<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 28, 1995
COMCAST CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 0-6983 23-1709202
- --------------- ---------------- --------------
(State or other (Commission file (IRS employer
jurisdiction of number) identification
incorporation) no.)
1500 Market Street, Philadelphia, PA 19102-2148
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 665-1700
--------------
<PAGE>
Item 5. Other Events.
In October 1995, Comcast Corporation (the "Company") announced its
agreement to acquire the cable television operations ("Scripps Cable") of The
E.W. Scripps Company ("E.W. Scripps") in exchange for shares of the Company's
Class A Special Common Stock, par value $1.00 per share (the "Class A Special
Common Stock"), worth $1.575 billion (the "Base Consideration"), subject to
certain closing adjustments (the "Scripps Transaction"). Scripps Cable passes
more than 1.2 million homes and serves more than 800,000 subscribers, with over
60% of the subscribers located in Sacramento, California and Chattanooga and
Knoxville, Tennessee. The acquisition is expected to close in the fourth quarter
of 1996, subject to shareholder and regulatory approval and certain other
conditions.
Pursuant to the Agreement and Plan of Merger dated as of October 28,
1995 (the "Merger Agreement"), incorporated by reference herein, by and among
the Company, E.W. Scripps, and Scripps Howard, Inc., a wholly owned
subsidiary of E.W. Scripps, E.W. Scripps will distribute to its shareholders
all assets other than Scripps Cable. Following such distribution, E.W.
Scripps will be merged with and into the Company (the "Merger") and each
share of E.W. Scripps common stock issued and outstanding immediately prior
to the Merger will be converted into a portion of the shares of the Class A
Special Common Stock to be paid as consideration in the Merger. Assuming
that (i) closing adjustments made to the Base Consideration result in a $17.1
million increase in the purchase price (estimated solely for purposes of the
unaudited pro forma condensed consolidated financial statements included
herein), and (ii) the Class A Special Common Stock is valued, as described
below, at $17.06 per share, the Company would issue to E.W. Scripps
shareholders an aggregate of approximately 93.3 million shares of Class A
Special Common Stock in the Merger, representing approximately 32.9% of such
class of stock outstanding as of June 30, 1996, on a pro forma basis.
For purposes of determining the number of shares of Class A Special
Common Stock to be delivered in the Merger, such stock will be valued on the
basis of the average closing price of the Class A Special Common Stock on The
Nasdaq Stock Market for 15 trading days randomly selected from the 40 trading
day period ending shortly before the closing date (the "Comcast Share
Price"); provided that the Comcast Share Price will be no greater than $23.09
and, except as provided below, no less than $17.06. If the Comcast Share
Price is below $17.06, E.W. Scripps has the right to terminate the Merger
Agreement, subject to the right of the Company to increase the number of
shares of Class A Special Common Stock to be delivered in the Merger to that
number of shares that would have been delivered if the Comcast Share Price
were not subject to the minimum price of $17.06 or to such lower number of
shares as may be agreed to by E.W. Scripps.
2
<PAGE>
Although the Company believes the consummation of the Scripps
Transaction is probable, no assurances can be given that the Scripps
Transaction will occur at all or occur in the foregoing manner.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS
The Company's Unaudited Pro Forma Condensed Consolidated Financial
Statements are included in this Report and are listed in the Index
to Unaudited Pro Forma Financial Information.
The audited combined financial statements of Scripps Cable for the
year ended December 31, 1995 are incorporated by reference from
the Company's Current Report on Form 8-K/A filed on July 22, 1996,
which filing incorporated such statements by reference from the
Form 8-K/A(5) of The E.W. Scripps Company (commission file no.
1-16914) dated July 18, 1996.
The unaudited combined financial statements of Scripps Cable for the
six months ended June 30, 1996 are incorporated by reference from the
Form 8-K/A(6) of The E.W. Scripps Company (commission file no.
1-16914) dated August 14, 1996.
(b) EXHIBITS
EXHIBIT NO.
