 $ 321,848,468
============= =============
</TABLE>
-8-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(NOTE A) - NATURE OF BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS: Benedek Communications Corporation (the "Company")
was formed on April 10, 1996. The Company is a holding company that derives its
operating income and cash flow from its subsidiary, Benedek Broadcasting
Corporation ("Benedek Broadcasting") which owns and operates twenty-two
television stations located throughout the United States. These stations operate
under network affiliation contracts, which provide programs to the affiliated
stations and the stations sell commercial time during the programs to national,
regional and local advertisers. The networks also sell commercial time during
the programs to national advertisers. Credit arrangements are determined on an
individual customer basis.
BASIS OF PRESENTATION: The consolidated financial statements include
the accounts of the Company and its wholly owned subsidiary Benedek
Broadcasting. The accounts of Benedek License Corporation (BLC), a wholly owned
subsidiary of Benedek Broadcasting, are included in the financial statements of
Benedek Broadcasting. All significant intercompany items and transactions have
been eliminated in the consolidated financial statements. Since Benedek
Broadcasting and the Company have identical stock ownership, these financial
statements include the operating results of Benedek Broadcasting accounted for
in a manner similar to that of a pooling-of-interests method of accounting. The
financial statements include all adjustments, consisting of normal and recurring
adjustments, which are considered necessary in the opinion of management for the
fair presentation of the financial position as of September 30, 1996 and the
results of operations and cash flows for the nine months ended September 30,
1995 and 1996. These financial statements do not include all the information and
footnotes required by generally accepted accounting principles.
Operating results for the three and nine month periods ended September
30, 1995 and 1996 and for the fiscal year ended 1995 are not necessarily
indicative of the results that may be expected for the fiscal year ended
December 31, 1996.
(NOTE B) - ACQUISITIONS AND CONTRIBUTION OF CAPITAL
The Company was formed by the sole stockholder of Benedek Broadcasting.
On June 6, 1996, two acquisition agreements entered into during 1995 by Benedek
Broadcasting were consummated. These agreements were to acquire (i) the assets
of the television broadcasting division of Stauffer Communications, Inc., which
owned five television stations for a total purchase price of $54,500,000 and
(ii) all the issued and outstanding capital stock of Brissette Broadcasting
Corporation which owned and operated eight television stations for a purchase
price of $270,000,000. At the closing of these acquisitions, the sole
stockholder of Benedek Broadcasting contributed all of the outstanding shares of
common stock of Benedek Broadcasting to the Company in exchange for the issuance
to him all of the outstanding shares of common stock of the Company.
The pro forma results of operations for the three months ended
September 30, 1995 and 1996 and the nine months ended September 30, 1995 and
1996 assuming the acquisitions had taken place on January 1, 1995 are as
follows:
-9-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(NOTE B) - ACQUISITIONS AND CONTRIBUTION OF CAPITAL - (CONTINUED)
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
----------------------------- ---------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenue .......... $ 28,091,356 $ 29,786,194 $ 87,845,440 $ 89,681,253
Operating expenses ... 25,836,043 27,790,277 77,260,605 81,069,436
Financial expenses ... 10,384,813 10,707,410 30,992,412 31,824,988
------------ ------------ ------------ ------------
(Loss) before income
taxes and extra-
ordinary item ........ (8,129,500) (8,711,493) (20,407,577) (23,213,171)
Income tax benefit ... 2,691,801 2,424,598 8,748,974 7,502,187
------------ ------------ ------------ ------------
(Loss) before extra-
ordinary item ........ (5,437,699) (6,286,895) (11,658,603) (15,710,984)
Extraordinary item ... -- -- 6,863,762 --
------------ ------------ ------------ ------------
Net (loss) ........... $ (5,437,699) $ (6,286,895) $ (4,794,841) $(15,710,984)
============ ============ ============ ============
Broadcast cash flow(1) $ 10,885,239 $ 11,285,131 $ 35,902,089 $ 34,112,707
============ ============ ============ ============
</TABLE>
(1) Broadcast cash flow is defined as operating income before financial income
as derived from the consolidated statements of operations plus depreciation and
amortization, amortization of program broadcast rights, corporate expenses and
noncash compensation less payments for program broadcast rights.
(NOTE C) - REDEEMABLE EQUITY SECURITIES AND DISCOUNT NOTES
Concurrent with the acquisitions described in Note (B) the Company
entered into the following financing transactions, the net proceeds of which
were contributed to Benedek Broadcasting.
(1) The Company sold 60,000 Units in a private placement, which
generated proceeds of $60,000,000. Each Unit consists of (i) ten
shares of Exchangeable Redeemable Senior Preferred Stock (ii) ten
Initial Warrants, and (iii) 14.8 Contingent Warrants.
(i) Exchangeable Redeemable Senior Preferred Stock - The Company
issued 600,000 shares of 15% Exchangeable Redeemable Senior
Preferred Stock due 2007, with an initial liquidation
preference equal to the proceeds received of $60,000,000. Of
these proceeds, $9,000,000 was allocated to the initial
warrants described in (ii). Dividends are payable to holders
of the outstanding shares at the rate of 15% per annum of the
then effective liquidation preference per share, payable
quarterly beginning July 1, 1996 and accruing from June 6,
1996. The Company has the option to pay dividends on any
dividend payment date occurring on or before July 1, 2001
either in cash or by adding such dividends to the then
effective liquidation preference. The Company also has the
option to immediately redeem these shares, in whole or in
part, at predetermined redemption prices. The Company is
required to redeem the outstanding shares on July 1, 2007 at
a redemption price equal to 100% of the then effective
liquidation preference plus any accrued and unpaid dividends
to the date of redemption. The Exchangeable Redeemable
-10-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(NOTE C) - REDEEMABLE EQUITY SECURITIES AND DISCOUNT NOTES - (CONTINUED)
Senior Preferred Stock is exchangeable into debentures at the
Company's option, subject to certain conditions, in whole on
any scheduled dividend payment date. The Exchangeable
Redeemable Senior Preferred Stock has been registered with
the Securities and Exchange Commission pursuant to a
registration statement delayed effective in October 1996.
(ii) Initial Warrants - The Company issued 600,000 Initial
Warrants each of which entitles the holder thereof to
purchase one share of Class A Common Stock at a price of
$0.01 per share. The value of the warrants at date of
issuance was $9,000,000 which was allocated to paid-in
capital and is being amortized at a rate of 15% per annum
through July 1, 2007, the mandatory redemption date of the
Exchangeable Redeemable Senior Preferred Stock. Accordingly,
this amount is being accreted to the Exchangeable Redeemable
Senior Preferred Stock on the same basis.
(iii) Contingent Warrants - The Company issued 888,000 Contingent
Warrants, each warrant to acquire one share of Class A Common
Stock at an exercise price of $0.01 per share. The Contingent
Warrants were issued to an escrow agent and are not
outstanding. The Contingent Warrants are not separable from
the Exchangeable Redeemable Senior Preferred Stock and will
not be delivered out of escrow unless the Exchangeable
Redeemable Senior Preferred Stock is not redeemed on or prior
to July 1, 2000. Since it is management's intention to redeem
the Exchangeable Redeemable Senior Preferred Stock prior to
any release of the Contingent Warrants from escrow, no
allocation of the proceeds was made to the Contingent
Warrants.
(2) Seller Junior Discount Preferred Stock - The Company issued 450,000
shares of Seller Junior Discount Preferred Stock due 2008 with an
aggregate liquidation preference equal to the proceeds of
$45,000,000. Dividends are payable to the holders of the Seller
Junior Discount Preferred Stock at 7.92% per annum until the fifth
anniversary of the issuance thereof and thereafter at increasing
rates up to 18%. Since the Company intends to redeem the Seller
Junior Discount Preferred Stock prior to the fifth anniversary,
dividends are being accrued at the initial rate. The dividends on
the Seller Junior Discount Preferred Stock are cumulative from date
of issuance. Until the fifth anniversary of the issuance thereof,
dividend payments on the Seller Junior Discount Preferred Stock may
not be made in cash and instead will be added automatically to the
liquidation preference and as a result will be deemed paid in full
and will not accumulate. The Seller Junior Discount Preferred Stock
is subject to mandatory redemption in whole on July 1, 2008 and the
Company has the option to redeem these shares in whole or in part
at a price equal to the sum of the liquidation value per share plus
an amount equal to all accumulated and unpaid dividends per share
to the date of redemption.
-11-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(NOTE C) - REDEEMABLE EQUITY SECURITIES AND DISCOUNT NOTES - (CONTINUED)
(3) 13 1/4% Senior Subordinated Discount Notes due 2006 - The Company
issued Senior Subordinated Discount Notes with a principal amount
of $170,000,000. These Notes were issued at a discount of
$79,821,800 which generated gross proceeds of $90,178,200. The
Notes mature on May 15, 2006 and yield 13.25% per annum with no
cash interest accruing prior to May 15, 2001. Thereafter, cash
interest will accrue until maturity payable semiannually,
commencing November 15, 2001. On or after May 15, 2000, the Notes
are redeemable at the option of the Company, in whole or in part,
at predetermined redemption prices and under specified conditions.
The Notes are subordinated to all Senior Debt of the Company. These
Notes contain various restrictive covenants, all of which the
Company was in compliance with at September 30, 1996. The Senior
Subordinated Discount Notes have been registered with the
Securities and Exchange Commission pursuant to a registration
statement declared effective in October 1996.
