PROVIDENCE JOURNAL CO, S-1, 1996-04-22

PROVIDENCE JOURNAL CO
S-1, 1996-04-22

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE PROVIDENCE JOURNAL COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S> <C> <C>
DELAWARE 4833, 2710 05-0481966
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
OF INCORPORATION OR CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
ORGANIZATION)
</TABLE>

75 FOUNTAIN STREET
PROVIDENCE, RHODE ISLAND 02902
(401) 277-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF PRINCIPAL EXECUTIVE OFFICES)
------------------------

JOHN L. HAMMOND
VICE PRESIDENT -- GENERAL COUNSEL & CHIEF ADMINISTRATIVE OFFICER
75 FOUNTAIN STREET
PROVIDENCE, RHODE ISLAND 02902
(401) 277-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------

Copies of all correspondence to:

<TABLE>
<S> <C>
LAURA N. WILKINSON, ESQ. MICHAEL L. FITZGERALD, ESQ.
EDWARDS & ANGELL BROWN & WOOD
2700 HOSPITAL TRUST TOWER ONE WORLD TRADE CENTER
PROVIDENCE, RHODE ISLAND 02903 NEW YORK, NEW YORK 10048
</TABLE>

------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.

If any of the securities registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/

CALCULATION OF REGISTRATION FEE

<TABLE>
===============================================================================================
<S> <C> <C>
- -----------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1)(2) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------
Class A Common Stock, par value $1.00 per share(3)... $138,000,000 $47,587
===============================================================================================
</TABLE>

(1) Includes $17,100,000 of Class A Common Stock that the Underwriters have the
option to purchase to cover over-allotments, if any.
(2) Estimated pursuant to Rule 457(o) under the Securities Act of 1933 solely
for the purpose of calculating the registration fee.
(3) Including Class A rights.

-----------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

EXPLANATORY NOTE

The Registration Statement contains two forms of prospectus, one to be used
in connection with an underwritten offering (the "Underwritten Prospectus") and
one to be used in connection with a concurrent direct sale by the Company of
Common Stock to eligible employees of the Company and its subsidiaries (the
"Direct Placement Prospectus"). The Underwritten Prospectus and the Direct
Placement Prospectus will be identical in all respects except for the outside
and inside front cover pages, page 15, the sections entitled "Underwriting", and
alternatively, "Plan of Distribution", and the outside back cover pages.

The form of the Underwritten Prospectus is included herein and the form of
the front cover page, inside front cover page, alternative page 15, "Plan of
Distribution" section and back cover page of the Direct Placement Prospectus are
included following the back cover page of the Underwritten Prospectus as pages
X-1 though X-7.
<PAGE> 3

THE PROVIDENCE JOURNAL COMPANY
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K

<TABLE>
<CAPTION>
ITEM NUMBER LOCATION IN PROSPECTUS*
- ----------- -----------------------
<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus..... Facing Page; Cross Reference Sheet; Outside
Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus; Available Information....... Inside Front and Outside Back Cover Pages of
Prospectus; Available Information
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges............... Prospectus Summary; Risk Factors
4. Use of Proceeds............................ Prospectus Summary; Use of Proceeds
5. Determination of Offering Price............ Underwriting or Plan of Distribution
6. Dilution................................... Dilution
7. Selling Security Holders................... Not Applicable
8. Plan of Distribution....................... Outside and Inside Front Cover Pages;
Underwriting or Plan of Distribution;
Outside Back Cover Page
9. Description of Securities to be
Registered................................. Outside Front Cover Page; Prospectus
Summary; Description of Capital Stock
10. Interests of Named Experts and Counsel..... Not Applicable
11. Information with Respect to the
Registrant................................. Outside Front Cover Page; Prospectus
Summary; Risk Factors; Use of Proceeds;
Dividend Policy; Capitalization; Selected
Financial Data; Management's Discussion
and Analysis of Financial Condition and
Results of Operations; Business;
Management; Principal Stockholders;
Certain Transactions; Description of
Capital Stock
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities................................ Not Applicable

<FN>
- ---------------

* All cross-references relate to each of the Underwritten Prospectus and the
Direct Placement Prospectus, except that references to "Underwriting" relate
solely to the Underwritten Prospectus and references to "Plan of Distribution"
relate solely to the Direct Placement Prospectus.

</TABLE>

<PAGE> 4

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 22, 1996

PROSPECTUS

[LOGO]

THE PROVIDENCE JOURNAL COMPANY
CLASS A COMMON STOCK
($1.00 PAR VALUE)
------------------------

All of the shares of Class A Common Stock, $1.00 par value (the
"Class A Common Stock"), offered hereby (the "Underwritten Offering") are being
offered by The Providence Journal Company (the "Company"). In addition to the
Underwritten Offering contemplated hereby, the Company is also offering an
additional shares of Class A Common Stock to eligible employees of the
Company and its subsidiaries (the "Direct Placement" and, together with the
Underwritten Offering, the "Offerings") at a price per share equal to the
initial public offering price per share for the Class A Common Stock less an
amount equal to the underwriting discount per share. Prior to the Offerings,
there has been no public market for the Class A Common Stock. It is currently
anticipated that the initial public offering price for the Class A Common Stock
will be between $ and $ per share. See "Underwriting" for
information relating to the determination of the initial public offering price.

Upon consummation of the Offerings, the Company's authorized and
outstanding capital stock will consist of Class A Common Stock and Class B
Common Stock, $1.00 par value (the "Class B Common Stock" and together with the
Class A Common Stock, the "Common Stock"). The rights of the holders of the
Common Stock are identical, except that each share of Class B Common Stock
entitles the holder to four votes per share, while each share of Class A Common
Stock entitles the holder to one vote per share. The Class A Common Stock and
Class B Common Stock vote as a single class on substantially all matters, except
as otherwise required by law. The Class B Common Stock is convertible at any
time at the election of the holder on a share-for-share basis into Class A
Common Stock, and automatically converts into Class A Common Stock under certain
circumstances involving a transfer. See "Description of Capital Stock".

Application has been made to list the shares of Class A Common Stock on the
New York Stock Exchange under the symbol " ".

SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE CLASS A COMMON STOCK
OFFERED HEREBY.
------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

<TABLE>
<CAPTION>
===========================================================================================================

PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
Per Share................................... $ $ $
- -----------------------------------------------------------------------------------------------------------
Total(3).................................... $ $ $
============================================================================================================
</TABLE>

(1) The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting".

(2) Before deducting expenses estimated at $ payable by the Company.

(3) The Company has granted the Underwriters an option, exercisable within 30
days after the date hereof, to purchase up to an aggregate of
additional shares of Class A Common Stock, at the initial price to public
per share, less the underwriting discount, solely to cover over-allotments,
if any. If such option is exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting".
------------------------

The shares of Class A Common Stock are being offered by the several
Underwriters, subject to prior sale, when, as and if issued to and accepted by
them, subject to approval of certain legal matters by counsel for the
Underwriters and certain other conditions. The Underwriters reserve the right to
withdraw, cancel or modify such offer and to reject orders in whole or in part.
It is expected that delivery of certificates for the shares of Class A Common
Stock will be made in New York, New York on or about , 1996.

------------------------

MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
------------------------
The date of this Prospectus is , 1996.
<PAGE> 5

IN CONNECTION WITH THIS UNDERWRITTEN OFFERING, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE CLASS A COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

2
<PAGE> 6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Unless the
context otherwise requires, all references to the "Company" are to The
Providence Journal Company and its consolidated subsidiaries, as successor to
Providence Journal Company ("Old PJC") after giving effect to the transactions
described herein under "The Company -- Background; Reorganization". Unless
otherwise indicated, all market rank, station rank in market and station
audience rating and share data contained herein have been obtained from the
Nielsen Station Index dated February 1996 and all "effective buying income"
("EBI"), market population, household growth and retail sales data contained
herein have been obtained from Investing in Television, 1996 Market Report,
published by BIA Publications, Inc. ("BIA"). Unless otherwise indicated, the
information in this Prospectus (i) assumes no exercise of the over-allotment
option granted to the Underwriters, (ii) assumes that shares of Class A
Common Stock will be issued in the Direct Placement and (iii) gives effect to a
400-for-1 stock split (the "Stock Split") of the Common Stock to be effected
immediately prior to the date of this Prospectus.

THE COMPANY

GENERAL

The Company owns and operates nine network-affiliated television stations
(the "Stations") and provides programming and marketing services to two
television stations (the "LMA Stations") under local marketing agreements
("LMAs") in geographically diverse markets throughout the United States (the
"Broadcasting Business"), publishes the largest daily newspaper in the Rhode
Island and southeastern Massachusetts market (the "Publishing Business"), and
produces diversified programming and interactive new media services (the
"Programming and New Media Business"). The Company's television broadcasting
group reaches 5.6 million households, or 6% of all U.S. television households;
its newspaper is the leading newspaper in its market in terms of advertising and
circulation; and certain of its programming and new media businesses, such as
the Television Food Network, serve subscribers and viewers nationwide.

Important factors in the success of the Company's broadcasting and
publishing businesses have been its strong local news focus, targeted local
advertising sales efforts, investment in advanced technology and emphasis on
cost control. The resulting strength of its media franchises presents attractive
opportunities for future growth and for realization of operating efficiencies.
In addition to increasing the reach of its broadcasting operations and cable and
satellite television networks through acquisitions and internal growth, the
Company intends to develop new revenue sources in a variety of media that build
on the existing strength of its brands and expertise and have broad regional or
national appeal. See "Business".

The Company's broadcasting operations are located in markets ranging from
the 12th to the 127th largest Designated Market Areas (defined by A. C. Nielsen
Co. ("Nielsen") as geographic markets for the sale of national "spot" and local
advertising time) in the United States ("DMAs"), with five such Stations in the
50 largest DMAs. Five of the Stations are network affiliates of the National
Broadcasting Company Incorporated ("NBC") television network, two are network
affiliates of the Fox Broadcasting Network ("Fox"), one is a network affiliate
of the American Broadcasting Company ("ABC") and one is a network affiliate of
CBS, Inc. ("CBS"). In 1995, EBITDA (as defined herein) of the Broadcasting
Business represented approximately 81% of the Company's EBITDA excluding
programming and new media and corporate expenses. Eight of these nine Stations
are VHF (as defined herein) television stations. The LMA Stations are affiliated
with the United Paramount Network ("UPN"). See "Business -- Broadcasting".

The Company publishes the leading newspaper in terms of advertising and
circulation in its market of Rhode Island and southeastern Massachusetts, the
Providence Journal-Bulletin Monday through Saturday and The Providence Sunday
Journal (collectively the "Providence Journal"). Average daily circulation
levels for the three months ended March 31, 1996 following the consolidation of
the morning and afternoon newspapers in June 1995 (see "Business -- Publishing")
were approximately 169,500 for Monday through

3
<PAGE> 7

Saturday and 251,300 for Sunday. The Company, which was founded in 1820,
believes that the Providence Journal is the oldest continuously published daily
newspaper in the United States. See "Business -- Publishing".

The Company produces cable and satellite television programming and
interactive and on-line new media services through its management role or
ownership interests in a variety of content-driven entertainment and information
businesses. The Company owns a 21% interest in and participates in the
management of Television Food Network, a cable television network that is
distributed to 15.5 million subscribers throughout the United States. The
Company controls America's Health Network with a 65% ownership interest, and
owns all of the equity interest in NorthWest Cable News, both recently launched
development stage cable programming network services. The Company also owns
equity interests in a variety of interactive, on-line, and broadcast programming
businesses. See "Business -- Programming and New Media".

BROADCASTING

GENERAL. The Stations generally are in markets that the Company believes
will experience above-average economic growth in retail sales, EBI and
population. The Stations are typically located in the largest cities or state
capitals of the states in which they operate. The Company's Stations and the LMA
Stations are in geographically diverse regions of the United States, which
reduces the Company's exposure to regional economic fluctuations.

The following table sets forth general information for each of the Stations
and the LMA Stations and the markets they serve, based on the Nielsen Station
Index as of February 1996. In February 1992, the Company acquired a 50% joint
venture interest (the "King Acquisition") in King Holding Corp. ("KHC"), which
indirectly owned Stations KING (Seattle), KGW (Portland), KHNL (Honolulu), KREM
(Spokane) and KTVB (Boise) (the "King Stations"). The Company has operated the
King Stations since such acquisition and in 1995 acquired 100% of the ownership
of the King Stations in the Kelso Buyout (as defined herein). The Stations are
listed in order of the ranking of their DMA.

<TABLE>
<CAPTION>
NUMBER OF
COMMERCIAL
TELEVISION
NETWORK CHANNEL/ DMA STATIONS RANK IN STATION
MARKET AREA(1) STATION(1) STATUS AFFILIATION FREQUENCY(2) RANK(3) IN MARKET(4) MARKET(5) SHARE(6)
- --------------- ---------- -------- ----------- ------------- ------- ------------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seattle, WA KING Owned NBC 5/VHF 12 10 1 18%
Portland, OR KGW Owned NBC 8/VHF 24 8 2 18
Charlotte, NC WCNC Owned NBC 36/UHF 28 7 3 9
Albuquerque/ KASA Owned Fox 2/VHF 48 8 4 8
Santa Fe, NM
Louisville, KY WHAS Owned ABC 11/VHF 50 7 1 21
Honolulu, HI KHNL Owned NBC 13/VHF 70 9 2 19
KFVE LMA UPN 5/VHF 70 9 - -
Spokane, WA KREM Owned CBS 2/VHF 74 4 1 18
Tucson, AZ KMSB Owned Fox 11/VHF 80 6 4 11
KTTU LMA UPN 18/UHF 80 6 - -
Boise, ID KTVB Owned NBC 7/VHF 127 5 1 28
</TABLE>

<TABLE>
<CAPTION>
1995
MARKET REVENUE(7)
---------------------
STATION $(IN
MARKET AREA(1) SHARE MILLIONS)
- --------------- ------- ---------
<S> <C> <C>
Seattle, WA 25% $269.0
Portland, OR 22 144.9
Charlotte, NC 11 118.1
Albuquerque/ 16 79.0
Santa Fe, NM
Louisville, KY 31 82.3
Honolulu, HI 19 63.7
- 63.7
Spokane, WA 27 42.8
Tucson, AZ 21 52.2
- 52.2
Boise, ID 40 26.0

<FN>
- ---------------
(1) As used in this Prospectus, the following "call letters" refer, as the
context may require, either to the corporate owner of the station indicated
or to the station itself: "KING" refers to KING-TV, Seattle, Washington;
"KGW" refers to KGW(TV), Portland, Oregon; "WCNC" refers to WCNC-TV,
Charlotte, North Carolina; "KASA" refers to KASA-TV, Albuquerque/Santa Fe,
New Mexico; "WHAS" refers to WHAS-TV, Louisville, Kentucky; "KHNL" refers to
KHNL(TV), Honolulu, Hawaii; "KFVE" refers to KFVE(TV), Honolulu, Hawaii;
"KREM" refers to KREM-TV, Spokane, Washington; "KMSB" refers to KMSB-TV,
Tucson, Arizona, "KTTU" refers to KTTU(TV), Tucson, Arizona; and "KTVB"
refers to KTVB(TV), Boise, Idaho.
(2) As used in this Prospectus, "VHF" refers to the very high frequency band
(channels 2-13) of the spectrum and "UHF" refers to the ultra-high frequency
band (channels above 13) of the spectrum.
(3) Ranking of DMA served by the Station among all DMAs, measured by the number
of television households.

</TABLE>
4
<PAGE> 8

(4) Represents the number of television stations ("reportable stations")
designated by Nielsen as "local" to the DMA, excluding public television
stations and stations that do not meet minimum Nielsen reporting standards
(weekly cumulative audience of less than 2.5%) for reporting in the Sunday
through Saturday, 6:00 a.m. to 2:00 a.m. period ("sign-on to sign-off").
Does not include national cable channels. The number of reportable stations
may change for each reporting period.
(5) Station's rank relative to other reportable stations, based upon the DMA
rating as reported by Nielsen sign-on to sign-off during February 1996. Data
for KHNL and KMSB include KFVE and KTTU, respectively.
(6) Represents the number of television sets tuned to the Station as a
percentage of the number of television sets in use for Sunday-Saturday 6:00
a.m. to 2:00 a.m. from the February 1996 Nielsen Station Index. Data for
KHNL and KMSB include KFVE and KTTU, respectively.
(7) Represents gross national, local, regional and political advertising
revenues, excluding network and barter revenues, for all commercial
television stations in the DMA, based on actual local market reporting, as
estimated by BIA. Station share of 1995 market revenue for KHNL and KMSB
includes revenues of KFVE and KTTU, respectively.

BROADCASTING BUSINESS AND OPERATING STRATEGY. The Company's strategy in
the Broadcasting Business is to increase viewership, advertising revenue and
EBITDA primarily by capitalizing on its strong local news franchises, targeted
marketing and local sales efforts, high quality, non-network programming and
strict cost controls. This strategy has contributed to compound annual growth in
the Company's net revenues and EBITDA in the Broadcasting Business, calculated
on a supplemental pro forma basis as herein described, of 9.5% and 23.9%,
respectively, from 1991 to 1995. In addition, EBITDA as a percentage of net
revenues, calculated on a supplemental pro forma basis, has increased from 21.6%
in 1991 to 35.7% in 1995. The components of the Company's Broadcasting Business
strategy include the following:

ENHANCE STRONG LOCAL NEWS FRANCHISES. Most of the Stations lead their
markets in terms of ratings for local news and number of hours of local
news that are broadcast per week. The Company has focused on enhancing each
Station's local market news programming franchise as the foundation to
build significant audience share in such market. Local news programming is
commercially valuable because of its high viewership level, the
attractiveness to advertisers of the demographic characteristics of the
typical news audience (allowing stations generally to charge higher rates
for advertising time) and the enhanced ratings of programming in time
periods adjacent to the news. In addition, the Company believes that its
strong local news programming has helped to differentiate the Stations from
cable programming competitors, which generally do not provide such
programming.

MATCH ADVERTISERS TO AUDIENCES THROUGH TARGETED LOCAL SALES. The
Company seeks to leverage its strong local presence to increase its
advertising revenues and broadcast cash flow by expanding relationships
with local and national advertisers and attracting new advertisers through
targeted marketing techniques and carefully tailored programming. Each of
the Company's Stations has developed high quality programming of local
interest and sponsored community events to attract audiences with
demographic characteristics desirable to advertisers. In addition, the
Company works closely with advertisers to develop campaigns that match
specifically targeted audience segments with the advertisers' overall
marketing strategies.

LEVERAGE LOCAL MARKET STRENGTH WITH ADDITIONAL LMAS. The Company
plans to pursue opportunities to enter into LMAs in the DMAs in which the
Company's Stations operate. The Company believes that LMAs enable the
Company to increase revenue and broadcast cash flow by taking advantage of
the economies of scale derived from being a television station group owner.
The Company also believes that there are benefits in terms of increased
advertising revenue from LMA arrangements.

MAXIMIZE VIEWER SHARE THROUGH HIGH QUALITY, NON-NETWORK
PROGRAMMING. Each of the Company's Stations is focused on improving its
syndicated and locally produced non-network programming to attract
audiences with favorable demographic characteristics. The Company believes
that through a cooperative approach to programming, it can generate
incremental revenue by adjusting its programming mix to capture viewers of
certain targeted demographic segments that meet the needs of valued
advertisers.

MAINTAIN EFFECTIVE COST CONTROLS AND LEVERAGE ECONOMIES OF
SCALE. Each Station emphasizes strict control of its programming and
operating costs as an essential factor in increasing broadcast cash

5
<PAGE> 9

flow. In addition, the Company, as a television station group owner,
believes that it has the ability to enter into advantageous group
programming contracts. As the provider of NBC network programming in five
markets, the Company believes that its ability to enter into stable and
favorable affiliation agreements with NBC is enhanced. Through strategic
planning and annual budget processes, the Company continually seeks to
identify and implement cost-saving opportunities at each of the Stations.

BROADCASTING ACQUISITION STRATEGY. The Company plans to pursue favorable
acquisition opportunities as they become available. The Company's acquisition
strategy is to target network-affiliated television stations where it believes
it can successfully apply its operating strategy and where such stations can be
acquired on attractive terms. The Company generally intends to review
acquisition opportunities in growth markets, typically in the 25th through 75th
largest DMAs in the nation, with what the Company believes to be advantageous
business climates. In assessing acquisitions, the Company targets stations for
which it has identified specific expense reductions and proposals for revenue
enhancement that can be implemented upon acquisition.

See "Business -- Broadcasting -- Business and Operating Strategy".

PUBLISHING

GENERAL. The Providence Journal is the leading newspaper in terms of
advertising and circulation in its market of Rhode Island and southeastern
Massachusetts. Average daily circulation levels for the three months ended March
31, 1996 following the consolidation of the morning and afternoon newspapers in
June 1995 (as described below) were approximately 169,500 for circulation Monday
through Saturday and 251,300 for circulation on Sunday. According to a 1995
Belden Associates study, approximately 58% and 69% of the 929,000 total adults
in the market read the daily Providence Journal-Bulletin and The Providence
Sunday Journal, respectively. In addition, according to this study, of adults in
the market who read any newspaper, approximately 77% and 87% read the daily
Providence Journal-Bulletin and The Providence Sunday Journal, respectively. The
Providence Journal has received numerous awards over the years for its local and
national coverage, including its fourth Pulitzer Prize in 1994.

BUSINESS AND OPERATING STRATEGY. The Company's publishing strategy is to
leverage the Providence Journal's comprehensive regional and local news coverage
to generate increased readership, local advertising sales, and new revenue
sources based on its strong brand recognition. The Company believes that the
recent consolidation of its daily newspapers, reorganization of its staff, and
effective cost controls will help contribute to improved operating results. The
Company's business and operating strategy for the Publishing Business includes
the following key elements:

ENHANCE STRONG LOCAL NEWS PRESENCE. The Company has the largest local
news gathering resources in its Rhode Island and southeastern Massachusetts
market. In 1995, the Company intensified its commitment to local news by
reallocating resources to the Providence Journal's regional sections that
target readers in seven geographic zones of its market. As a result of the
Company's strategies to emphasize regionally-zoned news and information
sections and to control costs, on June 5, 1995, the Company consolidated
the morning and afternoon newspapers in order to reallocate resources to
the regional editions and to reduce operating costs (the "Newspaper
Consolidation"). A portion of the total annual savings from this
consolidation is being used to enhance local news coverage.

6
<PAGE> 10

REORGANIZE SALES FORCE TO INCREASE CUSTOMER FOCUS. The Company
emphasizes a targeted approach to its advertisers and has recently begun
the reorganization of its sales force to enhance its effectiveness in
attracting advertisers. The Company also intends to institute a new
performance-based incentive compensation plan for its salespeople that
rewards employees based on their contribution to EBITDA rather than to
revenues. The Company believes that this reorganization will enable its
sales force to better identify sales opportunities, be more responsive to
advertiser needs, and operate more cost effectively.

REDUCE OPERATING COSTS. Expenses of the Company's Publishing Business
are closely monitored in an effort to control costs without sacrificing
revenue opportunities. The Company seeks to reduce labor costs through
investment in modern production equipment and the consolidation of
operations and administrative activities. The Company has recently reduced
operating costs through the Newspaper Consolidation and the Newspaper
Restructuring (defined below), which together have resulted in an estimated
$10 million in annual savings. As a result of the Newspaper Consolidation,
annual savings are estimated to be approximately $4 million. In addition,
in an effort to reduce labor costs, the Company recently reorganized the
staffing of the Providence Journal and offered retirement and voluntary
separation packages to selected groups of employees (the "Newspaper
Restructuring"), which the Company expects to result in anticipated savings
of approximately $6 million per year. The Company has also made efforts to
reduce its newsprint costs, which in 1995 accounted for 17.3% of the
Publishing Business' operating expenses and 7.6% of the Company's
consolidated operating expenses (excluding Newspaper Consolidation Costs
and Newspaper Restructuring Costs), through a variety of methods, including
reducing the page width of the newspaper and strict control of newspaper
waste.

INCREASE REVENUES THROUGH RELATED PRODUCTS. The Company has
introduced new informational products and services to generate revenue from
sources other than newspaper publishing. These products and services seek
to exploit the strong local brand recognition of the Providence Journal and
include fax-on-demand products, voice information services, a news wire
service, and telemarketing services.

See "Business -- Publishing -- Business and Operating Strategy" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations".

PROGRAMMING AND NEW MEDIA

GENERAL; BUSINESS AND OPERATING STRATEGY. The Company produces cable
television and satellite network programming and interactive and on-line new
media services through its management role or ownership interests in a variety
of content-driven entertainment and information businesses. The Company's
approach to development of programming and interactive opportunities is to
invest in or manage businesses that are extensions of its experience in the
production of programming content or that build on existing media franchises.
The Company's programming and new media strategy consists of the following key
elements:

LEVERAGE EXISTING EXPERTISE IN PROGRAMMING AND OTHER CONTENT
DEVELOPMENT. The Company has invested in and operates certain businesses
that capitalize on the Company's experience in television broadcasting and
newspaper publishing. As additional opportunities arise, the Company
expects to pursue such opportunities that best exploit or extend the
capabilities of existing talent and resources.

EMPHASIZE PROGRAMMING TOPICS WITH BROAD APPEAL. The Company's
strategy in its programming businesses is to develop cable and satellite
programming networks, such as the Television Food Network, America's Health
Network and NorthWest Cable News, based on issues of interest to potential
viewers such as food, health and local news. As the Company reviews
additional opportunities, it plans to invest in such ventures that it
believes have broad audience appeal.

7
<PAGE> 11

EXTEND AND ENHANCE EXISTING BRANDS AND CONTENT. The Company's
strategy in developing cable network programming and interactive and
on-line new media products has been to create products that are closely
related to the Company's existing brands and franchises. For example,
NorthWest Cable News builds on the leading local news franchises of the
Stations in Washington, Oregon and Idaho and Rhode Island Horizons, an
on-line service, presents news, features and advertising displayed in the
Providence Journal. The Company also believes that the success of these
ventures will serve to enhance the Company's existing broadcast and
newspaper properties.

MINIMIZE RISK THROUGH STAGED INVESTMENTS IN NEW OPPORTUNITIES. The
Company attempts to take a staged approach to investing in start-up
ventures by committing financial and managerial resources upon reaching
certain milestones in the businesses' development.

See "Business -- Programming and New Media -- Business and Operating
Strategy".

8
<PAGE> 12
<TABLE>
- ------------------------------------------------------------------------------------------

THE OFFERINGS

<S> <C>
Class A Common Stock offered in the
Underwritten Offering............... shares(1)

Class A Common Stock offered in the
Direct Placement.................... shares

Common Stock to be outstanding after
the Offering:

Class A Common Stock................ shares(2)(3)

Class B Common Stock................ 18,726,800 shares

Total....................... shares

Use of Proceeds....................... The net proceeds from the Offerings will be
used to repay a portion of the indebtedness
outstanding under the Company's revolving
credit facility. See "Use of Proceeds".

Voting and Conversion Rights.......... The rights of the holders of the Common Stock
are identical, except that each share of Class
B Common Stock entitles the holder to four
votes per share, while each share of Class A
Common Stock entitles the holder to one vote
per share. The Class A Common Stock and Class
B Common Stock vote as a single class on
substantially all matters, except as
otherwise required by law. The Class B Common
Stock is convertible at any time at the
election of the holder on a share-for-share
basis into Class A Common Stock, and
automatically converts into Class A Common
Stock under certain circumstances involving a
transfer. See "Description of Capital Stock".

New York Stock Exchange symbol........ Application has been made to list the shares of
Class A Common Stock on the New York Stock
Exchange under the symbol .
<FN>
- ---------------
(1) If the Underwriters exercise their over-allotment option in full, the total
number of shares of Class A Common Stock offered will be .

(2) If the Underwriters exercise their over-allotment option in full and
shares of Class A Common Stock are sold in the Direct Placement, the total
number of shares of Class A Common Stock outstanding after the Offerings
will be .

(3) Excludes an aggregate of shares of Class A Common Stock currently
issuable upon exercise of options and units outstanding under the Company's
1994 Employee Stock Option Plan, 1994 Non-Employee Director Stock Option
Plan, Incentive Units Plan and Restricted Stock Unit Plan (collectively, the
"Stock Incentive Plans"), including shares of Class A Common Stock
subject to outstanding options granted immediately prior to the Offerings.
See "Risk Factors -- Shares Available For Future Sale".

RISK FACTORS

Prospective investors should carefully consider the factors set forth
herein under "Risk Factors", in addition to the other information contained in
this Prospectus, before purchasing any of the shares of Class A Common Stock
offered hereby.

- ------------------------------------------------------------------------------------------
</TABLE>

9
<PAGE> 13

SUMMARY SUPPLEMENTAL PRO FORMA FINANCIAL DATA

<TABLE>

The following table presents summary supplemental pro forma financial data
for the years ended December 31, 1993, 1994, and 1995, as if the Spin-Off,
Merger and Kelso Buyout (each as defined herein under "The
Company -- Background; Reorganization") had occurred on January 1, 1993.
Supplemental pro forma financial data is presented because the Company believes
such data is more meaningful than historical financial data in comparing 1995
results of operations with prior periods because such pro forma data includes
KHC's operations and excludes discontinued cable operations for all periods
presented. Although the Company did not consolidate the results of KHC's
operations for accounting purposes until after the Kelso Buyout, the Company has
managed these operations since the completion of the King Acquisition in
February 1992. This summary supplemental pro forma financial data, which is
unaudited, consolidates the historical audited results of operations of the
Company and KHC, after giving effect to the supplemental pro forma adjustments
and eliminations described in footnote (1) below, for all periods presented.
This data is not necessarily indicative of the results of operations that would
have actually been obtained had the transactions referred to above been
consummated on January 1, 1993, nor is it indicative of the results of
operations that may be obtained in the future. Such financial data should be
read in conjunction with "Selected Financial Data", "-- Broadcasting
Business -- Summary of Financial Results", "-- Publishing Business -- Summary of
Financial Results" and "-- Programming and New Media Business -- Summary of
Financial Results" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations", and is qualified in its entirety by
reference to, the consolidated financial statements of the Company and KHC and
respective notes thereto, included elsewhere in this Prospectus.

<CAPTION>
SUPPLEMENTAL PRO FORMA (UNAUDITED)(1)
YEARS ENDED DECEMBER 31,
-------------------------------------
1993 1994 1995
-------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:

Revenues:
Broadcasting............................................. $147,846 $171,083 $180,547
Publishing............................................... 124,914 127,893 128,491
Programming and New Media................................ -- 2,300 3,468
-------- -------- --------
Total revenues...................................... 272,760 301,276 312,506
-------- -------- --------
Expenses:
Operating and administrative expenses:
Broadcasting.......................................... 104,832 113,449 116,128
Publishing, excluding Newspaper Consolidation
Costs(2) and Newspaper Restructuring Costs(3)....... 103,597 107,425 113,683
Programming and New Media............................. -- 2,914 5,132
Corporate............................................. 18,540 13,377 13,599
-------- -------- --------
Total............................................... 226,969 237,165 248,542
Depreciation and amortization(1)......................... 42,798 41,219 39,585
Stock-based compensation................................. 5,735 15,138 2,387
-------- -------- --------
Total............................................... 275,502 293,522 290,514
Newspaper Consolidation Costs
and Newspaper Restructuring Costs..................... -- -- 14,222
-------- -------- --------
Total expenses...................................... 275,502 293,522 304,736
-------- -------- --------
Operating income (loss).................................... (2,742) 7,754 7,770
Interest expense........................................... (18,213) (17,971) (19,573)
Equity in loss of affiliates(4)............................ (1,518) (5,054) (7,835)
Other income (expense), net................................ (1,055) 2,601 4,797
-------- -------- --------
Loss from continuing operations before income taxes........ (23,528) (12,670) (14,841)
Income tax expense (benefit)............................... (3,733) 6,466 52
-------- -------- --------
Loss from continuing operations............................ $(19,795) $(19,136) $(14,893)
======== ======== ========
Loss from continuing operations per share.................. $ (0.58) $ (0.56) $ (0.43)
Number of shares used in per share calculation............. 34,121 33,953 34,228
======== ======== ========
</TABLE>

10
<PAGE> 14

<TABLE>
<CAPTION>
SUPPLEMENTAL PRO FORMA (UNAUDITED)(1)
YEARS ENDED DECEMBER 31,
-------------------------------------
1993 1994 1995
-------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE
DATA)
<S> <C> <C> <C>
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(5):
Broadcasting............................................. $ 43,014 $ 57,634 $ 64,419
Publishing............................................... 21,317 20,468 14,808
-------- -------- --------
EBITDA excluding programming and new media and
corporate expenses.................................. 64,331 78,102 79,227
Programming and New Media................................ -- (614) (1,664)
Corporate................................................ (17,346) (13,074) (12,363)
-------- -------- --------
Total EBITDA.......................................... $ 46,985 $ 64,414 $ 65,200
======== ======== ========
EBITDA as a percentage of net revenues..................... 17.2% 21.4% 20.9%
Broadcast Cash Flow(6)..................................... $ 42,620 $ 59,492 $ 66,274
Capital expenditures....................................... 14,683 13,617 15,276
<FN>
- ---------------
(1) The Supplemental Pro Forma results of operations consolidate KHC's results
of operations for 1993 and 1994 with those of the Company in order for the
Company's results of operations during those years to be comparable with
1995. To effect this consolidation, adjustments were made to consolidate and
eliminate the minority interest in KHC for 1993 and 1994. In addition, pro
forma adjustments were made for all periods presented to reflect the
Spin-Off, the Kelso Buyout and the Merger as if those transactions had
occurred on January 1, 1993. For a detailed description of the pro forma
adjustments and elimination entries, see footnote (1) to "Selected Financial
Data -- Supplemental Pro Forma Financial Data".