10.1 Agreement and Plan of Merger, including certain exhibits
thereto, dated as of October 28, 1995, by and among The
E.W. Scripps Company, Scripps Howard, Inc. and Comcast
Corporation (incorporated by reference from Exhibit 10.1
to the Company's Current Report on Form 8-K dated
December 19, 1995).
3
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: August 21, 1996 COMCAST CORPORATION
By: /s/ Lawrence S. Smith
-----------------------
Lawrence S. Smith
Executive Vice President
4
<PAGE>
COMCAST CORPORATION
INDEX TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
Unaudited Pro Forma Financial Information F - 1
Unaudited Pro Forma Condensed Consolidated
Balance Sheet as of June 30, 1996 F - 2
Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the Six Months Ended June 30, 1996 F - 3
Unaudited Pro Forma Condensed Consolidated Statement
of Operations for the Year Ended December 31, 1995 F - 4
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements F - 5
<PAGE>
UNAUDITED PRO FORMA
FINANCIAL INFORMATION
In February 1995, the Company and Tele-Communications, Inc. ("TCI") acquired
all of the outstanding stock of QVC, Inc. ("QVC") not previously owned by them
(the "QVC Acquisition") for approximately $1.4 billion in cash. In October
1995, the Company announced its agreement to acquire the cable television
operations ("Scripps Cable") of The E.W. Scripps Company ("E.W. Scripps") in
exchange for shares of the Company's Class A Special Common Stock worth $1.575
billion, subject to certain closing adjustments (the "Scripps Transaction").
For a further description of the QVC Acquisition, the Scripps Transaction and
certain related transactions, see the notes to unaudited pro forma condensed
consolidated financial statements.
The following unaudited pro forma condensed consolidated financial statements
reflect the consolidated financial position of the Company and Scripps Cable
as of June 30, 1996, their consolidated operations for the six months ended
June 30, 1996 and their, along with QVC's, consolidated operations for the year
ended December 31, 1995. See the notes to unaudited pro forma condensed
consolidated financial statements for a description of the assumptions used in
preparing these unaudited pro forma condensed consolidated financial statements.
Although the Company believes consummation of the Scripps Transaction is
probable, no assurances can be given that it will occur at all or occur in the
manner assumed in the accompanying unaudited pro forma condensed consolidated
financial statements.
The unaudited pro forma condensed consolidated balance sheet assumes the
Scripps Transaction occurred on June 30, 1996. The unaudited pro forma
condensed consolidated statements of operations for the six months ended
June 30, 1996 and for the year ended December 31, 1995 assume the QVC
Acquisition and the Scripps Transaction occurred on January 1, 1995.
The unaudited pro forma condensed consolidated financial statements should be
read in conjunction with: 1) the historical consolidated financial statements
of the Company included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1995; 2) the historical condensed consolidated
financial statements included in the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1996; 3) the historical combined financial
statements of Scripps Cable for the year ended December 31, 1995 incorporated
by reference herein; and 4) the historical combined financial statements of
Scripps Cable for the six months ended June 30, 1996 incorporated by
reference herein.
The results presented in the unaudited pro forma condensed consolidated
statements of operations are not necessarily indicative of the results which
actually would have occurred had the QVC Acquisition and the Scripps
Transaction occurred on the dates indicated or which may result in the future.
F-1
<PAGE>
COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(D)
The Company Scripps Cable Pro Forma The Company
Historical Historical Adjustments Pro Forma
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash, cash equivalents and
short-term investments $541,590 $1,782 $ $543,372
Accounts receivable, net 340,006 10,598 350,604
Inventories, net 243,120 10,898 254,018
Prepaid charges and other 54,441 6,066 60,507
Deferred income taxes 63,912 5,421 69,333
---------- -------- ---------- -----------
Total current assets 1,243,069 34,765 1,277,834
Investments, principally in affiliates 1,135,104 1,135,104
Property and Equipment, net 1,957,586 314,363 317,852 (E.1.) 2,589,801
Deferred Charges, net 5,287,814 139,575 1,430,966 (E.2.,6.) 6,858,355
---------- -------- ---------- -----------
$9,623,573 $488,703 $1,748,818 $11,861,094
---------- -------- ---------- -----------
---------- -------- ---------- -----------
LIABILITIES AND STOCKHOLDERS'
(DEFICIENCY) EQUITY
Current Liabilities
Accounts payable and accrued expenses $895,682 $33,695 ($3,865) (E.3.) $925,512
Current portion of long-term debt 143,379 143,379
---------- -------- ---------- -----------
Total current liabilities 1,039,061 33,695 (3,865) 1,068,891
Long-term Debt, less current portion 7,120,289 7,120,289
Due to Affiliates 347,509 (347,509) (E.3.)