The following table summarizes these activities as follows:
<TABLE>
<CAPTION>
Exchangeable Seller 13 1/4%
Redeemable Junior Senior
Senior Discount Subordinated
Preferred Initial Preferred Discount
Stock Warrants Stock Notes
------------------------------------------------------
<S> <C> <C> <C> <C>
Issuance of preferred stock ... $51,000,000 $ 9,000,000 $45,000,000 $ --
Issuance of senior subordinated
discount notes ................ -- -- -- 90,178,200
Accrued dividends ............. 3,009,638 -- 1,133,304 --
Amortization of note discount . -- -- -- 3,752,112
-------------------------------------------------------
Balance at September 30, 1996 . $54,009,638 $ 9,000,000 $46,133,304 $93,930,312
=======================================================
</TABLE>
Since the Company derives all of its operating income and cash flow
from Benedek Broadcasting, the Company's ability to pay its obligations
including (i) interest on and principal of the senior subordinated discount
notes (ii) redemption of and cash dividends on the exchangeable preferred stock
and (iii) redemption of and cash dividends on the seller junior discount
preferred stock will be dependent primarily upon receiving dividends and other
payments on advances from Benedek Broadcasting. Benedek Broadcasting is a
separate and distinct legal entity and has no obligation, contingent or
otherwise, to pay any amounts to the Company or to make funds available to the
Company for debt service or any other obligation.
-12-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(NOTE D) - LONG TERM DEBT
As part of the financing transactions described in Note C, on June 6,
1996, Benedek Broadcasting entered into a new credit agreement which includes
two Term Loan Facilities consisting of (i) a Series A Facility of $70,000,000 at
a fluctuating rate per annum (currently 8.81%) (ii) a Series B Facility of
$58,000,000 at a fluctuating rate per annum (currently 9.31%). The Term Loan
Facilities provide for quarterly principal payments until final maturity (except
in the first year during which amortization will be on a semiannual basis). The
Series A Facility and the Series B Facility will mature five years and six and
one-half years, respectively, after the closing. Benedek Broadcasting will be
required to make scheduled aggregate amortization payments on the Series A and
Series B Facilities, as follows: during the first year after closing, $6.0
million; during the second year after closing, $11.0 million; during the third
year after closing, $14.5 million; during the fourth year after closing, $16.0
million; during the fifth year after closing, $27.5 million; during the sixth
year after closing, $15.0 million; and during the first half of the seventh year
after closing, $38.0 million.
The credit agreement also includes a Revolving Credit Facility of
$15,000,000, which bears interest at a customary base rate plus a spread. There
were no borrowings on the revolver as of September 30, 1996.
The Term Loan Facilities and the Revolving Credit Facility are
guaranteed by the Company and secured by certain of the Company's and Benedek
Broadcasting's present and future property and assets. The Term Loan Facilities
are also guaranteed by BLC and are secured by all of the stock of BLC. The Term
Loan Facilities contain various restrictive covenants and requires compliance
with certain financial ratios and covenants.
At September 30, 1996, the Company did not meet certain financial ratios
contained in its credit agreement. The lenders under the credit agreement have
agreed to waive such noncompliance. In connection with such waiver, the Company
agreed that for so long as its ratio of debt to Adjusted EBITDA (as defined in
the credit agreement) is in excess of 7.00:1.00, the Term Loan Facilities will
bear interest at an additional spread of 25 basis points from that originally
provided for in the credit agreement.
During 1995, Benedek Broadcasting issued $135,000,000 of 11 7/8% Senior
Secured Notes due 2005 (the "Senior Secured Notes"). The net proceeds of the
Senior Secured Notes were used, together with available cash, to (i) refinance
certain indebtedness, (ii) finance the acquisition of WTVY-TV ("the Dothan
Station") and (iii) pay fees and expenses in connection with the offering. The
Senior Secured Notes have been registered with the Securities and Exchange
Commission in a registration statement declared effective in November 1995.
The Senior Secured Notes bear interest at the rate of 11 7/8% payable
semiannually on March 1 and September 1 of each year and mature in March 2005.
The Senior Secured Notes may be redeemed by Benedek Broadcasting in whole or in
part after March 1, 2000 subject to certain prepayment premiums. The Senior
Secured Notes contain various restrictive covenants relating to prepayment
premiums. The Senior Secured Notes contain various restrictive covenants
relating to limitations on dividends, transactions with affiliates, further
issuance of debt, and sales of assets, among others. Benedek Broadcasting was in
compliance with these covenants at September 30, 1996.
-13-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(NOTE D) - LONG TERM DEBT (CONTINUED)
The Senior Secured Notes are collateralized by Benedek Broadcasting's
100% interest in BLC, certain agreements and contract rights related to the
stations which includes network affiliation agreements and certain general
intangibles.
NOTES PAYABLE CONSIST OF THE FOLLOWING:
<TABLE>
<CAPTION>
September 30,
1996
----
<S> <C>
Senior Secured Notes ................................. $135,000,000
Term loan Series A ................................... 70,000,000
Term loan Series B ................................... 58,000,000
Senior Subordinated Discount Notes ................... 93,930,312
Capital leases and other ............................. 897,554
------------
357,827,866
Less current maturities .............................. 9,074,052
------------
$348,753,814
============
</TABLE>
(NOTE E) - INCOME TAX MATTERS AND CHANGE IN TAX STATUS
Prior to the consummation of the acquisitions and the related
financing, Benedek Broadcasting, with the consent of its stockholder, elected to
be taxed under sections of federal and state income tax law, which provided
that, in lieu of corporation income taxes, the stockholder separately accounted
for Benedek Broadcasting's income, deductions, losses and credits. Due to the
structure of the financing for the acquisitions, the election to be taxed as an
"S" Corporation automatically terminated and Benedek Broadcasting became subject
to federal and state income taxes. As a result, Benedek Broadcasting recorded a
net deferred tax asset of approximately $3,550,000 which was offset by a
valuation allowance of the same amount. Management believes a benefit will be
realized to the extent of this net deferred tax asset as a result of the
acquisitions. Thus the valuation allowance was eliminated and accounted for as
part of the acquisition.
Under the provision of Statement of Financial Accounting Standards
(SFAS) No. 109, the deferred tax assets and liabilities, resulting principally
from the acquisitions explained in Note B consist of the following components:
-14-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(NOTE E) - INCOME TAX MATTERS AND CHANGE IN TAX STATUS - (CONTINUED)
<TABLE>
September 30,
1996
----
<S> <C>
Deferred tax assets:
Loss Carryforwards ......... $ 3,543,248
Nondeductible allowances and
other ...................... 1,089,776
Network agreement .......... 1,750,000
Original issue discount .... 1,500,845
------------
7,883,869
------------
Deferred tax liabilities:
Property and equipment ..... 15,252,026
Intangibles ................ 48,105,843
------------
63,357,869
------------
Net deferred tax liability . $(55,474,000)
============
</TABLE>
At September 30, 1996 a valuation allowance has not been established
since, in the opinion of management, it is more likely than not that the
deferred tax assets will be realized.
Under the provisions of the Internal Revenue Code, the Company has
approximately $7,300,000 of actual net operating loss carryforwards available to
offset future tax liabilities of the Company.
Reconciliation of the statutory federal income tax rate to the Company's
effective tax rate is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Computed "expected" income tax benefit ... (35.0)% (35.0)% (35.0)% (35.0)%
State income taxes, net of federal effect -- (5.0) -- (5.0)
Loss allocated to stockholder due to "S" . `
Corporation status ....................... 26.5 -- 4.0 8.3
Intangible amortization not deductible for
tax purposes ............................. 7.3 3.8 26.4 4.3
Other, net ............................... 1.2 (1.0) 4.6 0.2
-------------------------------------
Effective tax rate -- % (37.2)% -- % (27.2)%
=====================================
</TABLE>
-15-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE F) - COMMON STOCK AND OTHER SECURITIES
Common stock consists of the following numbers of shares:
<TABLE>
<CAPTION>
Authorized Issued Outstanding
----------- --------- -----------
<S> <C> <C> <C>
Class A common $.01 par
value........ 25,000,000 - -
Class B common $.01 par
value........ 25,000,000 7,030,000 7,030,000
</TABLE>
In addition, the Board of Directors of the Company has authorized 2,500,000
shares of preferred stock, 1,050,000 of which have been issued as described in
Note C above.
-16-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
This Quarterly Report on Form 10-Q contains forward-looking statements
that involve risks and uncertainties. Actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including changes in national and regional economies,
competition in the television business, successful integration of acquired
television stations, pricing fluctuations in local and national advertising,
program ratings and changes in programming costs, among other factors.
Except as otherwise provided, the financial data set forth below is
derived from the historical financial statements of the Company prepared in
accordance with generally accepted accounting principles. Such historical
financial data includes the results of operations of five television stations
acquired from Stauffer Communications, Inc. (the "Stauffer Stations") and eight
television stations acquired from Brissette Broadcasting Corporation (the
"Brissette Stations," and together with the Stauffer Stations, the "Acquired
Stations") from the date of the acquisition thereof on June 6, 1996. As used
herein, "Same Station" data refers to the historical results of operations of
all 22 television stations currently owned by the Company as if such stations
were owned by the Company throughout the periods indicated with pro forma
adjustments only for corporate expenses, depreciation and amortization.
As used herein, "Adjusted EBITDA" is defined as operating income before
financial income as derived from the consolidated statements of operations plus
depreciation and amortization, amortization of program broadcast rights and
noncash compensation less payments for program broadcast rights. "Adjusted
EBITDA" as defined in Benedek Broadcasting's Credit Agreement excludes from the
foregoing definition certain noncash revenues used in determining operating
income. As used herein, "broadcast cash flow" is defined as Adjusted EBITDA plus
corporate expenses.
The operating revenues of the Company are derived primarily from the
sale of advertising time and, to a lesser extent, from compensation paid by the
networks for broadcasting network programming and from barter transactions for
goods and services. Revenue depends on the ability of the Company to provide
popular programming which attracts audiences in the demographic groups targeted
by advertisers, thereby allowing the Company to sell advertising time at
satisfactory rates. Revenue also depends significantly on factors such as the
national and local economy and the level of local competition.
Approximately 54.9% of the gross revenues of the Company in the nine
months ended September 30, 1996 was generated from local and regional
advertising, which is sold primarily by its television station's sales staff,
and the remainder of the advertising revenues is comprised primarily of national
advertising, which is sold by national sales representatives retained by the
Company. The Company generally pays commissions to advertising agencies on
local, regional and national advertising and to national sales representatives
on national advertising. Net revenues reflect deductions from gross revenues for
commissions payable to advertising agencies and national sales representatives.