(2) "Newspaper Consolidation Costs" are defined as those costs totaling $7,422
incurred in 1995 in connection with the Newspaper Consolidation.

(3) "Newspaper Restructuring Costs" are defined as estimated severance costs
totaling $6,800 incurred in 1995 in connection with the Newspaper
Restructuring.

(4) Equity in loss of affiliates consists of equity in loss of affiliates in the
Programming and New Media Business of $1,391, $4,545, and $6,796 in 1993,
1994 and 1995, respectively, and also consists of equity in loss of Linkatel
Pacific, LP, an investment of the Company which is held for sale, of $127,
$509, and $1,039 for 1993, 1994, and 1995, respectively.

(5) "EBITDA" is defined by the Company as operating income (loss) plus Newspaper
Consolidation Costs, Newspaper Restructuring Costs, depreciation,
amortization, stock-based compensation and pension expense. Pension expense
was $1,194, $303, and $1,236 for 1993, 1994 and 1995, respectively. EBITDA
is not intended to represent cash flow from operations and should not be
considered as an alternative to operating or net income computed in
accordance with generally accepted accounting principles ("GAAP") as an
indicator of the Company's operating performance or as an alternative to
cash flows from operating activities (as determined in accordance with GAAP)
as a measure of liquidity. The Company believes that EBITDA is a standard
measure commonly reported and widely used by analysts, investors and other
interested parties in the media industry. Accordingly, this information has
been disclosed herein to permit a more complete comparative analysis of the
Company's operating performance relative to other companies in its industry.

(6) "Broadcast Cash Flow" is defined by the Company as Broadcasting EBITDA plus
corporate expense allocations for the Broadcasting Business plus program
rights amortization less program rights payments. Corporate expense
allocations for the Broadcasting Business were $514, $773, and $703 for
1993, 1994, and 1995, respectively. Program rights amortization for the same
periods were $17,899, $18,924, and $17,318, respectively. Program rights
payments for the same periods were $18,807, $17,839, and $16,166,
respectively.
</TABLE>

11
<PAGE> 15

RISK FACTORS

Prospective investors should carefully consider the following risk factors,
in addition to the other information contained in this Prospectus, before
purchasing any of the shares of Class A Common Stock offered hereby.

LOSSES FROM CONTINUING OPERATIONS OF THE COMPANY. The Company experienced
losses from continuing operations of $16.3 million, $23.2 million and $5.0
million in 1993, 1994 and 1995, respectively. These losses include certain
non-cash charges attributable to amortization of intangibles resulting from the
acquisition of the Stations, costs associated with stock-based compensation
expense and equity in losses from its affiliated companies. In 1995, Newspaper
Consolidation Costs and Newspaper Restructuring Costs accounted for a total of
$14.2 million in additional operating expenses. The Company expects to incur
losses from continuing operations during the next few years primarily due to
amortization charges attributable to its acquisitions and costs associated with
the development of its Programming and New Media Business. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations".

RELIANCE ON NETWORK PROGRAMMING; DEPENDENCE ON NETWORK AFFILIATION. Of the
Company's nine Stations, five are affiliated with NBC, two with Fox, one with
ABC and one with CBS. The television viewership levels for each of the Stations
are materially dependent upon programming provided by the network with which
each Station is affiliated. There can be no assurance that such programming will
achieve or maintain satisfactory viewership levels in the future. Since the
majority of the Company's Stations are affiliated with NBC and most of the
Company's 1995 cash flow was derived from such Stations, a material decline in
NBC's ratings would have an adverse effect on the Company. Each of the Stations
is a party to a network affiliation agreement giving such Station the right to
rebroadcast programs transmitted by the network. The affiliation agreement for
each of the NBC Stations expires in 2001 (except for the affiliation agreement
for KHNL (Honolulu) which expires in 2002), while such agreements for each of
the ABC, CBS and Fox Stations expire in 2000, 1998 and 1998, respectively. Each
network has the right to terminate its respective affiliation agreement in the
event of a material breach of such agreement by a Station and in certain other
circumstances. Although the Company expects to continue to be able to renew its
network affiliation agreements, no assurance can be given that such renewals
will be obtained. The non-renewal or termination of one or more of the Stations'
network affiliation agreements could have a material adverse effect on the
Company's results of operations. See "Business -- Broadcasting".

RISKS ASSOCIATED WITH NEW BUSINESSES. The Company has invested
approximately $37 million in its existing start-up businesses, including three
cable and satellite television networks, Television Food Network, America's
Health Network and NorthWest Cable News, and intends to fund approximately $80
million in 1996 in the form of investments and funding of the Company's share of
operating losses in TVFN and AHN (each as defined herein) and will likely spend
additional amounts in its existing and other early stage businesses. These
investments involve the considerable risks frequently encountered in the
establishment of a new business in an evolving industry characterized by new
market entrants, intense competition and new and rapidly changing technology.
See Business -- Programming and New Media -- Competition".

TELEVISION INDUSTRY; COMPETITION AND TECHNOLOGY. The television industry
is highly competitive. Some of the stations with which the Stations and the LMA
Stations compete are subsidiaries of large national or regional companies that
have greater resources, including financial resources, than the Company.
Technological innovation, and the resulting proliferation of programming
alternatives such as cable, direct satellite-to-home services and home video
rentals, have fractionalized television viewing audiences and subjected
television broadcast stations to new types of competition. Over the past decade,
cable television has captured an increasing market share, while the overall
viewership of the major networks has generally declined. In addition, the
expansion of cable television and other industry changes have increased, and may
continue to increase, competitive demand for programming. Such increased demand,
together with rising production costs, may in the future increase the Company's
programming costs or impair the Company's ability to acquire programming. In
addition, new television networks, such as the recently launched UPN and the
Warner Brothers Network ("WB"), could create additional competition.

12
<PAGE> 16

The Federal Communications Commission (the "FCC") has proposed the adoption
of rules for implementing advanced (including high-definition) television
("ATV") service in the United States. Implementation of ATV is expected to
improve the technical quality of television. Under certain circumstances,
however, conversion to ATV operations may reduce a station's geographical
coverage area. Implementation of ATV is expected to impose additional costs on
television stations providing the new service, due to increased equipment costs
and possible spectrum-related fees. Recently some leaders in Congress have
proposed various plans that might require broadcasters to bid at auction for ATV
channels, or which might require that the current conventional channels be
returned to the government on an expedited schedule. In addition, some leaders
in Congress have asked the FCC to postpone issuing ATV licenses pending
consideration of such matters. While the Company believes the FCC will
eventually authorize the implementation of ATV, the Company cannot predict when
such authorization might occur or whether an auction might be required, the
implementation costs of ATV or the effect such authorization might have on the
Company's business. See "Business -- Broadcasting -- Competition" and
"-- Licensing and Regulation".

In addition to competing with other media outlets for audience share, the
Stations also compete for advertising revenue, their primary source of revenue.
The Stations compete for such advertising revenue with other television stations
in their respective markets, as well as with other advertising media, such as
newspapers, radio stations, magazines, outdoor advertising, transit advertising,
yellow page directories, direct mail and local cable systems. The Stations are
located in highly competitive markets. Accordingly, the Company's results of
operations will be dependent upon the ability of each Station to compete
successfully for advertising revenue in its market, and there can be no
assurance that any one of the Stations will be able to maintain or increase its
current audience share or revenue share. To the extent that certain of its
competitors have, or may in the future obtain, greater resources than the
Company, the Company's ability to compete successfully in its broadcasting
markets may be impeded. See "Business -- Broadcasting -- Competition".

DEPENDENCE ON ADVERTISING REVENUES; EFFECT OF ECONOMIC CONDITIONS. Since
the Company is significantly dependent upon sales of advertising for its
revenues (approximately 85% of the Company's revenues during 1995), the
operating results of the Company are affected by the national economy as well as
by regional economic conditions in each of the markets in which the Company
operates. For 1995, KING (Seattle) and KGW (Portland) accounted for 36.7% and
14.0% of the Company's EBITDA (excluding programming and new media and corporate
expenses), respectively, while the Providence Journal and related businesses
accounted for 18.7% of the Company's EBITDA (excluding programming and new media
and corporate expenses). As a result, the Company's results of operations are
highly dependent on the local economies in these geographic regions,
particularly as they may affect advertising expenditures and, to a lesser
extent, circulation of the Providence Journal. In addition, the Company's
results of operations are slightly higher in the fourth quarter of the year, and
EBITDA is significantly higher during such period, due principally to increased
expenditures by advertisers. During 1995, 28.4% of the Company's revenues and
36.8% of the Company's EBITDA (excluding programming and new media and corporate
expenses) were earned in the fourth quarter. See "Management's Discussion and
Analysis and Results of Financial Condition", "Business -- Broadcasting" and
"-- Publishing".

NEWSPAPER CIRCULATION. The Company's daily newspaper has experienced a
steady decline in circulation from 1990 to 1995, attributable to a number of
factors, including increased prices, a lackluster economy and, more recently,
the Newspaper Consolidation. While the Company in recent years has been able to
offset the effect on revenues of this decline with periodic price increases,
there can be no assurance that the Company will be able to continue to raise
prices sufficiently to offset any future declines in circulation. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business -- Publishing".

NEWSPRINT COSTS. Newsprint, the single largest raw material expense of the
Publishing Business, represented 17.3% and 7.6% of the operating costs and
expenses (excluding Newspaper Consolidation Costs and Newspaper Restructuring
Costs) of the Publishing Business and the Company, respectively, during 1995,
reflecting an increase in newsprint costs of approximately 45% per metric ton.
While the major newsprint producers recently announced a withdrawal of their
previously planned price increase, any future increases

13
<PAGE> 17

could have an adverse effect on the Company's results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business -- Publishing".

INDEMNIFICATION AND TAX LIABILITIES. 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 Cablevision, Inc. ("Continental"),
Old PJC, the Company, KHC and King Broadcasting Company ("KBC") provides that
the Company will, with certain exceptions, hold Continental, as successor by
merger to Old PJC, harmless from all of Old PJC's liabilities arising from its
non-cable businesses. The Company's indemnification obligations include
responsibility for all federal and state income tax liabilities of Old PJC and
its subsidiaries for periods ending on or before the closing of the transactions
contemplated by the Merger Agreement (the "Closing Date"), including income tax
liabilities resulting from any failure of the Spin-Off and the Merger (each as
described under "The Company -- Background; Reorganization") to qualify as tax-
free reorganizations under the Internal Revenue Code of 1986, as amended (the
"Code"), unless such failure to qualify is the result of certain actions by
Continental. See "The Company -- Background; Reorganization" and
"Business -- Legal Proceedings" and "-- Background; Reorganization".

REGULATORY MATTERS. The Company's television operations are subject to
significant regulation by the FCC under the Communications Act of 1934, as
amended (the "Communications Act"), most recently amended by the
Telecommunications Act of 1996 (the "Telecommunications Act"). Approval of the
FCC is required for the issuance, renewal and transfer of television station
operating licenses. In particular, the Company's business is dependent upon its
continuing to hold broadcasting licenses from the FCC. License renewals filed
after 1996 will be customarily granted for terms of eight years. While broadcast
licenses are typically renewed by the FCC, there can be no assurance that the
Company's licenses or the licenses of the owner-operators of the LMA Stations
will be renewed at their expiration dates, or, if renewed, that the renewal
terms will be for eight-year periods. All of the Stations are presently
operating under five-year licenses that expire on the following dates: December
1, 1996 (WCNC (Charlotte)); August 1, 1997 (WHAS (Louisville)); October 1, 1998
(KASA (Albuquerque/Santa Fe), KMSB (Tucson) and KTVB (Boise)); and February 1,
1999 (KING (Seattle), KGW (Portland), KHNL (Honolulu) and KREM (Spokane)). In
addition, the licenses for the LMA Stations, KFVE (Honolulu) and KTTU (Tucson),
expire on February 1, 1999 and April 1, 1997, respectively. The non-renewal or
revocation of one or more of the Company's FCC licenses could have a material
adverse effect on the Company's operations. LMAs may also be subject to
regulation by the FCC. The Telecommunications Act grandfathers existing LMAs and
permits future LMAs that are in compliance with FCC rules. The FCC may, however,
consider the adoption of new restrictions on television LMAs, including the
treatment of an LMA as an attributable interest in the future. Further, the
Communications Act and FCC rules restrict alien ownership and voting of the
capital stock of, and participation in the affairs of, the Company.

The United States Congress and the FCC currently have under consideration,
and may in the future adopt, new laws, regulations and policies regarding a wide
variety of matters which could, directly or indirectly, materially adversely
affect the operation and ownership of the Company's broadcast properties. The
FCC has not yet fully implemented the Telecommunications Act. The Company is
unable to predict the outcome of future federal legislation or the impact of any
such laws or regulations on its operations. See "Business -- Licensing and
Regulation".

ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS OF THE COMPANY'S CERTIFICATE OF
INCORPORATION, BY-LAWS AND RIGHTS AGREEMENT. Certain provisions of the
Company's Certificate of Incorporation, as amended (the "Certificate") and the
Company's By-Laws, as amended (the "By-Laws"), could have the effect of making
it more difficult for a third party to acquire a majority of the outstanding
capital stock of the Company. These provisions include the disparate voting
rights of the Class A Common Stock and the Class B Common Stock, and the
division of the Company's Board of Directors into three classes to be elected on
a staggered basis of one class per year. In addition, the Rights Agreement to be
entered into between the Company and The First National Bank of Boston, as
Rights Agent (the "Rights Agreement"), provides stockholders of the Company with
certain rights which would substantially increase the cost of acquiring the
Company in a transaction not approved by the Company's Board of Directors. See
"Description of Capital Stock".

14
<PAGE> 18

RELIANCE ON KEY PERSONNEL. The Company believes that its success will
continue to be dependent upon its ability to attract and retain skilled managers
and other personnel, including its present officers. The loss of the services of
any of the present officers, especially Stephen Hamblett, Chairman of the Board
and Chief Executive Officer, and Jack C. Clifford, Executive Vice
President-Broadcasting, Programming and New Media, could have a material adverse
effect on the operations of the Company. The Company does not have employment
contracts with, nor does it maintain key man life insurance on, any of its
executive officers. See "Management".

NO PRIOR PUBLIC MARKET FOR CLASS A COMMON STOCK; POSSIBLE VOLATILITY OF
STOCK PRICE. Prior to the Offerings, there has been no public market for the
Class A Common Stock. Consequently, the initial public offering price of the
Class A Common Stock will be determined by negotiations among the Company and
the Underwriters and may not be indicative of the price at which the Class A
Common Stock will trade after the Offerings. See "Underwriting" for a discussion
of the factors considered in determining the initial public offering price of
the Class A Common Stock. There can be no assurance that any active public
market for the Class A Common Stock will develop or be sustained after the
Offerings, or that the market price of the Class A Common Stock will not decline
below the initial public offering price. The trading price of the Class A Common
Stock may fluctuate significantly based upon a number of factors, including
actual or anticipated business performance, announcements by the Company or
changes in general industry or securities market conditions. See "Underwriting".

DIVIDEND POLICY. The Company has no present intention of declaring any
cash dividends on the Class A Common Stock or the Class B Common Stock following
consummation of the Offerings. However, it is anticipated that total dividends
to be paid in 1996 prior to the consummation of the Offerings will be equivalent
to the aggregate dividend paid in 1995. The payment of future dividends will be
at the discretion of the Company's Board of Directors and will be dependent upon
a variety of factors, including the Company's future earnings, financial
condition and capital requirements, the ability to obtain dividends or advances
from its subsidiaries and restrictions in applicable financing and other
agreements.

RESTRICTIONS IN CERTAIN AGREEMENTS. As part of the Merger, the Company
agreed that until October 5, 1999, without the prior consent of Continental, it
would not dispose of any material assets or declare or pay any dividend or
distribution on its capital stock if, as a result of such transaction, the fair
market value of the Company (determined as described herein under
"Business -- Restrictions in Certain Agreements") would be less than certain
specified amounts. In addition, the Company agreed to certain non-competition
and employee non-solicitation restrictions related to the disposed cable
operations for a three-year period ending October 5, 1998.

The credit agreement of the Company and its principal subsidiaries contains
various covenants, events of default and other provisions that could affect the
Company's business, operating and acquisition strategies. Such provisions
include requirements to maintain compliance with certain financial ratios and
limitations on the ability of the Company and its principal subsidiaries to make
acquisitions or investments without the consent of the lenders, to incur
indebtedness, to make dividend and other restricted payments and to take certain
other actions. In addition, such indebtedness is secured by pledges of the stock
of the Company's principal subsidiaries. See "Business -- Restrictions in
Certain Agreements".

SHARES ELIGIBLE FOR FUTURE SALE. Upon completion of the Offerings, the
Company will have outstanding shares of Class A Common Stock and 18,726,800
shares of Class B Common Stock. All of the shares of Class B Common Stock are
convertible into shares of Class A Common Stock on a share-for-share basis at
any time at the option of the holder. Shares held by affiliates of the Company
may be sold only if they are registered under the Securities Act or are sold
pursuant to an applicable exemption from the registration requirements of the
Securities Act, including Rule 144 thereunder. The Company's directors,
executive officers and holders of more than 5% of the Class A Common Stock will
agree not to offer, sell, contract to sell or otherwise dispose of such shares
(or securities convertible into, or exchangeable or exercisable for, such
shares) for 180 days after the date of this Prospectus, without the prior
written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated. See
"Underwriting". In addition, the shares of Common Stock received by shareholders
of Old PJC in the Spin-Off are subject to transfer restrictions which terminate
on October 5,

15
<PAGE> 19

1996. See "Business -- Background; Reorganization". Up to an additional
shares of Class A Common Stock are reserved for issuance under the Stock
Incentive Plans, of which shares will be issuable upon the exercise of
options outstanding immediately following the Offerings. In accordance with
certain adjustments made pursuant to the Company's existing Stock Incentive
Plans, up to approximately $21 million of additional Class A Common Stock could
be issued to participants in such plans in 1996, representing an adjustment
based on the anticipated $320 million increase in the value of Continental class
A common stock received by the Company's stockholders in the Merger assuming
consummation of the US West Merger (as defined herein). Of such additional
consideration, $14 million could be payable to participants in the IUP. The
Company currently anticipates that payment of such $14 million will be paid
approximately two-thirds in cash and the remaining one-third in shares of Class
A Common Stock, although there can be no assurance in this regard. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Stock-Based Compensation Payouts". In addition, the Company may
finance a portion of the cost of future acquisitions through additional
issuances of Class A Common Stock. Sales of substantial amounts of Common Stock,
or the perception that such sales could occur, could adversely affect the
prevailing market prices of the Class A Common Stock and the Company's ability
to raise capital through an offering of Class A Common Stock. See "Shares
Eligible for Future Sale".

DILUTION. Purchasers of shares of Class A Common Stock in the Offerings
will incur immediate and substantial dilution in net tangible book value of
$ per share of Class A Common Stock based on an initial public offering
price of $ per share of Class A Common Stock. See "Dilution".

16
<PAGE> 20

THE COMPANY

GENERAL. The Company owns and operates nine network affiliated television
stations and provides programming and marketing services to two television
stations under local marketing agreements in geographically diverse markets
throughout the United States, publishes the largest daily newspaper in the Rhode
Island and southeastern Massachusetts market, and produces diversified
programming and interactive new media services. The Company's television
broadcasting group reaches 5.6 million households, or 6% of all U.S. television
households; its newspaper is the leading newspaper in its market in terms of
advertising and circulation; and certain of its programming and new media
businesses, such as the Television Food Network, serve subscribers and viewers
nationwide.

The Company was incorporated in the State of Delaware in 1994 as the
successor to Old PJC, which was incorporated in Rhode Island in 1884. The
principal executive offices of the Company are located at 75 Fountain Street,
Providence, Rhode Island 02902, telephone number (401) 277-7000.

BACKGROUND; REORGANIZATION. Pursuant to the transactions described below,
on October 5, 1995, the Company acquired its joint venture partner's 50%
interest in the King Stations which were owned and operated by KHC, a subsidiary
of Old PJC, and disposed of all its cable operations. Such transactions were as
follows: (i) Old PJC acquired its joint venture partner's interest (the "Kelso
Buyout") in KHC, which at the time of such acquisition held all of the capital
stock of KBC, (ii) Old PJC contributed all of its non-cable businesses
(including all of the outstanding capital stock of KHC) to the Company, its
wholly-owned subsidiary, and the Company assumed all of the liabilities related
thereto (the "Contribution"), (iii) Old PJC distributed one share of Class A
Common Stock and Class B Common Stock to the holder of each share of Old PJC's
Class A Common Stock and Class B Common Stock, respectively (the "Distribution",
and together with the Contribution, the "Spin-Off"), and (iv) Old PJC, which
following the Spin-Off held only Old PJC's cable television businesses and
assets (the "Old PJC Cable Business"), merged (the "Merger") with and into
Continental. Immediately prior to the Kelso Buyout, Continental purchased all of
the stock of King Videocable Company, a Washington corporation and wholly-owned
subsidiary of KBC, which held all of the cable television assets and business of
KHC and KBC (the "King Cable Purchase"). As a result of these transactions, the
Company, in substance, became successor to Old PJC, in the same lines of
business, simultaneously disposing of its cable operations.

In connection with, and as part of the Spin-Off, the Company, with certain
exceptions, assumed and agreed to hold Continental, as successor by merger to
Old PJC, harmless from all of Old PJC's liabilities arising from its non-cable
businesses, and Old PJC, with certain exceptions, in turn agreed to hold the
Company harmless from liabilities arising from the Old PJC Cable Business, which
liabilities were assumed by Continental pursuant to the Merger. See
"Business -- Background and Reorganization".

17
<PAGE> 21

USE OF PROCEEDS

The net proceeds from the Offerings, at an assumed initial public offering
price of $ per share in the Underwritten Offering and at an assumed offering
price of $ per share in the Direct Placement, are estimated to be $
million ($ million if the Underwriters' over-allotment option is exercised
in full), after deduction of the underwriting discount in the Underwritten
Offering and estimated expenses of the Offerings. The Company intends to use the
net proceeds of the Offerings to repay a portion of the indebtedness outstanding
under its revolving credit facility established pursuant to a Credit Agreement
dated as of October 5, 1995 (the "Credit Agreement") with a syndicate of
commercial banks. The Credit Agreement provides for a term loan of $75 million
and a revolving credit facility of up to $300 million. The amount outstanding
under the revolving credit facility as of March 31, 1996 was $188 million and
the stipulated interest rate provided for under the revolving credit facility at
such date was 6.5% per annum for the first $165 million principal amount and
8.25% for the remaining $23 million principal amount then outstanding. Credit
availability under the revolving credit facility decreases quarterly commencing
December 31, 1996 until its final maturity on June 30, 2004. See "Management's
Discussion of Financial Condition and Results of Operations" and Note 10 of the
Company's consolidated financial statements. The Company used the revolving
credit and term loan facilities to finance the Kelso Buyout, to pay certain
income taxes due as a result of the King Cable Purchase and for certain other
corporate purposes.

DIVIDEND POLICY

The Company paid cash dividends in each of 1994 and 1995 on all outstanding
shares of Class A Common Stock and Class B Common Stock in an amount equal to
$0.29 per share (after giving effect to the Stock Split). Subject to approval of
the Company's Board of Directors, the Company intends to declare and pay a
special dividend (the "Special Dividend") equal to $0.21 per share (after giving
effect to the Stock Split) prior to the consummation of the Offerings.
Purchasers of shares of Class A Common Stock in the Offerings will not be
entitled to receive the Special Dividend.

The Company has no present intention of paying any cash dividends on the
Class A Common Stock or the Class B Common Stock following consummation of the
Offerings. The payment of future dividends will be at the discretion of the
Company's Board of Directors and will be dependent upon a variety of factors,
including the Company's future earnings, financial condition and capital
requirements and restrictions in applicable financing and other agreements. See
"Business -- Restrictions in Certain Agreements".

18
<PAGE> 22
<TABLE>

DILUTION

At December 31, 1995, the Common Stock had a net tangible book value
(deficit) per share of $(2.67). Net tangible book value (deficit) per share is
equal to the Company's total tangible assets (total assets less intangible
assets, consisting primarily of goodwill) less its total liabilities, divided by
the number of shares of Common Stock outstanding. After giving effect to the
Offerings at an assumed initial public offering price of $ per share in the
Underwritten Offering and at an assumed offering price of $ per share in the
Direct Placement and the application of the estimated net proceeds therefrom to
repay indebtedness, the pro forma net tangible book value of the Company at
December 31, 1995, would have been $ million, or $ per share. This
represents an immediate increase in net tangible book value of $ per share
to existing stockholders and an immediate dilution in net tangible book value of
$ per share to the purchasers of the Class A Common Stock in the
Underwritten Offering and an immediate dilution of $ per share to the
purchasers of Class A Common Stock in the Direct Placement. The following table
gives effect to the Stock Split and illustrates the per share dilution that
would have occurred if the Offerings had been consummated on December 31, 1995:

<CAPTION>
UNDERWRITTEN
OFFERING DIRECT PLACEMENT
------------------- -------------------
<S> <C> <C> <C> <C>
Initial public offering price per share............. $ $
Net tangible book value per share prior to the
Offerings...................................... $ (2.67) $ (2.67)
Increase in net tangible book value per share
attributable to price paid by purchasers of
Class A Common Stock in the Offerings.......... $ $
------- -------
Pro forma net tangible book value per share after
the Offerings..................................... $ $
------- -------
Dilution in net tangible book value per share to
purchasers of Class A Common Stock in the
Offerings......................................... $ $
======= =======
</TABLE>

19
<PAGE> 23
<TABLE>

CAPITALIZATION

The following table sets forth the capitalization on a consolidated basis
of the Company at December 31, 1995, and as adjusted to reflect (i) the sale in
the Underwritten Offering of shares of Class A Common Stock at an assumed
initial public offering price of $ per share, (ii) the sale in the Direct
Placement of shares of Class A Common Stock at an assumed offering price
of $ per share and (iii) the application of the estimated net proceeds
thereof as described under "Use of Proceeds". This table should be read in
conjunction with the historical financial statements of the Company, including
the notes thereto. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Historical Financial Statements".

<CAPTION>
AT DECEMBER 31, 1995
----------------------------
HISTORICAL AS ADJUSTED
---------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Current installments of long-term debt............................. $ 100
--------
Long-term debt, less current installments:
Revolving credit and term loan facility.......................... $234,298
Industrial Revenue Bonds......................................... 9,700
--------
Total long-term debt, less current installments.......... 243,998

Stockholders' equity:
Class A common stock, par value $1.00 per share; authorized
180,000,000 shares; issued and outstanding 15,405,600
shares........................................................ 15,406
Class B common stock, par value $1.00 per share; authorized
46,825,000 shares; issued and outstanding 18,726,800 shares... 18,727
Additional paid-in capital....................................... 65
Retained earnings................................................ 230,294
Unrealized loss on securities held for sale, net................. (1,253)
--------
Total stockholders' equity.................................... 263,239
--------
$507,237
========
</TABLE>

20
<PAGE> 24

SELECTED FINANCIAL DATA
<TABLE>

SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA. The following selected
consolidated historical financial data has been derived from the audited
consolidated financial statements of the Company included elsewhere in this
Prospectus. The data should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and is qualified
in its entirety by reference to the consolidated financial statements of the
Company and notes thereto. As more fully discussed in "Management's Discussion
and Analysis of Financial Condition and Results of Operations", the Company,
among other transactions, disposed of its cable operations and completed the
Kelso Buyout on October 5, 1995. The results of operations for 1995 include the
results of operations of KHC since January 1, 1995 with adjustments for the
consolidation of KHC. As a result of these transactions, the Company's
historical results of operations and financial condition for the years 1991
through 1994 are not comparable to 1995.

<CAPTION>
HISTORICAL
--------------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Broadcasting.......................... $ 39,381 $ 43,281 $ 45,506 $ 54,024 $180,547
Publishing............................ 118,169 120,516 124,914 127,893 128,491
Programming and New Media............. -- -- -- 2,300 3,468
-------- -------- -------- -------- --------
Total revenues................... 157,550 163,797 170,420 184,217 312,506
-------- -------- -------- -------- --------
Expenses:
Operating and administrative
expenses:
Broadcasting....................... 36,597 37,884 38,296 39,949 116,128
Publishing, excluding newspaper
consolidation and restructuring
costs(1)......................... 101,770 97,204 103,597 107,425 113,683
Programming and New Media.......... -- -- -- 2,582 5,132
Corporate.......................... 9,852 12,310 15,388 10,716 13,599
-------- -------- -------- -------- --------
Total............................ 148,219 147,398 157,281 160,672 248,542

Depreciation and amortization......... 20,909 20,549 20,613 19,983 33,969
Stock-based compensation.............. 8,923 2,641 5,735 15,138 2,387
-------- -------- -------- -------- --------
Total............................ 178,051 170,588 183,629 195,793 284,898

Newspaper consolidation and
restructuring costs................ 3,400 2,335 -- -- 14,222
-------- -------- -------- -------- --------
Total expenses................... 181,451 172,923 183,629 195,793 299,120
-------- -------- -------- -------- --------
Operating income (loss)................. (23,901) (9,126) (13,209) (11,576) 13,386
Interest expense........................ (10,102) (6,455) (2,578) (2,426) (11,395)
Equity in loss of affiliates............ -- (12,705) (8,763) (13,380) (7,835)
Other income, net....................... 31,072 46,104 2,182 6,103 4,797
-------- -------- -------- -------- --------
Income (loss) from continuing
operations before income taxes........ (2,931) 17,818 (22,368) (21,279) (1,047)
Income tax expense (benefit)............ 3,616 11,816 (6,097) 1,950 3,956
-------- -------- -------- -------- --------
Income (loss) from continuing
operations............................ $ (6,547) $ 6,002 $(16,271) $(23,229) $ (5,003)
======== ======== ======== ======== ========
Income (loss) from continuing
operations per share.................. $ (0.19) $ 0.17 $ (0.48) $ (0.68) $ (0.15)
======== ======== ======== ======== ========
Dividends paid per share................ $ 0.22 $ 0.24 $ 0.26 $ 0.29 $ 0.29
======== ======== ======== ======== ========
Number of shares used in per share
calculation........................... 35,125 34,410 34,121 33,953 34,228
======== ======== ======== ======== ========
</TABLE>

21
<PAGE> 25

<TABLE>
<CAPTION>
HISTORICAL
--------------------------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
OTHER DATA:
EBITDA(2):
Broadcasting.......................... $ 2,784 $ 5,397 $ 7,210 $ 14,075 $ 64,419
Publishing............................ 16,399 23,312 21,317 20,468 14,808
-------- -------- -------- -------- --------
EBITDA excluding programming and
new media and corporate expenses... 19,183 28,709 28,527 34,543 79,227
Programming and New Media............. -- -- -- (282) (1,664)
Corporate............................. (10,442) (14,072) (14,632) (10,889) (12,363)
-------- -------- -------- -------- --------
Total EBITDA....................... $ 8,741 $ 14,637 $ 13,895 $ 23,372 $ 65,200
======== ======== ======== ======== ========
EBITDA as a percentage of net
revenues........................... 5.5% 8.9% 8.2% 12.7% 20.9%
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------
AT DECEMBER 31,
------------------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets...................... $594,098 $793,433 $775,685 $724,713 $707,230
Net assets of discontinued cable
television operations included
in total assets................ 54,184 400,639 402,819 369,790 --
Long-term debt (including current
installments).................. 73,112 263,609 280,106 260,761 244,098
Stockholders' equity.............. 399,938 391,967 359,575 285,887 263,239

<FN>
- ---------------
(1) Includes Newspaper Consolidation Costs totaling $7,422 incurred in 1995 in
connection with the Newspaper Consolidation, Newspaper Restructuring Costs
totaling $6,800 incurred in 1995 in connection with the Newspaper
Restructuring and severance costs totaling $3,400 and $2,335 incurred in
1991 and 1992, respectively associated with the consolidation from 30 to 13
of the Company's regional circulation centers ("RCC Consolidation Costs").

(2) "EBITDA" is defined by the Company as operating income (loss) plus RCC
Consolidation Costs, Newspaper Consolidation Costs, Newspaper Restructuring
Costs, depreciation, amortization, stock-based compensation and pension
expense. Pension expense (income) added back to arrive at EBITDA was $(590),
$(1,762), $756, $(173) and $1,236 in 1991, 1992, 1993, 1994 and 1995,
respectively. EBITDA is not intended to represent cash flow from operations
and should not be considered as an alternative to operating or net income
computed in accordance with GAAP as an indicator of the Company's operating
performance or as an alternative to cash flows from operating activities (as
determined in accordance with GAAP) as a measure of liquidity. The Company
believes that EBITDA is a standard measure commonly reported and widely used
by analysts, investors and other interested parties in the media industry.
Accordingly, this information has been disclosed herein to permit a more
complete comparative analysis of the Company's operating performance
relative to other companies in its industry.

