<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
( X ) Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Quarterly Period Ended:
SEPTEMBER 30, 1995
( ) 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 0-26928
THE PROVIDENCE JOURNAL COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 05-0481966
______________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
75 Fountain Street, Providence, RI 02902-9985
______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (401) 277-7000
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 twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such requirements for the past 90 days.
Yes X No ____
As of November 9, 1995, there were 38,500 shares of Class A Common
Stock and 46,817 shares of Class B Common Stock outstanding.
<PAGE> 2
THE PROVIDENCE JOURNAL COMPANY
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Financial information herein include consolidated data for The Providence
Journal Company ("Registrant" or "New Providence Journal" or "NPJ") and its
subsidiaries. New Providence Journal is the successor to Providence Journal
Company ("Old PJC" or "Providence Journal") which reorganized itself and
disposed of its cable operations on October 5, 1995 in a series of transactions
as described in Note 2 to the Condensed Consolidated Financial Statements.
Registrant and its subsidiaries are sometimes herein referred to collectively
as the "Company."
2
<PAGE> 3
<TABLE>
THE PROVIDENCE JOURNAL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
(UNAUDITED) (UNAUDITED)
----------- -----------
QUARTERS ENDED NINE MONTHS ENDED
-------------- -----------------
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1994 1995 1994 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues:
Newspaper advertising $22,687 $22,172 $69,835 $68,838
Newspaper circulation 7,890 8,147 23,125 24,168
Broadcasting 12,703 13,796 37,901 42,503
------- ------- ------- -------
Total net revenue 43,280 44,115 130,861 135,509
Expenses:
Operating 26,277 29,918 77,207 87,081
Selling, general and administrative 12,465 15,049 41,351 44,920
Depreciation and amortization 4,934 4,454 15,012 13,566
------- ------- ------- -------
Total expenses 43,676 49,421 133,570 145,567
Operating loss (396) (5,306) (2,709) (10,058)
Other income (expense):
Management fees from related parties 881 881 2,644 2,644
Interest expense (672) (373) (2,038) (1,549)
Equity in income (loss) of affiliated companies 628 (914) (1,761) (1,979)
Other income 396 1,764 1,944 2,815
------- ------- ------- -------
Total other income 1,233 1,358 789 1,931
Income (loss) from continuing operations, before income tax
benefits, discontinued operations, and extraordinary item 837 (3,948) (1,920) (8,127)
Income tax benefits (873) (1,120) (1,714) (3,072)
------- ------- ------- -------
Income (loss) from continuing operations, before discontinued
operations and extraordinary item 1,710 (2,828) (206) (5,055)
Loss from discontinued operations, net (3,821) - (6,854)
Loss from extraordinary item, net - (1,652) (1,652)
------- ------- ------- -------
Net loss ($2,111) ($4,480) ($7,060) ($6,707)
======= ======= ======= =======
Income (loss) per common share:
From continuing operations $20.11 ($33.39) ($2.43) ($59.69)
From discontinued operations (44.95) - (80.69) -
Extraordinary item - (19.51) - (19.51)
------- ------- ------- -------
Net loss per common share ($24.84) ($52.90) ($83.12) ($79.20)
======= ======= ======= =======
Weighted average shares outstanding 85,013 84,689 84,947 84,689
======= ======= ======= =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE> 4
<TABLE>
THE PROVIDENCE JOURNAL COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<CAPTION>
(UNAUDITED)
-----------
DECEMBER 31, SEPTEMBER 30,
1994 1995
------------ -------------
<S> <C> <C>
Current Assets:
Cash $1,319 $112
Accounts receivable, net of allowance for doubtful accounts of
$1,950 in 1994 and $1,442 in 1995 24,916 21,255
Television program rights, net 4,699 7,500
Inventories, prepaid expenses, deferrals and other current assets 25,119 24,811
Federal and state income taxes receivable 1,661 8,292
-------- --------
Total current assets 57,714 61,970
Investments in affiliated companies 83,407 99,087
Notes receivable 19,513 18,600
Television program rights, net 2,670 6,483
Property, plant, and equipment, net of accumulated depreciation
of $120,620 in 1994 and $124,683 in 1995 130,287 116,747
License costs, goodwill, intangibles and other assets, net 61,333 53,334
Net assets of discontinued operations 369,789 398,514
-------- --------
$724,713 $754,735
======== ========
Current liabilities:
Accounts payable $10,202 $12,179
Accrued expenses and other current liabilities 92,840 44,020
Current installments of long-term debt 13,588 100
Current portion of television program rights payable 4,542 9,945
-------- --------
Total current liabilities 121,172 66,244
Long term debt 247,173 337,300
Television program rights payable 2,822 4,525
Other liabilities and deferrals 67,659 68,921
-------- --------
Total liabilities 438,826 476,990
Commitments and contingencies
Stockholders' equity
Class A common stock, par value $2.50 per share; authorized 600,000
shares; issued 38,369 shares and 38,833 shares, in 1994 and 1995,
respectively 96 96
Class B common stock, par value $2.50 per share; authorized 300,000
shares; issued 47,281 shares and 46,817 shares in 1994 and 1995,
respectively 118 118
Additional capital 1,225 3,963
Retained earnings 291,791 277,818
Unrealized gain (loss) on securities held for sale, net 105 (1,669)
Treasury stock at cost - 961 shares and 333 shares in 1994 and 1995,
respectively (7,448) (2,581)
-------- --------
Total stockholders' equity 285,887 277,745
-------- --------
$724,713 $754,735
======== ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE> 5
<TABLE>
THE PROVIDENCE JOURNAL COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<CAPTION> (UNAUDITED)
--------------------------------
NINE MONTHS ENDED
--------------------------------
SEPTEMBER 30, SEPTEMBER 30,
1994 1995
------------- -------------
<S> <C> <C>
Operating activites:
Cash flows provided by (used in) continuing operations $ 14,172 $(22,423)
-------- --------
Investing activities:
Investments in and advances to affiliated companies (6,823) (17,380)
Additions to property, plant and equipment, net (4,247) (3,427)
Collections on notes receivable 2,757 913
Proceeds from sale of property and equipment 553 8,239
-------- --------
Cash flows used in investing activities of continuing operations (7,760) (11,655)
Decrease (increase) in investment in discontinued operations 16,202 (28,725)
-------- --------
Cash flows provided by (used in) investing activities 8,442 (40,380)
-------- --------
Financing activities:
Proceeds (payments) on long-term debt, net (5,553) 76,640
Payments on television program rights (5,097) (7,778)
Dividends paid (7,290) (7,266)
Purchase of treasury stock (4,291) -
-------- --------
Cash flows provided by (used in) financing activities
(22,231) 61,596
-------- --------
Increase (decrease) in cash 383 (1,207)
Cash at beginning of period 1,017 1,319
-------- --------
Cash at end of period $ 1,400 $ 112
======== ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMETNS
5
<PAGE> 6
THE PROVIDENCE JOURNAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Amounts in thousands, except per share data)
NOTE 1--BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
The results of operations for interim periods are not necessarily indicative
of the results that may be expected for the fiscal year. For further
information, refer to the consolidated financial statements and accompanying
notes of Providence Journal Company and Subsidiaries included in the
Registrant's Joint Proxy Statement-Prospectus as filed with the SEC on Form
S-4 dated August 31, 1995 which includes financial information for the year
ended December 31, 1994.