Local/regional advertising and national advertising constitute the
largest categories of the Company's operating revenues and represent
approximately 82.2% of gross revenues for the nine months ended September 30,
1996 as compared to 87.1% for the nine months ended September 30, 1995. Although
relatively constant as a total percentage of gross revenues, the mix of
advertising revenue can vary depending on the level of political advertising
revenue. Excluding political advertising revenue, the percentage of gross
revenues attributable to local/regional advertising and national advertising of
the Company was 86.1% for the nine months ended September 30, 1996 as compared
to 87.9% for the nine
-17-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW (CONTINUED)
months ended September 30, 1995. The decrease was the result of an increase in
network compensation of $2.6 million or 125.5%, representing 7.2% of gross
revenues (excluding political advertising revenues) for the nine months ended
September 30, 1996 as compared to 5.1% of gross revenues (excluding political
advertising revenues) for the nine months ended September 30, 1995. For the nine
months ended September 30, 1996, the Company reported net revenues of $59.9
million compared to net revenues of $36.2 million for the nine months ended
September 30, 1995. The Company had a net loss of $8.2 million for the nine
months ended September 30, 1996 compared to a net income of $6.0 million (after
an extraordinary gain of $6.9 million) for the nine months ended September 30,
1995. Adjusted EBITDA for the nine months ended September 30, 1996 was $21.5
million as compared to $14.0 million for the nine months ended September 30,
1995.
In December 1995, the Company entered into new long-term affiliation
agreements with CBS effective retroactive to July 1, 1995. In connection with
such arrangements, CBS paid the Company bonus payments of $2.5 million in the
fourth quarter of 1995 and $2.5 million in the first quarter of 1996. These
payments are being recognized as revenue by the Company at the rate of $0.5
million per year over the ten-year term of the affiliation agreements. In
connection with these payments, the Company also agreed with CBS that, upon the
consummation of the acquisition of the Acquired Stations, the terms of the
affiliation agreements for the Acquired Stations which are CBS affiliates would
be extended through 2005.
The Company's primary operating expenses are employee compensation,
programming and depreciation and amortization. Changes in compensation expense
result primarily from adjustments to fixed salaries based on employee
performance and inflation and, to a lesser extent, from changes in sales
commissions paid based on levels of advertising revenues. Programming expense
consists primarily of amortization of program rights. The Company purchases
first run and off-network syndicated programming on an ongoing basis and has a
policy of closely matching payments for and amortization of program rights in
each period. A network-affiliated station receives approximately two-thirds of
its required daily programming from the network at no cost. Depreciation and
amortization expense has generally declined from period to period as assets
acquired at the time of the acquisition of a station are fully depreciated.
However, for the nine months ended September 30, 1996, depreciation and
amortization increased $8.3 million due to the acquisition of the Acquired
Stations. Barter expense generally offsets barter revenue and reflects the fair
market value of goods and services received. The Company's operating expenses
(excluding depreciation and amortization) have remained fairly constant and
represent approximately 65.7% of net revenues for the nine months ended
September 30, 1996 as compared to 61.4.% of net revenues for the nine months
ended September 30, 1995.
On March 31, 1995, the Company acquired for a cash purchase price of
$28.7 million substantially all of the assets (excluding cash and accounts
receivable) of the Dothan Station which is the CBS affiliate serving both
Dothan, Alabama and Panama City, Florida.
On June 6, 1996, the Company acquired substantially all of the broadcast
television assets (including working capital of approximately $1.6 million) of
the Stauffer Stations consisting of five principal broadcast television stations
and four satellite broadcast television stations for a purchase price of $54.5
million. The principal stations acquired by the Company were KCOY-TV, Santa
Maria, California; WIBW-TV, Topeka, Kansas; KMIZ-TV, Columbia, Missouri;
KGWC-TV. Casper, Wyoming; and KGWN-TV, Cheyenne, Wyoming. KGWC-TV operates two
satellite stations, KGWL-TV, Lander,
-18-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW (CONTINUED)
Wyoming, and KGWR-TV, Rock Springs, Wyoming, both of which rebroadcast the
programming of KGWC-TV. KGWN-TV operates two satellite stations, KSTF-TV,
Scottsbluff, Nebraska and KTVS-TV, Sterling, Colorado, both of which rebroadcast
the programming of KGWN-TV. All of the Stauffer Stations are affiliated with
CBS, except for KMIZ-TV, Columbia, Missouri, which is affiliated with ABC.
On June 6, 1996, the Company acquired all of the capital stock of
Brissette Broadcasting Corporation ("Brissette") for $270.0 million in cash and
preferred stock. All of the outstanding indebtedness of Brissette was paid in
full by the sellers at the closing. Pursuant to the Brissette purchase
agreement, at the closing Brissette was required to have working capital of at
least $8.8 million and any amount in excess thereof was to be paid to the
sellers. By acquiring all of the capital stock of Brissette, the Company
acquired eight network-affiliated television stations including WMTV-TV, the NBC
affiliate serving Madison, Wisconsin; WWLP-TV, the NBC affiliate serving
Springfield, Massachusetts; WILX-TV, the NBC affiliate serving Lansing,
Michigan; WHOI-TV, the ABC affiliate serving Peoria, Illinois; WSAW-TV, the CBS
affiliate serving Wausau, Wisconsin; WTRF-TV, the CBS affiliate serving
Wheeling, West Virginia and Steubenville, Ohio; KAUZ-TV, the CBS affiliate
serving Wichita Falls, Texas; and KOSA-TV, the CBS affiliate serving Odessa,
Texas. Of the $270.0 million paid for the capital stock of Brissette, $225.0
million was paid in cash and $45.0 million was paid by the issuance to General
Electric Capital Corporation ("GECC") and Mr. Paul Brissette of the junior
preferred stock of the Company.
The Company has included Adjusted EBITDA and broadcast cash flow data
because such data is used by certain investors to measure a company's ability to
service debt. Adjusted EBITDA is used to pay principal and interest on long-term
debt and to fund capital expenditures. Adjusted EBITDA does not purport to
represent cash provided by operating activities as reflected in the Company's
Consolidated Financial Statements, is not a measure of financial performance
under generally accepted accounting principles and should not be considered in
isolation or as a substitute for measures of performance prepared in accordance
with generally accepted accounting principles.
The following table (in thousands) sets forth certain historical results
of operations and operating data for the three and nine months ended September
30, 1995 and 1996. The table includes the results of operations of the Acquired
Stations only from the closing date of June 6, 1996.
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
---------------------------- ---------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating
income..................... $3,040 $ 1,996 $10,439 $ 8,719
Add:
Amortization of pro-
gram broadcast rights. 537 1,530 1,619 2,832
Depreciation and
amortization.......... 1,416 7,776 3,540 11,846
Corporate
expenses.............. 418 693 1,116 1,781
Less:
Payments for program
broadcast liabilities. (537) (710) (1,574) (1,896)
------ ------- ------- -------
Broadcast cash flow......... $4,874 $11,285 $15,140 $23,282
====== ======= ======= =======
</TABLE>
-19-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW (CONTINUED)
The following Same Station information (in thousands) gives effect to
the acquisition of the Dothan Station and Brissette and Stauffer Stations as if
such transactions were consummated on January 1, 1995. The Same Station
information for the three months and nine months ended September 30, 1995 and
1996 does not purport to represent what the Company's results of operations
would have been if such transactions had been effected at such date and do not
purport to project results of operations of the Company in any future period.
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
---------------------------- ---------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues............... $28,092 $29,786 $87,845 $89,681
------- ------- ------- -------
Operating expenses:
Selling, technical and
program expenses...... 12,672 14,281 38,027 41,764
General and
administrative......... 4,590 5,039 13,964 14,761
Depreciation and amorti-
ization............... 7,939 7,777 23,249 22,502
Corporate............... 635 693 2,021 2,043
------- ------- ------- -------
25,836 27,790 77,261 81,070
------- ------- ------- -------
OPERATING INCOME.... $ 2,256 $ 1,996 $10,584 $ 8,611
======= ======= ======= =======
Broadcast cash flow........ $10,885 $11,285 $35,902 $34,113
Broadcast cash flow
margin.................. 38.7% 37.9% 40.9% 38.0%
Adjusted EBITDA............ $10,059 $10,592 $33,242 $29,029
Adjusted EBITDA margin..... 35.8% 35.6% 37.8% 32.4%
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1995
Net revenues for the three months ended September 30, 1996 increased
$17.6 million or 144.3% to $29.8 million from $12.2 million for the three months
ended September 30, 1995 primarily as a result of the acquisition on June 6,
1996 of the Acquired Stations which increased net revenue by $17.8 million. On a
Same Station basis, net revenues for the three months ended September 30, 1996
remained flat from the three months ended September 30, 1995. On a Same Station
basis, political advertising revenue for the three months ended September 30,
1996 increased by $2.1 million to $2.3 million. Gross revenues on a Same Station
basis excluding political advertising revenue decreased $0.2 million or 0.5%
from the three months ended September 30, 1995.
Net revenues during the three month period ended September 30, 1996 were
adversely affected by unexpected weakness in advertising revenues for the
Company's 12 CBS affiliated stations and six ABC affiliated stations which
experienced a decline in audience shares. On a Same Station basis, net revenues
of the Company's CBS affiliated stations increased by 0.3% and net revenues
of the Company's ABC affiliated stations increased by 0.3%, while net revenues
of the Company's NBC affiliated stations increased by 23.8%.
-20-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1995 (CONTINUED)
Operating expenses for the three months ended September 30, 1996
increased $18.6 million or 203.7% to $27.8 million from $9.2 million for the
three months ended September 30, 1995. Of the increase in operating expenses,
$17.4 million was attributable to the acquisition of the Acquired Stations. As a
percentage of net revenues, operating expenses increased to 93.3% from 75.0% in
the three months ended September 30, 1995, primarily as a result of an increase
of $6.4 million in depreciation and amortization expense. On a Same Station
basis, operating expenses for the three months ended September 30, 1996
increased $2.0 million or 7.6% from the three months ended September 30, 1995.