Deferred Income Taxes 1,515,538 101,911 513,712 (E.6.) 2,131,161
Minority Interest and Other 903,962 8,750 (8,750) (E.3.) 903,962
Stockholders' (Deficiency) Equity
Common stock 233,375 1,801 91,500 (E.4.,5.) 326,676
Additional capital 818,046 35,144 1,463,623 (E.4.,5.) 2,316,813
Accumulated deficit (2,030,633) (40,107) 40,107 (E.5.) (2,030,633)
Unrealized gains on marketable securities 42,080 42,080
Cumulative translation adjustments (18,145) (18,145)
---------- -------- ---------- -----------
Total stockholders' (deficiency) equity (955,277) (3,162) 1,595,230 636,791
---------- -------- ---------- -----------
$9,623,573 $488,703 $1,748,818 $11,861,094
---------- -------- ---------- -----------
---------- -------- ---------- -----------
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements.
F-2
<PAGE>
COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
(D)
The Company Scripps Cable Pro Forma The Company
Historical Historical Adjustments Pro Forma
---------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues, net $1,896,306 $153,432 ($463) (E.7.) $2,049,275
---------- -------- -------- ----------
Operating, Selling, General and
Administrative Expenses and Cost of Goods Sold 1,330,109 88,333 (463) (E.7.) 1,417,979
Depreciation and Amortization 324,272 27,923 68,007 (E.8.) 420,202
---------- -------- -------- ----------
1,654,381 116,256 67,544 1,838,181
---------- -------- -------- ----------
Operating Income 241,925 37,176 (68,007) 211,094
Investment (Income) Expense
Interest expense 267,993 17,406 (17,379) (E.9.) 268,020
Investment income (47,491) (47,491)
Equity in net losses of affiliates 60,321 60,321
Gain from equity offering of affiliate (40,638) (40,638)
Other 22,966 51 23,017
---------- -------- -------- ----------
263,151 17,457 (17,379) 263,229
---------- -------- -------- ----------
(Loss) Income Before Income Tax Expense
and Minority Interest (21,226) 19,719 (50,628) (52,135)
Income Tax Expense 24,612 7,925 (15,681) (E.10.) 16,856
Minority Interest (29,094) (29,094)
---------- -------- -------- ----------
(Loss) Income from Continuing Operations ($16,744) $11,794 ($34,947) ($39,897)
---------- -------- -------- ----------
---------- -------- -------- ----------
Loss from Continuing Operations Per Share ($0.07) ($0.12)
---------- ----------
---------- ----------
Weighted Average Number of the Company's
Common Shares Outstanding During the Period 237,624 93,301 (E.11.) 330,925
---------- -------- ----------
---------- -------- ----------
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements.
F-3
<PAGE>
COMCAST CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
(A)
QVC
The Company QVC Pro Forma
Historical Historical Adjustments
----------- ---------- -----------
<S> <C> <C> <C>
Revenues, net $3,362,946 $131,469 ($1,095) (B.1.)
---------- -------- --------
Operating, Selling, General and
Administrative Expenses and Cost of Goods Sold 2,344,103 108,044 (469) (B.1.)
Depreciation and Amortization 689,052 5,001 4,781 (B.1.,2.)
---------- -------- --------
3,033,155 113,045 4,312
---------- -------- --------
Operating Income 329,791 18,424 (5,407)
Investment (Income) Expense
Interest expense 524,727 125 12,256 (B.3.)