</TABLE>

22
<PAGE> 26
<TABLE>
SUPPLEMENTAL PRO FORMA FINANCIAL DATA. The following table presents
supplemental pro forma financial data for the years ended December 31, 1993,
1994, and 1995, as if the Spin-Off, Merger and Kelso Buyout had occurred on
January 1, 1993. Supplemental pro forma financial data is presented because the
Company believes such data is more meaningful than historical financial data in
comparing 1995 results of operations with prior periods because such pro forma
data includes KHC's operations, and excludes discontinued cable operations for
all periods presented. Although the Company did not consolidate the results of
KHC's operations for accounting purposes until after the Kelso Buyout, the
Company has managed these operations since the completion of the King
Acquisition in February 1992. This supplemental pro forma financial data, which
is unaudited, consolidates the historical audited results of operations of the
Company and KHC, after giving effect to the supplemental pro forma adjustments
and eliminations described in footnote (1) below, for all periods presented.
This data is not necessarily indicative of the results of operations that would
have actually been obtained had the transactions referred to above been
consummated on January 1, 1993, nor is it indicative of the results of
operations that may be obtained in the future. Such financial data should be
read in conjunction with "-- Selected Consolidated Historical Financial Data",
"-- Broadcasting Business -- Summary of Financial Results", "-- Publishing
Business -- Summary of Financial Results" and "-- Programming and New Media
Business -- Summary of Financial Results" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations", and is qualified in
its entirety by reference to the consolidated financial statements of the
Company and KHC and respective notes thereto, included elsewhere in this
Prospectus.

<CAPTION>
SUPPLEMENTAL PRO FORMA
(UNAUDITED)(1)
----------------------------------
YEARS ENDED DECEMBER 31,
----------------------------------
1993 1994 1995
-------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Broadcasting........................................... $147,846 $171,083 $180,547
Publishing............................................. 124,914 127,893 128,491
Programming and New Media.............................. -- 2,300 3,468
-------- -------- --------
Total revenues.................................... 272,760 301,276 312,506
-------- -------- --------
Expenses:
Operating and administrative expenses:
Broadcasting........................................ 104,832 113,449 116,128
Publishing, excluding Newspaper Consolidation
Costs(2) and Newspaper Restructuring Costs(3)..... 103,597 107,425 113,683
Programming and New Media........................... -- 2,914 5,132
Corporate........................................... 18,540 13,377 13,599
-------- -------- --------
Total............................................. 226,969 237,165 248,542
Depreciation and amortization(1)....................... 42,798 41,219 39,585
Stock-based compensation............................... 5,735 15,138 2,387
-------- -------- --------
Total............................................. 275,502 293,522 290,514
Newspaper Consolidation Costs and Newspaper
Restructuring Costs................................. -- -- 14,222
-------- -------- --------
Total expenses.................................... 275,502 293,522 304,736
-------- -------- --------
Operating income (loss).................................. (2,742) 7,754 7,770
Interest expense(1)...................................... (18,213) (17,971) (19,573)
Equity in loss of affiliates(4).......................... (1,518) (5,054) (7,835)
Other income (expense), net.............................. (1,055) 2,601 4,797
-------- -------- --------
Loss from continuing operations before income taxes...... (23,528) (12,670) (14,841)
Income taxes expense (benefit)(1)........................ (3,733) 6,466 52
-------- -------- --------
Loss from continuing operations.......................... $(19,795) $(19,136) $(14,893)
======== ======== ========
Loss from continuing operations per share................ $ (0.58) $ (0.56) $ (0.43)
Number of shares used in per share calculation........... 34,121 33,953 34,228
======== ======== ========
</TABLE>

23
<PAGE> 27

<TABLE>
<CAPTION>
SUPPLEMENTAL PRO FORMA
(UNAUDITED)(1)
----------------------------------
YEARS ENDED DECEMBER 31,
----------------------------------
1993 1994 1995
-------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
FINANCIAL RATIOS AND OTHER DATA:
EBITDA(5):
Broadcasting........................................ $ 43,014 $ 57,634 $ 64,419
Publishing.......................................... 21,317 20,468 14,808
-------- -------- --------
EBITDA excluding programming and new media and
corporate expenses................................ 64,331 78,102 79,227
Programming and New Media........................... -- (614) (1,664)
Corporate........................................... (17,346) (13,074) (12,363)
-------- -------- --------
Total EBITDA................................... $ 46,985 $ 64,414 $ 65,200
======== ======== ========
EBITDA as a percentage of net revenues................... 17.2% 21.4% 20.9%
Broadcast Cash Flow(6)................................... $ 42,620 $ 59,492 $ 66,274
Capital expenditures..................................... 14,683 13,617 15,276
</TABLE>

- ---------------

(1) The Supplemental Pro Forma results of operations consolidate KHC's results
of operations for 1993 and 1994 with those of the Company in order for the
Company's results of operations during those years to be comparable with
1995. To effect this consolidation, adjustments were made to consolidate and
eliminate the minority interest in KHC for 1993 and 1994. In addition, pro
forma adjustments were made for all periods presented to reflect the
Spin-Off, the Kelso Buyout and the Merger as if those transactions had
occurred on January 1, 1993. The pro forma adjustments and elimination
entries are as follows:

<TABLE>
<CAPTION>
INCREMENTAL AMOUNT TO ARRIVE AT
SUPPLEMENTAL PRO FORMA AMOUNTS
-------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------
LINE ITEM IN HISTORICAL FINANCIAL STATEMENTS 1993 1994 1995
-------------------------------------------- ------- ------- -------
DEBIT (CREDIT)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Pro Forma Adjustments
Depreciation and Amortization
Additional amortization expense as a result of the
"step-up" in basis in acquired assets of KHC......... $ 7,488 $ 7,488 $ 5,616
Interest Expense
Additional interest expense assuming beginning debt as a
result of the transactions at January 1, 1993 was
approximately $225 million with an average interest
rate of approximately 8%............................. 6,663 6,852 8,178
Income Tax Expense (Benefit)
Incremental income tax expense (benefit) from above
adjustments.......................................... $(3,763) $(3,827) $(3,904)
======= ======= =======
Elimination Entries
Operating and administrative expenses
Eliminate management fees paid to the Company from KHC
included in KHC continuing operating expenses ($1,941
and $1,481 was allocated to discontinued operations
in 1993 and 1994, respectively)...................... $(1,584) $(2,044) *
Other income (expense)
Eliminate management fees paid to the Company from
KHC.................................................. $ 3,525 $ 3,525 *
Equity in loss of affiliates
Eliminate the Company's equity in loss of KHC........... $(7,244) $(8,326) *
Income Tax Expense (Benefit)
Eliminate income tax effects of above eliminations...... $ (660) $ (500) *
======= ======= =======
</TABLE>

- ---------------
* Elimination entries are not shown for 1995 because KHC was consolidated
in the Company's audited financial statements for that year.

24
<PAGE> 28

(2) Newspaper Consolidation Costs are those costs totaling $7,422 incurred in
1995 in connection with the Newspaper Consolidation.

(3) Newspaper Restructuring Costs are estimated severance costs totaling $6,800
incurred in 1995 in connection with the Newspaper Restructuring.

(4) Equity in loss of affiliates consists of equity in loss of affiliates in the
Programming and New Media Business of $1,391, $4,545, and $6,796 in 1993,
1994 and 1995, respectively and also consists of equity in loss of Linkatel
Pacific, LP, an investment of the Company which is held for sale, of $127,
$509, and $1,039 for 1993, 1994, and 1995, respectively.

(5) "EBITDA" is defined by the Company as operating income (loss), plus
Newspaper Consolidation Costs, Newspaper Restructuring Costs, depreciation,
amortization, stock-based compensation and pension expense. Pension expense
was $1,194, $303, and $1,236 for 1993, 1994 and 1995, respectively. EBITDA
is not intended to represent cash flow from operations and should not be
considered as an alternative to operating or net income computed in
accordance with GAAP as an indicator of the Company's operating performance
or as an alternative to cash flows from operating activities (as determined
in accordance with GAAP) as a measure of liquidity. The Company believes
that EBITDA is a standard measure commonly reported and widely used by
analysts, investors and other interested parties in the media industry.
Accordingly, this information has been disclosed herein to permit a more
complete comparative analysis of the Company's operating performance
relative to other companies in its industry.

(6) "Broadcast Cash Flow" is defined by the Company as Broadcasting EBITDA plus
corporate expense allocations for the Broadcasting Business plus program
rights amortization less program rights payments. Corporate expense
allocations to the Broadcasting Business were $514, $773, and $703 for 1993,
1994, and 1995, respectively. Program rights amortization for the same
periods were $17,899, $18,924, and $17,318, respectively. Program rights
payments for the same periods were $18,807, $17,839, and $16,166,
respectively.

25
<PAGE> 29

BROADCASTING BUSINESS -- SUMMARY OF FINANCIAL RESULTS
<TABLE>

The following table sets forth historical and supplemental pro forma
(unaudited) operating results for the Broadcasting Business for 1993, 1994, and
1995. For comparison purposes, supplemental pro forma amounts consolidate the
results of KHC's broadcasting operations as if the Kelso Buyout occurred on
January 1, 1993 and give effect to the adjustments and eliminations described in
footnote (1) to "Selected Financial Data -- Supplemental Pro Forma Financial
Data".

<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
SUPPLEMENTAL PRO FORMA
HISTORICAL (UNAUDITED)
------------------------------ --------------------------------
1993 1994 1995 1993 1994 1995
------- ------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Revenues:
National...................... $19,475 $24,487 $ 91,125 $ 74,503 $ 88,691 $ 91,125
Local and regional............ 27,180 32,909 106,054 82,657 96,268 106,054
Other......................... 5,510 4,924 11,572 12,972 12,538 11,572
Agency commissions............ (6,659) (8,296) (28,204) (22,286) (26,414) (28,204)
------- ------- -------- -------- -------- --------
Net revenues.................... 45,506 54,024 180,547 147,846 171,083 180,547
------- ------- -------- -------- -------- --------
Operating and administrative
expenses...................... 38,296 39,949 116,128 104,832 113,449 116,128
Depreciation and amortization... 8,682 7,856 21,884 30,825 29,019 27,500
------- ------- -------- -------- -------- --------
Total operating
expenses............ 46,978 47,805 138,012 135,657 142,468 143,628
------- ------- -------- -------- -------- --------
Operating income (loss)......... $(1,472) $ 6,219 $ 42,535 $ 12,189 $ 28,615 $ 36,919
======= ======= ======== ======== ======== ========
OTHER DATA:
EBITDA(1)..................... $ 7,210 $14,075 $ 64,419 $ 43,014 $ 57,634 $ 64,419
EBITDA as a percentage of
net revenues............. 16% 26% 36% 29% 34% 36%
Corporate allocations......... 94 364 703 514 773 703
Program rights amortization... 7,674 7,356 17,318 17,899 18,924 17,318
Program rights payments....... (7,296) (6,760) (16,166) (18,807) (17,839) (16,166)
------- ------- -------- -------- -------- --------
Broadcast Cash Flow(2)........ $ 7,682 $15,035 $ 66,274 $ 42,620 $ 59,492 $ 66,274
======= ======= ======== ======== ======== ========
<FN>
- ---------------
(1) See footnote (2) to "Selected Financial Data -- Selected Consolidated
Historical Financial Data" and footnote (5) to "Selected Financial
Data -- Supplemental Pro Forma Financial Data" for a definition of, and
certain matters relating to, EBITDA.

(2) "Broadcast Cash Flow" is defined by the Company as Broadcasting EBITDA plus
corporate expense allocations for the Broadcasting Business plus program
rights amortization less program rights payments.
</TABLE>

26
<PAGE> 30

PUBLISHING BUSINESS -- SUMMARY OF FINANCIAL RESULTS
<TABLE>

The Publishing segment was not affected by the Spin-Off, the Merger or the
Kelso Buyout. Therefore, the following table includes only certain historical
operating and other data for the years ended December 31, 1993, 1994, and 1995:

<CAPTION>
HISTORICAL
--------------------------------------
YEARS ENDED DECEMBER 31,
--------------------------------------
1993 1994 1995
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
OPERATING DATA:
Revenues:
Advertising.......................................... $ 93,087 $ 95,079 $ 93,671
Circulation.......................................... 31,028 30,888 32,151
Other................................................ 799 1,926 2,669
-------- -------- --------
124,914 127,893 128,491
Operating and administrative expenses before Newspaper
Consolidation Costs(1) and Newspaper Restructuring
Costs(2)............................................. 103,597 107,425 113,683
Depreciation........................................... 11,426 11,198 10,850
-------- -------- --------
Operating income before Newspaper Consolidation Costs
and Newspaper Restructuring Costs.................... 9,891 9,270 3,958
Newspaper Consolidation Costs and Newspaper
Restructuring Costs.................................. -- -- (14,222)
-------- -------- --------
Operating income (loss)................................ $ 9,891 $ 9,270 $(10,264)
======== ======== ========
OTHER DATA:
EBITDA(3).............................................. $ 21,317 $ 20,468 $ 14,808
======== ======== ========
Average net paid circulation:
Daily................................................ 187,700 183,900 179,000
Sunday............................................... 268,900 267,100 259,800
<FN>
- ---------------
(1) Newspaper Consolidation Costs are those costs totaling $7,422 incurred in
1995 in connection with the Newspaper Consolidation.

(2) Newspaper Restructuring Costs are estimated severance costs totaling $6,800
incurred in 1995 in connection with the Newspaper Restructuring.

(3) See footnote (2) to "Selected Financial Data -- Selected Consolidated
Historical Financial Data" and footnote (5) to "Selected Financial
Data -- Supplemental Pro Forma Financial Data" for a definition of, and
certain matters relating to, EBITDA.

</TABLE>

27
<PAGE> 31

PROGRAMMING AND NEW MEDIA BUSINESS -- SUMMARY OF FINANCIAL RESULTS

The Programming and New Media Business was not significantly affected by
the Spin-Off, the Merger or the Kelso Buyout. As such, the following tables
present the historical results of the Company's wholly-owned entities and the
Company's share of the equity in loss of affiliates comprising this segment:

<TABLE>
<CAPTION>
HISTORICAL
-------------------------------
YEARS ENDED DECEMBER 31,
-------------------------------
1993 1994 1995
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
OPERATING DATA:
Revenues...................................................... $ -- $ 2,300 $ 3,468
Operating expenses(1)......................................... -- 2,582 5,132
Depreciation.................................................. -- 33 167
------- ------- -------
Operating loss................................................ $ -- $ (315) $(1,831)
======= ======= =======
Equity in loss of affiliates.................................. $(1,391) $(4,545) $(6,796)
======= ======= =======
EBITDA(2)..................................................... $ -- $ (282) $(1,664)
======= ======= =======
</TABLE>

- ---------------
(1) Operating expenses for 1994 on a Supplemental Pro Forma basis are $2.9
million, an increase of $0.3 million over historical operating expenses, due
to inclusion in Supplemental Pro Forma of the operation of NorthWest Cable
News, which was owned by KHC.

(2) See footnote (2) to "Selected Financial Data -- Selected Consolidated
Historical Financial Data" and footnote (5) to "Selected Financial
Data -- Supplemental Pro Forma Financial Data" for a definition of, and
certain matters relating to, EBITDA.

Equity in loss of affiliates for Programming and New Media consists of:

<TABLE>
<CAPTION>
HISTORICAL
-------------------------------
YEARS ENDED DECEMBER 31,
OWNERSHIP PERCENTAGE AS OF -------------------------------
DECEMBER 31, 1995 1993 1994 1995
-------------------------- ------- ------- -------
CUMULATIVE
INVESTMENTS THROUGH
DECEMBER 31, 1995(1)
---------------------
(DOLLARS IN
THOUSANDS) (DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
AHN.................. $10,250(2) 59% $ -- $ -- $(1,835)
TVFN................. 12,650(2) 21% (1,391) (3,848) (4,177)
Peapod(3)............ 5,335 17% -- -- (460)
PSN(3)............... 1,810 16% -- (697) (324)
------- ------- ------- -------
Total........... $30,045 $(1,391) $(4,545) $(6,796)
======= ======= ======= =======
</TABLE>

- ---------------
(1) In addition to the amounts invested in the Company's partially-owned
businesses included in the table, the Company has invested approximately
$6.5 million in 1995 in its wholly-owned businesses, NorthWest Cable News
and Rhode Island Horizons.
(2) Increases in cash invested in these entities in 1996, including funding of
the Company's share of operating losses, are currently anticipated to be
approximately $25 million for AHN, $55 million for TVFN and $1 million for
Peapod (defined below), which are expected to result in ownership interests
of approximately 60%, 55% and 14%, respectively.
(3) Peapod, L.P. ("Peapod") is an existing interactive grocery ordering and
delivery service. Partner Stations Network, L.P. ("PSN") is a limited
partnership formed to develop and produce broadcast television programming.

28
<PAGE> 32

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

GENERAL

The following analysis of the financial condition and results of operations
of the Company should be read in conjunction with the Company's audited
consolidated financial statements and notes thereto and the unaudited "Selected
Financial Data -- Selected Consolidated Historical Financial Data" and "--
Supplemental Pro Forma Data" included elsewhere in this Prospectus.

The Company's businesses are concentrated principally in broadcast
television, the publication of the Providence Journal, and in programming and
new media ventures. The Company's broadcast television revenues, which comprised
approximately 57.8% of total revenues in 1995, are derived substantially from
local and national advertising and, to a lesser extent, from network
compensation for the broadcast of network programming. The Company's publishing
revenues, which represented approximately 41.1% of total revenues in 1995, are
derived primarily from advertising and, to a lesser extent, paid circulation.
Revenues from the programming and new media ventures, which comprised
approximately 1.1% of total revenues in 1995, are principally derived from
subscriptions, service fees and advertising.

The Company's revenues historically have been slightly higher in the fourth
quarter of the year and EBITDA has been significantly higher during such period,
primarily attributable to increased expenditures by advertisers. Revenues and
EBITDA excluding programming and new media and corporate expenses for the fourth
quarter of 1995 amounted to approximately 28.4% and 36.8%, respectively, of the
Company's total revenues and EBITDA excluding programming and new media and
corporate expenses, respectively.

Broadcasting operating costs, which include primarily employee
compensation, programming, production and promotion, represented 48.4% of the
total operating costs of the Company, excluding Newspaper Consolidation Costs
and Newspaper Restructuring Costs during 1995. Publishing's operating costs,
principally labor and newsprint costs, represented 43.7% of the Company's 1995
operating costs, excluding Newspaper Consolidation Costs and Newspaper
Restructuring Costs.

REORGANIZATION

On October 5, 1995, Old PJC completed the acquisition of its joint venture
partner's interest in KHC through the Kelso Buyout for $265 million, including
transaction fees, completed the Spin-Off and, following the Spin-Off, at which
point it held only Old PJC's cable television businesses and assets, Old PJC was
merged with and into Continental. Immediately prior to the Kelso Buyout,
Continental purchased for $405 million all of the stock of KVC, an indirect
wholly-owned cable subsidiary of KHC. As a result of these transactions, the
Company, in substance, became successor to Old PJC, in the same lines of
businesses, simultaneously disposing of its cable operations, and in connection
with the Kelso Buyout, acquired the 50% interest in the King Stations that it
did not previously own.

DISPOSAL OF CABLE OPERATIONS

Gross proceeds from the disposal of the cable operations discussed above
consisted of a combination of Continental stock, which was received directly
from Continental by Old PJC's shareholders in connection with the Merger,
assumption of a portion of Old PJC's debt by Continental and cash. The total
combined consideration amounted to approximately $1.4 billion (including $405
million from the sale of KVC). The accounting for this transaction was to treat
the disposal of the cable operations as if the Company had spun off its cable
operations to shareholders, which the Company believes more appropriately
reflects the substance of the transaction. Accordingly, the excess of the gross
proceeds over the net assets of the discontinued cable operations less income
taxes, which amounted to $582.5 million, is reflected in the consolidated
statement of stockholders' equity. The receipt by the Old PJC shareholders of
the Continental shares, valued at $584.8 million, is recorded as a "deemed
distribution" in the consolidated statement of stockholders' equity.

29
<PAGE> 33

The loss from operations of the disposal of the discontinued cable business
is not reflected in the 1995 results of operations because loss on disposal of
that business, including estimated loss during the 1995 phase-out period, was
recognized in the fourth quarter of 1994. The loss from operations and disposal
of discontinued wholly-owned cable operations (excluding KHC's discontinued
cable operation) in 1994 amounted to $36.6 million, of which $34.8 million
reflected severance and transaction costs and $1.8 million reflected the
estimated loss from cable operations through the disposal date, net of allocated
interest of $20.7 million.

In connection with the Merger, the Company agreed to indemnify Continental
from any and all liabilities arising from the non-cable television businesses
and is responsible for all federal and state income tax liabilities for periods
ending on or before the closing date of the Merger. See "Business -- Background;
Reorganization".

KELSO BUYOUT

The Kelso Buyout as discussed above and in Note 3(a) of the consolidated
financial statements, was effected in the fourth quarter of 1995. As illustrated
below, the excess of the purchase price over the net book value of assets
acquired, including deferred taxes, was $206.7 million, of which approximately
$88.0 million was allocated to identifiable intangibles and the remainder to
goodwill together to be amortized over an average life of approximately 30
years.

<TABLE>

In connection with the Kelso Buyout, assets acquired and liabilities
assumed were as follows (in thousands):

<S> <C>
Assets acquired................................................... $243,186
Goodwill and other intangibles.................................... $206,740
Liabilities assumed............................................... $184,926
Cash paid......................................................... $265,000
</TABLE>

The primary business of KHC is broadcast television and, prior to the sale
to Continental of KVC, also included cable television. Prior to the Kelso
Buyout, the Company reported its 50% investment in KHC under the equity method
of accounting and provided management services to KHC. Audited financial
statements of KHC as of December 31, 1994 and for each of the years in the
two-year period then ended are presented elsewhere in this Prospectus.

CONSOLIDATED RESULTS OF OPERATIONS

SUPPLEMENTAL PRO FORMA RESULTS OF OPERATIONS

The supplemental pro forma financial data discussed below is presented as
if the Spin-Off, Merger and Kelso Buyout had occurred on January 1, 1993.
Supplemental pro forma data is presented because the Company believes such data
is more meaningful than historical financial data in comparing 1995 results of
operations with prior periods because such pro forma data includes KHC
operations and excludes discontinued cable operations for all periods presented.
Although the Company did not consolidate the results of KHC's operations for
accounting purposes until after the Kelso Buyout, the Company has managed these
operations since the completion of the King Acquisition in February 1992. This
supplemental pro forma financial data consolidates the historical audited
results of operations of the Company and KHC, after giving effect to the
supplemental pro forma adjustments and eliminations described in footnote (1) to
the table "Supplemental Pro Forma Financial Data" included in "Selected
Financial Data", for all periods presented. This data is not necessarily
indicative of the results of operations that would have actually been obtained
had the transactions referred to above been consummated on January 1, 1993, nor
is it indicative of the results of operations that may be obtained in the
future. Such financial data should be read in conjunction with "Selected
Financial Data", "-- Broadcasting Business -- Summary of Financial Results", "--
Publishing Business -- Summary of Financial Results" and "-- Programming and New
Media -- Summary of Financial Results" and is qualified in its entirety by
reference to the consolidated financial statements of the Company and KHC and
respective notes thereto included elsewhere in this Prospectus.

30
<PAGE> 34

SUPPLEMENTAL PRO FORMA 1995 TO SUPPLEMENTAL PRO FORMA 1994

Consolidated (Supplemental Pro Forma)

Consolidated revenues increased by 3.7% in 1995 to $312.5 million from
$301.3 million in 1994. Broadcasting revenues contributed significantly to the
increase in consolidated revenues with an increase of 5.5% in 1995 to $180.5
million from $171.1 million in 1994 due to increased advertising revenue
resulting from improved ratings and local market growth. Publishing contributed
substantially the same revenue in 1995 as in the prior year with $128.5 million
for 1995 compared with $127.9 million in 1994. The operations in the Programming
and New Media Business, which are in the early development phase, contributed
$3.5 million in revenue in 1995 compared to $2.3 million in 1994.

Consolidated operating and administrative expenses increased 4.8% to $248.5
million in 1995 from $237.2 million in 1994, primarily as a result of the
increased costs in Publishing. Broadcasting operating and administrative
expenses increased 2.4% to $116.1 million in 1995 from $113.4 million in 1994.
Publishing operating and administrative expenses increased 5.9% in 1995 to
$113.7 million from $107.4 million in 1994. This increase was the result of a
45% increase in the average price per ton of newsprint paid by the Company,
which caused a $6.5 million increase in newsprint costs in 1995 compared to
1994. Operating expenses for the development stage businesses in the Programming
and New Media Business increased to $5.1 million in 1995 from $2.9 million in
1994 primarily due to expenses associated with the launching of the Company's
cable network, NorthWest Cable News.

Consolidated EBITDA, excluding the one-time impact of the Newspaper
Consolidation Costs and the Newspaper Restructuring Costs, was relatively flat
at $65.2 million and $64.4 million in 1995 and 1994, respectively. Broadcasting
experienced 11.8% EBITDA growth in 1995 to $64.4 million compared to $57.6
million in 1994. The growth in Broadcasting EBITDA was offset by a $5.7 million
decline in Publishing EBITDA that was primarily the result of the 45% increase
in newsprint prices. In Programming and New Media, EBITDA was a loss of $1.7
million in 1995 and $0.6 million in 1994, largely as a result of development
stage expenses.

In 1995, the Company recorded a $7.4 million charge in connection with the
Newspaper Consolidation and a $6.8 million charge at year end in connection with
the Newspaper Restructuring. Substantially all of the Newspaper Restructuring
Costs were funded by the Company's pension plan. The combined impact of both of
these efforts is expected to reduce the number of employees by approximately 160
full time equivalents (net of 24 additional full-time equivalents) and, when
fully implemented, to generate estimated annual cost savings of approximately
$10 million.

Stock-based compensation expense, which relates to the Company's Stock
Incentive Plans, declined $12.7 million to $2.4 million in 1995 from $15.1
million in 1994 primarily due to the freezing of the Company's Incentive Units
Plan (the "IUP") in 1994 and the establishment of a reserve in 1994 for cash
payments to be made pursuant to such plan in 1995. See also "-- Liquidity and
Capital Resources" regarding possible additional payments under these plans.

Consolidated depreciation and amortization expense decreased $1.6 million
from $41.2 million in 1994 to $39.6 million in 1995. Included in supplemental
pro forma depreciation and amortization for both 1994 and 1995 is approximately
$7.5 million associated with the step-up in the carrying value of intangible
assets (with an average life of 30 years) acquired in the Kelso Buyout.

The increase of $2.8 million in equity in losses of affiliates from 1994 is
a result of the investment by the Programming and New Media Business in start-up
businesses, America's Health Network and Peapod. Other income (expense), net
increased $2.2 million to $4.8 million in 1995 from $2.6 million in 1994,
principally due to recognition in 1995 of $2.4 million in interest income from a
note receivable with the Lowell Sun Companies. Interest income received in 1994
and 1993 had been used to create a reserve against the principal of the note
receivable in those years. Included in other income (expense) are the operating
results of the Company's ancillary garage operation, which are not material to
the Company's results of operations.

31
<PAGE> 35

Income tax expense decreased from $6.5 million in 1994 to $0.1 million in
1995 primarily due to a $6.0 million additional tax provision recorded in 1994
relating principally to interest on settlements and contingencies related to
income tax liabilities identified during Internal Revenue Service examinations.
Effective tax rates for 1995 and 1994 were unfavorably affected by
non-deductible amortization of certain intangibles acquired. Loss from
continuing operations for 1995 was $14.9 million compared with $19.1 million in
1994 reflecting the factors discussed above.

Broadcasting (Supplemental Pro Forma)

The Broadcasting Business consists of the nine Stations and the two LMA
Stations. KING (Seattle), KGW (Portland), and WHAS (Louisville) contributed
approximately 45.2%, 17.2% and 14.0%, respectively, of the 1995 EBITDA of the
Broadcasting Business. No other station represented more than 10% of the
Broadcasting Business' 1995 EBITDA.

The Company's Broadcasting revenues grew 5.5% in 1995. Revenues
attributable to national advertisers increased 2.7% to $91.1 million in 1995
from $88.7 million in 1994. This modest increase occurred despite a slight
weakening of the economy in the fourth quarter of 1995 as well as the
unfavorable effects of large advance sales of advertising by the major networks
which reduced national advertiser demand for spot advertising at the Company's
stations. Revenues attributable to local and regional advertisers grew 10.2% in
1995, increasing from $96.3 million in 1994 to $106.1 million in 1995, due to
improved ratings and market growth.

Operating and administrative expenses increased 2.4% to $116.1 million in
1995 from $113.4 million in 1994, an increase of $2.7 million. This increase
reflects the incremental costs of a start-up news operation in Honolulu
(required by KHNL's affiliation switch from Fox to NBC on January 1, 1996) and
the offsetting impact of cost containment policies at the Stations. Depreciation
and amortization expense decreased 5.2% to $27.5 million in 1995 from $29.0
million in 1994, a change of $1.5 million. Included in supplemental pro forma
depreciation and amortization is approximately $7.5 million annually associated
with the step-up in carrying value of intangible assets (with an average life of
30 years) resulting from the Kelso Buyout.

As a result of revenue growth and cost control, EBITDA for the Broadcasting
Business increased 11.8% to $64.4 million in 1995 from $57.6 million in 1994.
Broadcast Cash Flow also grew 11.4% to $66.3 million in 1995 from $59.5 million
in 1994. Operating income improved 29.0% in 1995. Increases in EBITDA were
particularly strong at the Company's Seattle, Portland, Louisville, and
Albuquerque Stations.

Publishing (Supplemental Pro Forma and Historical)

The Publishing Business was unaffected by the Spin-Off, the Merger or the
Kelso Buyout. Therefore, the results for the Publishing Business are identical
on both a "Supplemental Pro Forma" and "Historical" basis.

Prior to June 5, 1995, the Company published a Sunday newspaper, and both a
morning daily newspaper (Monday through Saturday) and an afternoon daily
newspaper (Monday through Friday). As discussed previously, in response to
changing readership preferences and declining circulation, primarily in the
afternoon daily newspaper, and in an attempt to permanently reduce the Company's
cost basis, the Company effected the Newspaper Consolidation, and now publishes
a morning only daily Providence Journal-Bulletin (Monday through Saturday) in
addition to The Providence Sunday Journal.

Publishing revenues in 1995 of $128.5 million were relatively flat with
1994 revenues of $127.9 million. Advertising revenues declined slightly in 1995
to $93.7 million from $95.1 million in 1994 due to a continuing lackluster Rhode
Island economy. Advertising linage declined from 2.0 million in 1994 to 1.9
million in 1995. Principally as a result of the Newspaper Consolidation, daily
circulation has dropped 6.2% from a daily average of approximately 180,700 for
the three months ended March 31, 1995 to a daily average of approximately
169,500 for the three months ended March 31, 1996 and is expected to continue to
fall in the first half of 1996. While circulation levels declined as a result of
the Newspaper Consolidation, the Company believes that certain readers of the
Providence Journal who were purchasing both the morning and afternoon newspapers
have continued to read the consolidated newspaper. As a result, the Company
believes that the

32
<PAGE> 36

readership levels that the Company offered to advertisers remained relatively
constant immediately following the Newspaper Consolidation. Moreover, a recent
independent study conducted by Belden Associates on behalf of the Company has
indicated that both daily and Sunday readership has remained constant over the
past three years with daily readership fluctuating between 54% to 58% of the
total adults in the market and Sunday readership remaining between 68% to 70% of
total adults in the market. In addition, management is making efforts to
increase circulation levels through expanded local coverage and continued
improvement in content and customer service. There can be no assurances,
however, that management will be successful in these efforts. Despite the
decline in circulation levels, circulation revenues of $32.2 million in 1995
were 4% ahead of 1994 circulation revenues of $30.9 million as a result of rate
increases in 1994 and 1995.

Operating and administrative expenses increased 5.9% in 1995 to $113.7
million primarily due to newsprint price increases of $6.4 million in 1995. The
average price per ton of newsprint paid by the Company increased 45% in 1995.
Publishing has implemented several newsprint conservation programs to offset
these price increases, including, among others, reducing the page width of the
newspaper and strict control of newspaper waste. Due to recent market trends in
price increase withdrawals, the Company believes that if such trends continue,
newsprint prices could decrease somewhat in 1996. In implementing the Newspaper
Consolidation, the Company incurred costs of $7.4 million which include early
retirement and voluntary separation costs totaling $4.9 million affecting
approximately 80 employees and $2.5 million for promotion, training, and other
costs of the conversion. Annual savings from the Newspaper Consolidation are
estimated to be approximately $4 million. As previously discussed, the Company
also implemented the Newspaper Restructuring at the end of 1995 in an effort to
improve efficiencies. Under the plan, the Company has targeted a reduction in
workforce of approximately 100 full time equivalents through a combination of
early retirement and voluntary separation assistance plans. Newspaper
Restructuring Costs in an amount equal to $6.8 million were recorded in the
fourth quarter of 1995 relating to salaries, benefits, and payroll taxes
associated with the restructuring. Annual savings from the Newspaper
Restructuring are estimated to be approximately $6 million.