Operating expenses as a percentage of net revenues on a Same Station basis
increased from 91.2% for the three months ended September 30, 1995 to 93.3% in
the three months ended September 30, 1996.
Operating income for the three months ended September 30, 1996 decreased
$1.0 million or 34.3% to $2.0 million from $3.0 million for the three months
ended September 30, 1995.
Financial (expenses), net for the three months ended September 30, 1996
increased $6.2 million or 153.1% to $10.3 million from $4.1 million in the three
months ended September 30, 1995, due to the Company's higher debt level
following the completion of the financing of the purchase price for the Acquired
Stations in June 1996.
Income tax benefit for the three months ended September 30, 1996 was
$3.1 million compared to none for the three months ended September 30, 1995.
Reductions in the deferred tax liabilities related to the acquisitions and the
creation of deferred tax assets generated the income tax benefit for the three
months ended September 30, 1996. For the three months ended September 30, 1995
the Company recognized no income tax benefit due to its "S" Corporation status.
Net loss for the three months ended September 30, 1996 was $5.2 million
as compared to net loss of $1.0 million for the three months ended September 30,
1995.
Broadcast cash flow for the three months ended September 30, 1996
increased $6.4 million or 131.5% to $11.3 million from $4.9 million for the
three months ended September 30, 1995 primarily as a result of the acquisition
of the Acquired Stations. As a percentage of net revenues, broadcast cash flow
margin decreased to 37.9% for the three months ended September 30, 1996 from
40.0% for the three months ended September 30, 1995. On a Same Station basis,
broadcast cash flow for the three months ended September 30, 1996 increased $0.4
million or 3.7% to $11.3 million from $10.9 million for the three months ended
September 30, 1995. As a percentage of net revenues, broadcast cash flow margin
on a Same Station basis decreased to 37.9% for the three months ended September
30, 1996 from 38.7% for the three months ended September 30, 1995.
The decrease in broadcast cash flow and broadcast cash flow margin on a
Same Station basis for the three month period ended September 30, 1996 was
primarily related to an increase in operating expenses used in determining
broadcast cash flow and to lower than expected net revenues. Such operating
expenses increased by $1.6 million or 15.7% at the Acquired Stations for the
three months ended September 30, 1996 from the comparable period in 1995 and by
$0.5 million or 6.8% at the Company's previously owned stations.
-21-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995
Net revenues for the nine months ended September 30, 1996 increased
$23.6 million or 65.2% to $59.9 million from $36.3 million for the nine months
ended September 30, 1995 primarily as a result of the acquisition on June 6,
1996 of the Acquired Stations which increased net revenue by $22.8 million. On a
Same Station basis, net revenues for the nine months ended September 30, 1996
increased $1.8 million or 2.1% from the nine months ended September 30, 1995.
Political advertising revenue on a Same Station basis for the nine months ended
September 30, 1996 increased by $3.4 million to $3.9 million. Gross revenues on
a Same Station basis excluding political advertising revenue decreased $1.1
million or 1.1% from the nine months ended September 30, 1995.
Net revenues during the nine month period ended September 30, 1996 were
adversely affected by unexpected weakness in advertising revenues for the
Company's 12 CBS affiliated stations and six ABC affiliated stations which
experienced a decline in audience shares. On a Same Station basis, net revenues
of the Company's CBS affiliated stations decreased by 2.8% and net revenues of
the Company's ABC affiliated stations increased by 3.4%, while net revenues of
the Company's NBC affiliated stations increased by 9.2%.
Operating expenses for the nine months ended September 30, 1996
increased $25.4 million or 98.3% to $51.2 million from $25.8 million for the
nine months ended September 30, 1995. As a percentage of net revenues, operating
expenses increased to 85.4% from 71.2% in the nine months ended September 30,
1995, as a result of the acquisition of the Acquired Stations. On a Same Station
basis, operating expenses for the nine months ended September 30, 1996 increased
$3.8 million or 4.9% from the nine months ended September 30, 1995. Operating
expenses as a percentage of net revenues on a Same Station basis increased from
88.0% for the nine months ended September 30, 1995 to 90.5% in the nine months
ended September 30, 1996. The increases in operating expenses and operating
expense as a percentage of net revenues on a Same Station basis resulted in part
from increased expenses at certain of the Acquired Stations during the second
quarter prior to their acquisition by the Company.
Operating income for the nine months ended September 30, 1996 decreased
$1.7 million or 16.5% to $8.7 million from $10.4 million for the nine months
ended September 30, 1995.
Financial (expenses), net for the nine months ended September 30, 1996
increased $8.7 million or 77.5% to $20.0 million from $11.3 million in the nine
months ended September 30, 1995 due to the Company's higher debt level following
the completion of the financing of the purchase price for the Acquired Stations
in June 1996 and the offering of the Senior Secured Notes in March 1995.
Income tax benefit for the nine months ended September 30, 1996 was $3.1
million compared to none for the nine months ended September 30, 1995. The
income tax benefit for the nine months ended September 30, 1996 was attributable
to the reduction in deferred tax liabilities assumed in the acquisitions and the
creation of deferred tax assets. The income tax benefit was less than expected
for the nine months ended September 30, 1996 due to the Company's "S"
Corporation status prior to the acquisitions. There was no income tax benefit
for the nine months ended September 30, 1995 due to the Company's "S"
Corporation status.
-22-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1995 (CONTINUED)
Net loss for the nine months ended September 30, 1996 was $8.2 million
as compared to net income of $6.0 million for the nine months ended September
30, 1995. The nine months ended September 30, 1995 included an extraordinary
gain of $6.9 million on the early extinguishment of debt.
Broadcast cash flow for the nine months ended September 30, 1996
increased $8.2 million or 53.8% to $23.3 million from $15.1 million for the nine
months ended September 30, 1995 primarily as a result of the acquisition on June
6, 1996 of the Acquired Stations. As a percentage of net revenues, broadcast
cash flow margin decreased to 38.9% for the nine months ended September 30, 1996
from 41.8% for the nine months ended September 30, 1995. On a Same Station
basis, broadcast cash flow for the nine months ended September 30, 1996
decreased $1.8 million or 5.0% to $34.1 million from $35.9 million for the nine
months ended September 30, 1995. As a percentage of net revenues, broadcast cash
flow margin on a Same Station basis decreased to 38.0% for the nine months ended
September 30, 1996 from 40.9% for the nine months ended September 30, 1995.
The decrease in broadcast cash flow and broadcast cash flow margin on a
Same Station basis for the nine month period ended September 30, 1996 was
primarily related to an increase in operating expenses used in determining
broadcast cash flow and to lower than expected net revenues. Such operating
expenses increased by $3.8 million or 10.6% at the Acquired Stations for the
nine month period ended September 30, 1996 from the comparable period in 1995,
while such operating expenses at the Company's previously owned stations
remained flat.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities is the primary source of liquidity
for the Company and were $9.0 million for the nine months ended September 30,
1996 compared to $(3.5) million for the nine months ended September 30, 1995.
For the nine months ended September 30, 1996 cash flows from operating
activities included $2.5 million from the bonus payment from CBS. Cash flows
from operating activities included $2.8 million of collections on net accounts
receivable provided by Stauffer Communications, Inc. Noncash operating expenses,
including depreciation and amortization, increased due to the acquisition.
Depreciation and amortization caused operating income to decrease by $12.6
million without an effect on cash flow. For the nine months ended September
30, 1995 cash flows from operating activities primarily resulted from the
refinancing of substantially all of the Company's existing long-term debt in
March 1995 and the payment of $4.4 million of deferred and contingent interest
and $2.7 million of prepayment premiums. In addition, cash used by operations
included $6.9 million of noncash gain on early extinguishment of debt.
Cash Flows from Investing Activities were $(324.9) million for the nine
months ended September 30, 1996, compared to $(27.5) million for the nine months
ended September 30, 1995. For the nine months ended September 30, 1996, cash
flows from investing activities primarily resulted from the payment of $321.8
million for the Acquired Stations. For the nine months ended September 30, 1995
cash flows used in investing activities included $26.7 million paid to acquire
the Dothan Station.
-23-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Cash Flows from Financing Activities were $311.4 million for the nine
months ended September 30, 1996 compared to $33.1 million for the nine months
ended September 30, 1995. For the nine months ended September 30, 1996 cash
flows from financing activities resulted from the proceeds of financing
acquisitions. For the nine months ended September 30, 1995 cash flows from
financing activities primarily resulted from the issuance in March 1995 of
$135.0 million of the Company's Senior Secured Notes to refinance existing
indebtedness and finance the acquisition of the Dothan Station, offset by $96.0
million of principal payments on existing indebtedness.
THE FINANCING PLAN
The Company, together with its subsidiary Benedek Broadcasting,
implemented a financing plan in order to finance the acquisitions of the
Acquired Stations and to pay fees and expenses related thereto. The financing
plan consisted of (i) the offer and sale by the Company of the Senior
Subordinated Discount Notes to generate gross proceeds of $90.2 million, (ii)
the offer and sale by the Company of units consisting of Exchangeable Redeemable
Senior Preferred Stock and warrants to generate gross proceeds of $60.0 million,
(iii) Benedek Broadcasting borrowing $128.0 million pursuant to the Term Loan
Facilities of the Credit Agreement and (iv) the Company issuing an aggregate of
$45.0 million initial liquidation preference of Seller Junior Discount Preferred
Stock to GECC and Mr. Paul Brissette. Benedek Broadcasting also has available to
it $15.0 million under the Revolving Credit Facility of the Credit Agreement.