Certain amounts in the previously issued financial statements have been
reclassified to conform to the third quarter 1995 presentation. Financial
information in the Notes to Condensed Consolidated Financial Statements
excludes discontinued operations, except where noted.
NOTE 2--REORGANIZATION AND DISCONTINUED CABLE OPERATIONS
(a) Reorganization
On October 5, 1995, Old PJC (i) completed the acquisition of the 50% interest
in King Holding Corp. ("KHC") held by an unrelated third party for $265
million, including $5 million in transaction fees (the "Kelso Buyout"), (ii)
completed the transfer of all non-cable operations from Old PJC to the
Registrant in a tax-free reorganization pursuant to which the
shares of capital stock of the Registrant were distributed to the shareholders
of Old PJC (the "PJC Spin-Off"), and, (iii) following the PJC Spin-Off, at which
point Old PJC held only its cable television businesses and assets, merged
with and into Continental Cablevision, Inc. ("Continental").Immediately prior
to the Kelso Buyout, Continental purchased for $405 million all of the stock
of King Videocable Company ("KVC"), a wholly owned subsidiary of King
Broadcasting Company ("KBC"), which is wholly owned by KHC. As a result of
those transactions, the Registrant, became successor to Old PJC, in the same
lines of businesses, while simultaneously transferring its cable subsidiaries
to Continental for Continental stocks.
The Kelso Buyout will be recorded in the fourth quarter as a step acquisition
under the purchase method of accounting. The excess of the purchase price
over the net book value of assets acquired is estimated to be approximately
$178 million.
6
<PAGE> 7
THE PROVIDENCE JOURNAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
(Amounts in thousands, except per share data)
Proceeds from the disposal of the cable operations discussed above consisted
of a combination of Continental stock, which was received by Old PJC's
shareholders in connection with the merger, assumption of a portion of the
Registrant's and Old PJC's debt by Continental (see Note 3), and cash and
amounted to approximately $1.4 billion (including the $405 million from the
sale of KVC). The excess of the proceeds over the net assets of the
discontinued cable operations was approximately $580 million. (See note
8 for pro forma balance sheet information.)
<TABLE>
(b) Discontinued Cable Operations
The cable television operations are reported as discontinued operations
for all periods presented. Operating results of these discontinued
operations were as follows (in thousands):
<CAPTION>
QUARTERS ENDED NINE MONTHS ENDED
----------------------------------- -----------------------------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1994 1995 1994 1995
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 42,958 $ 52,609 $ 130,802 $ 148,268
Costs and expenses (44,155) (54,380) (134,199) (150,491)
Equity in income (loss) of
affiliates (2,530) 294 (3,057) 1,373
-------- -------- --------- ---------
Loss before income taxes (3,727) (1,477) (6,454) (850)
Income taxes 94 94 400 2,017
-------- -------- --------- ---------
Net loss* $ (3,821) $ (1,571) $ (6,854) $ (2,867)
======== ======== ========= =========
<FN>
* 1995 amounts were applied to accruals established at December 31, 1994.
</TABLE>
The net assets of the cable television operations transferred to
Continental, which were comprised primarily of property, plant and
equipment and intangible assets, were classified as net assets of discontinued
operations as of September 30, 1995 and December 31, 1994.
7
<PAGE> 8
THE PROVIDENCE JOURNAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
(Amounts in thousands, except per share data)
NOTE 3--DEBT
<TABLE>
At December 31, 1994, and September 30, 1995, long term debt consists of the
following:
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1994 1995
------------ -------------
<S> <C> <C>
Revolving Credit and term loan facility at rates of interest averaging
5.8% in 1994 and 7.52% in 1995, respectively $243,655 $327,500
Bonds payable at various rates of interest averaging 3.5% payable
through December 2022 9,900 9,900
Note payable at an annual rate of interest equal to 18% payable
through April 2002 (Repaid in July, 1995) 7,123 -
Other 83 -
-------- --------
Total long term debt $260,761 $337,400
Less current installments 13,588 100
-------- --------
Long-term debt, excluding current installments $247,173 $337,300
======== ========
</TABLE>
In July, 1995, the Company retired its 18% note payable for $8,734. The loss
on the early retirement of this debt amounted to $1,652 (net of income taxes
of $850) and is included as an extraordinary item in the Company's third
quarter statement of operations.
On October 5, 1995, in connection with the transactions discussed in Note 2,
Old PJC, prior to the PJC Spin-Off, incurred indebtedness to a subsidiary of
Continental in a principal amount of approximately $408 million net ("New
Cable Indebtedness"). Prior to the PJC Spin-Off, Old PJC used the proceeds
of the New Cable Indebtedness, the $405 million provided by the sale of KVC
and the NPJ Indebtedness (defined below) to (i) consummate the Kelso Buyout,
(ii) to repay substantially all outstanding indebtedness of Old PJC and KBC in
an aggregate amount of approximately $623 million, and (iii) to pay other
costs associated with the transactions discussed in Notes 2 and 7.