Principally as a result of the increase in newsprint costs, EBITDA declined
to $14.8 million in 1995 from $20.5 million in 1994. Substantially all of the
Restructuring Costs as well as the early retirement benefits offered in the
Newspaper Consolidation, together totaling approximately $10.6 million, are
expected to be paid from the Company's pension plan (the plan assets of which
exceed plan obligations), thereby minimizing the impact on cash flow of the
Publishing Business.

Programming and New Media (Supplemental Pro Forma and Historical)

The Programming and New Media Business was not significantly affected by
the Spin-Off, the Merger or the Kelso Buyout. The only difference between
"Historical" and "Supplemental Pro Forma" results of operations for the
Programming and New Media Business is an additional $0.3 million of operating
expenses on a supplemental pro forma basis attributable to the operations of
NorthWest Cable News, which was previously owned by KHC. Therefore, the results
of operations and financial condition of the Programming and New Media Business
are substantially identical on both a "Supplemental Pro Forma" and "Historical"
basis.

In December 1995, the Company launched the NorthWest Cable News channel,
which provides 24-hour news service to cable television viewers in Washington,
Oregon, and Idaho, and Rhode Island Horizons, the Company's electronic on-line
information service. The Company made new investments in America's Health
Network, a 24-hour health channel that was launched on March 25, 1996, and
Peapod, an existing interactive grocery ordering and delivery service. During
1995, the Company also continued to fund its share of its investment in
Television Food Network and PSN. In addition, the Company has fully subleased
the satellite transmission space it had previously acquired. In 1995, the
Company grouped these investments together in a new business segment called
"Programming and New Media". Currently, the Company wholly owns and operates
NorthWest Cable News and Rhode Island Horizons and has significant equity
investment positions in the other entities.

33
<PAGE> 37

The operations in the Programming and New Media Business are in the early
development phase and contributed $3.5 million in revenue in 1995 compared to
$2.3 million in 1994. Operating expenses for the Programming and New Media
Business increased to $5.1 million in 1995 from $2.9 million in 1994 primarily
due to expenses associated with the launching of NorthWest Cable News. The
increase of $2.3 million in the Programming and New Media equity in losses of
affiliates from 1994 is a result of start up costs incurred by America's Health
Network and Peapod.

SUPPLEMENTAL PRO FORMA 1994 TO SUPPLEMENTAL PRO FORMA 1993

Consolidated (Supplemental Pro Forma)

Consolidated revenues increased by 10.4% in 1994 to $301.3 million from
$272.8 million. Broadcasting revenues accounted for most of the consolidated
revenue increase, a 15.8% growth in revenues to $171.1 million in 1994 from
$147.8 million in 1993. Publishing revenues grew slowly at 2.4% to $127.9
million in 1994 from $124.9 million in 1993 reflecting a continuing recession in
the local economy serviced by the Publishing Business. The Programming and New
Media Business began developing its operating services in 1994 and generated
$2.3 million in revenue.

Consolidated operating and administrative expenses increased 4.5% to $237.2
million in 1994 from $227.0 million in 1993, primarily as a result of the
increased costs in Broadcasting. Broadcasting operating and administrative
expenses increased 8.2% to $113.4 million in 1994 from $104.8 million in 1993 as
a result of program development and increased promotional activities. Publishing
operating and administrative expenses increased 3.7% in 1994 to $107.4 million
from $103.6 million in 1993 due to development expenses, system conversion
costs, and payroll cost increases. Operating expenses for the start-up of
businesses in the Programming and New Media Business amounted to $2.9 million in
1994.

Consolidated EBITDA grew 37.0% to $64.4 million in 1994 from $47.0 million
in 1993 primarily due to a 34.0% increase in Broadcasting EBITDA. Broadcasting
EBITDA increased to $57.6 million in 1994 compared to $43.0 million in 1993.
Publishing EBITDA declined slightly to $20.5 million in 1994 from $21.3 million
in 1993. Corporate overhead declined $4.2 million in 1994 to $13.1 million from
$17.3 million in 1993 primarily due to consolidation and allocation of shared
services.

Stock-based compensation under the Company's Stock Incentive Plans
increased $9.4 million to $15.1 million in 1994 from $5.7 million in 1993,
primarily due to payments required to be made under the terms of such plans as a
result of a 40% increase in the valuation of the Company resulting from the
Kelso Buyout, the Spin-Off and the Merger, as determined by an independent
appraiser.

Consolidated depreciation and amortization expense decreased $1.6 million
to $41.2 million in 1994 from $42.8 million in 1993 reflecting the Company's
effort to control capital spending. Included in supplemental pro forma
depreciation and amortization in each of 1994 and 1993 is approximately $7.5
million associated with the step-up in carrying values of intangible assets
(with an average life of 30 years) acquired in the Kelso Buyout.

Supplemental pro forma other income (expense) increased $3.7 million in
1994 to $2.6 million income from $1.1 million expense in 1993. Losses in the
Company's garage operations included a valuation adjustment of approximately $3
million in 1993. Equity in losses of affiliates increased $3.5 million primarily
due to developing operations at TVFN and PSN.

Including the $6.0 million provision for income tax settlements and
contingencies in 1994 discussed earlier, supplemental pro forma loss from
continuing operations was $19.1 million in 1994 compared with $19.8 million in
1993, a $0.7 million improvement.

Broadcasting (Supplemental Pro Forma)

Broadcasting revenues grew 15.8% in 1994 to $171.1 million from $147.8
million in 1993. Revenues attributable to national advertisers grew 19.1% in
1994 to $88.7 million from $74.5 million in 1993 reflecting nationwide economic
improvement. Local and regional revenues exhibited strong growth in 1994 of
16.5%,

34
<PAGE> 38

due to improved ratings and market growth. Contributing to revenue growth in
1994 were changes in certain network affiliations, increased market share for
the three stations that were Fox affiliates during 1994 and advertising revenue
generated by the 1994 Winter Olympics carried by NBC.

Operating and administrative expenses increased 8.2% to $113.4 million in
1994 from $104.8 million in 1993, a change of $8.6 million. This increase is a
result of program development and promotional incentive programs to increase
market share. Depreciation and amortization expense decreased slightly to $29.0
million in 1994 from $30.8 million in 1993. Included in supplemental pro forma
depreciation and amortization in each of 1994 and 1993 is approximately $7.5
million associated with the step-up in carrying value of intangible assets (with
an average life of 30 years) resulting from the Kelso Buyout.

As a result of revenue growth and cost control, EBITDA for Broadcasting
increased 34.0% in 1994 to $57.6 million from $43.0 million in 1993. Broadcast
Cash Flow increased 39.7% in 1994 to $59.5 million from $42.6 million in 1993.

Publishing (Supplemental Pro Forma and Historical)

Publishing revenues grew 2.4% in 1994 to $127.9 million from $124.9 million
in 1993. The decline in advertising linage from 2.1 million in 1993 to 2.0
million in 1994 was offset by 3% rate increases. As a result, advertising
revenue increased 2.1% in 1994 to $95.1 million from $93.1 million in 1993.
Circulation revenues declined slightly to $30.9 million from $31.0 million in
1993 primarily as a result in the decline in the average net paid daily
circulation from 187,700 in 1993 to 183,900 in 1994, particularly in the
afternoon daily newspaper. Operating and administrative expenses increased 3.7%
in 1994 to $107.4 million from $103.6 million in 1993, primarily due to $2.3
million of costs associated with development efforts in 1994 related to a weekly
"shopper" and expanded information services, systems conversion costs of $1.0
million, and, to a lesser extent, payroll increases of $0.6 million.
Depreciation and amortization remained relatively flat with $11.2 million in
1994 and $11.4 million in 1993. As a result of the above factors, EBITDA for
Publishing declined 3.8% to $20.5 million in 1994 from $21.3 million in 1993 and
operating income declined 6.1% to $9.3 million in 1994 from $9.9 million in
1993.

Programming and New Media (Supplemental Pro Forma and Historical)

The Programming and New Media Business began developing its operating
services in 1994 and generated $2.3 million in revenue. Operating expenses for
the start-up of businesses in the Programming and New Media Business amounted to
$2.9 million in 1994 (on a supplemental pro forma basis). Equity in losses of
affiliates of this segment increased $3.2 million primarily due to costs
incurred in developing operations at TVFN and PSN.

CONSOLIDATED HISTORICAL RESULTS OF OPERATIONS

The consolidated historical financial data discussed below is derived from
the audited consolidated financial statements of the Company for the years ended
December 31, 1993, 1994, and 1995 summarized above in the table "Selected
Financial Data -- Selected Consolidated Historical Financial Data". As a result
of the Kelso Buyout, 1995 results include the results of operations of KHC since
January 1, 1995. As a result of the Spin-Off, the Merger and the Kelso Buyout,
the Company's results of operations and financial condition for the years 1991
through 1994 are not comparable to 1995.

The discussion of historical results of operations which follows is
presented for the consolidated results of operations and the Broadcasting
segment only. The Publishing Business and the Programming and New Media Business
were not significantly affected by the Spin-Off, the Merger and the Kelso
Buyout. The trends for these segments are as discussed under the "Supplemental
Pro Forma" basis discussed previously.

Consolidated Historical 1995 to Consolidated Historical 1994

As discussed above, 1995 results include the consolidation of KHC's
operations since January 1, 1995. Prior to the Kelso Buyout, the Company
recorded the investment in KHC under the equity method of

35
<PAGE> 39

accounting. Consequently, the significant increases in comparing historical
Broadcasting revenues, Broadcasting operating and administrative expenses,
Broadcasting operating income, interest expense and income taxes are
attributable to the consolidation of KHC's operations in 1995. The Company's 50%
ownership interest in KHC's net operations included in the equity in loss of
affiliates amounted to $8.3 million and $7.2 million for 1994 and 1993,
respectively. Management fees from KHC, which were eliminated in consolidation
in 1995, amounted to $3.5 million in each of the years 1994 and 1993, and are
included in interest, fees, and other income.

Broadcasting (Historical)

The primary difference between "Historical" and "Supplemental Pro Forma"
results of operations for the Broadcasting Business in 1995, 1994, and 1993 is
attributable to (i) an adjustment increasing amortization expense by $5.6
million in 1995 and $7.5 million in both 1994 and 1993 in connection with the
step-up in carrying value of intangible assets resulting from the Kelso Buyout
and (ii) consolidation of KHC broadcast operations. See footnote (1) to
"Selected Financial Data -- Supplemental Pro Forma Financial Data". Historical
depreciation and amortization increased $14.0 million in 1995 to $21.9 million
from $7.9 million in 1994 as a result of the consolidation of KHC and additional
amortization expense of $1.9 million associated with the step-up in carrying
values from the Kelso Buyout. Historical depreciation and amortization for 1994
decreased from $8.7 million in 1993 due to reduced capital spending.
Broadcasting's historical revenue and operating and administrative expenses for
the three year period ending December 31, 1995 exhibited the same trends as
those discussed on a "Supplemental Pro Forma" basis.

Consolidated 1994 (Historical) to Consolidated 1993 (Historical)

Historical consolidated revenues increased 8.1% to $184.2 million in 1994
from $170.4 million in 1993. Broadcasting revenues grew 18.7% to $54.0 million
from $45.5 million due to a national improvement in the economy. Publishing
revenues grew slowly at 2.4% to $127.9 million in 1994 from $124.9 million in
1993 reflecting a continuing recession in the local economy serviced by the
Publishing Business. The Programming and New Media Business began its early
stage development operating services in 1994 and generated $2.3 million in
revenue. Operating and administrative expenses increased 2.2% on a consolidated
basis to $160.7 million in 1994 from $157.3 million in 1993 primarily due to
$2.6 million in start-up costs associated with new operations of the Programming
and New Media Business. Stock-based compensation under the Company's Stock
Incentive Plans increased $9.4 million to $15.1 million in 1994 from $5.7
million in 1993 primarily due to payments required to be made under the terms of
such plans as a result of a 40% increase in the valuation of the Company
resulting from the Kelso Buyout, the Spin-Off and the Merger, as determined by
an independent appraiser. Depreciation and amortization declined slightly to
$20.0 million in 1994 from $20.6 million in 1993 due to reduced capital
spending. Other income, net increased $3.9 million from $2.2 million in 1993 to
$6.1 million in 1994. A valuation adjustment resulting in an approximate $3.0
million loss associated with the Company's garage operation was recorded in
1993. Increases in losses from affiliates of $4.6 million were primarily due to
an increase of $1.1 million in the Company's share of KHC's net operations
(including discontinued operations) and a $2.5 million increase in the Company's
share of TVFN losses. Including the $6.0 million provision for income tax
settlements and contingencies in 1994 discussed earlier, loss from continuing
operations declined $6.9 million to $23.2 million in 1994 from $16.3 million in
1993.

36
<PAGE> 40

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>

The Company has historically funded its working capital, debt service,
capital expenditures and dividend requirements primarily through cash provided
by its operating activities. Significant acquisitions or investments have
historically been funded primarily through long-term debt borrowings under
credit facilities. The following table sets forth summary information from the
Company's Consolidated Statement of Cash Flows for the years ended December 31,
1993, 1994, and 1995 included elsewhere in this Prospectus:

<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1993 1994 1995
-------- -------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Cash flows provided by continuing operations.............. $ 23,383 $ 24,927 $ 11,975
======== ======== =========
Cash flows provided by (used in) investing activities:
Kelso Buyout, less cash acquired........................ $ -- -- $(261,422)
Investments in affiliates............................... (5,783) (6,555) (23,647)
Property, plant, and equipment.......................... (11,597) (6,481) (15,276)
Cash proceeds from sale of cable operations, net of
taxes paid(1)........................................ -- -- 693,058
(Increase) decrease in investment in cable operations
through disposal date................................ (4,528) 24,838 (66,459)
Proceeds from sale of assets............................ 1,073 594 8,739
Other................................................... (2,800) 3,086 (58)
-------- -------- ---------
Total........................................... $(23,635) $ 15,482 $ 334,935
======== ======== =========
Cash flows provided by (used in) financing activities:
Net borrowings (repayments)............................. $ 18,847 $(19,345) $(313,215)
Payments for television programming rights financed..... (7,296) (6,760) (16,166)
Dividends paid.......................................... (8,872) (9,711) (9,706)
Purchases and adjustments to basis of treasury stock.... (2,387) (4,291) (7,353)
Other................................................... -- -- (1,702)
-------- -------- ---------
Total........................................... $ 292 $(40,107) $(348,142)
======== ======== =========
<FN>
- ---------------
(1) Represents $405,000 from the sale of KVC plus $410,000 assumption of New
Cable Indebtedness (as defined below) less taxes of $121,942.

</TABLE>

Cash Flows -- Investing and Financing Activities

The Company's significant investing and financing activities in 1995 are
primarily related to the consummation of the Merger and Kelso Buyout
transactions. The cash flows of KHC's operations are included in the above table
for 1995 since January 1, 1995, net of the effects of the acquired assets and
liabilities of KHC.

In connection with the Merger and Kelso Buyout transactions, Old PJC, prior
to the Spin-Off, incurred indebtedness to a subsidiary of Continental in a
principal amount of approximately $408 million (net of $2 million in certain
costs shared with Continental) ("New Cable Indebtedness"). Prior to the
Spin-Off, Old PJC used the proceeds of the New Cable Indebtedness, the $405
million provided by the sale of KVC and the Company Indebtedness (defined below)
to (i) consummate the Kelso Buyout, (ii) to repay substantially all outstanding
indebtedness of Old PJC and KHC in an aggregate amount of approximately $623
million, and (iii) to pay other costs associated with the transactions.
Additional indebtedness (the "Company Indebtedness") required to meet the
foregoing obligations, among others, was incurred by Old PJC and the Company in
the principal amount of $105 million. Following the 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 Company
Indebtedness. In connection with the sale of KVC, KBC paid approximately $121
million in taxes, which was funded by borrowings under the Company's credit
facility in December 1995.

37
<PAGE> 41

<TABLE>

The effects of the above transactions on consolidated long-term debt and
consolidated stockholders' equity of the Company are illustrated in the
following table comparing amounts immediately before the reorganization,
disposal of cable operations and the Kelso Buyout (effectively, September 30,
1995) with balances as of December 31, 1995:

<CAPTION>
AT AT
SEPTEMBER 30, DECEMBER 31,
1995 1995
-------------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Consolidated Long-Term Debt....................... $337,400 $244,098
Consolidated Stockholders' Equity................. 277,745 263,239
Long-Term Debt to Equity Ratio.................... 1.21 .93
======== ========
</TABLE>

Credit Facility

The Company Indebtedness was incurred pursuant to the Credit Agreement,
which consists of a $75 million term loan and a $300 million revolving credit
facility. The amount of credit available as of December 31, 1995 under the
revolving credit facility was approximately $141 million.

The amount available to be borrowed under the Company's revolving credit
facility decreases quarterly commencing December 31, 1996, with a final maturity
on June 30, 2004. The amount available to be borrowed under the revolving credit
facility decreases as follows (in thousands): 1996 -- $4,000; 1997 -- $10,500;
1998 -- $14,500; 1999 -- $21,500; 2000 -- $53,250; 2001 -- $65,750;
2002 -- $67,750; and 2003 -- $62,750. The indebtedness evidenced by the Credit
Agreement is secured by guarantees from all of the principal subsidiaries of the
Company and a first priority pledge of all such principal 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, plus the "spread" over such rates. The
"spread" is 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. See "Business -- Restrictions in Certain Agreements".
The Credit Agreement provides for the mandatory prepayment of amounts
outstanding and a reduction in the commitment under certain circumstances.

The Company has hedged against a portion of its liability for changes in
interest rates on its revolving credit and term loan facilities described above
through an interest rate swap agreement. The interest rate under the swap
agreement is equal to 6.71% plus an applicable margin as defined in the
revolving credit and term loan facility which effectively set the interest rate
at December 31, 1995 at 8.1% on the first $200 million of outstanding debt. The
Company recorded additional interest expense during 1995 of approximately $1.1
million which represents the excess of the swap agreement rate over the original
contractual rate. The notional amounts under the agreement are as follows: $200
million in 1996, $175 million in 1997 and $150 million in 1998 and 1999.

38
<PAGE> 42

Cash Flows from Operations

The following table discusses cash flows from operations in a manner which
identifies significant cash inflows and outflows. It is intended to enhance the
reader's understanding of, and reconciles EBITDA to, the cash flows from
operations as presented in the Company's consolidated statement of cash flows
for the year ending December 31, 1995 included elsewhere in this Prospectus.

<TABLE>
Consolidated cash flows provided by (used in) operations in 1995 can be
analyzed as follows (dollars in thousands):

<S> <C>
EBITDA:
Broadcasting......................................................... $ 64,419
Publishing (excluding Newspaper Consolidation Costs and Newspaper
Restructuring Costs).............................................. 14,808
Programming and New Media............................................ (1,664)
Corporate............................................................ (12,363)
--------
Total............................................................. 65,200
Program rights amortization.......................................... 17,318
Interest expense paid................................................ (11,400)
Income taxes paid.................................................... (12,679)
Other working capital items.......................................... (7,865)
--------
Cash flow from operations before one-time cash payouts............ 50,574
One-time cash payouts:
IRS settlements(1)................................................... (15,023)
Stock-based compensation payouts in connection with incentive stock
unit plan liquidation (see discussion below)...................... (20,633)
Cash paid related to Newspaper Consolidation Costs(2)................ (2,943)
--------
Cash flow from operations......................................... $ 11,975
========
<FN>

- ---------------
(1) "IRS settlements" relates to amounts paid in connection with final
settlements reached with the Internal Revenue Service relating to
examinations of the Company's income tax returns for the years 1984 through
1989.

(2) Cash portion of Newspaper Consolidation Costs. See discussion of such costs
in "Selected Financial Data -- Supplemental Pro Forma Financial Data" and
Note 8 of the Company's consolidated financial statements.
</TABLE>

<TABLE>
As discussed previously, EBITDA on a supplemental pro forma consolidated
basis for 1995 was relatively even with the prior year. However, 1995 EBITDA
compared to supplemental pro forma 1993 EBITDA increased 38.8% with 50% growth
in Broadcasting from 1993 to 1995. EBITDA for the KHC broadcasting operations
acquired amounted to $46.3 million in 1995, $43.5 million in 1994 and $35.8
million in 1993. Supplemental pro forma EBITDA for 1993, 1994 and 1995,
including KHC's broadcasting operations, are as follows:

<CAPTION>
SUPPLEMENTAL PRO FORMA
YEARS ENDED DECEMBER 31,
----------------------------------
1993 1994 1995
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
EBITDA:
Broadcasting..................................... $ 43,014 $ 57,634 $ 64,419
Publishing....................................... 21,317 20,468 14,808
Programming and New Media........................ -- (614) (1,664)
Corporate........................................ (17,346) (13,074) (12,363)
-------- -------- --------
Total.................................... $ 46,985 $ 64,414 $ 65,200
======== ======== ========
</TABLE>

39
<PAGE> 43

STOCK-BASED COMPENSATION PAYOUTS

Stock-based compensation payouts identified above totaling $20.6 million
relate to cash paid to participants in the liquidation of 85% of the units in
the IUP Plan. An additional $6.6 million of this liability was settled in shares
of Class A Common Stock. Amounts paid to participants in the IUP Plan and for
the remaining units previously were to be adjusted if, upon the occurrence of a
public offering of Continental class A common stock or certain other events, the
value of Continental class A common stock was greater or less than the price
attributed to such shares at the time 85% of the units were liquidated. A
similar adjustment was applicable to certain other stock-based compensation
plans of the Company. As a result of the proposed US West Merger (defined herein
under "Business -- Background; Reorganization"), the value of the Continental
class A common stock has been re-defined by the Compensation Committee of the
Company's Board of Directors as the amount received by the holders of
Continental's class A common stock (the holders of which include the
shareholders of the Company that were shareholders of Old PJC) upon consummation
of the US West Merger or, if the merger agreement between Continental and US
West is terminated, the average of the closing prices for Continental class A
common stock during a specified trading period following listing of
Continental's class A common stock. The amount of the final adjustment is
subject to consummation of the US West Merger, and could approximate $21
million, of which $14 million could be payable to participants in the IUP. All
of such $14 million will be charged to first quarter operations in 1996. Of such
$14 million additional consideration, the Company currently anticipates that
payment will be made approximately two-thirds in cash and the remaining
one-third in shares of Class A Common Stock. It is currently anticipated that
following the payout of any additional consideration (expected in the fourth
quarter of 1996), the IUP Plan will be fully liquidated and terminated. See
"Risk Factors -- Shares Eligible for Future Sale".

CAPITAL EXPENDITURES

Of the $15.3 million spent in 1995 on capital expenditures, $8.0 million
was spent by Broadcasting, $3.2 million was spent by Publishing and $3.7 million
was spent in Programming and New Media. Broadcasting and Programming and New
Media capital expenditures consisted primarily of maintenance of existing
broadcasting plant and equipment but also consisted of approximately $2.1
million spent on advanced digital editing systems with another $4 million to $5
million planned for such digital editing systems in 1996. Total capital
expenditures planned for Broadcasting in 1996 are expected to be approximately
$12.5 million. Publishing capital expenditures in 1995 of $3.2 million were
related to information and prepress systems and equipment replacement. A similar
amount of capital expenditures is planned for Publishing for 1996.

INVESTMENTS

In addition to the Kelso Buyout, the Company made significant investments
in Programming and New Media in 1995. Investments in AHN and TVFN totaled $10.3
million and $5.2 million, respectively, in 1995. Investments in its interactive
shopping venture, Peapod, totaled $5.3 million in 1995 and investments in PSN
totaled $0.9 million in 1995. The Company intends to spend approximately $25
million in 1996 to increase its investment in AHN and fund its share of
operating losses of AHN. The Company has recently entered into agreements to
purchase the equity partnership interests held by two partners of TVFN for a
total purchase price of $24 million and intends to pursue a proposed transaction
to purchase some or all of the equity partnership interest held by a third
partner. The total purchase price for these three transactions plus funding of
the Company's share of operating losses of TVFN in 1996 is currently estimated
at $55 million. The closing on the executed agreements is expected to occur in
May 1996, at which time the Company's equity interest in TVFN will increase to
45%. In 1995, the Company disposed of the Biltmore Hotel in Providence, Rhode
Island, for approximately $7 million, which approximated net book value.

DIVIDENDS AND TREASURY STOCK

Total gross dividends have been fairly constant over the past three years
at $9.7 million in 1995 and 1994 and $8.9 million in 1993. It is anticipated
that total dividends to be paid in 1996 prior to the consummation of the
Offerings will be equivalent to the aggregate dividend paid in 1995. See
"Dividend Policy".

40
<PAGE> 44

As discussed in note 16 of the consolidated financial statements,
additional consideration totaling $7.4 million was paid in 1995 to a former
stockholder under the terms of a redemption agreement dated April 15, 1987 in
connection with a treasury stock repurchase at that time.

FUTURE FUNDING AND CAPITAL RESOURCES

The Company anticipates that amounts available under its revolving credit
facility and cash flow from operations will be sufficient to meet the liquidity
requirements described above under "-- Liquidity and Capital Resources". To the
extent that the Company makes significant acquisitions or investments or is
required to meet significant liquidity requirements other than as described
above, the Company may need to obtain additional financing. There can be no
assurance that such additional financing will be available on terms acceptable
to the Company.

RECENT ACCOUNTING PRONOUNCEMENTS

On January 1, 1996, the Company adopted Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123").
The Statement encourages, but does not require, a fair value based method of
accounting for stock-based compensation plans. SFAS No. 123 allows an entity to
continue to measure compensation cost for those plans using the intrinsic value
based method prescribed by APB Opinion No. 25. For those entities electing to
use the intrinsic value based method, SFAS No. 123 requires pro forma
disclosures of net income and earnings per share computed as if the fair value
based method had been applied. The Company will continue to account for
stock-based compensation costs under APB Opinion No. 25 and will provide the
additional required disclosures relating to 1995 and 1996 stock options in its
1996 Annual Report.

On January 1, 1996, the Company adopted SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
This statement requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. This statement also requires that long-lived assets and
certain identifiable intangibles to be disposed of be reported at the lower of
carrying value or fair value less costs to sell. Adoption of SFAS No. 121 is not
expected to have a material impact on the Company's consolidated financial
statements.

41
<PAGE> 45

BUSINESS
GENERAL

The Company owns and operates nine network-affiliated television stations
and provides programming and marketing services to two television stations under
local marketing agreements in geographically diverse markets throughout the
United States, publishes the largest daily newspaper in the Rhode Island and
southeastern Massachusetts market, and produces diversified programming and
interactive new media services. The Company's television broadcasting group
reaches 5.6 million households, or 6% of all U.S. television households; its
newspaper is the leading newspaper in its market in terms of advertising and
circulation; and certain of its programming and new media businesses, such as
the Television Food Network, serve subscribers and viewers nationwide.

The Stations and the LMA Stations are located in markets ranging from the
12th to the 127th largest DMAs of the United States, with five such Stations in
the 50 largest DMAs. Five of the Stations are network affiliates of NBC, two are
network affiliates of Fox, one is a network affiliate of ABC and one is a
network affiliate of CBS. In 1995, EBITDA of the Broadcasting Business
represented approximately 81% of the Company's EBITDA excluding programming and
new media and corporate expenses. Eight of these nine Stations are VHF
television stations. The LMA Stations are affiliated with UPN. The Company's
strategy in the Broadcasting Business is to increase viewership, advertising
revenue and EBITDA primarily by capitalizing on its strong local news
franchises, targeted marketing and local sales efforts, high quality,
non-network programming and strict cost controls. For a discussion of the
television industry generally, see "-- Industry Background".

The Providence Journal is the leading newspaper in terms of advertising and
circulation in its market of Rhode Island and southeastern Massachusetts.
Average daily circulation levels for the three months ended March 31, 1996
following the consolidation of the morning and afternoon newspapers in June 1995
(see "-- Publishing") were approximately 169,500 for circulation Monday through
Saturday and 251,300 for Sunday. The Company's strategy for the Publishing
Business is to leverage the Providence Journal's comprehensive regional and
local news coverage to generate increased readership, local advertising sales,
and new revenue sources based on its strong brand recognition. The Company
believes that the recent Newspaper Consolidation, reorganization of its staff,
and effective cost controls will help contribute to improved operating results.

The Company produces cable and satellite television programming and
interactive and on-line new media services through its management role or
ownership interest in a variety of content-driven entertainment and information
businesses. The Company owns a 21% interest and participates in the management
of Television Food Network, a cable television network that is distributed to
15.5 million subscribers throughout the United States. The Company controls
America's Health Network, with a 65% ownership interest, and owns all of the
equity interest in NorthWest Cable News, both recently launched development
stage cable programming network services. The Company also owns equity interests
in a variety of interactive, on-line, and broadcast programming businesses. The
Company's strategy in its programming ventures is to develop cable and satellite
television programming networks, such as the Television Food Network, America's
Health Network and NorthWest Cable News, with programming content based on
topics or themes that the Company believes are of importance to a broad audience
of potential viewers.

42
<PAGE> 46
<TABLE>

The following table sets forth certain operating results and other
financial data for each of the Company's business segments for the years ended
December 31, 1995, 1994 and 1993, presented on a supplemental pro forma basis as
described under "Selected Financial Data -- Supplemental Pro Forma Financial
Data".

<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------
1993 1994 1995
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
EBITDA(1):
Broadcasting............................................. $ 43,014 $ 57,634 $ 64,419

Publishing............................................... 21,317 20,468 14,808

EBITDA excluding programming and new media and
corporate expenses.................................. 64,331 78,102 79,227

Programming and New Media................................ -- (614) (1,664)

Corporate................................................ (17,346) (13,074) (12,363)
-------- ------ --------
$ 46,985 $ 64,414 $ 65,200
======== ====== ========
<FN>
- ---------------
(1) See footnote (2) to "Selected Financial Data -- Selected Consolidated
Historical Financial Data" and footnote (5) to "Selected Financial
Data -- Supplemental Pro Forma Financial Data" for a definition of, and
certain matters relating to, EBITDA.
</TABLE>

BROADCASTING

OVERVIEW. The Stations generally are in markets that the Company believes
will experience above-average economic growth in retail sales, EBI and
population. The Stations are typically located in the largest cities or state
capitals of the states in which they operate. The Company's Stations and the LMA
Stations are in geographically diverse regions of the United States, which
reduces the Company's exposure to regional economic fluctuations. With the
exception of the Company's flagship station, KING (Seattle), which accounted for
approximately 19.2% of 1995 consolidated revenues, none of the Company's other
Stations accounted for more than 10% of the Company's consolidated revenues for
that period. For the year ended December 31, 1995, net revenues, Broadcast Cash
Flow and EBITDA attributable to the Broadcasting Business were $180.5 million,
$66.3 million and $64.4 million, respectively.

43
<PAGE> 47

The following table sets forth general information for each of the Stations
and the LMA Stations and the markets they serve, based on the Nielsen Station
Index as of February 1996. In February 1992, the Company completed the King
Acquisition and acquired a 50% joint venture interest in KHC, which indirectly
owned the King Stations. The Company has operated the King Stations since such
acquisition and in 1995 acquired 100% of the ownership of the King Stations in
the Kelso Buyout. The Stations are listed in order of the ranking of their DMA.
<TABLE>
<CAPTION>
NUMBER OF
COMMERCIAL
TELEVISION
NETWORK CHANNEL/ DMA STATIONS RANK IN STATION
MARKET AREA STATION STATUS AFFILIATION FREQUENCY RANK(1) IN MARKET(2) MARKET(3) SHARE(4)
- --------------- ------- -------- ----------- --------- ------- ------------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Seattle, WA KING Owned NBC 5/VHF 12 10 1 18%
Portland, OR KGW Owned NBC 8/VHF 24 8 2 18
Charlotte, NC WCNC Owned NBC 36/UHF 28 7 3 9
Albuquerque/ KASA Owned Fox 2/VHF 48 8 4 8
Santa Fe, NM
Louisville, KY WHAS Owned ABC 11/VHF 50 7 1 21
Honolulu, HI KHNL Owned NBC 13/VHF 70 9 2 19
KFVE LMA UPN 5/VHF 70 9 - -
Spokane, WA KREM Owned CBS 2/VHF 74 4 1 18
Tucson, AZ KMSB Owned Fox 11/VHF 80 6 4 11
KTTU LMA UPN 18/UHF 80 6 - -
Boise, ID KTVB Owned NBC 7/VHF 127 5 1 28

</TABLE>

<TABLE>

<CAPTION>
1995
MARKET
REVENUE(5)
---------------------
STATION $ (IN
MARKET AREA SHARE MILLIONS)
- --------------- ------- ---------
<S> <C> <C>
Seattle, WA 25% $269.0
Portland, OR 22 144.9
Charlotte, NC 11 118.1
Albuquerque/ 16 79.0
Santa Fe, NM
Louisville, KY 31 82.3
Honolulu, HI 19 63.7
- 63.7
Spokane, WA 27 42.8
Tucson, AZ 21 52.2
- 52.2
Boise, ID 40 26.0

<FN>
- ---------------

(1) Ranking of DMA served by the Station among all DMAs, measured by the number
of television households.
(2) Represents the number of television stations ("reportable stations")
designated by Nielsen as "local" to the DMA, excluding public television
stations and stations that do not meet minimum Nielsen reporting standards
(weekly cumulative audience of less than 2.5%) for reporting in the Sunday
through Saturday, 6:00 a.m. to 2:00 a.m. period ("sign-on to sign-off").
Does not include national cable channels. The number of reportable stations
may change for each reporting period.
(3) Station's rank relative to other reportable stations, based upon the DMA
rating as reported by Nielsen sign-on to sign-off during February 1996. Data
for KHNL and KMSB include KFVE and KTTU, respectively.
(4) Represents the number of television sets tuned to the Station as a
percentage of the number of television sets in use for Sunday-Saturday 6:00
a.m. to 2:00 a.m. from the February 1996 Nielsen Station Index. Data for
KHNL and KMSB include KFVE and KTTU, respectively.
(5) Represents gross national, local, regional and political advertising
revenues, excluding network and barter revenues, for all commercial
television stations in the DMA, based on actual local market reporting, as
estimated by BIA. Station share of 1995 market revenue for KHNL and KMSB
includes revenues of KFVE and KTTU, respectively.