Investment income (229,848) (1,634) 348 (B.4.)
Equity in net losses of affiliates 86,618 2,285 5,480 (B.5.)
Other (6,296)
---------- -------- --------
375,201 776 18,084
---------- -------- --------
(Loss) Income Before Income Tax Expense
and Minority Interest (45,410) 17,648 (23,491)
Income Tax Expense 42,171 8,055 (8,134) (B.6.)
Minority Interest (49,732) (802) (B.7.)
---------- -------- --------
(Loss) Income from Continuing Operations ($37,849) $9,593 ($14,555)
---------- -------- --------
---------- -------- --------
Loss from Continuing Operations Per Share ($0.16)
----------
----------
Weighted Average Number of the Company's
Common Shares Outstanding During the Period 239,679
----------
----------
<CAPTION>
The Company (D) The Company
Pro Forma Scripps Cable Pro Forma
with Scripps Cable Pro Forma with QVC and
QVC Historical Adjustments Scripps Cable
---------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues, net $3,493,320 $279,482 ($766) (E.7.) $3,772,036
---------- -------- -------- ----------
Operating, Selling, General and
Administrative Expenses and Cost of Goods Sold 2,451,678 162,810 (766) (E.7.) 2,613,722
Depreciation and Amortization 698,834 54,099 136,104 (E.8.) 889,037
---------- -------- -------- ----------
3,150,512 216,909 135,338 3,502,759
---------- -------- -------- ----------
Operating Income 342,808 62,573 (136,104) 269,277
Investment (Income) Expense
Interest expense 537,108 35,258 (34,915) (E.9.) 537,451
Investment income (231,134) (231,134)
Equity in net losses of affiliates 94,383 94,383
Other (6,296) (2,288) (8,584)
---------- -------- -------- ----------
394,061 32,970 (34,915) 392,116
---------- -------- -------- ----------
(Loss) Income Before Income Tax Expense
and Minority Interest (51,253) 29,603 (101,189) (122,839)
Income Tax Expense 42,092 11,913 (31,297) (E.10.) 22,708
Minority Interest (50,534) (50,534)
---------- -------- -------- ----------
(Loss) Income from Continuing Operations ($42,811) $17,690 ($69,892) ($95,013)
---------- -------- -------- ----------
---------- -------- -------- ----------
Loss from Continuing Operations Per Share ($0.18) ($0.29)
---------- ----------
---------- ----------
Weighted Average Number of the Company's
Common Shares Outstanding During the Period 239,679 93,301 (E.11.) 332,980
---------- -------- ----------
---------- -------- ----------
</TABLE>
See notes to unaudited pro forma condensed consolidated financial statements.
F-4
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
QVC
A. SUMMARY OF TRANSACTIONS
In February 1995, the Company and Tele-Communications, Inc. ("TCI")
acquired all of the outstanding stock of QVC, Inc. and its subsidiaries
("QVC") not previously owned by them (approximately 65% of such
shares on a fully diluted basis) for $46, in cash, per share (the
"QVC Acquisition"), representing a total cost of approximately $1.4
billion. The QVC Acquisition, including the exercise of certain
warrants held by the Company, was financed with cash contributions
from the Company (see below) and TCI of $296.3 million and $6.6
million, respectively, borrowings of $1.1 billion under a $1.2
billion QVC credit facility and existing cash and cash equivalents
held by QVC. Following the acquisition, the Company and TCI own, through
their respective subsidiaries, 57.45% and 42.55%, respectively, of QVC.
The Company, through a management agreement, is responsible for the
day to day operations of QVC. The Company has accounted for the QVC
Acquisition under the purchase method and QVC was consolidated with the
Company effective February 1, 1995. QVC's historical results of
operations included in the unaudited pro forma condensed consolidated
statement of operations for the year ended December 31, 1995 represents
QVC's historical results of operations for the month ended January 31,
1995.
In January 1995, the Company exchanged its investments in Heritage
Communications, Inc. ("Heritage") with TCI for approximately 13.3 million
publicly-traded Class A common shares of TCI with a fair market value
of approximately $290.0 million. Shortly thereafter, the Company sold
approximately 9.1 million unrestricted TCI shares for total proceeds of
approximately $188.1 million (collectively, the "Heritage Transaction").