The Company believes that the financing plan will provide for a
long-term financing structure that will allow management to concentrate its
efforts on maximizing results of operations. The Company anticipates that
Adjusted EBITDA of Benedek Broadcasting will be sufficient to finance the
operating requirements of the Stations, debt service requirements and presently
anticipated capital expenditures until such time that the debt matures or
requires payment in full for at least the period until the Company is required
to make cash payments in respect of the Notes, the Exchangeable Preferred Stock
and the Seller Junior Discount Preferred Stock (approximately five years). The
Company anticipates that capital expenditures of approximately $6.0 million will
be required in the aggregate at the Acquired Stations. Such capital expenditures
will be financed either from cash provided by operations, borrowings under the
Revolving Credit Facility or purchase money financing.
The Senior Subordinated Discount Notes do not bear interest until May
15, 2001, and the Company will not be obligated to pay cash interest on the
Notes until November 15, 2001. In addition, for all dividend payment dates with
respect to the Exchangeable Redeemable Senior Preferred Stock and interest
payment dates with respect to the Exchange Debentures through and including July
1, 2001, the Company may, at its option, pay dividends by adding the amount
thereof to the then effective liquidation preference of the Exchangeable
Redeemable Senior Preferred Stock or pay interest on the Exchange Debentures by
issuing additional Exchange Debentures. For all dividend payment dates with
respect to the Seller Junior Discount Preferred Stock prior to October 1, 2001,
the Company is required to pay such dividends by adding the amount thereof to
the then effective liquidation preference of the Seller Junior Discount
Preferred Stock. In order for the Company to meet its debt service obligations
and pay required dividends after May 15, 2001 with respect to the Notes, after
July 1, 2001 with respect to the Exchangeable Preferred Stock or Exchangeable
Debentures, as the case may be, and from and after October 1, 2001 with respect
to the Seller Junior Discount Preferred Stock, the Company will need to
substantially increase broadcast cash flow at its stations.
-24-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FINANCING PLAN (CONTINUED)
In order to repay the Senior Subordinated Discount Notes and the Senior
Secured Notes at maturity, the Company will need to refinance all or a portion
of such Notes. The Company's ability to refinance the Senior Subordinated
Discount Notes and the Senior Secured Notes will depend upon the Company's
operating performance, as well as prevailing economic and market conditions,
levels of interest rates, refinancing costs and other factors, many of which are
beyond the Company's control.
The Company is a holding company that will derive all of its operating
income and Adjusted EBITDA from its sole subsidiary, Benedek Broadcasting, the
common stock of which, together with all other assets of the Company, have been
pledged to secure the Company's senior guarantee of all indebtedness of Benedek
Broadcasting outstanding under the Credit Agreement and in respect of the Senior
Secured Notes. As a holding company, the Company's ability to pay its
obligations, including its obligation to pay interest on and principal of the
Notes, whether at maturity, upon a Change of Control or otherwise, will be
dependent primarily upon receiving dividends and other payments or advances from
Benedek Broadcasting. Benedek Broadcasting is a separate and distinct legal
entity and has no obligation, contingent or otherwise, to pay any amounts to the
Company or to make funds available to the Company for debt service or any other
obligation. Although the Credit Agreement does not limit the ability of Benedek
Broadcasting to pay dividends or make other payments to the Company, the Senior
Secured Note Indenture does contain such limitations. However, after giving
effect to the implementation of the financing plan on June 6, 1996 (assuming the
contribution to the common equity of Benedek Broadcasting of net cash proceeds
of proceeds of approximately $188.5 million from the sale of the Notes, the
Units and the Seller Junior Discount Preferred Stock), as of September 30,
1996, Benedek Broadcasting could have distributed approximately $188.5 million
to the Company under such limitations.
The Credit Agreement entered into by Benedek Broadcasting as part of the
financing plan includes Term Loan Facilities and a Revolving Credit Facility.
The Term Loan Facilities consist of (i) Series A Facility of $70.0 million and
(ii) Series B Facility of $58.0 million. The Term Loan Facilities provide for
quarterly amortization until final maturity (except in the first year during
which amortization will be on a semiannual basis). The Series A Facility will
mature five years and the Series B Facility will mature six and one-half years
after the closing. Benedek Broadcasting will be required to make scheduled
amortization payments on the Term Loan Facilities, on an aggregate basis for
Series A and Series B Facilities, as follows: during the first year after
closing, $6.0 million; during the second year after closing, $11.0 million;
during the third year after closing, $14.5 million; during the fourth year after
closing, $16.0 million; during the fifth year after closing, $27.5 million;
during the sixth year after closing, $15.0 million; and during the first half of
the seventh year after closing, $38.0 million.
In addition, Benedek Broadcasting will be required to make prepayments
on the Term Loan Facilities under certain circumstances, including upon certain
asset sales and issuance of debt or equity securities. Benedek Broadcasting will
also be required to make prepayments on the Term Loan Facilities in an amount
equal to 50% of Benedek Broadcasting's excess cash flow (as defined). These
mandatory prepayments will be applied to prepay, on a pro rata basis, the Series
A and Series B Facilities. The Series A Facility bears interest, at Benedek
Broadcasting's option, at a base rate plus a spread or at a Eurodollar rate plus
a spread. The Series B Facility bears interest, at Benedek Broadcasting's
option, at a base rate plus a spread or at a Eurodollar rate plus a spread. The
margins above the base rate and the Eurodollar rate at which the Term Loan
Facilities and Revolving Credit Facility will bear interest are subject to
reductions at such times as certain leverage ratio performance tests are met.
-25-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FINANCING PLAN (CONTINUED)
Benedek Broadcasting will have the ability, subject to a borrowing base
and compliance with certain covenants and conditions, to borrow up to an
additional $15.0 million for general corporate purposes pursuant to the
revolving credit facility. The revolving credit facility has a term of five
years and is fully revolving until final maturity. The revolving credit facility
bears interest, at Benedek Broadcasting's option, at a base rate plus a spread
or at a Eurodollar rate plus a spread.
The Term Loan Facilities and the revolving credit facility are secured
by certain of Benedek Broadcasting's present and future property and assets. The
Term Loan Facilities are also guaranteed by BLC and will be secured by all of
the stock of BLC.
The Term Loan Facilities and the revolving credit facility contain
certain financial covenants, including, but not limited to, covenants related to
cash interest coverage, fixed charge coverage, bank debt/Adjusted EBITDA ratio,
total debt/Adjusted EBITDA ratio and minimum Adjusted EBITDA. In addition, the
Term Loan Facilities and the revolving credit facility contain other affirmative
and negative covenants relating to (among other things) liens, payments on other
debt, restricted junior payments (excluding distributions from Benedek
Broadcasting to the Company) transactions with affiliates, mergers and
acquisitions, sales of assets, leases, guarantees and investments. The Term Loan
Facilities and the revolving credit facility contain customary events of default
for highly-leveraged financings, including certain changes in ownership or
control of Benedek Broadcasting or the Company.
As a result of the lower than expected increases in net revenues on a
Same Station basis and the increases in operating expenses on a Same Station
basis at certain of the Acquired Stations during the second quarter prior to
their acquisition by the Company as described above, at September 30, 1996, the
Company did not meet certain financial ratios contained in the Credit Agreement.
The lenders under the Credit Agreement have agreed to waive such noncompliance.
In connection with such waiver, the Company agreed that for so long as its ratio
of debt to Adjusted EBITDA (as defined in the Credit Agreement) is in excess of
7.00:1.00, the Term Loan Facilities will bear interest at an additional spread
of 25 basis points from that originally provided for in the Credit Agreement. In
addition, the results for the second and third quarters of fiscal 1996 will
continue to affect the ability of the Company to meet financial ratios in the
Credit Agreement for the full fiscal 1996 year and during fiscal 1997. During
the fourth quarter of 1996, the Company intends to discuss with its bank lenders
a further amendment to the Credit Agreement. The Company believes such an
amendment will be required in order to avoid further noncompliance with
financial ratios contained in the Credit Agreement.
SEASONALITY
Net revenues and Adjusted EBITDA of the Company are generally higher
during the fourth quarter of each year, primarily due to increased expenditures
by advertisers in anticipation of holiday season consumer spending and an
increase in viewership during this period, and, to a lesser extent, during the
second quarter of each year.
-26-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
EMERGING ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock Based Compensation' in
October 1995, which establishes financial accounting and reporting standards for
stock based employee compensation plans, including stock purchase plans, stock
options, restricted stock, and stock appreciation rights. The Company has
elected to continue accounting for stock based compensation under Accounting
Principles Board Opinion No. 25. The disclosure requirements of SFAS No. 123
will be effective for the Company's financial statements beginning in 1996.
Management does not believe that the implementation of SFAS 123 will have a
material effect on its consolidated financial statements.
-27-
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibits
- ------- -----------------------
<S> <C>
3.1 - Certificate of Incorporation of the Registrant, incorporated by
reference to Exhibit 3.1 to the Registrant's Registration Statement on
Form S-4, File No. 333-09529, filed on August 2, 1996 (the "S-4
Registration Statement").
3.2 - By-laws of the Registrant, incorporated by reference to Exhibit 3.2
to the S-4 Registration Statement.
3.3 - Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 15.0% Exchangeable
Redeemable Senior Preferred Stock Due 2007 and Qualifications,
Limitations and Restrictions thereof, incorporated by reference to
Exhibit 3.3 to the S-4 Registration Statement.
3.4 - Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Series C Junior Discount
Preferred Stock and Qualifications, Limitations and Restrictions
thereof, incorporated by reference to Exhibit 3.4 to the S-4
Registration Statement.
4.1 - Indenture dated as of May 15, 1996 between the Registrant and United
States Trust Company of New York, relating to the 13 1/4% Senior
Subordinated Discount Notes due 2006, incorporated by reference to
Exhibit 4.1 to the S-4 Registration Statement.
4.2 - Form of 13 1/4% Senior Subordinated Discount Note due 2006 (included
in Exhibit 4.1 hereof), incorporated by reference to Exhibit 4.2 to
the S-4 Registration Statement.