Additional indebtedness required to meet the foregoing obligations, among
others, was incurred by Old PJC and the Company in the principal amount of
$105 million (the "NPJ Indebtedness"). Following the PJC Spin-Off, the
Company had no obligations or liabilities with respect to the New Cable
Indebtedness, and Continental had no obligations or liabilities with respect
to the NPJ Indebtedness. In connection with the sale of KVC, KBC is
expected to have to pay approximately $120 million in taxes. In order to
assure Continental that such taxes will be paid, as part of the NPJ
Indebtedness, a $120 million letter of credit was issued to Continental.
8
<PAGE> 9
THE PROVIDENCE JOURNAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
(Amounts in thousands, except per share data)
The NPJ Indebtedness, including the $120 million letter of credit, was
incurred pursuant to a Credit Agreement entered into by the Company on
October 5, 1995 (the "Credit Agreement"). The Credit Agreement, which
consists of a term loan and revolving credit facilities, provides the Company
with maximum credit availability of $375 million. Credit availability under
the Credit Agreement decreases quarterly on a schedule commencing December
31, 1996, with a final maturity on June 30, 2004. The indebtedness
evidenced by the Credit Agreement is secured by guarantees from all of the
material subsidiaries of the Company and a first priority pledge of all such
material subsidiaries' capital stock. The Credit Agreement provides for
borrowings indexed, as the Company may from time to time elect, to the
Eurodollar rate, the certificate of deposit rate, or the "base" rate of the
agent, as from time to time in effect, plus the "spread" over such rates.
The actual "spread" over such rates will be determined by the ratio of the
total debt of the Company to the operating cash flow of the Company (as
defined by the Credit Agreement).
The Credit Agreement contains customary events of default, financial
covenants, covenants restricting the incurrence of debt (other than under
the Credit Agreement), investments and encumbrances on assets and covenants
limiting mergers and acquisitions. The Credit Agreement provides for the
mandatory prepayment of amounts outstanding and a reduction in the commitment
under certain circumstances.
In connection with the Credit Agreement, the Company will maintain its
existing interest rate swap arrangements in the notional amounts of $200
million in 1996, $175 million in 1997 and $150 million in 1998 and 1999. At
September 30, 1995, the amount of payment required to settle outstanding
interest rate swaps approximated $4,246.
NOTE 4 -- NET INCOME (LOSS) PER SHARE AND DIVIDENDS PER COMMON SHARE
Net income (loss) per share is based on the weighted average number of
shares of Class A and Class B common stock outstanding during the period.
Restricted stock units and stock options are both considered common stock
equivalents. Common stock equivalents were anti-dilutive for all periods in
which the common stock equivalents were outstanding.
Cash dividends of $28.60 and $85.80 per share of common stock were
declared in the quarter and nine months ended September 30, 1995,
respectively.
9
<PAGE> 10
THE PROVIDENCE JOURNAL COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Amounts in thousands, except per share data)
NOTE 5-- DEFERRED INCENTIVE COMPENSATION UNITS PLAN AND STOCK OPTION PLANS
(a) Deferred Incentive Compensation Units Plan
On September 29, 1995, the Company liquidated 85% of the units in the
Company's deferred incentive compensation units plan (the IUP Plan ) which
was paid $20,633 in cash and $6,600 in stock issued from treasury. Amounts
paid to participants in the plan and for the remaining units may be adjusted
if, upon the occurrence of a public offering of Continental Class A Common
Stock or certain other events, the price of Continental Class A Common Stock
is greater or less than the price attributed to such shares at the time 85%
of the units were liquidated.
(b) Stock Option Plans
As described in Note 11 of the 1994 consolidated financial statements
included in the Registrant's Joint Proxy Statement-Prospectus dated August
31, 1995, the Company has two stock option plans which were approved by
the stockholders of Old PJC at its Annual Meeting held on September 27, 1995
and assumed by the Company on October 5, 1995 as part of the PJC Spin-Off.
In connection with the reorganization and transactions described in Note 2,
and as provided under the terms of the plans, the option exercise price on
637 outstanding options was adjusted in order to preserve the economic value of
the outstanding options.
NOTE 6 -- INCOME TAXES
The Company's effective tax rate for continuing operations exceeds the federal
statutory income tax rate due principally to state taxes and permanent state
and federal tax differences related to the non-deductible amortization of
goodwill.
NOTE 7 -- CONTINGENT LIABILITIES
Pursuant to an agreement reached in 1987 (the "Redemption Agreement") the
Company repurchased approximately 8% of its outstanding shares of common
stock from an unaffiliated party and agreed to pay additional amounts upon the
occurrence of certain events. On July 14, 1995, the Company agreed to pay
this unaffiliated party an amount to be determined just prior to the merger
with Continental in full settlement under the terms of the Redemption
Agreement. Consequently, the Company paid this unaffiliated party
approximately $7,300 on October 5, 1995 in full settlement of the Redemption
Agreement.
See also "Legal Proceedings" discussed in Item 1 of Part II of this Form 10-Q.
10
<PAGE> 11
NOTE 8 --PRO FORMA BALANCE SHEET INFORMATION
The following pro forma balance sheet has been derived from the historical
consolidated balance sheets of the Company and KHC, after giving effect to the
transactions described in Note 2(a) which occurred on October 5, 1995, as if
such transactions had occurred on September 30, 1995.