</TABLE>

BUSINESS AND OPERATING STRATEGY. The Company's strategy in the
Broadcasting Business is to increase viewership, advertising revenue and EBITDA
by capitalizing on its strong local news franchise, targeted marketing and local
sales efforts, high quality, non-network programming and strict cost controls.
This strategy has contributed to compound annual growth in the Company's net
revenues and EBITDA in the Broadcasting Business, calculated on a supplemental
pro forma basis as herein described, of 9.5% and 23.9%, respectively, from 1991
to 1995. In addition, EBITDA as a percentage of net revenues calculated on a
supplemental pro forma basis have increased from 21.6% in 1991 to 35.7% in 1995.
The components of the Company's Broadcasting Business strategy include the
following:

ENHANCE STRONG LOCAL NEWS FRANCHISES. The Company's Stations, other than
the Fox-affiliated Stations, generally are the local news leaders and attempt to
exploit the revenue potential associated with local news leadership. Most of
such Stations lead their markets in terms of ratings for local news and the
number of hours of local news broadcast per week. The Company has focused on
enhancing each such Station's local market news programming franchise as the
foundation to build significant audience share in such market. The Company's
commitment to a strong local presence is particularly evidenced by the hours of
local news

44
<PAGE> 48

programming that each such Station broadcasts per week. Local news programming
is commercially valuable because of its high viewership level, the
attractiveness to advertisers of the demographic characteristics of the typical
news audience (allowing Stations generally to charge higher rates for
advertising time) and the enhanced ratings of programming in time periods
adjacent to the news. In addition, the Company believes that its strong local
news programming has helped to differentiate each such Station from cable
programming competitors, which generally do not provide such programming. At
certain of such Stations, the Company has also created enhanced viewership
through an emphasis on local weather trends through the use of advanced weather
radar equipment.

MATCH ADVERTISERS TO AUDIENCES THROUGH TARGETED LOCAL SALES. The Company
seeks to leverage its strong local presence to increase its advertising revenues
and broadcast cash flow by expanding relationships with local and national
advertisers and attracting new advertisers through targeted marketing techniques
and carefully tailored programming. Each of the Company's Stations has developed
high quality programming of local interest and periodically sponsors community
events which the Company believes have generally proven successful in attracting
incremental advertising revenues. In addition, the Company works closely with
advertisers to develop campaigns that match specifically targeted audience
segments with the advertisers' overall marketing strategies. With this
information, the Company regularly refines its programming mix among network,
syndicated and locally-produced programs in a focused effort to attract
audiences with demographic characteristics desirable to advertisers.

LEVERAGE LOCAL MARKET STRENGTH WITH ADDITIONAL LMAS. The Company plans to
pursue opportunities to enter into LMAs in the DMAs in which the Company's
Stations operate. The Company believes that LMAs enable the Company to take
advantage of the economies of scale that are derived from operating a group of
broadcast stations. By providing programming and marketing services to other
stations in the DMAs where the Stations are located, the Company believes that
it can increase revenue without incurring substantial incremental expenses and
thereby increase operating margins. The Company also believes that there are
benefits in terms of increased advertising revenue from LMA arrangements.

MAXIMIZE VIEWER SHARE THROUGH HIGH QUALITY NON-NETWORK PROGRAMMING. Each
of the Company's Stations is focused on improving its syndicated and locally
produced non-network programming to attract audiences with favorable demographic
characteristics during dayparts which are not programmed by a Station's network.
An important element in determining advertising rates is the Station's share
among a particular demographic group which an advertiser may be targeting. The
Company believes that through a cooperative approach to programming, it can
generate incremental revenue by adjusting its programming mix to capture viewers
of certain targeted demographic segments that meet the needs of valued
advertisers. The Company focuses on purchasing cost-effective programming that
will have long-term audience appeal and will be supported by syndicators with
local promotion of the shows. For several of the Stations, such programming
includes "Wheel of Fortune", "Jeopardy" and "The Oprah Winfrey Show", which are
highly ranked, first-run syndicated programs.

MAINTAIN EFFECTIVE COST CONTROLS AND LEVERAGE ECONOMIES OF SCALE. Each
Station emphasizes strict control of its programming and operating costs as an
essential factor in increasing broadcast cash flow. As a result of its ownership
of a group of nine television Stations and its programming and marketing of two
LMA Stations, the Company is able to purchase syndicated programming at a
discount (on a per Station basis) to the cost that any one of its Stations would
incur as an individual purchaser of such programming and is able to purchase a
variety of programming that might otherwise not be available to a single
station. For example, the Company believes that it has the ability to enter into
advantageous group programming purchases such as those with King World
Productions, Inc. (syndicator of "The Oprah Winfrey Show", "Wheel of Fortune"
and "Jeopardy"). As the provider of NBC network programming in five markets, the
Company believes that its ability to enter into stable and favorable affiliation
agreements with NBC is enhanced. Through strategic planning and annual budget
processes, the Company continually seeks to identify and implement cost-saving
opportunities at each of the Stations. The Company closely monitors the expenses
incurred by each of the Stations and continually reviews the performance and
productivity of Station personnel. The Company believes that it has been
successful in reducing its costs without sacrificing revenues through efficient
use of its available resources.

45
<PAGE> 49

CREATE OPERATING EFFICIENCIES THROUGH INVESTING IN TECHNOLOGY. The Company
invests selectively in technology to increase operating efficiency, reduce
Station operating expenses or gain a local market competitive advantage. Areas
of focus include digital news production, editing and library systems, advanced
weather radar equipment, and robotic cameras. The Company invested $2.1 million
in 1995 and anticipates investing $11.5 million in capital expenditures in 1996
and 1997 to deploy AVID digital editing, production and server technology that
will create a streamlined video production environment. The Company has entered
into an agreement with AVID to test and enhance this advanced, digital
technology. The Company believes that the use of AVID's digital equipment will
result in cost savings and operating efficiencies when fully deployed at the
Stations. To date, this technology is being used on a limited basis by KING
(Seattle), KGW (Portland) and WHAS (Louisville). The Company's operations at
NorthWest Cable News and KHNL (Honolulu) are entirely run with AVID technology.
The Company is using its NorthWest Cable News facility in order to further test
and refine such technology before deploying the technology at all of its
Stations. The Company intends to invest on a cost-effective basis in the most
up-to-date technology as it becomes available.

BROADCASTING ACQUISITION STRATEGY. The Company plans to pursue favorable
acquisitions of network-affiliated television stations where the Company
believes it can successfully apply its operating strategy and where such
stations can be acquired on attractive terms. The Company generally intends to
review acquisition opportunities in growth markets, typically in the 25th
through 75th largest DMAs in the nation, with what the Company believes to be
advantageous business climates. In assessing acquisitions, the Company targets
stations for which it has identified expense reductions and proposals for
revenue enhancements that can be implemented upon acquisition.

THE STATIONS

As used in the tables for each Station in the following section (i) "Market
revenue" represents gross advertising revenues, excluding network compensation
and barter revenues, for all commercial television stations in the market, and
for 1995, represents calendar year gross market revenue estimates, in each case
as reported by BIA; (ii) "Market rank (DMA)" is based on the Nielsen Station
Index for February of the years indicated; (iii) "Total commercial competitors
in market" is the total number of commercial television stations in the DMA
calculated as set forth in footnote (2) to the Station table appearing on page
44 of this Prospectus; (iv) "Station rank in market" is the Station's rank in
the market based on its share of total viewing of commercial broadcast
television stations in the market for the time periods referenced; and (v)
"Station audience share" is a Station's share of total viewing of commercial
broadcast television stations in the market for the time periods referenced.
Depending on the Station, data is presented for either 4:00 p.m. to 8:00 p.m. or
3:00 p.m. to 7:00 p.m., which represents the four hour "early fringe" period
immediately preceding "prime time" in the indicated market, during which period
the Stations earn a substantial portion of their advertising revenue.

KING: SEATTLE, WASHINGTON

Market Overview. KING, an NBC affiliate, operates in the Seattle/Tacoma
market, the 12th largest DMA in the nation, with approximately 1.5 million
television households and a population of approximately 3.8 million. In 1994,
approximately 71% of the population in the DMA subscribed to cable. In 1994, the
market's metropolitan audience was of above-average affluence in the United
States, with an average household EBI of approximately $49,400 as compared to
the national average of $45,937. The Seattle economy has experienced steady
economic and employment growth, with greater economic diversification in recent
years. Major industries in the market include aerospace, biotechnology,
forestry, software, telecommunications, transportation, retail and international
trade. Major employers include The Boeing Company, Microsoft Corporation,
Weyerhauser Company, Nordstrom, Inc., Alaska Airlines, Inc. and Airborne Freight
Corporation. The television advertising revenue for the Seattle market is
estimated to have been $269 million in 1995 as compiled by BIA.

Station Performance and Strategy. KING is the leading television station
in the Seattle market in terms of ratings. The Station, promoted as "KING-5",
has been the leading station in the Seattle market in recent years, with
significant share advantages over its competitors. KING is ranked first in the
4:00 p.m. to 8:00 p.m. daypart, a primarily non-network time period sold by the
Station from which it realizes a substantial portion of its revenue. KING ranked
first in the highly competitive Seattle market with an 18% audience share
"sign-on

46
<PAGE> 50

to sign-off" (6:00 a.m. to 2:00 a.m., Pacific Time, Sunday through Saturday) as
compared to its nearest competitor at 16%. KING is the leading station in terms
of share during prime time (8:00 p.m. to 11:00 p.m., Pacific Time, Monday
through Saturday, and 7:00 p.m. to 11:00 p.m., Pacific Time, Sunday) with a 23%
rating in comparison to its nearest competitor at 17%. KING is ranked first in
terms of ratings during nearly every news time period and is ranked first during
nearly every news time period in the demographic category most valued by
advertisers, adults between the ages of 25 and 54. KING has been an NBC
affiliate since 1959, and its current affiliation agreement expires in 2001.

The Company believes that KING has established a strong local presence
through its news broadcasts that has enabled it to maintain its leading position
in the market in terms of ratings and audience share. Based on the cumulative
ratings for dayparts, 71% of the adults in the DMA watch the Station's 11:00
p.m. news broadcast for some period of time. KING airs 32 hours of news
programming per week and promotes its broadcasts as "Coverage You Can Count On".
KING has invested in weather tracking technology that enables the Station to
provide advanced weather images and forecasts, and is the only station in the
market with Doppler radar equipment.

KING's programming strategy is to feature local news, programming and
entertainment. KING is one of the few stations in the country that airs its own
program, "Evening Magazine". "Evening Magazine" is aired during the "access"
daypart (7:00 p.m. to 8:00 p.m., Pacific time, Monday through Friday), and
performs well against non-network syndicated programming at a lower cost. KING
also features highly rated non-network syndicated programming including "The
Oprah Winfrey Show", "American Journal" and "Rosie O'Donnell".

KING's journalistic achievements have been recognized by its receipt of
numerous national and regional awards. KING maintains a strong community focus,
which is demonstrated through an unusually high level of locally-produced
programming and public affairs programs and campaigns. The quality of these
programs has earned KING numerous national and local awards in the areas of
entertainment, news, education and public service.

<TABLE>

In order to extend its local franchise, KING-5 provides portions of its
news broadcasts for use by NorthWest Cable News in its programming for
distribution to viewers in its DMA and throughout the northwest.

<CAPTION>
MARKET/STATION DATA
----------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
KING: SEATTLE, WASHINGTON
Market revenue (in thousands)(1)................................... $203,500 $223,900 $228,400 $260,400 $269,000
Market revenue growth over prior period............................ -5.0% 10.0% 2.0% 14.0% 3.3%
Market rank (DMA).................................................. 16 14 13 13 12
Television homes (in thousands).................................... 1,379 1,399 1,428 1,469 1,464
Total commercial competitors in market............................. 10 10 10 10 10
Station rank in market 6:00 a.m. to 2:00 a.m....................... 2 2 1 1 1
Station audience share 6:00 a.m. to 2:00 a.m....................... 19 18 21 19 18
Station rank in market 4:00 p.m. to 8:00 p.m....................... 2 1 1 1 1
Station audience share 4:00 p.m. to 8:00 p.m....................... 22 24 23 21 20
</TABLE>

KGW: PORTLAND, OREGON

Market Overview. Portland, Oregon ranks as the 24th largest DMA in the
nation, with approximately 933,400 television households in the DMA and a
population of approximately 2.5 million. Approximately 61% of Portland's
population subscribed to cable in 1994. The Portland market has experienced
rapid population growth since 1990 of 2.5% on a compound annual basis. Average
household EBI and average household retail sales in 1994 were $43,183 and
$24,028, respectively. Portland maintains a balanced economy with services,
wholesale/retail and manufacturing representing approximately 26%, 25% and 16%
of total employment, respectively. Major employers include such high-technology
companies such as Intel Corporation, Fujitsu, Hewlett-Packard Company, and
Tektronix, Inc., as well as Kaiser Permanente, the United States Government and
the State of Oregon. The Company believes that the demographic characteristics
of the Portland DMA make it an excellent national test market. Consequently, the
Company believes that KGW derives incremental advertising revenues from
advertisers seeking to test market new products.

47
<PAGE> 51

Station Performance and Strategy. KGW is the second-ranked station in the
Portland market with an audience share, sign-on to sign-off, of 18% as of
February 1996. KGW is a news leader in its market with 28 hours per week
broadcast as compared to 25 and 21 hours per week for KGW's closest competitors.
The Station provides the only Saturday morning newscast in the market. The
Station has won numerous awards for news programming, including the "Best News
Program" awarded by the Associated Press in 1995. KGW is the only station in the
market to utilize a helicopter, which the Company believes provides that
Station's newscasts with a distinct brand awareness in the market. In addition,
the Station has 5 outdoor, robotically-controlled cameras mounted at various
locations in the market which provide live video footage of areas of interest to
viewers and are utilized during the weather sections of news broadcasts. KGW is
also under a five-year contract which expires in 2000 with the Portland Trail
Blazers basketball team to provide television coverage of 20 games per season
and non-network playoff coverage. The Station's syndicated programming includes
"Live with Regis and Kathie Lee", "The Oprah Winfrey Show", "Inside Edition" and
"American Journal". KGW was first in terms of ratings in February 1996 for each
of these syndicated programs with the exception of "Inside Edition". KGW has
been an NBC affiliate since 1959 and its current affiliation agreement expires
in 2001.

Television advertising revenues in the Portland area are estimated to have
grown approximately 4.8% from approximately $138.2 million in 1994 to $144.9
million in 1995. KGW is estimated to have received approximately 22.6% of 1995
revenues compared with 23.5% and 20.0% for its two closest competitors. During
1995, political advertising for KGW totaled $1.2 million, which represented 36%
of total estimated political advertising revenue in the market, compared with
approximately 30% and 25% for each of its two closest competitors.

KGW will shortly institute a free on-line service for its viewers which
provides such data as weather, a video tour of the Station, and links to other
on-line databases on the Internet. The Station has begun to solicit corporate
advertising as a way to subsidize the operating cost of this on-line service.

KGW participates in over 25 community service sponsorships with local
corporations as a means to promote viewer awareness and philanthropy. In
conjunction with these programs, corporations underwrite KGW's production
expenses and purchase airtime. KGW has helped to increase awareness of a number
of civic programs and events, including anti-drug campaigns, environmental
awareness programs and toy drives. The Station has also received numerous awards
and recognition for its contributions to local schools and other learning
institutions.

Since 1993, KGW has made several investments in new technology such as
robotic cameras, weather graphics systems, and AVID digital equipment. KGW
expects to spend approximately $2.5 million in 1996 to complete the first phase
of the Station's conversion to AVID's digital equipment, purchase three
additional outdoor cameras and perform necessary equipment maintenance. The
Company believes that the conversion to digital production and editing will
improve operating efficiencies and reduce operating costs.

<TABLE>
In order to extend its local franchise, KGW provides portions of its news
broadcasts for use by NorthWest Cable News in its programming for distribution
to viewers in its DMA and throughout the northwest.

<CAPTION>
MARKET/STATION DATA
----------------------------------------------------
1991 1992 1993 1994 1995
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
KGW: PORTLAND, OREGON
Market revenue (in thousands)(1)................................... $111,800 $119,900 $119,100 $138,200 $144,900
Market revenue growth over prior period............................ -7.9% 7.2% -0.7% 16.0% 4.8%
Market rank (DMA).................................................. 27 27 27 27 24
Television homes (in thousands).................................... 840 888 890 920 933
Total commercial competitors in market............................. 8 8 8 8 8
Station rank in market 6:00 a.m. to 2:00 a.m....................... 3 3 2 2 2
Station audience share 6:00 a.m. to 2:00 a.m....................... 17 17 18 18 16
Station rank in market 4:00 p.m. to 8:00 p.m....................... 3 3 2 2 2
Station audience share 4:00 p.m. to 8:00 p.m....................... 14 15 17 17 16
</TABLE>

48
<PAGE> 52

WCNC: CHARLOTTE, NORTH CAROLINA

Market Overview. Charlotte, North Carolina is the 28th largest DMA in the
nation, with approximately 802,000 television households and a population of
approximately 2.1 million. The Charlotte market is experiencing substantial
growth in population, retail sales and EBI. The Charlotte metropolitan area had
an average household EBI of approximately $41,154 in 1994, average household
retail sales of $22,056 in 1994 and experienced a 2.1% increase in the number of
households from 1990 to 1994. Following the textile-related recessions of the
1980s, Charlotte has diversified its employment base away from a substantial
dependence on the textile and apparel industry. Charlotte is one of the major
banking centers in the United States, serving as the headquarters of First Union
Corporation and NationsBank Corporation, with other important sectors in the
market including transportation, communications, wholesale trade, health care
and utilities. Charlotte had a low unemployment rate of 3.6% in 1994. Television
advertising revenue in the market has experienced significant growth and is
estimated to have been $118 million in 1995 and to have grown at a compound
annual rate of 6.8% from 1991 to 1995.

Station Performance and Strategy. As a UHF station competing against two
VHF stations and four other UHF stations in the Charlotte market, WCNC increased
its station audience share during 1991 through 1995 in comparison to the falling
audience share for the three network stations in the market in the aggregate for
the same period. As part of its positioning strategy, the Company negotiated
with most cable systems in the DMA to carry WCNC's signal on the cable channel 6
position, which improves its competitive position as compared to its off-air
channel 36 position. As a result, WCNC markets itself as NBC 6. Cable
penetration in the DMA is 66%, with 69% penetration in metropolitan Charlotte.
Mecklenburg County, in which Charlotte is located, has close to 80% cable
penetration. WCNC's local news coverage distinguishes the Station with
approximately 17 hours of local news broadcasts each week, with local news
broadcast at 5:00 p.m. through 6:30 p.m. and 11:00 p.m. through 11:30 p.m. on
weekdays and with Saturday and Sunday morning newscasts. The Station has begun
the conversion to the use of digital technology in the production of its
broadcasts and is deploying AVID equipment in the Station. The Company believes
the use of such technology and equipment will improve operating efficiencies and
reduce operating costs. The Station's inventory of syndicated programming
includes "The Oprah Winfrey Show", "Wheel of Fortune" and "Jeopardy". WCNC has
been an NBC affiliate since 1978, and its current affiliation agreement expires
in 2001.

<TABLE>
<CAPTION>
MARKET/STATION DATA
-------------------------------------------------
1991 1992 1993 1994 1995
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
WCNC: CHARLOTTE, NORTH CAROLINA
Market revenue (in thousands)(1)...................................... $91,000 $94,900 $94,500 $105,700 $118,100
Market revenue growth over prior period............................... 12.5% 4.3% -0.4% 11.9% 11.7%
Market rank (DMA)..................................................... 31 31 30 29 28
Television homes (in thousands)....................................... 740 757 775 794 802
Total commercial competitors in market................................ 6 6 6 7 7
Station rank in market 6:00 a.m. to 2:00 a.m.......................... 3 3 3 4 3
Station audience share 6:00 a.m. to 2:00 a.m.......................... 9 9 9 9 9
Station rank in market 4:00 p.m. to 8:00 p.m.......................... 4 4 4 5 3
Station audience share 4:00 p.m. to 8:00 p.m.......................... 7 8 7 9 9
</TABLE>

KASA: ALBUQUERQUE/SANTA FE, NEW MEXICO

Market Overview. KASA operates in the Albuquerque/Santa Fe market, the
48th largest DMA in the nation, with approximately 553,000 television households
and a population of approximately 1,571,000 Approximately 59% of the population
in the DMA subscribed to cable in 1994. The Albuquerque/Santa Fe market has had
an average growth in retail sales of 14.0% per year from 1993 to 1994. In 1994,
the market's average household EBI was $38,083. The Albuquerque/Santa Fe market
has attracted a growing number of high technology companies such as Intel
Corporation and is home to several research and military facilities such as Los
Alamos National Laboratories, Sandia National Laboratories and Kirtland and
Holloman Air Force Bases. Television advertising revenue in the market has
experienced significant growth, and is estimated to have been $79 million in
1995 and to have grown at a compound annual rate of 13.8% from 1991 to 1995.

49
<PAGE> 53

<TABLE>

Station Performance and Strategy. In April 1993, KASA converted from a UHF
station to a VHF station, putting KASA on a par with its other network
competitors. The Santa Fe/Albuquerque market is the second largest geographic
DMA in the nation, encompassing over 160,000 square miles. KASA's conversion to
VHF and its concomitant signal expansion have spurred a 54% growth in its
revenue for 1995 as compared to 1993. KASA increased its overall station
audience share 25% from 1991 to 1995 compared to falling audience shares for its
three network competitors. KASA has increased its overall revenue share by 12%
since 1993. The Station's marketing inventory of syndicated programming includes
"The Simpsons", "Fresh Prince" and "Roseanne". KASA has been a Fox affiliate
since 1986 and its current affiliation agreement expires in 1998.

<CAPTION>
MARKET/STATION DATA
-----------------------------------------------
1991 1992 1993 1994 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
KASA: ALBUQUERQUE/SANTA FE, NEW MEXICO
Market revenue (in thousands)........................................... $47,100 $52,700 $57,700 $74,100 $79,000
Market revenue growth over prior period................................. -5.9% 11.9% 9.5% 28.4% 6.6%
Market rank (DMA)....................................................... 52 52 49 50 48
Television homes (in thousands)......................................... 502 519 530 541 553
Total commercial competitors in market.................................. 7 7 7 7 8
Station rank in market 6:00 a.m. to 2:00 a.m............................ 4 4 4 4 4
Station audience share 6:00 a.m. to 2:00 a.m............................ 7 8 8 11 9
Station rank in market 3:00 p.m. to 7:00 p.m............................ 4 4 4 4 4
Station audience share 3:00 p.m. to 7:00 p.m............................ 9 9 11 12 10

</TABLE>

WHAS: LOUISVILLE, KENTUCKY

Market Overview. Louisville, Kentucky is the 50th ranked DMA, with total
television households of approximately 543,000 and a total population of
approximately 1,438,000. Cable penetration in the DMA was 65% in 1994. Average
household EBI and average retail sales for the Louisville market in 1994 was
$41,673 and $21,680, respectively. Louisville's economy has been stable in
recent years, with unemployment for the region at 4.2% versus the national
average of 5.5%. The Louisville economy has a diverse employment base with 30.3%
of the workforce in the service sector, 23.2% in wholesale and retail trade,
17.8% manufacturing, and the remainder in construction, transportation,
utilities, finance, real estate and the public sectors. Major employers in the
Louisville market include United Parcel Service of America, Inc., General
Electric Company, Ford Motor Company, Humana Inc., The Kroger Co., Columbia/HCA
Healthcare Corporation and PNC Bank Corp.

Station Performance and Strategy. WHAS is the market leader in Louisville,
with a 31% share of television revenues and a 21% audience share between sign-on
and sign-off as reported in the February, 1996 Nielsen Station Index. WHAS is
promoted as "Kentuckiana's News Channel", serving portions of Kentucky and
Indiana, and is ranked first in every revenue-critical news time period. The
Station currently originates approximately 31 hours of local programming per
week, compared to 24 and 22 hours originated by its two closest competitors.
WHAS's strategy is to maintain its leading position in the market by (i)
focusing on local programming, news and special events, (ii) providing
syndicated and locally-originated programming that receives high audience
ratings and (iii) extending the Station's strong local presence through
community service.

WHAS's syndicated programs include "Live with Regis and Kathie Lee", "The
Oprah Winfrey Show", "Coach" and "M*A*S*H*", all of which ranked as or were tied
for first place in their time periods in February, 1996. The Company believes
that WHAS's exclusive coverage of the Kentucky Derby each year is an important
factor in generating ratings and advertising in connection with the event and in
terms of developing audience loyalty to the Station. In 1995, WHAS broadcast 30
hours of Kentucky Derby-related programming, which garnered substantial ratings
and audience share. During the actual race in 1995, audience share increased to
85%. This coverage includes live coverage of all races at Churchill Downs on the
day of the Kentucky Derby, as well as coverage of the Kentucky Oaks and Triple
Crown. The Station also successfully launched a Saturday morning news program in
1991, which generated an audience share of 32% as reported in the February, 1996
Nielsen Station Index. The Station has an exclusive contract with the Kentucky
State

50
<PAGE> 54

Lottery through 1999 which provides WHAS with an additional revenue stream of
approximately $1 million per year.

WHAS is also a leader in philanthropic activities, which serves to promote
viewer awareness and community service, most notably the "WHAS Crusade for
Children" which has raised over $56 million in 42 years. The Station has also
received numerous awards and recognition for its contributions to local schools
and learning institutions.

<TABLE>

Since 1994, WHAS has made several investments in new technology such as
robotic cameras, weather graphics systems, and AVID's digital equipment, which
the Company believes will improve operating efficiencies and reduce operating
costs. Furthermore, the Station maintains a unique scenic department which
develops and manufactures sets for the Company's other Stations.

<CAPTION>
MARKET/STATION DATA
-----------------------------------------------
1991 1992 1993 1994 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
WHAS: LOUISVILLE, KENTUCKY
Market revenue (in thousands)(1)........................................ $65,900 $66,900 $73,100 $74,600 $82,300
Market revenue growth over prior period................................. 1.5% 1.5% 9.3% 2.1% 10.3%
Market rank (DMA)....................................................... 47 45 50 49 50
Television homes (in thousands)......................................... 550 545 533 539 543
Total commercial competitors in market.................................. 6 6 6 7 7
Station rank in market 6:00 a.m. to 2:00 a.m............................ 3 1 1 1 1
Station audience share 6:00 a.m. to 2:00 a.m............................ 20 24 23 22 21
Station rank in market 4:00 p.m. to 8:00 p.m............................ 3 3 1 1 1
Station audience share 4:00 p.m. to 8:00 p.m............................ 22 21 24 28 26
</TABLE>

KHNL AND KFVE: HONOLULU, HAWAII

Market Overview. Honolulu, Hawaii is the 70th largest DMA in the United
States if ranked by number of television households, but is the 58th largest DMA
when ranked by television advertising revenues. The Honolulu DMA comprises the
entire State of Hawaii. The market has approximately 381,000 television
households, total population of approximately 1.2 million and an average
household EBI of $57,619 in 1994. Cable penetration in the Honolulu DMA was 85%
in 1994. Hawaii's chief employment sectors are tourism, retail, services,
finance, insurance, defense, and government. Leading employers include ITT
Sheraton Hotels, Bank of Hawaii, Alexander & Baldwin, Inc., Outrigger
Enterprises and GTE Corporation.

Station Performance and Strategy. On January 1, 1996, KHNL began a seven
year affiliation contract with NBC, propelling KHNL to the leading position
during prime time (7:00 p.m. to 10:00 p.m., Monday through Friday) with a 23.8%
share among adults ages 25 to 54 as compared to 15.8% for its closest
competitor. With this performance in prime time, KHNL outperformed the NBC
national prime time average. KHNL plans to capitalize on its strength in prime
time to promote continued growth in other broadcast time periods. Since its
first newscast aired in April 1995, now promoted as "NBC Hawaii News 8", the
KHNL news organization has evolved into a strong local news competitor. The
Station now produces four hours of local news daily and has gained market share
for every news broadcast category with its approach to newsgathering and
presentation and the only all-digital newsroom in Hawaii. KHNL's inventory of
syndicated programming includes "Ricki Lake", "Geraldo" and "Entertainment
Tonight".

As a part of the Company's LMA strategy, the Company entered into an LMA
with KFVE in May 1993 which has expanded the Company's audience reach, market
revenue share, and combined ratings in the market. Under the LMA for KFVE, the
Company provides programming and marketing services pursuant to which the
Company receives all advertising revenues in exchange for funding the
programming and most operating costs. The Company is required to pay a
percentage of such revenues to KFVE (equal to approximately $748,000 in 1995).
KFVE is affiliated with UPN. In 1994, the Company transferred the broadcast of
University of Hawaii sporting events to KFVE. The current agreement expires in
May 1997 and the Company is currently negotiating a renewal of the agreement.
While the Company's owned and operated station, KHNL, and its LMA Station, KFVE,
have separate identities in the market among viewers, the Company believes there
are advantages to having two stations in the DMA and, at times, markets the two

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<PAGE> 55

stations together to advertisers. For example, KFVE's exclusive contract for the
University of Hawaii's sporting events provides KHNL with a promotional
opportunity for the newscasts of KHNL. In addition, as a result of the Company's
marketing efforts, these two stations when calculated together have garnered
audience ratings and revenue shares that provide the Company with additional
strength in the market. For example, during prime time, KFVE in February 1996
earned a 7.7% audience share among adults ages 25 to 54, in addition to KHNL's
leading market share of 23.8%. KFVE's inventory of syndicated programming
includes "The Simpsons", "Blossom", "Doogie Howser, M.D." and "Coach".

<TABLE>
<CAPTION>
MARKET/STATION DATA
-------------------------------------------------------
1991 1992 1993 1994 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
KHNL/KFVE: HONOLULU, HAWAII
Market revenue (in thousands)................................... $58,000 $60,800 $59,600 $67,600 $63,700
Market revenue growth over prior period......................... -4.0% 4.8% -2.0% 13.4% -5.8%
Market rank (DMA)............................................... 71 70 70 70 70
Television homes (in thousands)................................. 357 363 374 380 381
Total commercial competitors in market.......................... 9 9 9 9 9
Station rank in market 6:00 a.m. to 2:00 a.m.................... * * 4 3 3
Station audience share 6:00 a.m. to 2:00 a.m.................... * * 13 16 14
Station rank in market 4:00 p.m. to 8:00 p.m.................... * * 4 4 4
Station audience share 4:00 p.m. to 8:00 p.m.................... * * 13 14 14
<FN>
- ---------------

* Data not available for these years.
</TABLE>

KREM: SPOKANE, WASHINGTON

Market Overview. KREM operates in the Spokane, Washington market, the 74th
largest DMA in the nation, with approximately 366,250 television households, a
population of 925,000 and cable penetration of 63% in 1994. The Spokane area had
an average household EBI of $37,781 in 1994, with average retail sales per
household of $21,762. EBI per household and retail sales grew 6.2% and 11.4%,
respectively, in 1994 from 1993. Spokane's largest employer is the Fairchild Air
Force Base and is not currently subject to closure. Other employers include
health care, manufacturing and high technology companies.

Station Performance and Strategy. KREM, a CBS affiliate, is tied for first
for overall audience share for the Spokane DMA, sign-on to sign-off, with an 18%
household share. In the local news category, KREM, branded as "Your News Leader
for the Inland Northwest", is the number one ranked news source for the Spokane
area in the majority of news periods. In the February 1996 Nielsen ratings, KREM
was the number one station in the market during the revenue critical 4:00 p.m.
to 8:00 p.m., Monday through Friday, daypart with an audience share of 23%.
KREM's news excellence has earned the Station numerous awards including three
Emmy Awards in 1994 and most recently the prestigious Polk award for the Best
Local Reporting in the country. In addition, the station's number one ranked
"The Oprah Winfrey Show" and the popular ranked "Seinfeld" and "The Simpsons"
syndicated programming are used by the Station to lead and follow KREM news
programming. KREM has been a CBS affiliate since 1977 and its affiliation
agreement expires in 1998. CBS is currently tied for the number one network in
prime time in the Spokane market.