4.3 - Indenture dated as of March 1, 1995 between Benedek Broadcasting
Corporation ("Benedek Broadcasting") and The Bank of New York,
relating to the 11 7/8% Senior Secured Notes due 2005 of Benedek
Broadcasting, incorporated by reference to Exhibit 4.3 to the S-4
Registration Statement.
4.4 - Form of 11 7/8% Senior Secured Note due 2005 of Benedek Broadcasting
(included in Exhibit 4.3 hereof), incorporated by reference to Exhibit
4.4 to the S-4 Registration Statement.
4.5 - Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 15.0% Exchangeable
Redeemable Senior Preferred Stock Due 2007 and Qualifications,
Limitations and Restrictions thereof (filed as Exhibit 3.3 hereof),
incorporated by reference to Exhibit 4.5 to the S-4 Registration
Statement.
4.6 - Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Series C Junior Discount
Preferred Stock and Qualifications, Limitations and Restrictions
thereof (filed as Exhibit 3.4 hereof), incorporated by reference to
Exhibit 4.6 to the S-4 Registration Statement.
</TABLE>
-28-
<PAGE>
<PAGE>
EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- -------------------
<S> <C>
4.7 - Warrant Agreement dated as of June 5, 1996 between the Registrant
and IBJ Schroder Bank & Trust Company with respect to Class A Common
Stock of the Registrant, incorporated by reference to Exhibit 4.7 to
the S-4 Registration Statement.
10.1 - Purchase Agreement dated May 30, 1996 between the Registrant and
Goldman, Sachs & Co., incorporated by reference to Exhibit 10.1 to the
S-4 Registration Statement.
10.2 - Exchange and Registration Rights Agreement dated May 30, 1996 between
the Registrant and Goldman, Sachs & Co. with respect to the 13 1/4%
Senior Subordinated Discount Notes, due 2006, of the Registrant,
incorporated by reference to Exhibit 10.2 to the S-4 Registration
Statement.
10.3 - Placement Agreement dated June 5, 1996 among the Registrant, Goldman,
Sachs & Co. and BT Securities Corporation, incorporated by reference
to Exhibit 10.3 to the S-4 Registration Statement.
10.4 - Exchange and Registration Rights Agreement dated June 5, 1996 among
the Registrant, Goldman, Sachs & Co. and BT Securities Corporation
with respect to the 15.0% Exchangeable Redeemable Senior Preferred
Stock due 2007 of the Registrant, incorporated by reference to Exhibit
10.4 to the S-4 Registration Statement.
10.5 - Warrant Agreement dated as of June 5, 1996 between the Registrant and
IBJ Schroder Bank & Trust Company (filed as Exhibit 4.7 hereof),
incorporated by reference to Exhibit 10.5 to the S-4 Registration
Statement.
10.6 - Contingent Warrant Escrow Agreement dated June 5, 1996 between the
Registrant and IBJ Schroder Bank & Trust Company, incorporated by
reference to Exhibit 10.6 to the S-4 Registration Statement.
10.7 - Common Stock Registration Rights Agreement dated as of June 5, 1996
among the Registrant, Goldman, Sachs & Co. and BT Securities
Corporation, incorporated by reference to Exhibit 10.7 to the S-4
Registration Statement.
10.8 - Credit Agreement dated as of June 6, 1996 among the Registrant,
Benedek Broadcasting, the Lenders listed therein, Pearl Street L.P.,
Goldman, Sachs & Co. and Canadian Imperial Bank of Commerce, New York
Agency, incorporated by reference to Exhibit 10.8 to the S-4
Registration Statement.
10.9 - Guaranty dated as of June 6, 1996 by the Registrant in favor of
Canadian Imperial Bank of Commerce, New York Agency, incorporated by
reference to Exhibit 10.9 to the S-4 Registration Statement.
10.10 - Pledge Agreement dated as of June 6, 1996 between the Registrant and
Canadian Imperial Bank of Commerce, New York Agency, incorporated by
reference to Exhibit 10.10 to the S-4 Registration Statement.
</TABLE>
-29-
<PAGE>
<PAGE>
EXHIBITS AND REPORTS ON FORM 8-K (CONTINUED)
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibits
- ------- -----------------------
<S> <C>
10.11 - Security Agreement dated as of June 6, 1996 between the Registrant
and Canadian Imperial Bank of Commerce, New York Agency, incorporated
by reference to Exhibit 10.11 to the S-4 Registration Statement.
10.12 - Collateral Account Agreement dated as of June 6, 1996 between the
Registrant and Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.12 to the S-4 Registration
Statement.
10.13 - Third Party Account Agreement dated as of June 6, 1996 among the
Registrant, AMCORE Bank, N.A., Rockford and Canadian Imperial Bank of
Commerce, New York Agency, incorporated by reference to Exhibit 10.13
to the S-4 Registration Statement.
10.14 - Form of Indemnity Agreement between the Registrant and each of its
executive officers and directors, incorporated by reference to Exhibit
10.14 to the S-4 Registration Statement.
10.15 - Option Agreement dated as of June 6, 1996 between the Registrant and
K. James Yager, incorporated by reference to Exhibit 10.15 to the S-4
Registration Statement.
10.16 - Employment Agreement dated as of June 6, 1996 between the Registrant
and A. Richard Benedek, incorporated by reference to Exhibit 10.16 to
the S-4 Registration Statement.
10.17 - Employment Agreement dated as of June 6, 1996 between the Registrant
and K. James Yager, incorporated by reference to Exhibit 10.17 to the
S-4 Registration Statement.
10.18 - Employment Agreement dated as of March 8, 1996 between the
Registrant and Douglas E. Gealy, incorporated by reference to Exhibit
10.18 to the S-4 Registration Statement.
10.19 - Employment Agreement dated as of June 6, 1996 between the Registrant
and Ronald L. Lindwall, incorporated by reference to Exhibit 10.19 to
the S-4 Registration Statement.
10.20 - Employment Agreement dated as of June 6, 1996 between the Registrant
and Terrance F. Hurley, incorporated by reference to Exhibit 10.20 to
the S-4 Registration Statement.
*10.21 - Limited Waiver and First Amendment to Credit Agreement dated as of
October 31, 1996 among the Registrant, Benedek Communications
Corporation, Goldman Sachs Credit Partners L.P., the lenders listed
therein and Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent.
*27 - Financial Data Schedule Pursuant to Article 5 of Regulation S-X.
</TABLE>
- ------------------
* Filed herewith
(b)Reports on Form 8-K
None.
-30-
<PAGE>
<PAGE>
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.
BENEDEK COMMUNICATIONS CORPORATION
----------------------------------
(Registrant)
By: /S/ RONALD L. LINDWALL
--------------------------------------
Ronald L. Lindwall
Senior Vice President and Chief
Financial Officer
(Authorized Officer and Principal
Accounting Officer)
Date: November 14, 1996
--------------------
-31-
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- ----------------
<S> <C> <C>
3.1 - Certificate of Incorporation of the Registrant, incorporated by
reference to Exhibit 3.1 to the Registrant's Registration Statement on
Form S-4, File No. 333-09529, filed on August 2, 1996 (the "S-4
Registration Statement").
3.2 - By-laws of the Registrant, incorporated by reference to Exhibit 3.2
to the S-4 Registration Statement.
3.3 - Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 15.0% Exchangeable
Redeemable Senior Preferred Stock Due 2007 and Qualifications,
Limitations and Restrictions thereof, incorporated by reference to
Exhibit 3.3 to the S-4 Registration Statement.
3.4 - Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Series C Junior Discount
Preferred Stock and Qualifications, Limitations and Restrictions
thereof, incorporated by reference to Exhibit 3.4 to the S-4
Registration Statement.
4.1 - Indenture dated as of May 15, 1996 between the Registrant and United
States Trust Company of New York, relating to the 13 1/4% Senior
Subordinated Discount Notes due 2006, incorporated by reference to
Exhibit 4.1 to the S-4 Registration Statement.
4.2 - Form of 13 1/4% Senior Subordinated Discount Note due 2006 (included
in Exhibit 4.1 hereof), incorporated by reference to Exhibit 4.2 to
the S-4 Registration Statement.
4.3 - Indenture dated as of March 1, 1995 between Benedek Broadcasting
Corporation ("Benedek Broadcasting") and The Bank of New York,
relating to the 11 7/8% Senior Secured Notes due 2005 of Benedek
Broadcasting, incorporated by reference to Exhibit 4.3 to the S-4
Registration Statement.
4.4 - Form of 11 7/8% Senior Secured Note due 2005 of Benedek Broadcasting
(included in Exhibit 4.3 hereof), incorporated by reference to Exhibit
4.4 to the S-4 Registration Statement.
4.5 - Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 15.0% Exchangeable
Redeemable Senior Preferred Stock Due 2007 and Qualifications,
Limitations and Restrictions thereof (filed as Exhibit 3.3 hereof),
incorporated by reference to Exhibit 4.5 to the S-4 Registration
Statement.
4.6 - Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Series C Junior Discount
Preferred Stock and Qualifications, Limitations and Restrictions
thereof (filed as Exhibit 3.4 hereof), incorporated by reference to
Exhibit 4.6 to the S-4 Registration Statement.
</TABLE>
-32-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- ----------------
<S> <C> <C>
4.7 - Warrant Agreement dated as of June 5, 1996 between the Registrant
and IBJ Schroder Bank & Trust Company with respect to Class A Common
Stock of the Registrant, incorporated by reference to Exhibit 4.7 to
the S-4 Registration Statement.
10.1 - Purchase Agreement dated May 30, 1996 between the Registrant and
Goldman, Sachs & Co., incorporated by reference to Exhibit 10.1 to the
S-4 Registration Statement.
10.2 - Exchange and Registration Rights Agreement dated May 30, 1996 between
the Registrant and Goldman, Sachs & Co. with respect to the 13 1/4%
Senior Subordinated Discount Notes, due 2006, of the Registrant,
incorporated by reference to Exhibit 10.2 to the S-4 Registration
Statement.