Schedule 1 - Pro forma Balance Sheet as of September 30, 1995
Schedule 2 - Notes to Pro forma Balance Sheet
11
<PAGE> 12
SCHEDULE 1
----------
<TABLE>
PRO FORMA CONDENSED BALANCE SHEET
(IN THOUSANDS)
<CAPTION>
AS OF SEPTEMBER 30, 1995
-------------------------------------------------------------------------
KING NEW
PROVIDENCE HOLDING PRO FORMA ADJUSTMENTS PROVIDENCE
JOURNAL CORP. -------------------------- JOURNAL
HISTORICAL HISTORICAL DEBIT CREDIT PRO FORMA
---------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $112 $2,756 $1,040,000 (1) $265,000 (2) $2,868
622,932 (3)
120,000 (5)
22,067 (6)
10,001(10)
Accounts receivable, net 21,255 24,321 45,576
Television program rights 7,500 10,281 17,781
Prepaid expenses, deferrals and other current asssets 33,103 1,400 34,503
-------- -------- --------
Total Current Assets 61,970 38,758 100,728
Investments in and advances to affiliated companies 99,087 344,386 (4) 19,701
Notes receivable 18,600 18,600
Television program rights, net 6,483 693 7,176
Property, plant and equipment, at cost less accumulated
depreciation 116,747 57,776 174,523
Intangible assets and goodwill, net 32,978 118,972 214,217 (4) 366,167
Other assets 20,356 2,266 1,748 (6) 24,370
Net assets of discontinued cable operations 398,514 261,915 13,311 (6) 388,740 (7) 0
120,000 (5) 405,000 (1)
-------- -------- --------
Total Assets $754,735 $480,380 $711,265
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $56,199 $3,252 9,655 (6) 17,403 (7) $55,969
11,230(10)
Current installments of long-term debt 100 100
Current portion of television program rights payable 9,945 9,302 19,247
-------- -------- --------
Total Current Liabilities 66,244 12,554 75,316
Long-term debt 337,300 284,303 622,932 (3) 635,000 (1) 234,900
10,000 (6)
410,000 (7) 1,229(10)
Television program rights payable 4,525 1,402 5,927
Deferred income taxes 10,762 17,202 35,703 (4) 63,667
Other liabilities and deferrals 58,159 5,810 63,969
-------- -------- --------
Total Liabilities 476,990 321,271 443,779
-------- -------- --------
Continental class A common stock 584,769 (7) 584,769 (8) 0
Stockholders' Equity:
Class A common stock 96 58 (9) 38
Class B common stock 118 21 21 (4) 47
71 (9)
Additional paid-in capital 3,963 210,314 210,314 (4) 129 (9) 4,092
Retained earnings (deficit) 277,818 (51,226) 51,226 (4) 274,912
584,769 (8)
6,763 (4) 588,626 (7)
Unrealized loss on securities available for resale (1,669) (1,669)
Treasury stock (2,581) 7,353 (6) (9,934)
-------- -------- --------
Total Stockholders' Equity 277,745 159,109 267,486
-------- -------- --------
Total Liabilities and Stockholders' Equity $754,735 $480,380 $711,265
======== ======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO PRO FORMA CONDENSED BALANCE SHEET
12
<PAGE> 13
NOTES TO PRO FORMA CONDENSED BALANCE SHEET SCHEDULE 2
----------
(1) To record (i) the incurrence by Providence Journal prior to the Merger
of the New Cable Indebtedness and the NPJ Indebtedness in the amounts of
$410 million and $225 million, respectively, and (ii) the receipt by
Providence Journal prior to the Kelso Buyout of the purchase price for
the King Cable Purchase in the amount of $405 million.
(2) To record the purchase by Providence Journal of the 50% ownership in
KHC held by an unrelated third party for $265 million (including $5
million in transaction fees).
(3) To record the repayment of outstanding borrowings of $328.2 million and
$284.7 million under the Providence Journal and KBC revolving credit and
term loan facilities, respectively. Also to repay bridge loan of $10.0
million.
(4) To record the consolidation of KHC into Providence Journal. Also, to
record the excess purchase price over book value of $178 million
resulting from the KHC purchase as intangible assets of the PJC
Broadcasting Business and to adjust goodwill and deferred taxes by $36
million for the tax effect of the difference between the assigned
values and the tax bases of the assets and liabilities associated with
the purchase of KBC as required by FAS 109.
(5) To record the payment of taxes of approximately $120 million related to
the sale of KVC systems to Continental.
(6) To record the settlement of amounts due to a former stockholder and
the payment of expenses incurred in connection with the
transactions, together totaling approximately $32.1 million.
(7) To record the disposition of Providence Journal Cable comprised of (i)
approximately $585 million of Continental Class A Common Stock received
by Providence Journal stockholders, and (ii) the assumption of $410
million of the New Cable Indebtedness by Continental. After giving
effect to the payment by Continental of the purchase price of $405
million in connection with the King Cable Purchase, the excess of
the purchase price over the net assets of discontinued cable operations is
estimated to be $580 million.
(8) To reflect the deemed distribution of approximately $585 million of the
proceeds from the sale of Providence Journal Cable and the PJC Spin-Off.
Proceeds of $585 million are in the form of Continental Class A
Common Stock distributed by Continental directly to Providence Journal
stockholders in the Merger.
(9) To record the exchange of Old PJC shares for Registrant shares. 38,500
shares of Registrant Class A Common Stock and 46,817 shares of Registrant
Class B Common Stock, both at par values of $1.00 per share, were
distributed to the stockholders of Providence Journal in the PJC
Spin-Off.
(10) To pay down accounts payable with excess cash and adjust debt for cash
flow from September 30 to October 5.
13
<PAGE> 14
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
On October 5, 1995, the Company completed the Merger of its Cable
operations with Continental and also completed related transactions
including the purchase of the remaining 50% interest in King Holding Corp.
(KHC) and the spin-off of non-cable assets into a newly formed company, The
Providence Journal Company (the "Registrant"). After the spin-off,
shareholders of the Company now own the equivalent number and class of common
shares of the Registrant. Note 2 included in this Form 10-Q provides a
detailed discussion of these transactions.
Results of Operations
- ---------------------
The following tables present historical and restated combined Statements of
Operations for 1994 and 1995 quarterly and year-to-date results. The restated
combined results consolidate KHC's Broadcast operations, with appropriate
adjustments for minority earnings and discontinued cable operations.
Historically, the investment in KHC was accounted for under the equity
method. Management believes these restated combined Statements of Operations
present results that are more indicative of the current status of the
Registrant.