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<PAGE> 56

<TABLE>

In order to extend its local franchise, KREM provides portions of its news
broadcasts for use by NorthWest Cable News in its programming for distribution
to viewers in its DMA and throughout the northwest.

<CAPTION>
MARKET/STATION DATA
-----------------------------------------------
1991 1992 1993 1994 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
KREM: SPOKANE, WASHINGTON
Market revenue (in thousands)........................................... $30,200 $34,100 $37,100 $43,600 $42,800
Market revenue growth over prior period................................. -0.3% 12.9% 8.8% 17.5% -1.8%
Market rank (DMA)....................................................... 78 80 79 78 74
Television homes (in thousands)......................................... 310 316 342 353 366
Total commercial competitors in market.................................. 4 4 4 4 4
Station rank in market 6:00 a.m. to 2:00 a.m............................ 1 1 1 2 2
Station audience share 6:00 a.m. to 2:00 a.m............................ 22 22 21 19 18
Station rank in market 4:00 p.m. to 8:00 p.m............................ 1 1 1 2 2
Station audience share 4:00 p.m. to 8:00 p.m............................ 24 24 25 22 21
</TABLE>

KMSB AND KTTU: TUCSON/NOGALES, ARIZONA

Market Overview. Tucson, Arizona is the 80th largest DMA in the United
States when ranked by number of television households, but is the 67th largest
DMA when ranked by television advertising revenues. In 1994, the market had
approximately 344,000 television households and population of approximately
887,000 and cable penetration of approximately 60%. Tucson's chief employers
include federal, state and local government, aerospace manufacturing, mining,
health and the hospitality industry. The Tucson DMA had an average household EBI
of $36,026 in 1994. In 1994, the Tucson market totaled approximately $7.6
billion in retail sales. EBI per household and retail sales grew 5.8% and 8.4%,
respectively, in 1994 from 1993.

Station Performance and Strategy. Acquired by the Company in 1985, KMSB
has been a Fox affiliate since 1987 and its current affiliation agreement
expires in 1998. As a part of the Company's LMA strategy, the Company entered
into an LMA with KTTU in 1991, which has facilitated expanding the Company's
audience reach, market revenue share, and combined rating in the market. KTTU is
affiliated with UPN. Under this LMA, the Company provides programming and
marketing services pursuant to which the Company receives all advertising
revenues in exchange for funding the programming and most operating costs. The
Company is required to pay a fixed periodic fee (equal to approximately $420,000
in 1995). While the Company's owned and operated Station, KMSB, and its LMA
Station, KTTU, have separate identities in the market among viewers, the Company
markets the two stations together to advertisers. The result of the Company's
marketing efforts is that these two stations when calculated together have
garnered audience ratings and revenue shares that frequently are on par with or
above certain of the three major networks. For example, during prime time in the
market (7:00 p.m. to 10:00 p.m., Monday through Saturday, 6:00 p.m. to 10:00
p.m., Sunday), KMSB and KTTU together are ranked second in the market on a
combined basis with a 17% audience share above the 15% shares for each of the
ABC and CBS affiliates. Moreover, KMSB is in first place during the 5:00 p.m. to
7:00 p.m. Monday through Friday, daypart as measured among adults ages 18 to 49,
an important demographic group for advertisers. From sign-on to sign-off, KMSB
and KTTU taken together were in fourth place with 11% audience share, two share
points behind its closest competitor.

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<PAGE> 57

<TABLE>

The Company believes that KMSB and KTTU produce special local programming
on a cost-effective basis. The Stations' inventory of syndicated programming
includes, among other shows, "Frasier", "Home Improvement", "The Simpsons",
"Entertainment Tonight" and "Star Trek: The Next Generation".

<CAPTION>
MARKET/STATION DATA
-----------------------------------------------
1991 1992 1993 1994 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
KMSB/KTTU: TUCSON/NOGALES, ARIZONA
Market revenue (in thousands)........................................... $35,900 $37,000 $41,000 $51,300 $52,200
Market revenue growth over prior period................................. -3.2% 3.1% 10.8% 25.1% 1.8%
Market rank (DMA)....................................................... 80 78 81 81 80
Television homes (in thousands)......................................... 311 320 323 334 344
Total commercial competitors in market.................................. 6 6 6 6 6
Station rank in market 6:00 a.m. to 2:00 a.m............................ 4 4 4 4 4
Station audience share 6:00 a.m. to 2:00 a.m............................ 12 12 12 14 12
Station rank in market 3:00 p.m. to 7:00 p.m............................ 4 4 4 4 4
Station audience share 3:00 p.m. to 7:00 p.m............................ 15 13 12 13 12
</TABLE>

KTVB: BOISE, IDAHO

Market Overview. The Boise, Idaho market, the 127th largest DMA in the
nation, serves approximately 185,000 television households and a total
population of approximately 498,000. Cable penetration in the DMA was 54% in
1994. The Boise market has a diversified economy and serves as the seat of state
and local government. Several major national and international corporations are
headquartered in Boise, including four Fortune 500 companies. Among the
companies that are headquartered in Boise are Albertson's, Inc., Boise Cascade
Corporation, Micron Technology, Inc. and the J.R. Simplot Company. The city is
also home to one of Hewlett-Packard's largest and most profitable facilities.
The Mountain Home Air Force Base in nearby Mountain Home, with its 4,000
military and civilian employees, adds further diversification to the market. The
Boise market also has a significant concentration of businesses in the high
technology, manufacturing, retail and wholesale trade, agriculture, timber
products and services industries. In 1994, the Boise market totaled
approximately $4.7 billion in retail sales, with average household EBI of over
$42,000 in 1994 and average retail sales per household of $25,495. EBI per
household and retail sales grew 6.6% and 30.1%, respectively, in 1994 from 1993.

Station Performance and Strategy. KTVB, an NBC affiliate, is Boise's first
rated television station sign-on to sign-off, outranking its competition with
news ratings and audience shares double that of its closest competitor. In
February 1996, four out of KTVB's five Monday to Friday newscasts had a market
share greater than 40%. An independent survey conducted by Frank N. Magid
Associates in January 1996 indicated that 59% of the viewers in the Boise market
preferred Channel 7's news programming to that of its competitors in the market.
KTVB has been an NBC affiliate since 1953 and its current affiliation agreement
expires in 2001.

The Station has an active public affairs schedule and community service
commitments with weekly viewpoint programs and quarterly town hall live
telecasts, including sponsorship and broadcast coverage of important local
events. The Station's news coverage and public service efforts have been
regularly recognized by local and regional awards from such organizations as the
Associated Press, the Idaho Press Club and the Idaho State Broadcasters
Association. The Station's inventory of syndicated programming includes "The
Oprah Winfrey Show" and "Entertainment Tonight".

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<PAGE> 58

<TABLE>

In order to extend its local franchise, KTVB provides portions of its news
broadcasts for use by NorthWest Cable News in its programming for distribution
to viewers in its DMA and throughout the northwest.

<CAPTION>
MARKET/STATION DATA
-----------------------------------------------
1991 1992 1993 1994 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
KTVB: BOISE, IDAHO
Market revenue (in thousands)........................................... $17,300 $18,400 $20,100 $25,000 $26,000
Market revenue growth over prior period................................. -3.3% 6.4% 9.2% 24.4% 4.0%
Market rank (DMA)....................................................... 136 142 135 131 127
Television homes (in thousands)......................................... 188 199 212 223 233
Total commercial competitors in market.................................. 5 5 5 5 5
Station rank in market 6:00 a.m. to 2:00 a.m............................ 1 1 1 1 1
Station audience share 6:00 a.m. to 2:00 a.m............................ 27 27 29 29 28
Station rank in market 3:00 p.m. to 7:00 p.m............................ 1 1 1 1 1
Station audience share 3:00 p.m. to 7:00 p.m............................ 31 34 37 36 37
</TABLE>

NETWORK AFFILIATION AGREEMENTS AND RELATIONSHIPS. Each of the Stations is
a party to an affiliation agreement with one of the four major networks giving
the Station the right to rebroadcast programs transmitted by such network. The
affiliation agreement for each of the NBC Stations expires in 2001 (except for
the affiliation agreement for KHNL, which expires in 2002), while such
agreements for each of the ABC, CBS and Fox Stations expire in 2000, 1998 and
1998, respectively. Each network has the right to terminate its respective
affiliation agreement in the event of a material breach of such agreement by a
Station and in certain other circumstances. Although the Company expects to
continue to be able to renew its network affiliation agreements no assurance can
be given that such renewals will be obtained. The non-renewal or termination of
one or more of the Stations' affiliation agreements could have a material
adverse effect on the Company's results of operations. See "Risk
Factors -- Reliance on Network Programming; Dependence on Network Affiliation".

INDUSTRY BACKGROUND. Commercial television broadcasting began in the
United States on a regular basis in the 1940s. There are a limited number of
channels available for broadcasting in any one geographic area, and the license
to operate a television station is granted by the FCC. Television stations that
broadcast over the VHF band (channels 2-13) of the spectrum generally have some
competitive advantage over television stations that broadcast over the UHF band
(channels above 13) of the spectrum because VHF channels usually have better
signal coverage and operate at a lower transmission cost. However, the
improvement of UHF transmitters and receivers, the complete elimination from the
marketplace of VHF-only television receivers and the expansion of cable
television systems have reduced the competitive advantage of television stations
broadcasting over the VHF band.

Television station revenues are primarily derived from local, regional and
national advertising and, to a much lesser extent, from network compensation and
revenues from studio rental and commercial production activities. Because
broadcast television stations rely on advertising revenues, they are sensitive
to cyclical changes in the economy. The size of advertisers' budgets, which are
affected by broad economic trends, affect the broadcast industry in general and
the revenues of individual broadcast television stations.

Television stations in the country are grouped by Nielsen into
approximately 210 generally recognized television markets that are ranked in
size according to various formulae based upon actual or potential audience. Each
market is designated as an exclusive geographic area consisting of all counties
in which the home-market commercial stations receive the greatest percentage of
total viewing hours.

Nielsen, which provides audience measuring services, periodically publishes
data on estimated audiences for television stations in the various television
markets throughout the country. These estimates are expressed in terms of the
percentage of the total potential audience in the market viewing a station (the
station's "rating") and of the percentage of the audience actually watching
television (the station's "share"). Nielsen provides such data on the basis of
total television households and selected demographic groupings in the market.
The specific geographic markets are called DMAs. Nielsen uses two methods of
determining a station's rating and share. In larger geographic markets, ratings
are determined by a combination of meters

55
<PAGE> 59

connected directly to selected television sets and weekly viewer-completed
diaries of television viewing, while in smaller markets, ratings are determined
by weekly diaries only. Of the markets in which the Company conducts its
business, three are metered markets while the remaining markets are weekly diary
markets.

Historically, three major broadcast networks, NBC, ABC and CBS, dominated
broadcast television. In recent years, Fox has effectively evolved into the
fourth major network, although the hours of network programming produced by Fox
for its affiliates are fewer than those produced by the other three major
networks. In addition, UPN and WB recently have been launched as new television
networks.

The affiliation by a television station with one of the four major networks
has a significant impact on the composition of the station's programming,
revenues, expenses and operations. A typical affiliated station receives
approximately 9 to 10 hours of each day's programming from the network. This
programming, along with cash payments ("network compensation"), is provided to
the affiliate by the network in exchange for a substantial majority of the
advertising time sold during the airing of network programs. The network then
sells this advertising time for its own account. The affiliate retains the
revenues from time sold during breaks in and between network programs and during
programs produced by the affiliate or purchased from non-network sources. In
acquiring programming to supplement network programming, network affiliates
compete primarily with other affiliates and independent stations in their
markets. Cable systems generally do not compete with local stations for
programming, although various national cable networks from time to time have
acquired programs that would otherwise have been offered to local television
stations. In addition, a television station may acquire programming through
bartering arrangements. Under such arrangements, which are becoming increasingly
popular with both network affiliates and independents, a national program
distributor may receive advertising time in exchange for the programming it
supplies, with the station paying no fee or a reduced fee for such programming.

An affiliate of UPN or WB receives a smaller portion of each day's
programming from its network compared to an affiliate of NBC, ABC, CBS or Fox.
Currently, UPN and WB provide six and two hours of programming per day to their
affiliates, respectively. As a result of the smaller amount of programming
provided by their networks, affiliates of UPN or WB must purchase or produce a
greater amount of their programming, resulting in generally higher programming
costs. These stations, however, retain a larger portion of the inventory of
advertising time and the revenues obtained therefrom than stations affiliated
with the major networks, which may partially offset their higher programming
costs.

In contrast to a network-affiliated station, an independent station
purchases or produces all of the programming that it broadcasts, generally
resulting in higher programming costs, although the independent station is, in
theory, able to retain its entire inventory of advertising time and all of the
revenue obtained from the sale of such time. Barter and cash-plus-barter
arrangements, however, have become increasingly popular among all stations.

Broadcast television stations compete for advertising revenues primarily
with other broadcast television stations and, to a lesser extent, with radio
stations, cable system operators and programmers and newspapers serving the same
market. Traditional network programming, and recently Fox programming, generally
achieves higher audience levels than syndicated programs aired by independent
stations. However, as greater amounts of advertising time become available for
sale by independent stations and Fox affiliates in syndicated programs, those
stations typically achieve a share of the television market advertising revenues
greater than their share of the market's audience.

Through the 1970s, network television broadcasting enjoyed virtual
dominance in viewership and television advertising revenues because
network-affiliated stations only competed with each other in local markets.
Beginning in the 1980s, this level of dominance began to change as the FCC
authorized more local stations and marketplace choices expanded with the growth
of independent stations and cable television services.

Cable television systems were first installed in significant numbers in the
1970s and were initially used to retransmit broadcast television programming to
paying subscribers in areas with poor broadcast signal reception. In the
aggregate, cable-originated programming has emerged as a significant competitor
for viewers

56
<PAGE> 60

of broadcast television programming, although no single cable programming
network regularly attains audience levels amounting to more than a small
fraction of any of the major broadcast networks. The advertising share of cable
networks increased during the 1970s and 1980s as a result of the growth in cable
penetration (the percentage of television households that are connected to a
cable system). Notwithstanding such increases in cable viewership and
advertising, over-the-air broadcasting remains the dominant distribution system
for mass market television advertising.

The Company believes that the market shares of television stations
affiliated with NBC, ABC and CBS declined during the 1980s primarily because of
the emergence of Fox and certain strong independent stations and secondarily
because of increased cable penetration. Independent stations have emerged as
viable competitors for television viewership share, particularly as a result of
the availability of first-run, network-quality programming. In addition, there
has been substantial growth in the number of home satellite dish receivers and
video cassette recorders, which has further expanded the number of programming
alternatives available to household audiences.

Further advances in technology may increase competition for household
audiences and advertisers. Video compression techniques, now in use with direct
broadcast satellites and in development for cable and wireless cable, are
expected to permit greater numbers of channels to be carried with existing
bandwidth. These compression techniques, as well as other technological
developments, are applicable to all video delivery systems, including
over-the-air broadcasting, and have the potential to provide vastly expanded
programming to highly targeted audiences. Reduction in the cost of creating
additional channel capacity could lower entry barriers for new channels and
encourage the development of increasingly specialized niche programming. This
ability to reach very narrowly defined audiences is expected to alter the
competitive dynamics for advertising expenditures. The Company is unable to
predict the effect that technological changes will have on the broadcast
television industry or the future results of the Company's operations.

COMPETITION. Competition in the television industry, including each of the
markets in which the Stations and the LMA Stations compete, takes place on
several levels: competition for audience, competition for programming (including
news) and competition for advertisers. Additional factors material to a
television station's competitive position include signal coverage and assigned
frequency. The television broadcasting industry is continually faced with
technological change and innovation, the possible rise in popularity of
competing entertainment and communications media and governmental restrictions
or actions of federal regulatory bodies, including the FCC and the Federal Trade
Commission, any of which could have a material effect on the Broadcasting
Business.

Audience. The Stations compete for audience on the basis of program
popularity, which has a direct effect on advertising rates. A majority of the
daily programming on the Stations is supplied by the network with which each
Station is affiliated. In those periods, the Stations are totally dependent upon
the performance of the network programs in attracting viewers. Non-network time
periods are programmed by the Station with a combination of self-produced news,
public affairs and other entertainment programming, including news and
syndicated programs.

The Stations compete for television viewership share against local
network-affiliated and independent stations, as well as against cable and
alternate methods of television transmission. These other transmission methods
can increase competition for a Station by bringing into its market distant
broadcasting signals not otherwise available to the Station's audience and also
by serving as a distribution system for non-broadcast programming originated on
the cable system. Historically, cable operators have not sought to compete with
broadcast stations for a share of the local news audience. To the extent cable
operators elect to do so, their increased competition for local news audiences
could have an adverse effect on the Company's advertising revenues.

Other sources of competition for the Stations include home entertainment
systems (including video cassette recorder and playback systems, videodiscs and
television game devices), multipoint distribution systems, multichannel
multipoint distribution systems, wireless cable, satellite master antenna
television systems, and some low power, in-home satellite services. The Stations
also face competition from high-powered direct broadcast satellite services,
such as DIRECT-TV, which transmit programming directly to

57
<PAGE> 61

homes equipped with special receiving antennas or to cable television systems
for transmission to their subscribers.

Programming. Competition for non-network programming involves negotiating
with national program distributors or syndicators which sell first-run and rerun
packages of programming. The Stations compete against in-market broadcast
station competitors for exclusive access to off-network reruns (such as "Home
Improvement") and first-run product (such as "The Oprah Winfrey Show") for
exclusive access to those programs. Cable systems generally do not compete with
local stations for programming, although various national cable networks from
time to time have acquired programs that would have otherwise been offered to
local television stations. Competition for exclusive news stories and features
is also endemic to the television industry.

Advertising. Advertising rates are based upon the size of the market in
which the Station operates, a program's popularity among the viewers an
advertiser wishes to attract, the number of advertisers competing for the
available time, the demographic makeup of the market served by the Station, the
availability of alternative advertising media in the market area, aggressive and
knowledgeable sales forces and the development of projects, features and
programs that tie advertiser messages to programming. Advertising rates are also
determined by a Station's overall ability to attract viewers in its market, as
well as the Station's ability to attract viewers among particular demographic
groups that an advertiser may be targeting. The Stations compete for advertising
revenues with other television stations in their respective markets, as well as
with other advertising media, such as newspapers, radio, magazines, outdoor
advertising, transit advertising, yellow page directories, direct mail and local
cable systems. Competition for advertising dollars in the broadcasting industry
occurs primarily within individual markets. Generally, a television broadcasting
station in the market does not compete with stations in other market areas. The
Stations are located in highly competitive markets.

PUBLISHING

OVERVIEW. The Providence Journal is the leading newspaper in terms of
advertising and circulation in its market of Rhode Island and southeastern
Massachusetts. Average daily circulation levels for the three months ended March
31, 1996 following the Newspaper Consolidation in June, 1995 were approximately
169,500 for circulation Monday through Saturday and 251,300 for circulation on
Sunday. According to a 1995 Belden Associates study, approximately 58% and 69%
of the 929,000 total adults in the market read the daily Providence
Journal-Bulletin and The Providence Sunday Journal, respectively. In addition,
according to this study, of adults in the market who read any newspaper,
approximately 77% and 87% read the daily Providence Journal-Bulletin and The
Providence Sunday Journal, respectively. The Company believes that the
Providence Journal is the oldest continuously published daily newspaper in the
United States. The Providence Journal has received numerous awards over the
years for its local and national coverage, including its fourth Pulitzer Prize
in 1994.

The Publishing Business generated approximately $128.5 million in revenues
in 1995, or 41.1% of consolidated operating revenues. Publishing EBITDA was
$14.8 million in 1995, which represented 18.7% of the Company's EBITDA excluding
programming and new media and corporate expenses.

The Company's business and operating strategy for the Publishing Business
includes the following key elements:

ENHANCE STRONG LOCAL NEWS FRANCHISE. The Company has the largest local
news gathering resources in its Rhode Island and southeastern Massachusetts
market and, as a result, the Providence Journal provides high quality, local
news and information that effectively serves its readers. The Company emphasizes
a local focus in virtually every section of the Providence Journal with a
commitment to editorial excellence that has

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<PAGE> 62

earned it a high degree of reader loyalty and market penetration. The Providence
Journal regularly features the following sections, among others, in which
articles concerning local issues are published: Main News, Rhode Island,
Suburban, Sports, Business, Lifebeat, Food, Hers, Travel/Society, Your Home and
Classified. In order to reach and attract readers more effectively, the Company
in 1995 began publishing more extensive regional sections in the Providence
Journal that targeted the news and information needs of readers in seven
geographic zones of its market. The Company is committing significant resources
to these local sections, with 82 full-time equivalent newsroom employees out of
a total of 295 focusing on news gathering for these sections. As a result of the
Company's strategies to emphasize regionally-zoned news and information sections
and to control operating costs, on June 5, 1995, the Company completed the
Newspaper Consolidation in order to reallocate personnel to the regional
editions and to reduce operating costs. A portion of the total annual savings is
being used to enhance local news coverage.

REORGANIZE SALES FORCE TO INCREASE CUSTOMER FOCUS. The Company emphasizes
a targeted approach to its advertisers and has recently begun a reorganization
of its sales force in an attempt to enhance its effectiveness in attracting
advertising revenues and increasing EBITDA. Salespeople will be grouped in teams
that are focused on categories of advertisers rather than on types of
advertisements, as had been the Company's previous practice. For example, the
Providence Journal will have teams of sales people focused on automobile
dealers, professional services firms, national chains, travel companies, and
help wanted advertisers, among other categories. The Company also intends to
institute a new performance-based incentive compensation plan for its
salespeople which will reward employees based on their contribution to EBITDA
rather than to revenues. The Company believes that this reorganization, which it
has entitled "World Class," will enable its sales force to better identify sales
opportunities, be more responsive to advertiser needs, and operate more cost
effectively.

REDUCE OPERATING COSTS. The Company attempts to closely monitor expenses
in its Publishing Business to control costs without sacrificing revenue
opportunities. The Company seeks to reduce labor costs through investment in
modern production equipment and the consolidation of operations and
administrative activities. As a result of the Newspaper Consolidation, annual
savings are estimated to be approximately $4 million. In an effort to reduce
labor costs, the Company recently reorganized the staffing of the Providence
Journal in the Newspaper Restructuring and offered retirement and voluntary
separation packages to employees. As a result of personnel reductions achieved
through these plans, the Company estimates that it will realize cost savings of
approximately $6 million per year. In addition, the Company seeks to realize
cost savings through emphasizing increased accountability for performance by its
employees. The Company has also made efforts to reduce its newsprint costs,
which in 1995 accounted for 17.3% of the Publishing Business' operating expenses
and 7.6% of the Company's consolidated operating expenses (excluding Newspaper
Consolidation Costs and Newspaper Restructuring Costs). The Company has reduced
the number of suppliers and entered into contracts with these suppliers
resulting in favorable pricing and continuity of supply. The Company's cost
control initiatives have included aggressive conservation efforts, including
reducing the page width of the newspaper and strict control of newspaper waste.

INCREASE REVENUES THROUGH RELATED PRODUCTS. The Publishing Business has
developed a number of fax-on-demand services providing material ranging from old
Providence Journal newspaper articles to current information on sports, weather
and other subjects of general interest. The Publishing Business has also
developed and expanded Journal Line, a voice information service that provides
pre-recorded information in a variety of categories, including stock quotes,
weather forecasts and sports scores; the New England Wire Service, that
electronically provides editorial content to area newspapers; and Journal
Telemarketing, a telemarketing sales division providing services to a range of
customers. These products and services seek to exploit the additional potential
of the strong local brand recognition of the Providence Journal. As part of its
strategy to increase revenue and EBITDA, the Company anticipates introducing
additional services in the future.

MARKET OVERVIEW. The Providence Journal market area includes the entire
state of Rhode Island as well as southeastern Massachusetts, an area that
includes approximately 458,000 households and a population of 1.2 million. In
the market area, 34% of the adults are college graduates compared to only 20% of
all adults in the United States. Median household income for the market was
$38,000 in 1995, which exceeded the

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national average by over $4,000. Retail sales in the market grew by 5% from 1990
through 1994 to reach total retail sales in 1994 of $9.8 billion.

The economy of Providence Journal's market is comprised of a diversified
industrial base, banking, educational institutions, financial services industry,
health care and tourism. Major employers in the market include the state and
federal government, the Diocese of Providence, Rhode Island Hospital, Stop &
Shop Co. Inc., Brown University, Fleet Financial Group, Inc., General Dynamics,
and Hasbro, Inc.

With 75% of all adults reading a daily newspaper every day, the Providence
Journal market is considered to be the second best newspaper market in the
country in terms of the percentage of adults in the market who read a daily
newspaper.

<TABLE>

SOURCES OF REVENUE. Substantially all of the Company's Publishing revenue
is derived from advertising and circulation, with lesser amounts derived from
electronic publishing, telemarketing and other sources. The following table sets
forth the sources and amounts of the Company's Publishing revenue for the years
ended December 31, 1993, 1994 and 1995:

<CAPTION>
1993 1994 1995
----------------- ----------------- -----------------
SOURCE OF REVENUE AMOUNT % AMOUNT % AMOUNT %
------------------------- -------- ------ -------- ------ -------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Newspaper Advertising:
Retail................. $ 57,935 46.4% $ 58,880 46.0% $ 56,795 44.2%
Classified............. 26,465 21.2% 27,764 21.7% 29,006 22.6%
General................ 8,687 7.0% 8,435 6.6% 7,870 6.1%
Circulation.............. 31,028 24.8% 30,888 24.2% 32,151 25.0%
Development
(New Ventures)......... 799 0.6% 1,926 1.5% 2,669 2.1%
-------- ----- -------- ----- -------- -----
Total.......... $124,914 100.0% 127,893 100.0% 128,491 100.0%
======== ===== ======== ===== ======== =====
</TABLE>

NEWSPAPER ADVERTISING. Approximately 73% of the Providence Journal's 1995
revenues is derived from the sale of advertising (historically between 70% and
80% of the Providence Journal's revenues). Retail advertising appears throughout
the Providence Journal and consists of display advertising from local merchants,
such as grocery and department stores, and national retail advertisers that have
local outlets. Classified advertising consists of display and text
advertisements which are listed together in sequence by the nature of the
advertisement, such as automobile, employment and real estate and appear in the
classified section of the Providence Journal. National advertising is comprised
of advertisements from national distributors and manufacturers that appear
throughout the Providence Journal. The Providence Journal also contains
preprinted advertisements that are provided to the Providence Journal for
distribution both in the Providence Journal and at times through the mail.
Preprint advertising revenue is derived primarily from retail and national
advertisers and accounted for approximately 20% of the total Providence Journal
advertising revenue in 1995.

The Providence Journal increased advertising rates for most major
categories of retail and classified advertising by at least 3% in each of 1993,
1994 and 1995.

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CIRCULATION AND PRICING. The following table shows the average net paid
daily, Saturday and Sunday circulation of the Providence Journal for the 52
weeks ended on the last Sunday in March in each of the years 1991 through 1994,
as reported by the Audit Bureau of Circulation (the "Audit Bureau"), an
independent agency that audits the circulation of most U.S. newspapers and
magazines on an annual basis. To coincide with the Newspaper Consolidation, the
auditing cycle at the "Audit Bureau" was changed to July 2, 1995, a 53-week
period.

<TABLE>

AVERAGE NET PAID CIRCULATION

<CAPTION>
52 WEEKS ENDED DAILY SATURDAY SUNDAY
-------------- -------- -------- --------
<S> <C> <C> <C>
March 31, 1991........................................ 202,200 188,900 265,000
March 29, 1992........................................ 197,100 186,400 268,100
March 28, 1993........................................ 192,500 182,700 269,100
March 27, 1994........................................ 188,200 179,600 268,800
July 2, 1995.......................................... 184,100 177,000 264,300
</TABLE>

The above numbers are before the Newspaper Consolidation of the morning and
afternoon newspapers. Circulation levels as calculated by management for the
three months ended March 31, 1996 were approximately 169,500 for daily
circulation and 251,300 for Sunday circulation. Following the Newspaper
Consolidation, management is currently making efforts to increase the
circulation of the Providence Journal with emphasis on the local news and
information provided in the seven regionally zoned sections of the newspaper.
There can be no assurances, however, that circulation will increase as a result
of these efforts.

PRODUCTION AND RAW MATERIALS. In 1987, the Company began operations at its
newly-constructed newspaper flexographic printing and distribution plant in
Providence, Rhode Island. The use of flexography, a water-based printing
process, improves printing quality and prevents newspaper ink from rubbing off
onto the reader's hands. The facility is also equipped with computer
control-driven systems, which shut down presses within five copies of the
specified production number, thereby significantly reducing the number of
unusable copies.

Newsprint costs, which are the largest component of direct expenses, have
in recent years accounted for between 13.0% and 17.3% of the Publishing
Business' total operating expenses. In 1995, the Providence Journal incurred
total newsprint costs of $21.5 million, or 17.3% of total Publishing Business
operating expenses and 7.6% of the Company's operating expenses (excluding
Newspaper Consolidation Costs and Newspaper Restructuring Costs), and used
approximately 33,000 metric tons of newsprint. The Company reduced the number of
newsprint suppliers to five from eight in 1992 and has entered into contracts
with these suppliers resulting in favorable pricing and continuity of supply.
The Providence Journal currently receives modest discounts off list price for
newsprint supplies. Additional cost savings have been achieved by the
implementation of quality controls. Although the Company's newsprint costs
increased approximately 45% per metric ton in 1995, recently the major newsprint
producers announced a withdrawal of their previously planned price increase. The
Company has implemented measures in an attempt to offset the impact of future
increases in newsprint prices, such as reducing the page width of the newspaper
and strict control of newspaper waste. Any such future increases could have an
adverse effect on the Company's results of operations.

COMPETITION. The Providence Journal has five daily newspaper competitors
in Rhode Island: The Times (Pawtucket, RI), Woonsocket Call, Daily News
(Newport, RI), Westerly Sun, and Kent County Daily Times, each with net paid
circulation levels under 20,000 in Rhode Island. The Providence Journal also
encounters competition in varying degrees from Boston and other Massachusetts
newspapers, nationally circulated newspapers, television, radio, magazines,
electronic publishing services, and other advertising media, including direct
mail advertising and yellow pages. The competition from electronic information
services may be increased in the future as a result of the Telecommunications
Act, which allows the Regional Bell Holding Companies to provide such services,
subject to certain safeguards.

NEWSPAPER INDUSTRY BACKGROUND. Newspaper publishing is the oldest and
largest segment of the media industry, with total advertising expenditures on
daily and weekly newspapers reported at $35.9 billion in 1995 according to the
Newspaper Association of America (the "NAA"). Due to a focus on local news,
newspapers

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remain the dominant medium for local advertising and account for more than 48.6%
of all local media advertising expenditures according to the NAA. In addition,
newspapers continue to be the preferred medium for retail advertising that
emphasizes the price of goods, in contrast to television which is generally used
for image advertising.

Advertising and, to a lesser extent, circulation, revenues are cyclical and
dependent upon general economic conditions. Historically, increases in
advertising revenues have corresponded with economic recoveries while decreases,
as well as changes in the mix of advertising, have corresponded with general
economic downturns and regional and local economic recessions.

The State of Rhode Island has enacted legislation concerning the percentage
of recycled content of newsprint which must be contained in the Providence
Journal. For 1996, at least 22% of the Company's annual usage of newsprint must
consist of recycled content. Such percentage increases to 31% and 40% in 1998
and 2001, respectively. The Rhode Island law does not require such minimum
quantities in the event the price of recycled materials is more expensive than
virgin newsprint or if recycled materials are not readily available for use by
the Providence Journal. The Company is currently in compliance and intends to
use its best efforts to comply with this law in the future.

PROGRAMMING AND NEW MEDIA

OVERVIEW. The Company produces cable television and satellite network
programming and interactive and on-line new media services through its
management role or ownership interest in a variety of content-driven
entertainment and information businesses. The Company's approach to development
of programming and interactive opportunities is to invest in or manage
businesses that are extensions of its experience in the production of
programming content or build on existing media franchises.

BUSINESS AND OPERATING STRATEGY

LEVERAGE EXISTING EXPERTISE IN PROGRAMMING AND OTHER CONTENT
DEPLOYMENT. Through its primary businesses in television broadcasting and
newspaper publishing, the Company believes that it has developed expertise in
creating entertaining informational programming and editorial content. The
Company has invested in and operates certain businesses that capitalize on the
Company's experience in this regard. As additional opportunities arise, the
Company expects to review such projects and pursue such opportunities that best
exploit or extend the capabilities of existing talent and resources.