As a result of these transactions, the Company recognized a pre-tax gain
of $141.0 million in 1995.
The Company's cash contribution in connection with the QVC Acquisition was
funded, in part, by the cash proceeds from the Heritage Transaction, along
with a borrowing of $80.0 million under a subsidiary's credit facility.
F-5
<PAGE>
B. PRO FORMA ADJUSTMENTS
The following adjustments and elimination entries have been made to the
unaudited pro forma condensed consolidated statement of operations for the
year ended December 31, 1995 to reflect the QVC Acquisition:
1. Elimination of commissions and other payments by QVC to the Company.
2. Represents additional depreciation and amortization expense resulting
from the increased fair market value of the assets acquired in excess
of their historical book values and amortization of goodwill arising
from the acquisition. Depreciation expense is based on a weighted
average property and equipment life of approximately 7 years.
Amortization expense assumes a life of 30 years for goodwill and 10
years for cable television distribution rights. Debt issuance costs
are amortized over the term of the related debt.
3. Represents the increase in interest expense due to the incurrence of
additional long-term indebtedness, at a weighted average interest rate
of 8.3%.
4. Elimination of interest income on the Company's notes receivable from
Heritage, which were exchanged for TCI Shares in connection with the
Heritage Transaction.
5. Elimination of the Company's historical equity in the net income of
QVC. The Company historically accounted for its investment in QVC
under the equity method through the date of the QVC Acquisition.
6. Represents the adjustments to the tax provision resulting from the
pro forma adjustments.
7. Represents the minority interest resulting from TCI's 42.55% interest
in QVC.
F-6
<PAGE>
SCRIPPS CABLE
C. SUMMARY OF TRANSACTIONS
In October 1995, the Company announced its agreement to acquire the
cable television operations ("Scripps Cable") of The E.W. Scripps Company
("E.W. Scripps") in exchange for shares of the Company's Class A Special
Common Stock, par value $1.00 per share (the "Class A Special Common
Stock"), worth $1.575 billion (the "Base Consideration"), subject to
certain closing adjustments (the "Scripps Transaction"). Scripps Cable
passes more than 1.2 million homes and serves more than 800,000
subscribers, with over 60% of the subscribers located in Sacramento,
California and Chattanooga and Knoxville, Tennessee. The acquisition is
expected to close in the fourth quarter of 1996, subject to shareholder
and regulatory approval and certain other conditions.
Pursuant to the Agreement and Plan of Merger dated as of October 28, 1995
(the "Merger Agreement"), incorporated by reference herein, by and among
the Company, E.W. Scripps and Scripps Howard, Inc., a wholly owned
subsidiary of E.W. Scripps, E.W. Scripps will distribute to its
shareholders all assets other than Scripps Cable. Following such
distribution, E.W. Scripps will be merged with and into the Company (the
"Merger") and each share of E.W. Scripps common stock issued and
outstanding immediately prior to the Merger will be converted into a
portion of the shares of the Class A Special Common Stock to be paid as
consideration in the Merger. Assuming that (i) closing adjustments
made to the Base Consideration result in a $17.1 million increase in the
purchase price (estimated solely for purposes of the unaudited pro forma
condensed consolidated financial statements included herein), and (ii) the
Class A Special Common Stock is valued, as described below, at $17.06 per
share, the Company would issue to E.W. Scripps shareholders an aggregate
of approximately 93.3 million shares of Class A Special Common Stock in
the Merger, representing approximately 32.9% of such class of stock
outstanding as of June 30, 1996, on a pro forma basis.
For purposes of determining the number of shares of Class A Special Common
Stock to be delivered in the Merger, such stock will be valued on the basis
of the average closing price of the Class A Special Common Stock on The
Nasdaq Stock Market for 15 trading
F-7
<PAGE>
days randomly selected from the 40 trading day period ending shortly before
the closing date (the "Comcast Share Price"); provided that the Comcast
Share Price will be no greater than $23.09 and, except as provided below,
no less than $17.06. If the Comcast Share Price is below $17.06, E.W.