14
<PAGE> 15
THE PROVIDENCE JOURNAL COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------
HISTORICAL RESTATED
-------------------------------- --------------------------------
1994 1995 1994 1995
------- ------- ------- -------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
Publishing $30,576 $30,319 $30,576 $30,319
Broadcasting 12,704 13,796 40,172 42,485
------- ------- ------- -------
Total net revenues 43,280 44,115 70,748 72,804
------- ------- ------- -------
Operating income (loss):
Publishing $ 1,870 $(4,469) $ 1,870 $(4,469)
Broadcasting 1,621 1,979 7,003 7,443
Corporate (3,887) (2,816) (4,659) (3,562)
------- ------- ------- -------
Total operating income (loss) (396) (5,306) 4,214 (588)
Other income (expenses), net 1,233 1,358 (2,988) (1,189)
------- ------- ------- -------
Income (loss) from continuing operations
before income taxes 837 (3,948) 1,226 (1,777)
Income taxes (benefits) (873) (1,120) 478 453
------- ------- ------- -------
Income (loss) from continuing operations 1,710 (2,828) 748 (2,230)
Loss from discontinued operations, net (3,821) - (3,939) -
Loss from extraordinary item, net - (1,652) - (1,652)
------- ------- ------- -------
Loss before minority interests $(2,111) $(4,480) $(3,191) $(3,882)
Minority interests - _ 1,080 (598)
------- ------- ------- -------
Net loss $(2,111) $(4,480) $(2,111) $(4,480)
======= ======= ======= =======
</TABLE>
15
<PAGE> 16
THE PROVIDENCE JOURNAL COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-----------------------------------------------------------------------------------
HISTORICAL RESTATED
--------------------------------- ---------------------------------
1994 1995 1994 1995
-------- -------- -------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
Publishing $ 92,959 $ 93,006 $ 92,959 $ 93,006
Broadcasting 37,902 42,503 118,327 128,557
-------- -------- -------- --------
Total net revenues 130,861 135,509 211,286 221,563
-------- -------- -------- --------
Operating income (loss):
Publishing $ 5,808 $ (6,184) $ 5,808 $ (6,184)
Broadcasting 3,293 7,214 20,857 26,902
Corporate (11,810) (11,088) (13,527) (12,724)
-------- -------- -------- --------
Total operating income (loss) (2,709) (10,058) 13,138 7,994
Other income (expenses), net 789 1,931 (8,765) (7,928)
-------- -------- -------- --------
Income (loss) from continuing operations
before income taxes (1,920) (8,127) 4,373 66
Income taxes (benefits) (1,714) (3,072) 2,863 2,563
-------- -------- -------- --------
Income (loss) from continuing operations (206) (5,055) 1,510 (2,497)
Loss from discontinued operations, net (6,854) - (11,279) -
Loss from extraordinary item, net - (1,652) - (1,652)
-------- -------- -------- --------
Loss before minority interests $ (7,060) $ (6,707) $ (9,769) $ (4,149)
Minority interests - - 2,709 ( 2,558)
-------- -------- -------- --------
Net loss $ (7,060) $ (6,707) $ (7,060) $ (6,707)
======== ======== ======== ========
</TABLE>
Comparison of Quarterly and Year-to-Date Restated Results of Operations
Revenue increased 3% for the third quarter and 4.6% for the first nine
months, showing no growth in the Publishing Division and growth in
the Broadcasting Division. Operating income decreased $4.8 million for the
quarter and $5.1 million for the nine months with losses in the Publishing
Division more than offsetting increases in operating income in the
Broadcasting Division. The 1995 results were impacted by the consolidation
of the Providence Journal morning paper and The Evening Bulletin and rising
costs of newsprint.
Income (loss) from continuing operations for the third quarter was a loss of
$(2.2) million as compared to income of $.7 million last year. The decrease
in operating income discussed above was partially offset by lower interest
expense and higher interest income related to the Lowell Sun companies note
receivable. Income (loss) from continuing operations for the first nine
months decreased from a profit of $1.5 million in 1994 to a loss of $(2.5)
million in 1995. In addition to the factors previously mentioned, this
decrease is partially due to an increase in equity in loss of affiliated
companies from $(3.5) million in 1994 to $(4.5) million in 1995. This
increased loss relates to two start-up equity investments, Partner Stations
Network and America's Health Network.
Loss before minority interests includes an extraordinary charge of $1.6
million in the third quarter 1995 and nine month results relating to the early
extinguishment of debt. See Note 3 to these interim financial statements.
Loss from discontinued operations is not reflected in the 1995 third quarter
and nine month
16
<PAGE> 17
results because loss on disposal of the cable business, including estimated
loss during the phase-out period, were accrued in the fourth quarter of 1994.
Comparison of Quarterly and Year-to-Date Historical Results of Operations to
Restated Results of Operations
The impact of consolidating King's Broadcast operations on continuing
operations for the third quarter 1995 was a decrease in loss from $(2.8)
million historical to $(2.2) million restated. Correspondingly, the impact on
the first nine months of 1995 was favorable with loss from continuing
operations on a historical basis of $(5.1) million, declining to $(2.5) on a
restated basis. The King Broadcast television stations are experiencing the
same growth trends as the Company's wholly owned stations with a 4% increase
in revenue in the third quarter and a 7% increase in revenue for the first nine
months.
ANALYSIS BY SEGMENT
<TABLE>
Publishing Segment
The following table sets forth certain operating and other data for the quarter
and nine months ended September 30, 1994 and 1995:
<CAPTION>
QUARTERS ENDED NINE MONTHS ENDED
-------------- -----------------
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1994 1995 1994 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
Advertising $22,225 $21,632 $68,592 $67,018
Circulation 7,850 8,077 23,018 23,996
Other 502 610 1,350 1,992
------- ------- ------- -------
$30,577 $30,319 $92,960 $93,006
======= ======= ======= =======
Operating income (loss) $ 1,871 $(4,469) $ 5,809 $(6,183)
======= ======= ======= =======
OTHER DATA:
Earnings before interest, taxes,
depreciation and amortization* $ 4,735 $ 2,330 $14,347 $ 8,423
======= ======= ======= =======
Average Net Paid Circulation:
Daily 184,284 180,665
Sunday 268,087 260,697
======= =======
</TABLE>
*Excludes one-time charges for consolidation of morning and afternoon
newspapers for the quarter and nine months ended September 30, 1995 of $4,125
and $6,424, respectively.
Publishing revenues were flat for the third quarter and nine months.
Advertising revenues were down as a result of a weak Rhode Island
market. Circulation revenues were slightly ahead of the prior year, as
price increases more than offset declines in circulation levels.