EMPHASIZE PROGRAMMING TOPICS WITH BROAD APPEAL. The Company's strategy in
its programming businesses is to develop cable and satellite programming
networks, such as the Television Food Network, America's Health Network and
NorthWest Cable News, and broadcast programming content based on topics or
themes that the Company believes are of importance to a broad audience of
potential viewers. The Company believes that the focus of these investments on
food, health, and local news is attractive to cable television subscribers. As
the Company reviews additional opportunities, it plans to invest in such
ventures that it believes have broad audience appeal.

EXTEND AND ENHANCE EXISTING BRANDS AND CONTENT. The Company's strategy in
developing cable and satellite network programming and interactive and on-line
new media products, has been to create products and approaches that are closely
related to the Company's existing brands and franchises. For example, NorthWest
Cable News builds on the leading local news franchise of, and uses some of the
programming resources available to, the Stations in Washington, Oregon and
Idaho. In addition, Rhode Island Horizons, an on-line service, presents news,
features and advertising displayed in the Providence Journal. Moreover, the
Company maintains the right to link its investment in Peapod, an interactive
grocery shopping service, to the operations of its Stations and cable television
networks, including the Television Food Network. The Company also believes that
the success of these ventures will serve to enhance the Company's existing
broadcast and newspaper properties.

MINIMIZE RISK THROUGH STAGED INVESTMENTS IN NEW OPPORTUNITIES. The Company
attempts to take a staged approach to investing in start-up ventures by
committing financial and managerial resources incre-

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mentally. The Company has initially provided its portion of the capital required
to commence operations of a venture and has increased its investment and its
managerial role at certain milestones in the businesses' development.

CABLE AND SATELLITE TELEVISION PROGRAMMING. The Company continually
reviews opportunities to participate in the creation and development of new
cable and satellite television programming services. The Company seeks to enter
into partnerships and other relationships with companies or individuals having
specialized expertise with regard to the content of the programming. The
Company's practice is to play the leading role in the formation and management
of the services and to increase its ownership interest when appropriate.

TELEVISION FOOD NETWORK. As of December 31, 1995, the Company controlled a
21% interest in Television Food Network, G.P. ("TVFN"). TVFN, a general
partnership consisting of eight media companies with cable television and/or
programming holdings, was formed specifically to own and operate the Television
Food Network, a 24-hour advertising-supported cable and satellite network
service that provides television programming related to the preparation,
enjoyment and consumption of food, as well as programs focusing on nutrition and
topical news areas. The Television Food Network is distributed predominately
through cable television operators to approximately 15.5 million subscribers
throughout the United States. The Company is the managing general partner of the
managing partner of TVFN and has invested approximately $12.7 million in TVFN
through December 31, 1995. In addition, the Company has recently entered into
agreements with two TVFN partners obligating the Company, upon the satisfaction
of certain closing conditions, to purchase the TVFN partnership interests of
such partners for a total purchase price of approximately $24.1 million. Such
purchases are anticipated to occur in early May. Following such purchases, the
Company would hold 45% of the TVFN partnership interests and would control three
of the five votes on the TVFN management committee. The Company is continuing to
negotiate with a third partner for the purchase of that partner's TVFN interest.
If this negotiation is successfully concluded, the Company would directly or
indirectly hold 55% of the TVFN partnership interests and would control four of
the five votes on the TVFN management committee.

Currently, the Television Food Network is the only 24-hour a day cable
channel dedicated solely to broadcasting food-related programming. As a result,
the Company believes that the Television Food Network has a unique opportunity
to establish a leading brand name in a variety of media relating to food and its
preparation. The Television Food Network's production operation enables the
Television Food Network to produce the vast majority of its programming in
27,282 square feet of office space in New York City.

The Television Food Network generated net revenues of $6.7 million in 1995,
up $4.7 million from 1994. The Television Food Network's subscriber base grew
57% in 1995 to 15.5 million from 9.9 million at year end 1994. At present, the
Television Food Network has distribution agreements with 42 of the top 50 cable
television multiple system operators ("MSOs") and is carried in 26 of the top 50
cable systems in the United States. The network is currently available at no
charge to MSOs that place the Television Food Network on a basic or expanded
service level; however, due to the changing programming marketplace, the
Television Food Network will begin to institute subscriber fees along with
enhanced marketing support in 1996. The Television Food Network believes that
this initiative as well as the introduction of several on-air direct
merchandising projects will become major sources of revenue for the network over
the next five years.

The Company believes that the quality of the Television Food Network's
programming has generated strong ratings in comparison to other cable television
networks. While the Company believes the network has broad appeal, the
Television Food Network's strategy is to produce programming to reach a target
audience of women, particularly young and working women, in order to attract
advertisers. Advertisers generally consider women ages 25 to 54 to be one of the
most economically attractive demographic groups. The Company believes that the
network reaches more working women than any other cable network. As a result,
the Company can charge advertisers premium rates to reach this favorable
demographic group. The Television Food Network ranks as one of the top cable and
satellite programming networks in terms of the amount of time per week its
viewers spend viewing the channel. Further, the Company believes that the
Television Food Network viewers are highly interactive with the network as
demonstrated by the approximately 2,500 letters per day it receives requesting
recipes, critiquing the network, and writing to chefs and hosts. Since its
inception

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in March 1996, the Television Food Network Internet site (http://www.foodtv.com)
has averaged over 4,000 visits per day. These contacts have contributed to the
Television Food Network's growing database of over 250,000 unduplicated names.

A significant part of the network's strategy going forward is to tap into
what the Company believes is the high interest and involvement of its viewers by
creating and marketing merchandise related to the network, its programs and its
talent. In 1996, the Television Food Network will introduce several on-air
direct merchandising projects which allow the network to share in the revenues
from the on-air sale of merchandise. The Company expects the product selection
to include the Television Food Network branded items, products from third-party
suppliers and advertisers. The Television Food Network is also beginning to
produce cookbooks which focus on its most popular hosts and programs. The
Company believes that the Television Food Network's programming results could be
duplicated outside the United States and is currently exploring international
expansion through joint ventures.

AMERICA'S HEALTH NETWORK. The Company owns interests in America's Health
Network, LLC and AHN Partners, L.P. (collectively, "AHN"), the controlling
entities of America's Health Network, that collectively represent a 65% equity
interest in the development stage programming network service. It is anticipated
that this interest will be reduced to between 56% and 62% in early 1997 through
the exercise of certain options by investors in AHN Partners, L.P. America's
Health Network is a 24-hour basic cable television programming service
principally featuring viewer call-in programs designed for health-conscious
adults who are active participants in their own health care and the health care
of spouses, parents, and children. America's Health Network's "Ask the Doctor"
programs are hosted by health care professionals whose responses to viewers'
questions are extensively visualized using graphics, animations and
illustrations. America's Health Network's programming also includes brief
"Health Mall" segments during which health-related products are offered for sale
to viewers, and "Health News" segments which provide daily updates on the areas
of health, medicine, wellness and nutrition. In addition, a limited number of
commercials from national and local advertisers are shown.

America's Health Network launched its service on March 25, 1996. To date
the Company believes that America's Health Network is available to approximately
626,000 basic cable television subscribers in the United States. AHN has
distribution agreements with MSOs that include affiliates of Cablevision Systems
Corporation, Adelphia Communications Corporation and Greater Media Cablevision
and also has agreements with two buying consortiums that represent small and
mid-sized MSOs, Telesynergy Inc. and National Cable TV Cooperative to distribute
America's Health Network. These organizations represent a subscriber base of
over 16 million subscribers. The Company expects affiliates representing 1.4
million subscribers to carry the network by July 1, 1996. The Company provided
project management services to AHN in connection with the construction and
build-out of America's Health Network's production center at Universal Studios
and has agreed to sub-lease a transponder to AHN for five years. AHN has also
assembled a group of strategic partners including the Mayo Foundation for
Medical Education and Research ("Mayo" or "Mayo Clinic") and IVI Publishing,
Inc. ("IVI"), Mayo's electronic publisher, which have entered into a
comprehensive and exclusive program content relationship with AHN. The Company
believes that the strategic relationship with Mayo is an important factor in
establishing credibility with subscribers as the Mayo Clinic has one of the most
recognized names in medicine in the United States. AHN has also entered into an
agreement in principle with Reuters Health Information Services, Inc. and the
Massachusetts Medical Society, publisher of the New England Journal of Medicine,
to produce the "Health News" segments and has exclusive rights to syndicate
these segments.

America's Health Network is housed in a 16,500 square foot production
facility immediately adjacent to the Universal Studios Florida theme park in
Orlando, Florida, and Universal Studios will recruit its theme park visitors to
participate in America's Health Network's live productions. National Call
Center, Inc., a wholly-owned subsidiary of Home Shopping Network, Inc., provides
telemarketing, order processing, warehousing and fulfillment services related to
the sale of merchandise on America's Health Network's "Health Mall" segments and
through AHN's database marketing programs.

NORTHWEST CABLE NEWS. To build on the Company's established local news
franchises in Washington, Oregon and Idaho, the Company launched NorthWest Cable
News, a 24-hour regional cable news network

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serving cable subscribers in the Pacific Northwest in December 1995. NorthWest
Cable News is based in Seattle and combines state-of-the-art digital
news-gathering and editing systems with resources of the Company's Stations
located in Seattle, Portland, Spokane and Boise. NorthWest Cable News was
developed as a result of research conducted by Frank M. Magid Associates that
indicated that 95% of northwest United States television viewers are likely to
watch a regional news cable network, with 86% of these prospective viewers
likely to watch such a news cable network in addition to their local broadcast
news program. The Company believes that NorthWest Cable News is currently
available in approximately 1.3 million cable homes. NorthWest Cable News
provides Pacific Northwest cable subscribers with 24-hour continuous news by
combining the quality news teams of the Company's four northwestern Stations
with NorthWest Cable News own bureaus located throughout the region. The
Company's four Stations also help to promote NorthWest Cable News and increase
viewers' overall awareness of the network.

Interactive and On-Line Media.

The Company continually reviews opportunities to participate in the
creation and development of the interactive and on-line media. The Company seeks
to enter into partnerships and other relationships with companies or individuals
having specialized expertise with regard to the content and technology of the
service.

RHODE ISLAND HORIZONS. During 1994, the Company entered into a two year
agreement with Prodigy Services Company providing for the creation of Rhode
Island Horizons, a local on-line service owned by the Providence Journal to be
offered in conjunction with the national Prodigy service. The local on-line
service includes, on an exclusive basis for Rhode Island and certain areas in
Massachusetts, news, features and advertising similar to that appearing in the
Providence Journal. Rhode Island Horizons began operations in the second quarter
of 1995. The Company is currently negotiating with certain Internet providers to
make Rhode Island Horizons available over the Internet.

PEAPOD, L.P. As of December 31, 1995, the Company owned a 17.2% interest
in Peapod, which provides an interactive computer on-line grocery ordering,
shopping and delivery service in Chicago and San Francisco, with plans to expand
into Boston and Providence. The Company expects to invest an additional $1
million in Peapod in 1995 in a proposed private placement offering which will
result in the Company owning an approximate 14.5% equity interest. The Company
maintains certain rights with regard to the expansion of Peapod into the
Stations, markets and Providence, Rhode Island.

STARSIGHT. The Company is a 4.85% investor in StarSight Telecast, Inc.
("StarSight"), a company engaged in developing and marketing an on-screen
interactive television program guide designed to facilitate the identification,
selection and recording of television programming. StarSight's shares are traded
on the National Association of Securities Dealers Automated Quotation System
under the symbol "SGHT".

Broadcast Television Programming.

The Company continually reviews opportunities to participate in the
creation and development of broadcast television programming. The Company seeks
to enter into partnerships and other relationships with companies or individuals
having specialized expertise with regard to the content of the programming.

The Company is a limited partner with four other television group
broadcasters in PSN, a limited partnership formed in 1994 to develop and produce
television programming for broadcast on their own stations and for potential
national distribution to other television broadcast stations. The stations owned
by PSN's five limited partners serve markets accounting for approximately 20% of
the television households in the United States. Each of PSN's limited partners
has a right of first access in its respective television markets to the programs
produced by PSN. The Company believes PSN to be a cost-effective testing ground
for new programs and a launch vehicle for successful syndicated programming.
Before making a full-season commitment to production, PSN will conduct short
trials on its partners' stations. Promising shows can then be introduced to a
broader national audience. PSN has produced and is currently testing several
programs. As of December 31, 1995, the Company's investment in PSN was
approximately $1.8 million.

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COMPETITION

CABLE TELEVISION AND SATELLITE NETWORK PROGRAMMING SERVICES. Competition
in the cable television and satellite network programming services industry
takes place on several levels: competition for distribution, competition for
audience and advertisers and, to a lesser extent, competition for programming.

Distribution. The Company's cable television and satellite network
programming services compete for distribution with numerous other programming
services and local television stations. There are currently over 50 nationally
distributed cable television and satellite network programming services that
compete for distribution over existing cable, wireless cable and satellite
distribution systems with very limited distribution capacity. "Must-carry" and
certain other rules may further limit distribution capacity. See "Licensing and
Regulation". These systems carry established cable television and satellite
network programming services such as CNN, USA, TBS, ESPN, TNT, Discovery,
Lifetime and A&E, and are upgrading their facilities and enhancing their
technological capabilities in order to carry additional services, many of which
have been launched in the past several years, such as E!, The History Channel,
ESPN2, Home & Garden, Outdoor Life and Speedvision, in addition to the
Television Food Network, America's Health Network and NorthWest Cable News.

Audience and Advertisers. The Company's cable television and satellite
network programming services compete for audience on the basis of program
popularity, which has a direct effect on advertising sales rates. Advertising
rates are based upon the size of the demographic make-up of the network
subscriber base that is reached, a program's popularity among the viewers an
advertiser wishes to attract, the number of advertisers competing for the
available time, the demographic make-up of the household subscriber base and
availability of alternative advertising media in the market areas where the
network is distributed, the aggressive and knowledgeable sales forces and the
development of projects, features and programs that tie advertiser messages to
programming. Advertising rates are also determined by a network's overall
ability to attract viewers, especially among particular demographic groups that
an advertiser may target. In the case of America's Health Network, program
popularity has an additional effect on the sale of merchandise. The Company's
networks compete for viewership share and advertising revenue against local,
affiliated and independent television stations, other cable and satellite
network programming services, local cable systems, broadcast television stations
and networks, newspapers, radio, magazines, outdoor advertising, transit
advertising, yellow page advertising and direct mail.

Programming. The Company's networks compete on a limited basis for
pre-produced programming with other cable television and satellite network
programming services. This involves negotiating with national program owners,
distributors and syndicators which sell first run and rerun packages of
programming. While the effects of the Telecommunications Act on the Company's
Programming and New Media Business cannot be fully determined at this time, the
Company believes that various provisions of the new law could create a favorable
environment for the development and distribution of new programming and
interactive services.

INTERACTIVE AND ON-LINE MEDIA SERVICES. The market for interactive and
on-line media services products is highly competitive and competition is
expected to continue to increase significantly. The Company's interactive and
on-line media services compete in varying degrees with commercial on-line
services and various electronic media, including Internet and CD-ROM-distributed
services. The Company's interactive and on-line media services also face
indirect competition from more traditional media that vie for consumers' time
and money, including cable television and satellite network programming
services, local cable systems, broadcast television stations and networks,
newspapers, radio and magazines.

BROADCAST TELEVISION PROGRAMMING. The market for the development of
broadcast television programming is extremely competitive. The Company's efforts
in this regard compete directly with producers, syndicators and other
broadcasters that produce programming for syndication and license.

LICENSING AND REGULATION

The following is a brief discussion of certain provisions of the
Communications Act, the Telecommunications Act and of FCC regulations and
policies that affect the Broadcasting Business and the Programming and

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New Media Business. Reference should be made to the Communications Act, FCC
rules and the public notices and rulings of the FCC, on which this discussion is
based, for further information concerning the nature and extent of FCC
regulation of television broadcasting stations. The Publishing Business is not
subject to extensive regulation.

License Renewal, Assignments and Transfers. Television broadcasting
licenses are currently for a maximum of five years and are subject to renewal
upon application to the FCC. Pursuant to the Telecommunications Act, the FCC
proposed to extend the maximum term to eight years for most television broadcast
stations filing for license renewal in 1996 or later. The FCC prohibits the
assignment of a license or the transfer of control of a broadcasting license
without prior FCC approval. In determining whether to grant or renew a
broadcasting license, the FCC considers a number of factors pertaining to the
applicant, including compliance with limitations on alien ownership, common
ownership of broadcasting, cable and newspaper properties, and compliance with
character and technical standards. The Telecommunications Act, which has been
enacted, but not yet fully implemented by the FCC, eliminates the comparative
renewal process and simplifies license renewal. During certain limited periods
when a renewal application is pending, petitions to deny a license renewal may
be filed by interested parties, including members of the public. Such petitions
may raise various issues before the FCC. The FCC is required to hold
evidentiary, trial-type hearings on renewal applications if a petition to deny
renewal raises a "substantial and material question of fact" as to whether the
grant of the renewal application would be inconsistent with the public interest,
convenience and necessity. The FCC is required to renew a broadcast license if
the FCC finds that the station has served the public interest, convenience and
necessity; there have been no serious violations by the licensee of either the
Communications Act or the FCC's rules; and there have been no other violations
by the licensee which taken together would constitute a pattern of abuse. If the
incumbent licensee fails to meet the renewal standard, and it if does not show
other mitigating factors warranting a lesser sanction, the FCC then has the
authority to deny the renewal application and consider a competing application.

Failure to observe FCC rules and policies, including, but not limited to,
those discussed herein, can result in the imposition of various sanctions,
including monetary forfeitures, the grant of short-term (i.e., less than the
full eight years) license renewals or, for particularly egregious violations,
the denial of a license renewal application or revocation of a license.

While in the vast majority of cases such licenses are renewed by the FCC,
there can be no assurance that the Company's licenses or the licenses of the
owner-operators of the LMA Stations will be renewed at their expiration dates,
or, if renewed, that the renewal terms will be for eight years. All of the
Stations are presently operating under regular five-year licenses that expire on
the following dates: December 1, 1996 (WCNC (Charlotte)); August 1, 1997 (WHAS
(Louisville)); October 1, 1998 (KASA (Albuquerque/Santa Fe), KMSB (Tucson) and
KTVB (Boise)); and February 1, 1999 (KING (Seattle), KGW (Portland), KHNL
(Honolulu) and KREM (Spokane)). In addition, the licenses for each of the LMA
Stations, KFVE (Honolulu) and KTTU (Tucson) expire on February 1, 1999 and April
1, 1997, respectively. The non-renewal or revocation of one or more of the
Company's FCC licenses could have a material adverse effect on the Company's
operations.

Multiple Ownership Rules and Cross Ownership Restrictions. The FCC
generally applies its ownership limits to "attributable" interests held by an
individual, corporation, partnership or other association. In the case of
corporations holding broadcast licenses, the interests of officers, directors
and those who, directly or indirectly, have the right to vote 5% or more of the
corporation's stock (or 10% or more of such stock in the case of insurance
companies, mutual funds, bank trust departments and certain other passive
investors that are holding stock for investment purposes only) are generally
deemed to be attributable, as are positions as an officer or director of a
corporate parent of a broadcast licensee. On a national level, pursuant to the
Telecommunications Act, the FCC has eliminated the restrictions on the number of
television stations in which a person or entity may have an attributable
interest, but instead establishes a national television audience reach limit of
35%. The Telecommunications Act requires the FCC to conduct a rulemaking
proceeding to determine whether the local "duopoly" television ownership rules
should be retained, modified or eliminated. The present "duopoly" rules prohibit
attributable interests in two or more television stations with overlapping
service areas. The Telecommunications Act grandfathers existing LMAs and permits
future

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LMAs that are in compliance with FCC rules as they may be adopted from time to
time. The FCC may, however, consider the adoption of new restrictions on
television LMAs, including the treatment of an LMA as an attributable interest
in the future. Further, if the FCC were to find that a licensee of an LMA
station failed to maintain control over its operations, the licensee of the LMA
station and/or the station providing programming and marketing services could be
subject to sanctions. While LMAs provide a financial benefit to the Company,
LMAs permit stations that otherwise might "go dark" or operate marginally to add
programming and public affairs coverage and contribute to diversity in their
respective markets. The Telecommunications Act directs the FCC to extend its
liberal waiver policy of the one-to-a-market restriction (allowing
radio-television combinations) to the top 50 markets, consistent with the public
interest, convenience and necessity.

The statutory prohibition against television station/cable system
cross-ownership is repealed in the Telecommunications Act, but the FCC's
parallel cross-ownership rule remains in place. The FCC intends to conduct a
proceeding on repeal of this cross-ownership restriction. The television
station/daily newspaper cross-ownership prohibition in the FCC rule was not
repealed by the Telecommunications Act. The FCC, however, intends to conduct a
rulemaking proceeding on whether to repeal the restriction. The
Telecommunications Act requires the FCC to review its ownership rules biennially
as part of its regulatory reform obligations.

Because of these multiple ownership rules and cross-ownership restrictions,
unless or until these rules are modified or repealed, a purchaser of Class A
Common Stock who acquires an attributable interest in the Company may violate
the FCC's rules if that purchaser also has an attributable interest in other
television or radio stations, or in daily newspapers, depending on the size and
location of those radio or television stations or daily newspapers. Such a
purchaser also may be restricted in the companies in which it may invest to the
extent that those investments give rise to an attributable interest. If an
attributable stockholder of the Company violates any of these ownership rules or
if a proposed acquisition by the Company would cause such a violation, the
Company may be unable to obtain from the FCC one or more authorizations needed
to conduct the Broadcasting Business and may be unable to obtain FCC consents
for certain future acquisitions.

The Company is unable to predict the ultimate outcome of possible changes
to these FCC rules and the impact such changes may have on its broadcasting
operations.

Alien Ownership. Under the Communications Act, broadcast licenses may not
be granted to or held by any corporation having more than one-fifth of its
capital stock owned of record or voted by non-U.S. citizens (including a
non-U.S. corporation), foreign governments or their representatives
(collectively, "Aliens"). The Communications Act also prohibits a corporation,
without an FCC public interest finding, from holding a broadcast license if that
corporation is controlled, directly or indirectly, by another corporation, or
more than one-fourth of the capital stock of which is owned of record or voted
by Aliens. The FCC has issued interpretations of existing law under which these
restrictions in modified form apply to other forms of business organizations,
including general and limited partnerships. As a result of these provisions, and
without an FCC public interest finding, the Company, which serves as a holding
company for its various television station licensee subsidiaries, cannot have
more than 25% of its capital stock owned of record or voted by Aliens.

Programming and Operation. The Communications Act requires broadcasters to
serve the "public interest." Since the late 1970s, the FCC gradually relaxed or
eliminated many of the more formalized procedures it had developed to promote
the broadcast of certain types of programming responsive to the needs of a
station's community of license. Broadcast station licensees continue, however,
to be required to present programming that is responsive to community problems,
needs and interests and to maintain certain records demonstrating such
responsiveness. Complaints from viewers concerning a station's programming may
be considered by the FCC when it evaluates license renewal applications,
although such complaints may be filed, and generally may be considered by the
FCC, at any time. Stations also must follow various rules promulgated under the
Communications Act that regulate, among other things, children's television
programming, political advertising, sponsorship identifications, contest and
lottery advertising, obscene and indecent broadcasts, and technical operations,
including limits on radio frequency radiation. In addition, broadcast licensees
must develop and implement affirmative action programs designed to promote equal
employment opportunities, and must submit reports to the FCC with respect to
these matters on an annual basis and in connection with a license renewal
application.

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Syndicated Exclusivity/Territorial Exclusivity. Effective January 1, 1990,
the FCC reimposed syndicated exclusivity rules and expanded the existing network
non-duplication rules. The syndicated exclusivity rules allow local broadcast
stations to require that cable television operators black out certain
syndicated, non-network programming carried on "distant signals" (i.e., signals
of broadcast stations, including so-called superstations, that serve areas
substantially removed from the local community). Under certain circumstances,
the network non-duplication rule allows local broadcast network affiliates to
demand that cable television operators black out duplicative network broadcast
programming carried on more distant signals.

Prime Time Access Rule. The FCC's prime time access rule (the "PTAR") also
places programming restrictions on affiliates of "networks". The PTAR restricts
affiliates of "networks" in the 50 largest television markets (as defined by the
PTAR) from broadcasting more than three hours of network programming during the
four hours of prime time. Five of the Stations are located in the nation's 50
largest television markets. In a Report and Order released on July 31, 1995, the
FCC repealed the PTAR effective August 30, 1996. The Company cannot predict the
effect any modification or elimination of the PTAR would have on the Company's
programming or operations.

Restrictions on Broadcast Advertising. The advertising of cigarettes on
broadcast stations has been banned for many years. The broadcast advertising of
smokeless tobacco products has more recently been banned by Congress. Certain
Congressional committees have in the past examined legislative proposals to
eliminate or severely restrict the advertising of beer and wine. The Company
cannot predict whether any or all of such proposals will be enacted into law
and, if so, what the final form of such law might be. The elimination of all
beer and wine advertising would have an adverse effect on the Stations' revenues
and operating income, as well as the revenues and operating income of other
stations that carry beer and wine advertising.

Other Programming Restrictions. The Telecommunications Act requires that
any newly manufactured television set with a picture screen of 13 inches or
greater be equipped with a feature designed to enable viewers to block all
programs with a certain violence rating (the "v-chip"). The FCC, after
consulting with the TV manufacturing industry, shall specify the effective date
of this requirement, which may not be less than two years after enactment of the
law. The FCC is directed to oversee the adoption of standards for this blocking
technology. If the television industry has not voluntarily devised a violence
rating system within one year, the FCC is directed to prescribe a rating system.
Industry efforts to adopt a rating system similar to the motion picture rating
system are now underway. The Company cannot predict whether the v-chip and a
ratings system will have any significant effect on the operations of the
Broadcasting Business.

Cable "Must-Carry" or "Retransmission Consent" Rights. The 1992 Cable Act
requires television broadcasters to make an election to exercise either certain
"must-carry" or "retransmission consent" rights in connection with the carriage
of television stations by cable television systems in the station's local
market. If a broadcaster chooses to exercise its must-carry rights, it may
demand carriage on a specified channel on cable systems within its market,
which, in certain circumstances, may be denied. Must-carry rights are not
absolute, and their exercise is dependent on variables such as the number of
activated channels on and the location and size of the cable system and the
amount of duplicative programming on a broadcast station. If a broadcaster
chooses to exercise its retransmission consent rights, it may prohibit cable
systems from carrying its signal, or permit carriage under a negotiated
compensation arrangement.

On April 8, 1993, a three-judge panel of the United States District Court
for the District of Columbia upheld the constitutionality of the must-carry
provisions of the 1992 Cable Act. In 1994, the Supreme Court ruled that the
must-carry provisions were "content neutral" and thus not subject to strict
scrutiny and that Congress' stated interests in preserving the benefits of free,
over-the-air local broadcast television, promoting the widespread dissemination
of information from a multiplicity of sources and promoting fair competition in
the market for television programming all qualify as important governmental
interests. However, the Court remanded the case to a lower federal court with
instructions to hold further proceedings with respect to evidence that lack of
the must-carry requirements would harm local broadcasting. In late 1995, on
remand, the three-judge panel of the United States District Court for the
District of Columbia upheld the constitutionality of the must-carry
requirements. The case is now again before the Supreme Court, with a

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decision likely in the first half of 1997. The Company cannot predict the effect
of the outcome or the effect on the Company of this case.

Proposed Legislation and Regulations. The FCC has proposed the adoption of
rules for implementing Advanced Television ("ATV") in the United States.
Implementation of ATV will improve the technical quality of over-the-air
broadcast television. Under certain circumstances, however, conversion to ATV
operations may reduce a station's geographical coverage area. The FCC is
considering the implementation of a proposal that would allot a second broadcast
channel to each regular commercial television station for ATV operation.
Stations would be required to phase in their ATV operations on the second
channel, with a three-year period to build necessary ATV facilities and a
consecutive three-year period in which to begin operations. Such stations would
be required to surrender their non-ATV channel 15 years after the commencement
of the first three-year period. Implementation of ATV will impose additional
costs on television stations providing the new service due to increased
equipment and operating costs. The Company estimates that the adoption of ATV
would require average capital expenditures of approximately $8-10 million per
Station to provide facilities and equipment necessary to broadcast an ATV
signal. The introduction of this new technology will require that consumers
purchase new receivers (television sets) for ATV signals or, if available by
that time, adapters for their existing receivers. The FCC has also proposed to
assign to full-power ATV stations the channels currently occupied by LPTV
stations, which could adversely affect the Company's LPTV channels. When the
Telecommunications Act was passed, certain leaders in Congress asked the FCC to
postpone issuing ATV licenses pending consideration of possible future
legislation that might require broadcasters to bid at auction for ATV channels
or which might require that the current conventional channels be returned to the
government on an expedited schedule. In the course of the debate on the federal
budget, some leaders in Congress have proposed various plans that might require
the auctioning of the spectrum which broadcasters will need in order to provide
ATV. Various plans for raising revenue also include provisions to require the
auctioning of radio frequencies in bands which encompass those currently
licensed for use by broadcasters, including those channels used for "auxiliary"
purposes, such as remote pickups in electronic news gathering and
studio-to-transmitter links. Hearings on spectrum auctions and usage will be
held by Congress beginning in the Spring of 1996. While the Company believes
that the FCC will authorize ATV in the United States, the Company cannot predict
when such authorization might be given or the effect such authorization might
have on the Broadcasting Business. The Company cannot predict whether
legislation requiring auctions for ATV spectrum will be enacted or the effect of
such legislation.

In addition, the FCC is conducting an inquiry to consider proposals to
increase broadcasters' obligations under its rules implementing the Children's
Television Act of 1990, which requires television stations to present
programming specifically directed to the "educational and informational" needs
of children. Other matters that could affect the Stations include technological
innovations affecting the mass communications industry such as technical
allocation matters, including assignment by the FCC of channels for additional
broadcast stations, low-power television stations and wireless cable systems and
their relationship to and competition with full-power television broadcasting
service.

Congress and the FCC also have under consideration, or may in the future
consider and adopt, new laws, regulations and policies regarding a wide variety
of matters that could, directly or indirectly, affect the operation, ownership
and profitability of the Broadcasting Business and the Stations, result in the
loss of audience share and advertising revenues of the Stations, and affect the
Company's ability to acquire additional broadcast stations or finance such
acquisitions. Such matters include, for example, (i) changes to the license
renewal process; (ii) imposition of spectrum use or other governmentally imposed
fees upon a licensee; (iii) proposals to expand the FCC's equal employment
opportunity rules and other matters relating to minority and female involvement
in broadcasting; (iv) proposals to increase the benchmarks or thresholds for
attributing ownership interest in broadcast media; (v) proposals to change rules
or policies relating to political broadcasting; (vi) technical and frequency
allocation matters, including those relative to the implementation of ATV; (vii)
proposals to restrict or prohibit the advertising of beer, wine and other
alcoholic beverages on broadcast stations; (viii) changes in the FCC's
cross-interest, multiple ownership, alien ownership and cross-ownership
policies; (ix) changes to broadcast technical requirements; and (x) proposals to
limit the tax deductibility of advertising expenses by advertisers.

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The Company cannot predict what other matters might be considered in the
future, nor can it judge in advance what impact, if any, the implementation of
any of these proposals or changes might have on the Broadcasting Business.

The foregoing does not purport to be a complete discussion of all of the
provisions of the Communications Act, the Telecommunications Act, or other
Congressional acts or the regulations and policies promulgated by the FCC
thereunder. Reference is made to the Communications Act, the Telecommunications
Act, other Congressional acts, such regulations, and the public notices
promulgated by the FCC, on which the foregoing discussion is based, for further
information. There are additional FCC regulations and policies, and regulations
and policies of other federal agencies, that govern political broadcasts, public
affairs programming, equal employment opportunities and other areas affecting
the Station's businesses and operations.

SEASONALITY OF BUSINESSES

The Company's revenues historically have been slightly higher in the fourth
quarter of the year and EBITDA has been significantly higher during such period,
primarily attributable to increased expenditures by advertisers. During 1995,
28.4% of the Company's revenues and 36.8% of the Company's EBITDA were earned in
the fourth quarter in each case excluding programming and new media and
corporate expenses.

EMPLOYEES

As of December 31, 1995, the Company employed approximately 2,500 full-time
equivalents, of which approximately 1,075 worked in the Broadcasting Business,
approximately 1,255 worked in the Publishing Business, and the remainder of
which worked in corporate headquarters and the Programming and New Media
Business. Approximately 340 of the Broadcasting Business employees are
represented by a number of labor unions that are independent and unaffiliated
among the Stations.

Approximately 50% of the Publishing Business employees are represented by
labor unions, mostly under existing collective bargaining agreements. The
Providence Newspaper Guild and The Communications Workers of America, Local 33
collective bargaining agreements expire on December 31, 1996. No assurance can
be given that new collective bargaining agreements will be entered into prior to
the December 31, 1996 expiration dates. The Newspaper Printing Pressman's Union
is in the fifth year of a ten-year contract. The International Brotherhood of
Teamsters, Local 64, was elected on February 29, 1996 as the bargaining agent
for 172 packaging department employees.