Scripps has the right to terminate the Merger Agreement, subject to the
right of the Company to increase the number of shares of Class A Special
Common Stock to be delivered in the Merger to that number of shares that
would have been delivered if the Comcast Share Price were not subject to
the minimum price of $17.06 or to such lower number of shares as may be
agreed to by E.W. Scripps.
Although the Company believes the consummation of the Scripps Transaction
is probable, no assurances can be given that the Scripps Transaction will
occur at all or occur in the manner assumed in the accompanying unaudited
pro forma condensed consolidated financial statements.
D. BASIS OF PRESENTATION
E.W. Scripps has historically been the holding company for its cable
television businesses along with other operations. As noted above, in the
Merger Agreement, E.W. Scripps intends to remove its non-cable television
businesses through a distribution to its shareholders prior to the closing
date. Accordingly, when the Company acquires E.W. Scripps, it will only
be purchasing Scripps Cable.
The historical combined financial statements of Scripps Cable included in
the unaudited pro forma condensed consolidated financial statements
represent the net assets that the Company will be acquiring and exclude the
assets, liabilities and results of operations of the non-cable television
operations of E.W. Scripps.
E. PRO FORMA ADJUSTMENTS
The following adjustments and elimination entries have been made to the
unaudited pro forma condensed consolidated balance sheet to reflect the
Scripps Transaction:
1. Represents the estimated fair value of the property and equipment to
be acquired in the Scripps Transaction in excess of the historical
book value of such property and equipment ($317.9 million). The
estimated fair value of the acquired property
F-8
<PAGE>
and equipment is subject to adjustment upon receipt by the Company of
an independent appraisal of Scripps Cable.
2. Represents the allocation of the total consideration in the Scripps
Transaction to deferred charges ($917.3 million), principally to
franchise acquisition costs and subscriber lists. The purchase price
allocation is subject to adjustment upon receipt by the Company of an
independent appraisal of Scripps Cable.
3. Represents the elimination of certain liabilities which will not be
assumed by the Company in the Scripps Transaction pursuant to the
terms of the Merger Agreement (primarily income taxes payable,
accruals for lawsuits and related settlements and amounts payable by
Scripps Cable to E.W. Scripps) ($360.1 million in total).
4. Represents the par value of the Class A Special Common Stock to be
issued by the Company for Scripps Cable ($93.3 million) and the
related additional capital ($1.499 billion), assuming that the
closing adjustments made to the Base Consideration result in a $17.1
million increase in the purchase price (estimated solely for purposes
of the unaudited pro forma condensed consolidated financial
statements), and assuming a Comcast Share Price of $17.06 per share.
5. Represents the elimination of Scripps Cable's historical equity.
6. Represents goodwill and deferred income taxes resulting from
differences in the book and tax bases of the assets of Scripps Cable
arising from the acquisition ($513.7 million).
The following adjustments and elimination entries have been made to the
unaudited pro forma condensed consolidated statements of operations to
reflect the Scripps Transaction:
7. Represents the elimination of commissions paid by QVC to Scripps
Cable.
8. Represents additional depreciation and amortization expense resulting
from the increased fair market value of the assets acquired in excess
of their historical book values and amortization of goodwill arising
from the acquisition, offset, in part, by the elimination of Scripps
Cable's historical goodwill amortization. Depreciation expense is
based on a weighted average property and equipment life of
approximately 10 years. Property and equipment of Scripps Cable
principally consists of operating facilities, which is typically
depreciated over a period of 12 years by the Company. Amortization
expense is based on an average life for deferred charges and
goodwill of 12 and 20 years, respectively.
F-9
<PAGE>
9. Represents the elimination of Scripps Cable's historical interest
expense on balances due to affiliates.
10. Represents the adjustments to the tax provision resulting from the
pro forma adjustments.
11. Represents the additional shares of Class A Special Common Stock to be
issued in connection with the Scripps Transaction.
F-10