17
<PAGE> 18
Operating income for the Publishing Division declined in the third quarter from
$1.9 million in 1994 to $(4.5) million loss in 1995. For the nine months,
operating income declined from $5.8 million in 1994 to $(6.2) million loss in
1995. The Publishing Division operating results were significantly affected by
two factors: One-time costs associated with the consolidation of the Rhode
Island newspapers as previously discussed ($4.1 million charge for the third
quarter and $6.4 million charge during the first nine months), and a major
increase in newsprint and ink ($1.7 million increase for the third quarter and
$4.4 million increase for the first nine months because of a 43% increase in
average newsprint price). Included in the $6.4 million one-time charge for the
newspaper consolidation is a $3.8 million non-cash cost associated with a
voluntary retirement program which ended on September 30, 1995. This cost will
be paid out of the Company's over funded retirement plan. The remainder of the
charge relates to promotion, training and another voluntary separation program,
all of which have been funded as of September 30, 1995.
Publishing Outlook. Publishing results in 1995 were impacted by two critical
factors: the weak Rhode Island economy and the sharp increases in newsprint
prices experienced throughout the industry. Newsprint expense, currently
represents approximately 18% of operating costs. The average newsprint price
per ton is expected to continue to rise throughout 1995 and into 1996 due to
increased demand and this trend will continue to have an adverse impact on
the Company's future operating results. The Publishing Division has
implemented newsprint conservation programs to help offset price increases.
The Publishing Division faces many industry changes, including growth of
electronic media. In addition, advertising revenue growth over the long term
may be limited by structural shifts in the retail marketplace both nationally
and locally, including retailer consolidations, changing consumer buying habits
and growth in discount stores which use little newspaper advertising.
18
<PAGE> 19
Broadcasting Television Segment
The following table sets forth operating results for the Company's Broadcast
Television Division to include both wholly owned stations(historical) and
combined with KHC's Broadcast operations (restated).
<TABLE>
<CAPTION>
QUARTERS ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------
HISTORICAL RESTATED
-------------------------------- --------------------------------
1994 1995 1994 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
OPERATING DATA:
Net Revenues $12,704 $13,796 $40,172 $42,485
======= ======= ======= =======
Operating Income $ 1,621 $ 1,979 $ 7,003 $ 7,443
======= ======= ======= =======
Other Data:
----------
Earnings before Interest, Taxes
Depreciation and Amortization $ 3,515 $3,515 $12,244 $12,564
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
----------------------------------------------------------------------------------
HISTORICAL RESTATED
-------------------------------- --------------------------------
1994 1995 1994 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
OPERATING DATA:
Net Revenues $37,902 $42,503 $118,327 $128,557
======= ======= ======== ========
Operating Income $ 3,293 $ 7,214 $ 20,857 $ 26,902
======= ======= ======== ========
Other Data:
----------
Earnings before Interest, Taxes
Depreciation and Amortization $ 9,189 $11,867 $ 37,063 $ 41,919
======= ======= ======== ========
</TABLE>
Broadcasting revenues (restated) increased 5.8% for the third quarter and
8.6% for the first nine months. The increase resulted from continuing
improvement in local and regional marketing conditions combined with
expanded sports coverage in certain markets. Broadcast revenues were
negatively impacted in the third quarter 1995 by the large advance bookings of
advertising by the major networks which reduced demand for spot advertising at
the Company's stations. This trend is expected to continue into the fourth
quarter.
19
<PAGE> 20
Operating income (restated) increased 6.3% for the third quarter and 29% for
the first nine months. Increase in operating expenses were modest until the
third quarter when the Division accelerated investing in its Northwest Cable
News channel and its start-up news operation in Honolulu.
EBITDA is defined as operating income plus depreciation and amortization. The
overall impact on the Broadcasting Division of consolidating the King
Broadcasting business (restated) with the Company's wholly owned business
(historical) was to improve EBITDA $9 million for the first quarter of 1995
and $30 million for the first nine months of 1995. Management believes that
EBITDA serves as an important financial analysis tool for measuring and
comparing other companies in the same lines of business.
Broadcast Television Outlook.
Local network affiliated television stations are expected to remain the
dominant provider and distributor of local news and entertainment
programming. The launch during January 1995 of two new additional national
networks, Paramount and Warner Brothers, is evidence of the strength and
viability of broadcast television.
Results for 1996 are expected to be favorably impacted by the Olympics, which
will be carried on NBC, and the Presidential election. However, competition for
the attention of television viewers is increasing. It is the Company's
strategy to protect and increase audience share and revenue of each of its
markets by maintaining a strong relationship with its networks and producing
local programs which create an identity with its viewers and advertisers.
KHNL in Honolulu will switch to NBC in the first quarter of 1996. The
Northwest Cable News channel is expected to be launched in late 1995.
Liquidity and Capital Resources (Refer to Pro Forma Balance Sheet in Note 8 to
- --------------------------------------------------------------------------------
the interim financial statements)
- ---------------------------------
The Company's total debt on a pro forma basis as of September 30, 1995 was
$235 million, with a debt to equity ratio on a pro forma basis of 0.84, as
compared to 1.2 on a historical basis as of September 30, 1995. In
conjunction with the reorganization, the Company entered into a new Credit
Agreement on October 5, 1995 with maximum credit availability of $375
million. See Note 3 to the interim financial statements for further
information. As of the close of the reorganization on October 5, 1995, $150
million was available under this credit facility. Credit availability under
this Credit Agreement decreases quarterly on a schedule commencing December
31, 1996 with a final maturity on June 30, 2004. To manage exposures
associated with interest rate fluctuations under the Credit Agreement, the
Company maintained its existing interest rate swap arrangement in the notional
amount of $200 million in 1996.
EBITDA on a restated basis for the combined Company for the first nine months
of 1994 and 1995 is as follows:
<TABLE>
<CAPTION>
NINE MONTHS
-------------
1994 1995
---- ----
<S> <C> <C>
Publishing Division $ 14,347 $ 8,423
Broadcasting Division 37,063 41,919
Corporate (12,909) (11,928)
-------- --------
Restated EBITDA $ 38,501 $ 38,414
======== ========
</TABLE>
The declining EBITDA in the Publishing Division is partially offset by
improving EBITDA in the Broadcasting Division and Corporate, resulting in
nearly flat EBITDA for the first nine months of 1995 as compared with the prior
year.
The EBITDA for the Publishing Division for 1995 excludes the one-time charge of
$6.4 million associated with the consolidation of its Rhode Island newspaper.