10.3 - Placement Agreement dated June 5, 1996 among the Registrant, Goldman,
Sachs & Co. and BT Securities Corporation, incorporated by reference
to Exhibit 10.3 to the S-4 Registration Statement.
10.4 - Exchange and Registration Rights Agreement dated June 5, 1996 among
the Registrant, Goldman, Sachs & Co. and BT Securities Corporation
with respect to the 15.0% Exchangeable Redeemable Senior Preferred
Stock due 2007 of the Registrant, incorporated by reference to Exhibit
10.4 to the S-4 Registration Statement.
10.5 - Warrant Agreement dated as of June 5, 1996 between the Registrant and
IBJ Schroder Bank & Trust Company (filed as Exhibit 4.7 hereof),
incorporated by reference to Exhibit 10.5 to the S-4 Registration
Statement.
10.6 - Contingent Warrant Escrow Agreement dated June 5, 1996 between the
Registrant and IBJ Schroder Bank & Trust Company, incorporated by
reference to Exhibit 10.6 to the S-4 Registration Statement.
10.7 - Common Stock Registration Rights Agreement dated as of June 5, 1996
among the Registrant, Goldman, Sachs & Co. and BT Securities
Corporation, incorporated by reference to Exhibit 10.7 to the S-4
Registration Statement.
10.8 - Credit Agreement dated as of June 6, 1996 among the Registrant,
Benedek Broadcasting, the Lenders listed therein, Pearl Street L.P.,
Goldman, Sachs & Co. and Canadian Imperial Bank of Commerce, New York
Agency, incorporated by reference to Exhibit 10.8 to the S-4
Registration Statement.
10.9 - Guaranty dated as of June 6, 1996 by the Registrant in favor of
Canadian Imperial Bank of Commerce, New York Agency, incorporated by
reference to Exhibit 10.9 to the S-4 Registration Statement.
10.10 - Pledge Agreement dated as of June 6, 1996 between the Registrant and
Canadian Imperial Bank of Commerce, New York Agency, incorporated by
reference to Exhibit 10.10 to the S-4 Registration Statement.
</TABLE>
-33-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- ----------------
<S> <C> <C>
10.11 - Security Agreement dated as of June 6, 1996 between the Registrant
and Canadian Imperial Bank of Commerce, New York Agency, incorporated
by reference to Exhibit 10.11 to the S-4 Registration Statement.
10.12 - Collateral Account Agreement dated as of June 6, 1996 between the
Registrant and Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.12 to the S-4 Registration
Statement.
10.13 - Third Party Account Agreement dated as of June 6, 1996 among the
Registrant, AMCORE Bank, N.A., Rockford and Canadian Imperial Bank of
Commerce, New York Agency, incorporated by reference to Exhibit 10.13
to the S-4 Registration Statement.
10.14 - Form of Indemnity Agreement between the Registrant and each of its
executive officers and directors, incorporated by reference to Exhibit
10.14 to the S-4 Registration Statement.
10.15 - Option Agreement dated as of June 6, 1996 between the Registrant and
K. James Yager, incorporated by reference to Exhibit 10.15 to the S-4
Registration Statement.
10.16 - Employment Agreement dated as of June 6, 1996 between the Registrant
and A. Richard Benedek, incorporated by reference to Exhibit 10.16 to
the S-4 Registration Statement.
10.17 - Employment Agreement dated as of June 6, 1996 between the Registrant
and K. James Yager, incorporated by reference to Exhibit 10.17 to the
S-4 Registration Statement.
10.18 - Employment Agreement dated as of March 8, 1996 between the
Registrant and Douglas E. Gealy, incorporated by reference to Exhibit
10.18 to the S-4 Registration Statement.
10.19 - Employment Agreement dated as of June 6, 1996 between the Registrant
and Ronald L. Lindwall, incorporated by reference to Exhibit 10.19 to
the S-4 Registration Statement.
10.20 - Employment Agreement dated as of June 6, 1996 between the Registrant
and Terrance F. Hurley, incorporated by reference to Exhibit 10.20 to
the S-4 Registration Statement.
*10.21 - Limited Waiver and First Amendment to Credit Agreement dated as of
October 31, 1996 among the Registrant, Benedek Communications
Corporation, Goldman Sachs Credit Partners L.P., the lenders listed
therein and Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent.
*27 - Financial Data Schedule Pursuant to Article 5 of Regulation S-X.
</TABLE>
- ------------------
* Filed herewith
-34-
<PAGE>
<PAGE>
EXECUTION
BENEDEK BROADCASTING CORPORATION
BENEDEK COMMUNICATIONS CORPORATION
LIMITED WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT
This LIMITED WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT (this
"WAIVER AND AMENDMENT") is dated as of October 31, 1996, and entered into by and
among Benedek Broadcasting Corporation, a Delaware corporation ("COMPANY"),
Benedek Communications Corporation, a Delaware corporation ("BCC"), Goldman
Sachs Credit Partners L.P. (as successor to Pearl Street L.P.; "GSCP") and the
other financial institutions listed on the signature pages hereof ("LENDERS"),
and Canadian Imperial Bank of Commerce, New York Agency ("CIBC-NYA"), as
Administrative Agent, and for purposes of Section 11 hereof, Benedek License
Corporation, a Delaware corporation ("LICENSE SUB"), and is made with reference
to that certain Credit Agreement dated as of June 6, 1996 (the "CREDIT
AGREEMENT"), by and among Company, BCC, Lenders, GSCP, as Arranging Agent,
Goldman, Sachs & Co., as Syndication Agent, and CIBC-NYA, as Administrative
Agent and Collateral Agent. Capitalized terms used herein without definition
shall have the same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, BCC and Company have requested Lenders to waive compliance
with the leverage ratio covenants in the Credit Agreement and Lenders desire to
grant such waiver; and
WHEREAS, BCC, Company and Lenders desire to amend the Credit Agreement
to increase the interest rate applicable to the Loans, subject to reduction
under certain conditions;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. WAIVER
Subject to the terms and conditions set forth herein and in reliance on
the representations and warranties of BCC and Company herein contained, Lenders
hereby
1
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waive compliance with certain provisions of subsection 6.6 of the Credit
Agreement as follows:
(A) MINIMUM FIXED CHARGE COVERAGE RATIO. Lenders hereby waive
compliance with the provisions of subsection 6.6B with respect to the
Fixed Charge Coverage Ratio for the Fiscal Quarter ended September 30,
1996; provided that the Fixed Charge Coverage Ratio for such Fiscal
Quarter is not less than 1.08:1.00.
(B) MAXIMUM LEVERAGE RATIO. Lenders hereby waive compliance
with the provisions of subsection 6.6C with respect to the Leverage
Ratio as of September 30, 1996; provided that the Leverage Ratio as of
such date is not greater than 7.65:1.00.
(C) MAXIMUM CREDIT FACILITIES LEVERAGE RATIO. Lenders hereby
waive compliance with the provisions of subsection 6.6D with respect to
the Credit Facilities Leverage Ratio as of September 30, 1996; provided
that the Credit Facilities Leverage Ratio as of such date is not
greater than 2.80:1.00.
SECTION 2. LIMITATION OF WAIVER
Without limiting the generality of the provisions of subsection 9.6 of
the Credit Agreement, the waiver set forth above shall be limited precisely as
written and relates solely to the noncompliance by BCC and Company with the
provisions of subsections 6.6B, 6.6C and 6.6D of the Credit Agreement in the
manner and to the extent described above, and nothing in this Waiver and
Amendment shall be deemed to:
(A) constitute a waiver of compliance by BCC or Company with
respect to (i) subsection 6.6 of the Credit Agreement in any other
instance or (ii) any other term, provision or condition of the Credit
Agreement or any other instrument or agreement referred to therein; or
(B) prejudice any right or remedy that Agents or any Lender may
now have (except to the extent such right or remedy was based upon
existing defaults that will not exist after giving effect to this
Waiver and Amendment) or may have in the future under or in connection
with the Credit Agreement or any other instrument or agreement referred
to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
SECTION 3. AMENDMENTS TO CREDIT AGREEMENT
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Subsection 1.1 of the Credit Agreement is hereby amended by deleting
the definitions of "Applicable Margin" and "Pricing Reduction" in their entirety
and substituting the following therefor:
"APPLICABLE MARGIN" means, for each AXEL Series A, AXEL Series
B and Revolving Loan, as of any date of determination, a percentage per
annum as set forth below less the Pricing Reduction, if any:
<TABLE>
<CAPTION>
==============================================================================================================
AXELS SERIES A AXELS SERIES B REVOLVING LOANS
- --------------------------------------------------------------------------------------------------------------
BASE RATE EURODOLLAR BASE RATE EURODOLLAR BASE RATE EURODOLLAR
LOANS RATE LOANS LOANS RATE LOANS LOANS RATE LOANS
==============================================================================================================
<S> <C> <C> <C> <C> <C>
2.25% 3.25% 2.75% 3.75% 2.25% 3.25%
==============================================================================================================
</TABLE>
After October 1, 1996, any change in the Applicable Margin resulting
from a Pricing Reduction shall become effective on the day following
delivery of the relevant Compliance Certificate to Administrative Agent
and Lenders and shall remain in effect through the next scheduled date
for delivery of a Compliance Certificate.
"PRICING REDUCTION" means (i) from the Closing Date to (but not
including) October 1, 1996, a pricing reduction equal to 0.25%; (ii) if
at any time after October 1, 1996 the Leverage Ratio as of the end of
any Fiscal Quarter is less than 7.00:1.00, a pricing reduction equal to
0.25%; and (iii) if at any time after the first anniversary of the
Closing Date the Leverage Ratio as of the end of any Fiscal Quarter is
equal to or less than 5.75:1.00, a pricing reduction equal to 0.50%.