Future cash flow from the combined operating activities of the Company and
KHC's Broadcasting television business is expected to be sufficient to meet
capital investment, debt repayment and dividend requirements. The Company
expects to use its credit facility and cash flow from operations for a number
of purposes including developing its existing businesses, investing in
programming ventures and payment of dividends at a rate that is initially
consistent with the rate currently paid by the Company. See Note 4 to these
interim financial statements.
20
<PAGE> 21
Historical Cash Flow (Refer to Condensed Consolidated Statements of Cash Flow
on page 5 to the interim financial statements)
For the first nine months of 1995, the Company used $(22.4) million in cash
for operating activities as compared to providing $14.2 million in the
comparable period of the prior year. This substantial decrease primarily
resulted from payments of approximately $35 million in September 1995 of
severance associated with the sale of the Company's cable television business
and deferred incentive compensation payable in connection with the
reorganization (See Note 5(a) to the interim financial statements).
Cash used in investing activities of continuing operations was $(11.6)
million in the first nine months of 1995 as compared with $(7.8) million for
the first nine months of 1994. The change primarily reflects an increase
in investments in affiliated companies of $(10.6) million offset by proceeds
from the sale by the Company of the Omni Biltmore Hotel in July
1995 for $6 million. Net cash flows used for discontinued operations of
$(28.7) million in the first nine months of 1995 reflects the impact of
acquiring minority interests in the Company's cable television business in
order to facilitate the sale of the business to Continental.
Cash flows provided by financing activities of $61.6 million in the first
nine months of 1995 included $83.8 million in proceeds from the Company's old
credit facility offset by an $8.7 million early retirement of debt and payment
of dividends and television program rights.
21
<PAGE> 22
THE PROVIDENCE JOURNAL COMPANY
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On January 17, 1995, Cable LP I, Inc. ("Cable LP") brought a declaratory
judgment action against Providence Journal Company, the predecessor of the
Registrant ("Providence Journal"), Colony Communications, Inc. ("Colony") and
Dynamic Cablevision of Florida, Inc. ("Dynamic") in the Circuit Court of the
Eleventh Judicial Circuit in and for Dade County, Florida. Colony and
Dynamic were cable television subsidiaries of Providence Journal, which became
units of Continental Cablevision, Inc. ("Continental") in connection with
the merger (the "Merger") of Providence Journal with and into Continental,
pursuant to the Agreement and Plan of Merger dated as of November 18, 1994,
as amended and restated as of August 1, 1995 (the "Merger Agreement") by and
among Continental, Providence Journal, the Registrant, King Holding Corp., a
subsidiary of Providence Journal ("KHC") and King Broadcasting Company, a
subsidiary of KHC. This case relates to a partnership (the "Dynamic
Partnership"), in which Dynamic is the general partner with an 89.8%
interest, and Cable LP is the limited partner with a 10.2% interest. In
this action, Cable LP claims that Dynamic was obligated to offer to sell to
Cable LP Dynamic's general partnership interest before Providence Journal
entered into the Merger Agreement with Continental. Cable LP further claims
that Dynamic's offer to purchase Cable LP's limited partnership interest
for $13.1 million triggered a right of first refusal entitling Cable LP to
purchase the general partnership interest for $115 million. Cable LP seeks a
declaration by the court that the right of first refusal it is asserting
applies.
Providence Journal, Colony and Dynamic made a motion to strike allegations
against them of bad faith and breach of fiduciary duty, which motion was
granted by the court, and they filed an Answer to the Complaint and a
Counterclaim on March 16, 1995. In their counterclaim, Colony and Dynamic
seek a declaratory judgment that Cable LP unreasonably refused consent to the
transfer of the general partner's interest to Continental and that a purported
transfer of Cable LP's interest in the Dynamic Partnership to a partnership
to be managed by Adelphia Communications, Inc. violates Dynamic's right of
first refusal under the Dynamic Partnership Agreement. Discovery is well
underway. The case is scheduled to be tried in late December.
In the event that, as a result of such litigation, Dynamic is required to
sell its interest in the Dynamic Partnership to Cable LP, the Merger
Agreement provides that the Registrant will pay to Continental simultaneously
with the closing of such sale an amount equal to the sum of (i) the amount
(if any) by which the consideration received by Dynamic for the sale of such
interest is less than $115 million plus (ii) the taxes which would have been
payable assuming the purchase price for such interest equaled $115 million.
The Registrant's management believes that the claims asserted by Cable LP are
without merit and intends to vigorously defend this matter.
22
<PAGE> 23
ITEM 2. CHANGES IN SECURITIES
Pursuant to the Contribution and Assumption Agreement dated as of October
5, 1995 between Old PJC and the Registrant entered into in connection with
the Merger, the Registrant has agreed that for a period of four years from
October 5, 1995 (the "Effective Time"), it will not (i) sell, transfer,
assign or otherwise dispose of any material assets or (ii) declare, set
aside or pay any dividend or other distribution (with certain exceptions) in
respect of its capital stock, or redeem or otherwise acquire any of its
capital stock, if, as a result of any such transaction, the Registrant would
have a fair market value (determined on the basis of a sale on a private
market, going concern basis, free and clear of all liabilities) of less than:
(x) for the period to and including the first anniversary of the Effective
Time, $200,000,000, (y) for the period from such first anniversary to
and including the second anniversary of the Effective Time, $150,000,000
and (z) for the period from such second anniversary to and including the
fourth anniversary of the Effective Time, $50,000,000, PROVIDED, HOWEVER, that
the Registrant may proceed with any transaction which would otherwise be
prohibited by the foregoing if it provides security to Continental in form and
amount reasonably acceptable to Continental.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Special Meeting of Providence Journal on September 27, 1995, the
shareholders approved the following proposals:
(1) A proposal to approve (i) the contribution (the
"Contribution") by Providence Journal of all of its businesses and assets
unrelated to its cable television businesses to The Providence Journal
Company (or, as the Registrant was referred to in these proposals, "New
Providence Journal"), its newly created wholly owned subsidiary, in
exchange for which New Providence Journal would assume all liabilities
related to such businesses and assets and issue to Providence Journal a
number of shares of New Providence Journal's Class A Common Stock ("New
Providence Journal Class A Common Stock") and New Providence Journal's Class
B Common Stock ("New Providence Journal Class B Common Stock") equal to the
number of outstanding shares of Providence Journal's Class A Common Stock
("Providence Journal Class A Common Stock") and Providence Journal's Class B
Common Stock ("Providence Journal Class B Common Stock"), respectively, and
(ii) the distribution (the "Distribution") of one share of New Providence
Journal Class A Common Stock to the holder of each share of Providence
Journal Class A Common Stock and one share of New Providence Journal Class B
Common Stock to the holder of each share of Providence Journal Class B Common
Stock, each as outstanding immediately prior to Distribution. The
Contribution and the Distribution discussed above are hereinafter referred to
collectively as the "PJC Spin-Off."
(2) A proposal to approve and adopt an amendment to the
Charter of Providence Journal (the "Providence Journal Charter Amendment")
required in connection with the PJC Spin-Off to permit Providence Journal to
distribute one share of New Providence Journal Class A Common Stock to the
holder of each share of Providence Journal Class A Common Stock and one share
of New
23
<PAGE> 24
Providence Journal Class B Common Stock to the holder of each share of
Providence Journal Class B Common Stock.
(3) A proposal to approve and adopt the Merger Agreement which
provided, among other things, for the merger of Providence Journal, which at
the time of the Merger held only Providence Journal's cable television
businesses and assets, with and into Continental.
(4) A proposal to approve and adopt the Providence Journal
Cable Division Sale Bonus Plan, which provided compensation to certain
executives of Providence Journal's cable television operations upon and subject
to the consummation of the Merger.
<TABLE>
The results of the Special Meeting were as follows:
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C> <C>
Proposal 1 205,986 1 425
Proposal 2 205,927 0 485
Proposal 3 205,924 2 486
Proposal 4 197,488 81 8,843
</TABLE>
At the Annual Meeting of Providence Journal on September 27, 1995, the
shareholders approved the following proposals:
(1) The election of four directors of the Company to serve a
three-year term, and until their successors are elected and qualified. The
members of the Board of Directors of the Registrant continuing in office were
F. Remington Ballou, Henry P. Becton, Jr., Peter B. Freeman, Benjamin P.
Harris, III, Trygve E. Myhren, Henry D. Sharpe, Jr., W. Nicholas Thorndike and
John W. Wall.
(2) A proposal to approve the 1994 Providence Journal Employee
Stock Option Plan.
(3) A proposal to approve the 1994 Providence Journal Non-Employee
Director Stock Option Plan.
(4) A proposal to ratify and approve certain agreements with
Company executives which provide, upon change of control of the Company,
employment for varying terms and defined compensation if involuntary
termination occurs during the term of employment.
24
<PAGE> 25
<TABLE>
(5) The ratification of the selection by the Board of Directors
of KPMG Peat Marwick LLP as independent auditors to audit the Company's books
and accounts for the year ending December 31, 1995.
<CAPTION>
Proposal 1 For Withheld
--- --------
<S> <C> <C>
Slate of Directors
189,766 12,668
Stephen Hamblett
Fanchon M. Burnham
John W. Rosenblum
Patrick R. Wilmerding
</TABLE>
<TABLE>
<CAPTION>
For Against Abstain
---- ------- -------
<S> <C> <C> <C>
Proposal 2 179,981 12,270 10,183
Proposal 3 176,776 12,380 13,278
Proposal 4 196,742 112 5,580
Proposal 5 182,877 4,813 14,744
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required to be filed by Item 601 of Regulation S-K:
3 (i) Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 1 of Registrant's Registration Statement on Form 8-A
dated September 29, 1995).
(ii) By-laws of the Registrant (incorporated by reference to
Exhibit 2 of Registrant's Registration Statement on Form 8-A dated
September 29, 1995).
4 Credit Agreement dated as of October 5, 1995 among Old PJC,
Registrant, Fleet National Bank, as Administrative Agent, The First National
Bank of Boston, The Chase Manhattan Bank, N.A., Chemical Bank and The Toronto
Dominion Bank, as Managing Agents and the other lenders named therein
(incorporated by reference to Exhibit 4 of Registrant's Current Report on Form
8-K dated October 5, 1995).
10 (i) The Providence Journal Company 1994 Employee Stock Option Plan
(incorporated by reference to Exhibit 4(a) of Registrant's Registration
Statement on Form S-8 (No. 33-63833) dated November 1, 1995).
25
<PAGE> 26
(ii) The Providence Journal Company 1994 Non-Employee
Director Stock Option Plan (incorporated by reference to Exhibit 4 (b)
of Registrant's Registration Statement on Form S-8 (No. 33-63833)
dated November 1, 1995).
(iii) Form of Restricted Stock Unit Grant Agreement
(incorporated by reference to Exhibit 10.2 of Registrant's Registration
Statement on Form S-4 (No. 33-57479) dated August 31, 1995).
(iv) Form of Change of Control Agreement (incorporated by
reference to Exhibit 10.6 of Registrant's Registration Statement on Form S-4
(No. 33-57479) dated August 31, 1995).
27 Financial data schedule
(b) Reports on Form 8-K
None
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, who is also signing in his capacity as
Registrant's chief accounting officer.
Dated: November 14, 1995
THE PROVIDENCE JOURNAL COMPANY
By: /s/ Thomas N. Matlack
----------------------
Thomas N. Matlack
Vice President-Finance
26
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 112
<SECURITIES> 0
<RECEIVABLES> 21,255
<ALLOWANCES> 1,442
<INVENTORY> 0
<CURRENT-ASSETS> 24,811
<PP&E> 241,430
<DEPRECIATION> 124,683
<TOTAL-ASSETS> 754,735
<CURRENT-LIABILITIES> 66,244
<BONDS> 0
<COMMON> 4,177
0
0
<OTHER-SE> 273,569
<TOTAL-LIABILITY-AND-EQUITY> 754,735
<SALES> 0
<TOTAL-REVENUES> 135,509
<CGS> 0
<TOTAL-COSTS> 145,567
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,549
<INCOME-PRETAX> (8,127)
<INCOME-TAX> (3,072)
<INCOME-CONTINUING> (5,055)
<DISCONTINUED> 0
<EXTRAORDINARY> 1,652
<CHANGES> 0
<NET-INCOME> (6,707)
<EPS-PRIMARY> 79.20
<EPS-DILUTED> 0
</TABLE>