After October 1, 1996, the Pricing Reduction shall be determined by
reference to the Leverage Ratio set forth in the most recent financial
statements delivered by Company to Administrative Agent and Lenders
pursuant to clause (ii) or (iii) of subsection 5.1 (accompanied by a
Compliance Certificate delivered by Company pursuant to clause (iv) of
subsection 5.1). It is understood and agreed that the Pricing Reduction
set forth in clause (ii) and the Pricing Reduction set forth in clause
(iii) of this definition are not cumulative. Notwithstanding anything
herein to the contrary, at any time an Event of Default shall have
occurred and be continuing, the Pricing Reduction shall be zero.
SECTION 4. CONDITIONS TO EFFECTIVENESS
Notwithstanding anything to the contrary herein, this Waiver and
Amendment shall become effective only upon the satisfaction of the following
conditions precedent (the date of satisfaction of such conditions being referred
to herein as the "FIRST AMENDMENT EFFECTIVE DATE"):
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(A) BCC, Company and License Sub shall have delivered to
Administrative Agent sufficient originally executed copies for each
Lender and its counsel of this Waiver and Amendment; Administrative
Agent and Lenders constituting Requisite Lenders shall each have
executed a counterpart of this Waiver and Amendment; and Company and
Administrative Agent shall have received written or telephonic
notification of such execution by Requisite Lenders and authorization
of delivery thereof; and
(B) Administrative Agent shall have received from Company, for
distribution to each Lender that has executed and delivered a
counterpart of this Waiver and Amendment on or prior to 5:00 p.m. (New
York City time) on November 7, 1996, an amendment fee in an amount
equal to 0.05% of the combined AXEL Exposure and Revolving Loan
Exposure of such Lender.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Waiver and Amendment and
to amend the Credit Agreement in the manner provided herein, each of BCC and
Company hereby represents and warrants that after giving effect to this Waiver
and Amendment:
(A) CORPORATE POWER AND AUTHORITY. Each of BCC, Company and
License Sub has all requisite corporate power and authority to enter
into this Waiver and Amendment, and each of BCC and Company has all
requisite corporate power and authority to carry out the transactions
contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Waiver and Amendment.
(B) AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Waiver and Amendment and the performance of the Credit Agreement
as amended by this Waiver and Amendment (as so amended, the "AMENDED
AGREEMENT") have been duly authorized by all necessary corporate action
on the part of BCC, Company and License Sub.
(C) NO CONFLICT. The execution and delivery by each of BCC and
Company of this Waiver and Amendment and the performance by Company of
the Amended Agreement do not and will not (i) violate any provision of
any law or any governmental rule or regulation applicable to BCC,
Company or any of their respective Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of BCC or Company or any of their
respective Subsidiaries or any order, judgment or decree of any court
or other agency or government binding on BCC, Company or any of their
respective Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under
any Contractual Obligation of BCC, Company or any of their
respective Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the
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properties or assets of BCC, Company or any of their respective
Subsidiaries (other than Liens created under any of the Loan Documents
in favor of Collateral Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under
any Contractual Obligation of BCC, Company or any of their respective
Subsidiaries.
(D) GOVERNMENTAL CONSENTS. The execution and delivery by each
of BCC and Company of this Waiver and Amendment and the performance by
BCC and Company of the Amended Agreement do not and will not require
any registration with, consent or approval of or notice to, or other
action to, with or by, any federal, state or other governmental
authority or regulatory body.
(E) BINDING OBLIGATION. This Waiver and Amendment and the
Amended Agreement have been duly executed and delivered by each of BCC
and Company and are the legally valid and binding obligations of BCC
and Company, enforceable against BCC and Company in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles
relating to enforceability.
(F) INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of
the Credit Agreement are and will be true, correct and complete in all
material respects on and as of the First Amendment Effective Date to
the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date.
(G) ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated
by this Waiver and Amendment that would constitute an Event of Default
or a Potential Event of Default.
(H) NO CHANGE TO ORGANIZATIONAL DOCUMENTS. Neither the
Certificate of Incorporation nor the Bylaws of BCC or of Company has
been amended, supplemented or otherwise modified since the Closing
Date.
SECTION 6. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
(A) On and after the First Amendment Effective Date, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or
words or like
5
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import referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(B) Except as specifically amended by this Waiver and Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(C) The execution, delivery and performance of this Waiver and
Amendment shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy of Agent
or any Lender under, the Credit Agreement or any of the other Loan Documents.
SECTION 7. FEES AND EXPENSES.
Each of BCC and Company acknowledges that all costs, fees and expenses
as described in subsection 9.2 of the Credit Agreement incurred by Agents and
their respective counsel with respect to this Waiver and Amendment and the
documents and transactions contemplated hereby shall be for the account of BCC
and Company.
SECTION 8. HEADINGS.
Section and subsection headings in this Waiver and Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Waiver and Amendment for any other purpose or be given any
substantive effect.
SECTION 9. COUNTERPARTS
This Waiver and Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
6
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SECTION 10. GOVERNING LAW
THIS WAIVER AND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 11. ACKNOWLEDGEMENT AND CONSENT BY CREDIT SUPPORT PARTIES
BCC is a party to the BCC Pledge Agreement and the BCC Security
Agreement (collectively, the "BCC COLLATERAL DOCUMENTS") and the BCC Guaranty,
in each case as amended through the First Amendment Effective Date, pursuant to
which BCC has (a) guarantied the Obligations and (b) created Liens in favor of
Collateral Agent on certain Collateral and pledged certain Collateral to
Collateral Agent to secure the obligations of BCC under the BCC Guaranty.
License Sub is a party to the License Sub Guaranty, as amended through the First
Amendment Effective Date, pursuant to which License Sub has guarantied the
Obligations. BCC and License Sub are collectively referred to herein as the
"CREDIT SUPPORT PARTIES", and the BCC Guaranty, the BCC Collateral Documents and
the License Sub Guaranty are collectively referred to herein as the "CREDIT
SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Waiver and Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Waiver and Amendment. Each Credit Support Party hereby confirms that each Credit
Support Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guaranty or secure, as the case may be, to
the fullest extent possible the payment and performance of all "Guarantied
Obligations" and "Secured Obligations", as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Guarantied Obligations" or
"Secured Obligations", as the case may be, in respect of the Obligations of
Company now or hereafter existing under or in respect of the Amended Agreement
and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Waiver and Amendment. Each Credit Support
Party represents and warrants that all representations and warranties contained
in the Amended Agreement and the Credit Support Documents to which it is a
7
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<PAGE>
party or otherwise bound are true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Waiver and
Amendment, such Credit Support Party is not required by the terms of the Credit
Agreement or any other Loan Document to consent to the amendments to the Credit
Agreement effected pursuant to this Waiver and Amendment and (ii) nothing in the
Credit Agreement, this Waiver and Amendment or any other Loan Document shall be
deemed to require the consent of such Credit Support Party to any future
amendments to the Credit Agreement.
[Remainder of page intentionally left blank]
8
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
LENDERS:
GOLDMAN SACHS CREDIT PARTNERS
L.P.,
as a Lender
By: ________________________________________
Authorized Signatory
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY,
as a Lender and as Administrative Agent
By: CIBC Wood Gundy Securities Corp.,
as agent
By: ____________________________________
Managing Director
CIBC INC.,
as a Lender
By: CIBC Wood Gundy Securities Corp.,
as agent
By: ____________________________________
Managing Director
S-1
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<PAGE>
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR,
as a Lender
By: ________________________________________
Name:
Title:
CHL HIGH YIELD LOAN PORTFOLIO, A
UNIT OF THE CHASE MANHATTAN
BANK,
as a Lender
By: ________________________________________
Name:
Title:
ING CAPITAL ADVISORS, INC.,
AS AGENT FOR BANK SYNDICATION
ACCOUNT,
as a Lender
By: ________________________________________
Name:
Title:
S-2
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<PAGE>
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY,
as a Lender
By: ________________________________________
Name:
Title:
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.,
as a Lender
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By: ____________________________________
Name:
Title:
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY,
as a Lender
By: ________________________________________
Name:
Title:
S-3
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<PAGE>
PILGRIM AMERICA PRIME RATE
TRUST,
as a Lender
By: ________________________________________
Name:
Title:
PRIME INCOME TRUST,
as a Lender
By: ________________________________________
Name:
Title:
PROTECTIVE LIFE INSURANCE
COMPANY,
as a Lender
By: ________________________________________
Name:
Title:
SENIOR DEBT PORTFOLIO,
as a Lender
By: ________________________________________
Name:
Title:
S-4
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<PAGE>
RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS B.V.,
as a Lender
By: ________________________________________
Name:
Title:
STRATA FUNDING LTD.,
as a Lender
By: ________________________________________
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST,
as a Lender
By: ________________________________________
Name:
Title:
S-5
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<PAGE>
BCC AND COMPANY:
BENEDEK BROADCASTING
CORPORATION
By: ________________________________________
Name:
Title:
BENEDEK COMMUNICATIONS
CORPORATION
By: ________________________________________
Name:
Title:
BENEDEK LICENSE CORPORATION
By: ________________________________________
Name:
Title:
S-6
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,178,512
<SECURITIES> 0
<RECEIVABLES> 19,951,465
<ALLOWANCES> 422,178
<INVENTORY> 0
<CURRENT-ASSETS> 31,398,719
<PP&E> 121,790,941
<DEPRECIATION> 34,536,903
<TOTAL-ASSETS> 492,866,881
<CURRENT-LIABILITIES> 25,286,918
<BONDS> 348,753,814
<COMMON> 70,300
100,142,942
0
<OTHER-SE> (43,173,111)
<TOTAL-LIABILITY-AND-EQUITY> 492,866,881
<SALES> 67,327,612
<TOTAL-REVENUES> 68,638,196
<CGS> 8,736,975
<TOTAL-COSTS> 8,736,975
<OTHER-EXPENSES> 50,963,034
<LOSS-PROVISION> 218,861
<INTEREST-EXPENSE> 20,275,573
<INCOME-PRETAX> (11,309,193)
<INCOME-TAX> (3,077,179)
<INCOME-CONTINUING> (8,231,514)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,231,514)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<PAGE>