The Company contributes to and maintains various employee benefit or
retirement plans for eligible employees. The Company considers its relations
with its employees to be good.

PROPERTIES

The Company's corporate headquarters and various operating and
administrative departments of the Broadcasting Business, the Publishing Business
and the Programming and New Media Business are located at 75 Fountain Street,
Providence, Rhode Island, an historic building owned by the Company with 205,635
square feet of working space. Each of the Stations has local facilities
consisting of owned or leased offices, studios, sales offices and transmitter
and tower sites. The Company owns a number of production and storage facilities
in Providence used for the Publishing Business, and leases various regional
distribution centers and news and advertising offices.

The Company believes that its properties are generally in good condition
and are adequate and suitable for the operations of its businesses. None of the
properties owned or leased by the Company is subject to a lien under the Credit
Agreement or is individually material to the Company's operations. However, the
cost to relocate any of the Stations' towers could be significant because zoning
and other land use restrictions, as well as Federal Aviation Administration
regulations, limit the number of suitable sites available in any geographic
area.

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LEGAL PROCEEDINGS

On January 17, 1995, Cable LP I, Inc. ("Cable LP") brought a declaratory
judgment action against Old PJC, Colony Communications, Inc. ("Colony") and
Dynamic Cablevision of Florida, Inc. ("Dynamic") in the Circuit Court of the
Eleventh Judicial Circuit in Dade County, Florida. Colony and Dynamic were cable
television subsidiaries of Old PJC, which became units of Continental in
connection with the Merger. 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 (i) Dynamic was obligated to offer to sell Dynamic's general
partnership interest to Cable LP before Old PJC entered into the Merger
Agreement with Continental and (ii) 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.

A motion to strike allegations of bad faith and breach of fiduciary duty
against Old PJC, Colony and Dynamic was granted by the court, and an Answer to
the Complaint and a Counterclaim was filed by them on March 16, 1995, seeking 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. The case was tried in December 1995 and the
decision of the Court is expected shortly. The Company believes that the claims
asserted by Cable LP are without merit and intends to vigorously defend this
matter through the appeal process in the event of an unfavorable ruling.
Although the Company expects to succeed on the merits, an adverse decision could
be material to the operating results of the Company.

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 Company 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 Company is a party to various other claims, legal actions and
complaints arising in the ordinary course of business. In the Company's opinion,
all such matters are adequately covered by insurance or, if not so covered, are
without merit or are of such kind, or involve such amounts, that unfavorable
disposition would not have a material effect on the consolidated financial
position or results of operations of the Company.

BACKGROUND; REORGANIZATION

Pursuant to the transactions described above under "The
Company -- Background; Reorganization", on October 5, 1995, the Company, Old PJC
and Continental completed the Kelso Buyout, the Spin-Off and the Merger.
Immediately prior to the Kelso Buyout, Continental completed the King Cable
Purchase. In connection with, and as part of the Spin-Off, the Company, with
certain exceptions, assumed and agreed to hold Continental, as successor by
merger to Old PJC, harmless from all of Old PJC's liabilities arising from its
non-cable businesses, and Old PJC, with certain exceptions, in turn agreed to
hold the Company harmless from liabilities arising from the Old PJC Cable
Business, which liabilities were assumed by Continental pursuant to the Merger.

The Merger and the Spin-Off were intended to qualify as tax-free
reorganizations under the Code. In the event either the Merger or the Spin-Off
are determined not to so qualify, such failure to qualify would result in
Continental, the surviving entity in the Merger, recognizing gain equal to the
excess of the fair market value of the shares of the Company's Common Stock
received in the Spin-Off (the "Spin-Off Stock") distributed to Old PJC's
stockholders over Old PJC's basis in the assets transferred to the Company in
the Contribution. The Merger Agreement also provides that the Company will
indemnify Continental for all federal and state income tax liabilities of Old
PJC and its subsidiaries for periods ending on or before the Closing Date,
including income tax liabilities resulting from any failure of the Spin-Off or
the Merger to qualify as tax-free reorganizations under the Code, unless such
failure to qualify is the result of certain actions by Continental.

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Continental and US West Media Group ("US West") recently announced that they had
entered into an agreement pursuant to which Continental will be merged with and
into US West (the "US West Merger"). As part of such transaction, US West has
agreed that any failure of the Spin-Off and the Merger to qualify as tax-free
reorganizations under the Code as a result of the transactions contemplated by
the US West Merger would not give rise to an indemnification obligation by the
Company under the Merger Agreement.

In order to protect the tax-free nature of the Spin-Off and the Merger, for
the one-year period ending on October 5, 1996, the Spin-Off Stock is subject to
transfer restrictions (the "Transfer Restrictions") which prohibit all
transfers, sales, assignments or other dispositions of Spin-Off Stock for value
by the former Old PJC stockholders.

RESTRICTIONS IN CERTAIN AGREEMENTS

Pursuant to the Contribution and Assumption Agreement entered into in
connection with the Spin-Off, the Company agreed that until October 5, 1999, it
would 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
Company 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 October 5, 1996, $200 million, (y) for
the period from October 5, 1996 to and including October 5, 1997, $150 million
and (z) for the period from October 5, 1997 to and including October 5, 1999,
$50 million. The Company 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.

As part of the Merger, the Company entered into a noncompetition agreement
pursuant to which the Company agreed that, until October 5, 1998, neither it nor
any of its subsidiaries will (or will attempt to), on its own behalf or in the
service or on behalf of others, (i) solicit for employment, interfere with or
entice away any of the directors, officers, employees or agents of Continental
or any person who at any time on or after January 1, 1994 was an officer or
employee of the Company or its cable subsidiaries and who is employed by
Continental following the Closing Date, (ii) subject to certain exceptions,
engage in any manner in the operation (in specified geographic areas) of cable
television systems providing the services provided by Old PJC and its cable
subsidiaries (the "Restricted Business") at the Closing Date other than the
business of developing or creating programming or (iii) use or permit Old PJC or
the Company's name to be used in connection with any Restricted Business in
specified geographic locations.

The indebtedness under the Credit Agreement is guaranteed by the Company's
principal subsidiaries, and is secured by pledges of the stock of such
companies. The Credit Agreement contains various covenants, events of default
and other provisions which could affect the Company's business, operating and
acquisition strategies. Such covenants include specified financial covenants
relating to debt and interest coverage and fixed charge ratios. In addition, the
Credit Agreement (i) prohibits the creation of indebtedness in excess of (x) $45
million in the aggregate of pari passu and senior indebtedness and (y) $150
million in the aggregate of unsecured subordinated indebtedness; (ii) restricts
the creation of liens; (iii) restricts the sale of assets, subject to certain
restrictions and prepayment requirements; and (iv) limits (a) investments in
existing or identified investments to $20 million in the aggregate and (b)
investments in businesses involved in publishing, television stations and
programming other than existing and qualified investments to $50 million in the
aggregate, in each case subject to certain exceptions and conditions.

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<TABLE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

<CAPTION>
NAME POSITION WITH COMPANY
---- ---------------------
<S> <C>
Stephen Hamblett(1).................. Chairman of the Board, Chief Executive Officer,
Publisher and Director
Jack C. Clifford..................... Executive Vice President-Broadcasting, Programming &
Electronic Media
Howard G. Sutton..................... Senior Vice President & General Manager-Publishing
John L. Hammond...................... Vice President-General Counsel & Chief Administrative
Officer
Thomas N. Matlack.................... Vice President-Finance and Chief Financial Officer
John A. Bowers....................... Vice President-Human Resources
John E. Hayes........................ Vice President-Television
Michael B. Isaacs.................... Vice President-Government and Corporate Relations
Paul H. McTear, Jr................... Vice President-Finance and Business Development-
Broadcasting, Programming and Electronic Media
Joel P. Rawson....................... Vice President and Executive Editor
Joel N. Stark........................ Vice President-Publishing Development and Marketing
Harry Dyson.......................... Treasurer and Secretary
F. Remington Ballou(2)............... Director
Henry P. Becton, Jr.(3)(4)........... Director
Fanchon M. Burnham(3)(4)............. Director
Kay K. Clarke(3)..................... Director
Peter B. Freeman(3)(4)............... Director
Benjamin P. Harris, III.............. Director
Paul A. Maeder(3).................... Director
Trygve E. Myhren(5).................. Director
John W. Rosenblum(2)(3).............. Director
Henry D. Sharpe, Jr.(1)(6)........... Director
W. Nicholas Thorndike(1)(2).......... Director
John W. Wall(1)...................... Director
Patrick R. Wilmerding(1)(4).......... Director
<FN>
- ---------------
(1) Member of the Executive Committee
(2) Member of the Compensation Committee
(3) Member of the Audit Committee
(4) Member of the Nominating Committee
(5) Mr. Myhren resigned as President and Chief Operating Officer of the Company
effective March 31, 1996, but will continue to serve on the Board of
Directors of the Company.
(6) Mr. Sharpe will retire from the Board of Directors at the Company's 1996
Annual Meeting.
</TABLE>

The Company has three classes of Directors, Class I, Class II and Class
III, the terms of office of which will expire, respectively, at the annual
meetings of stockholders in 1998, 1997 and 1996. The term of the current Class I
Directors, Messrs. Hamblett, Wilmerding and Rosenblum and Ms. Burnham, will
expire at the 1998 Annual Meeting of the Company. The term of current Class II
Directors, Messrs. Wall, Thorndike, Becton, Maeder and Myhren, will expire at
the 1997 Annual Meeting of the Company. The term of current Class III Directors,
Messrs. Sharpe, Freeman, Ballou and Harris and Ms. Clarke, will expire at the
1996 Annual Meeting of the Company. Successors to any Directors whose terms are
expiring are elected to three-

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year terms and hold office until their successors are elected and qualified.
Executive officers of the Company are elected to serve until they resign or are
removed or are otherwise disqualified to serve.

STEPHEN HAMBLETT, 61, is Chairman of the Board of Directors and Chief
Executive Officer of the Company and Publisher of the Journal-Bulletin
newspapers. He has served in such capacities since 1987. Mr. Hamblett was first
employed by the Company in 1957 in its advertising department and has been
continuously employed by the Company since that time, serving as Assistant Vice
President for Administration, Vice President Marketing, Vice President Marketing
and Corporate Development, Executive Vice President and President and Chief
Operating Officer before assuming his current positions. He has been a Director
of the Company since 1985. Mr. Hamblett also serves on the Board of Directors of
the Associated Press, Continental and the Inter American Press Association.

JACK C. CLIFFORD, 62, was appointed Executive Vice President-Broadcasting,
Programming & Electronic Media on April 1, 1996. Prior to that, Mr. Clifford
served as Vice President-Broadcasting since September 1995 and was Vice
President-Broadcasting and Cable Television from 1982 to 1995. Mr. Clifford
serves on the Board of Directors of StarSight.

HOWARD G. SUTTON, 46, was appointed Senior Vice President & General
Manager-Publishing on April 1, 1996. Prior to that, Mr. Sutton served as Vice
President & General Manager since 1994 and Vice President-Administration since
1987.

JOHN L. HAMMOND, 50, was appointed Vice President-General Counsel & Chief
Administrative Officer on April 1, 1996. Mr. Hammond had been Vice
President-Legal since October, 1992. Mr. Hammond was Vice President, General
Counsel and Secretary of Landstar System, Inc. from 1989 to 1992. Prior to that,
Mr. Hammond was employed by The Singer Company for ten years and was Deputy
General Counsel at the time of his departure.

THOMAS N. MATLACK, 31, was appointed Chief Financial Officer of the Company
on April 1, 1996. Since September 1995, Mr. Matlack has been Vice
President-Finance. From 1992 to 1995, Mr. Matlack was Director-Financial
Planning and Analysis of the Company. Prior to that, Mr. Matlack was employed by
Houghton-Mifflin Company in various strategic and financial positions and by
Goldman, Sachs & Co.

JOHN A. BOWERS, 43, has been Vice President-Human Resources since November,
1990. Prior to that time, Mr. Bowers served in various Human Resources positions
with the Company and its subsidiaries since 1980.

JOHN E. HAYES, 54, has been Vice President-Television since April 1, 1996.
From 1992 to 1996, Mr. Hayes had been Vice President-Television of the Company's
Broadcasting Division. Prior to that, Mr. Hayes had been President and General
Manager of the Company's television station in Charlotte, North Carolina since
1989.

MICHAEL B. ISAACS, 49, was appointed Vice President-Government and
Corporate Relations on April 1, 1996. Prior to that, Mr. Isaacs has been Vice
President-Government Affairs and Public Policy of the Company's Broadcasting and
Telecommunications Division since 1994. From 1991 to 1994, Mr. Isaacs had been
Director of Government Affairs & Public Policy.

PAUL H. MCTEAR, JR., 47, has been Vice President-Finance and Business
Development-Broadcasting, Programming and Electronic Media since April 1, 1996.
Prior to that, Mr. McTear had been Vice President-Finance and Business
Development of the Company's Broadcasting and Telecommunications Division since
October 1, 1995. Mr. McTear had been Vice President-Finance and Business Affairs
of the Company's Broadcasting and Cable Television Division since June 1995 and
prior to that, was Executive Director-Finance of the Company's Broadcasting and
Cable Television Division.

JOEL P. RAWSON, 52, became Vice President and Executive Editor in January
1996. Prior to that, Mr. Rawson served as Deputy Executive Editor since 1989.

JOEL N. STARK, 51, is currently Vice President-Publishing Development and
Marketing, a position he has held since 1988.

75
<PAGE> 79

HARRY DYSON, 59, a certified public accountant, is currently Treasurer and
Secretary, a position he has held since 1986.

F. REMINGTON BALLOU, 67, has been Chief Executive Officer of B. A. Ballou &
Co., Inc., a jewelry manufacturing company and prior to that was its president
since 1965. Mr. Ballou has served as a Director of the Company since 1985. He is
also a Director of Keyport Life Insurance Co.

HENRY P. BECTON, JR., 52, has been President and General Manager of WGBH
Education Foundation, the operator of public television and radio stations in
Massachusetts and producer of educational broadcast and non-broadcast
programming and software, since 1984. Mr. Becton has been a Director of the
Company since 1992 and currently serves as Chairman of the Nominating Committee
of the Board of Directors. He is also a director of Becton Dickinson and Company
and is a trustee or director of the following investment companies managed by
Scudder, Stevens & Clark: Scudder Cash Investment Trust; Scudder California Tax
Free Trust; Scudder Municipal Trust; Scudder State Tax Free Trust; Scudder
Investment Trust; and Scudder Portfolio Trust.

FANCHON M. BURNHAM, 51, has been a partner in the accounting firm of F.M.
Burnham and Associates (formerly Brooks/Burnham) in Washington, D.C., since
1985. Ms. Burnham has been a Director of the Company since 1992.

KAY K. CLARKE, 57, is President of Templeton, Ltd., a management consulting
firm. Prior to that, Ms. Clarke was President of the Micromarketing Division and
Senior Vice President-Business Development for ADVO, Inc., which she joined in
1990, from McGraw-Hill, Inc., where she was Executive Vice President. Ms. Clarke
is also a director of Guardian Life Insurance Company of America, Age Wave, Inc.
and Lumex, Inc. Ms. Clarke joined the Company's Board of Directors in 1995.

PETER B. FREEMAN, 63, has been a Director of the Company since 1981 and
currently serves as Chairman of the Executive Committee of the Board of
Directors. During the past five years Mr. Freeman has been self-employed as a
corporate director and trustee, including serving as a director of Blackstone
Valley Electric Company, AMICA Mutual Insurance Company and AMICA Life Insurance
Company, a trustee of Eastern Utilities Associates, as well as a trustee or
director of the following investment companies managed by Scudder, Stevens &
Clark: Scudder Fund, Inc.; Scudder Institutional Fund, Inc.; Scudder Cash
Investment Trust; Scudder California Tax Free Trust; Scudder Municipal Trust;
Scudder State Tax Free Trust; Scudder Tax Free Money Fund; Scudder Tax Free
Trust; Scudder Funds Trust; and Scudder Variable Life Investment Fund.

BENJAMIN P. HARRIS, III, 59, has been a partner in the law firm of Edwards
& Angell, Providence, Rhode Island, since 1969 and has practiced law with the
firm since 1961. Mr. Harris has been a Director of the Company since 1985. Mr.
Harris is also a director of The Providence Mutual Fire Insurance Company.

PAUL A. MAEDER, 42, is Managing General Partner of Highland Capital
Partners, Inc., where he manages the firm's technology investments. Before
joining Highland in 1988, Mr. Maeder was a general partner at Charles River
Ventures. Mr. Maeder is also a Director of AVID, The Dodge Group, SQA, Inc.,
HighGround Systems Inc. and PureSpeech, Inc. Mr. Maeder has been a Director of
the Company since 1995.

TRYGVE E. MYHREN, 59, was President and Chief Operating Officer of the
Company from 1990 until his recent resignation effective March 31, 1996. From
1981 to 1988, Mr. Myhren was Chairman and Chief Executive Officer of American
Television and Communications Corporation (now Time Warner Cable). Mr. Myhren
was a member of the Board of Directors of the National Cable Television
Association from 1980 to 1991 and served as its Chairman in 1986 and 1987. Prior
to joining the Company, Mr. Myhren served as President and Chief Executive
Officer of Myhren Media and General Partner of Arizona & Southwest Cable from
1989 to 1990. Mr. Myhren is currently a director of Advanced Marketing Services,
Inc., Peapod, Cable Labs and Continental. Mr. Myhren has been a Director of the
Company since 1994.

JOHN W. ROSENBLUM, 52, became the Tayloe Murphy Professor of Business
Administration at the Darden School of Business, University of Virginia, in
1993. From 1982 to 1993, Mr. Rosenblum was the Dean of the Darden School of
Business. Mr. Rosenblum serves on the Board of Directors of Cadmus
Communications

76
<PAGE> 80

Corp., Chesapeake Corporation, Comdial Corporation, Cone Mills Corporation and
T. Rowe Price Associates. He has been a Director of the Company since 1992 and
currently serves as Chairman of the Compensation Committee of the Board of
Directors.

HENRY D. SHARPE, JR., 72, has been a Director of the Company since 1964 and
currently serves as Chairman of the Executive Committee of the Board of
Directors. Mr. Sharpe is currently Chairman of Brown & Sharpe Manufacturing
Company, a position he has held since 1954. From 1951 to 1980 Mr. Sharpe was the
Chief Executive Officer of Brown & Sharpe Manufacturing Company.

W. NICHOLAS THORNDIKE, 63, has been a Director of the Company since 1984.
Mr. Thorndike serves as a corporate director or trustee of a number of
organizations, including Bradley Real Estate, Inc., Courier Corporation, Data
General, Eastern Utilities Associates and The Putnam Funds. He also serves as a
trustee of Massachusetts General Hospital, having served as Chairman of the
Board of Directors from 1987 to 1992 and President from 1992 to 1994. In
February 1994 he accepted appointment as a successor trustee of private trusts
in which he has no beneficial interest, and concurrently became, serving until
October 1994, Chairman of the Board of Directors of two privately-owned
corporations controlled by such trusts that filed voluntary petitions for relief
under Chapter 11 of the United States Bankruptcy Code in August 1994.

JOHN W. WALL, 71, retired as Vice-Chairman of Rhode Island Hospital Trust
National Bank ("Hospital Trust"), Providence, Rhode Island in 1986. Mr. Wall had
been with Hospital Trust since 1946. He returned to Hospital Trust at
management's request to serve as Chairman and Chief Executive Officer from 1991
to 1992. Since 1992 Mr. Wall has served as Vice-Chairman of Hospital Trust. Mr.
Wall has served as a Director of the Company since 1975.

PATRICK R. WILMERDING, 53, has been a Director of the Company since 1979.
Mr. Wilmerding has been chairman of Private Signals, Inc., an import/export
company, since 1994. Prior to that, he served as a Division Executive with The
First National Bank of Boston. Mr. Wilmerding is a director of the Indian
Opportunities Fund and a trustee of five U.S. business trusts managed by Martin
Currie Investment Management Ltd.

COMMITTEES OF THE BOARD OF DIRECTORS OF THE COMPANY

The standing committees of the Board of Directors of the Company are an
Executive Committee, an Audit Committee, a Compensation Committee and a
Nominating Committee. The Executive Committee has authority to exercise
substantially all authority of the Board of Directors with specific exceptions
provided by law and the Company's By-Laws. The Audit Committee reviews the
Company's audit plan, the scope of activities of the independent auditors and of
internal auditors, the results of the audit after completion, and the fees for
services performed during the year. The Audit Committee also recommends to the
Board of Directors the firm to be appointed as independent auditors. During
portions of some meetings this Committee meets with representatives of the
independent auditors without any officers or employees of the Company present.
The Compensation Committee administers the Company's incentive compensation
plan, Incentive Stock Plans and retirement and benefit plans, determines the
compensation of key officers of the Company and authorizes and approves
bonus-incentive compensation programs for executive personnel. The Nominating
Committee considers and recommends to the Board of Directors nominees for
possible election to the Board of Directors and considers other matters
pertaining to the size and composition of the Board of Directors and its
Committees.

COMPENSATION OF DIRECTORS

The Board of Directors of the Company is comprised of fourteen Directors,
one of whom is a salaried employee of the Company. Directors who are full-time
employees of the Company receive no additional compensation for services
rendered as a Director. The members of the Company's Board of Directors who are
not officers of the Company ("Non-Employee Directors") receive an annual
retainer of $10,000. In addition, each Non-Employee Director received a fee of
$950 for each meeting attended in 1995, which amount was increased to $1,250 in
1996 as a result of the Board of Directors' decision to reduce from ten to six
the number of meetings but increase their length from a half day to four full
day meetings and strategic meetings in December and July lasting one full day
and two full days, respectively. The Company also pays each Non-

77
<PAGE> 81

Employee Director a fee of $750 for each Committee meeting attended. In
addition, the Chairmen of the Executive Committee, the Audit Committee, the
Compensation Committee and the Nominating Committee of the Company's Board of
Directors receive an annual retainer of $3,000, $2,500, $2,500 and $1,000,
respectively. Directors who reside outside the Providence area are reimbursed
for their travel expenses incurred in connection with attendance at meetings of
the Company's Board of Directors. The Board of Directors recently adopted
guidelines suggesting that Non-Employee Directors own the equivalent of at least
three times their annual compensation in shares of Common Stock.

The Directors of the Company are participants in the Company's IUP Plan. At
December 31, 1994, the Directors held 263,200 Stock Units (adjusted to give
effect to the Stock Split) in the IUP. Upon the liquidation of eighty-five
percent of the Stock Units in the IUP, which occurred prior to the consummation
of the Merger, the Non-Employee Directors were paid an aggregate amount of
$3,610,263 in a combination of cash and stock. The payout related to the
liquidation of the remaining fifteen percent of the Stock Units in the IUP is
anticipated in the second half of 1996. See footnote (2) to table, "Aggregated
SAR Exercises in Last Fiscal Year and Year-End SAR Values".

Each Non-Employee Director of the Company also participates in the
Company's 1994 Non-Employee Director Stock Option Plan (the "Director Option
Plan"). Under the Director Option Plan, an option to purchase 2,000 shares
(adjusted to give effect to the Stock Split) of the Class A Common Stock is
granted to each Non-Employee Director upon commencement of service on the Board
of Directors. An option to purchase an additional 2,000 shares is granted to
each such Director on October 1 of each subsequent year the Director Option Plan
is in effect. The exercise price for each option is the fair market value of the
Company's Class A Common Stock on the date of grant. Each option is exercisable
one year following the date of grant. The Board of Directors has recommended to
the stockholders of the Company a proposal to increase the number of additional
options to be granted under the Director Option Plan to 4,000. This proposal is
being presented for approval by the stockholders at the Company's 1996 Annual
Meeting.

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<PAGE> 82

EXECUTIVE COMPENSATION

The following table sets forth for the fiscal years ended December 31,
1995, 1994 and 1993 information regarding compensation paid by the Company and
its predecessor, Old PJC, to the Chief Executive Officer and the Company's other
four most highly compensated executive officers (the "Named Executive
Officers").

<TABLE>

SUMMARY COMPENSATION TABLE

<CAPTION>
LONG-TERM COMPENSATION(1)
ANNUAL COMPENSATION -------------------------
----------------------------------- RESTRICTED SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(2) AWARDS(3) OPTIONS(#)(4) COMPENSATION(5)
- ---------------------- ----- --------- -------- --------------- ---------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen Hamblett...... 1995 $600,000 $390,000 -- -- 60,000 $ 702
Chairman, Chief 1994 600,000 360,000 -- -- 60,000 702
Executive Officer 1993 600,000 360,000 -- $1,013,800 -- 30,702
and Publisher
Trygve E. Myhren(6)... 1995 500,000 325,000 -- -- 46,000 702
President and Chief 1994 500,000 300,000 -- -- 46,000 702
Operating Officer 1993 500,000 300,000 $51,949 762,200 -- 25,702
Jack C. Clifford...... 1995 260,000 169,000 -- -- 26,000 702
Executive Vice 1994 260,000 171,000 47,481 -- 22,000 544,702
1993 260,000 156,000 407,000 -- 702
President-Broadcasting,
Programming and
New Media
John A. Bowers........ 1995 180,000 117,000 -- -- 16,000 702
Vice President- 1994 180,000 108,000 52,544 -- 14,000 702
Human Resources 1993 180,000 108,000 -- 273,800 -- 9,702
John L. Hammond....... 1995 155,000 147,000(7) -- -- 16,000 702
Vice 1994 148,000 74,200(7) -- -- 4,000 702
President-General
Counsel & Chief 1993 140,000 56,000(7) -- 199,800 -- 30,846
Administrative
Officer
<FN>
- ---------------
(1) All participants, including the Named Executive Officers, in the Company's
1994 Employee Stock Option Plan (the "Employee Option Plan"), the Director
Option Plan and the Company's Restricted Stock Unit Plan (the "Restricted
Stock Unit Plan") previously were to receive additional payments in cash or
shares of the Company's Class A Common Stock reflecting any increase in the
price of Continental class A common stock established after a public
offering thereof or in certain other circumstances. As a result of the
proposed US West Merger, participants in these plans now may receive such
additional payments based on the increased price of Continental class A
common stock reflected in the proposed merger. See footnote (2) to table,
"Aggregated SAR Exercises in Last Fiscal Year and Year-End SAR Values".

(2) This column includes the aggregate incremental cost to the Company of
providing various perquisites and personal benefits. Includes automobile
purchase allowances in 1994 for Mr. Clifford and Mr. Bowers of $21,702 and
$31,540, respectively. During 1993, Mr. Myhren was granted an allowance to
purchase a vehicle including tax reimbursement for $23,148.

(3) This column shows the market value of Restricted Stock Unit awards made
pursuant to the Restricted Stock Unit Plan on October 1, 1993, the date of
grant, to senior officers of the Company including the executives listed on
the table above. Restricted stock units will be completely vested on October
1, 1996. The number of restricted stock unit holdings at the end of 1995
(adjusted for the Stock Split) were for Mr. Hamblett, 130,800 units; Mr.
Clifford, 52,400 units; Mr. Bowers, 35,200 units; Mr. Hammond, 25,600 units,
and Mr. Myhren, 98,000 units. The value of each unit as of December 31,
1995, based upon the most recent independent appraisal of the Class A Common
Stock, is $12.68 (adjusted for the Stock Split). Dividends are added to the
awards as and when declared, but have not been accrued in the listed
valuation.

(4) Adjusted for the Stock Split.

</TABLE>
79
<PAGE> 83

(5) The amount shown for Mr. Clifford in 1994 includes a payout of $544,000
pursuant to a previous deferred bonus arrangement. The amounts shown for
1993 include Old PJC class A common stock granted in lieu of salary
increases in 1993 to Mr. Hamblett, Mr. Myhren, and Mr. Bowers in the amounts
of $30,000, $25,000 and $9,000, respectively. The remaining amounts shown in
the table are amounts contributed under the Company's 401(k) Plan as
described below under the caption "Retirement Benefits". The amount shown
for Mr. Hammond in 1993 includes $30,142 in moving expenses.

(6) Resigned from the Company effective March 31, 1996. See "Change in Control
and Termination of Employment Agreements" for a discussion of payments made
to Mr. Myhren upon his resignation.

(7) Includes deferred compensation.

<TABLE>

The following table sets forth stock options granted on October 1, 1995 to
the Named Executive Officers pursuant to the Employee Option Plan.

OPTION/SAR GRANTS IN FISCAL YEAR 1995

<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
- --------------------------------------------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -------------------------
NAME GRANTED(1) FISCAL YEAR ($/SH)(2) DATE 5% 10%
------ ---------- ------------- -------------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Stephen Hamblett....... 60,000 19% $12.68 10/04/05 $478,500 $1,212,450

Trygve E. Myhren....... 46,000 14% 12.68 10/04/05 366,850 929,945

Jack C. Clifford....... 26,000 8% 12.68 10/04/05 207,350 525,395

John A. Bowers......... 16,000 5% 12.68 10/04/05 127,600 323,320

John L. Hammond........ 16,000 5% 12.68 10/04/05 127,600 323,320

<FN>
- ---------------
(1) The options are non-qualified stock options and become exercisable in four
equal annual installments beginning October 1, 1996. All options become
exercisable immediately upon a change of control (as defined in the Employee
Option Plan). Adjusted for the Stock Split.

(2) The per share option exercise price represents the fair market value of the
Company's Class A Common Stock at the date of grant, adjusted for the Stock
Split. In accordance with the terms of the Employee Option Plan, the
Committee used the most recent valuation by an independent appraisal firm as
the basis to determine the fair market value since the Company's shares are
not traded on a public market.

(3) The dollar amounts under these columns result from calculations at the 5%
and 10% assumed appreciation rate set by the Securities and Exchange
Commission (the "Commission") and, therefore, are not intended to forecast
possible future appreciation, if any, of the Company's Class A Common Stock
price. At the 5% and 10% assumed appreciation rate the price per share of
the Company's Class A Common Stock would be $20.66 and $32.89, respectively,
adjusted for the Stock Split.

</TABLE>

80
<PAGE> 84

<TABLE>

AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1995
AND FISCAL YEAR-END OPTION VALUES

<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR-END(#) AT FISCAL YEAR-END
NAME EXERCISE(#)(1) REALIZED(2) EXERCISABLE/UNEXERCISABLE(1) EXERCISABLE/UNEXERCISABLE(2)
---- ----------- ----------- ----------------------------- ----------------------------
<S> <C> <C> <C> <C>
Stephen Hamblett...... -- -- 15,200/104,800 $167,580/$493,920
Trygve E. Myhren...... -- -- 46,000/ 46,000 507,150/ 0
Jack C. Clifford...... 5,600 $61,740 0/ 42,400 0/ 180,810
John A. Bowers........ -- -- 3,600/ 26,400 39,690/ 114,660
John L. Hammond....... -- -- 1,200/ 18,800 13,230/ 30,870

<FN>
- ---------------
(1) Adjusted for the Stock Split.

(2) The amounts in these columns are calculated using the difference between the
fair market value of the Company's Class A Common Stock at the end of the
Company's 1995 fiscal year (using the most recent appraisal of the Class A
Common Stock) and the option exercise prices.

</TABLE>

<TABLE>

AGGREGATED SAR EXERCISES IN FISCAL YEAR 1995
AND FISCAL YEAR-END SAR VALUES

<CAPTION>
STOCK UNITS VALUE NUMBER OF VALUE OF
NAME LIQUIDATED(1) REALIZED(2) RETAINED STOCK UNITS(1) RETAINED STOCK UNITS(2)
---- ------------- ----------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
Stephen Hamblett............. 500,800 $12,474,965 88,000 $2,201,464
Trygve E. Myhren............. 271,200 4,720,747 48,000 833,073
Jack C. Clifford............. 179,200 4,086,289 31,600 721,110
John A. Bowers............... 63,200 759,366 11,200 134,006
John L. Hammond.............. -- -- -- --

<FN>
- ---------------
(1) Adjusted for the Stock Split.

(2) Eighty-five percent of the Stock Units in the IUP were liquidated upon
completion of an independent appraisal of the class A common stock of Old
PJC with respect to Old PJC's non-cable assets (the "Company Appraisal"),
which was completed prior to the Merger. Each of the Stock Units of an IUP
participant was valued in an amount equal to the sum of (i) the price
ascribed to a share of the Company's Common Stock as determined by the
Company Appraisal and (ii) the price ascribed to a share of Continental
Common Stock received by the Old PJC shareholders (the "Continental Merger
Stock") on the date of the closing of the Merger, which was $19.40 per share
(the "Continental Closing Share Value"). IUP participants received a
combination of cash and Old PJC class A common stock, net of tax
obligations, in the liquidation of eighty-five percent of the Stock Units.
The Old PJC class A common stock received by IUP participants was exchanged
for Continental Merger Stock and Class A Common Stock in connection with the
Merger and the Spin-Off. The remaining obligations regarding the IUP,
including the Stock Units that were not liquidated (the "Retained Stock
Units") were transferred to and assumed by the Company. Each of the Retained
Stock Units will be valued based upon the sum of (a) the fair market value
of a share of Continental class A common stock determined as described below
(the "Continental Share Value"), and (b) the value of the Common Stock
previously determined in the Company Appraisal. The Retained Stock Units
will be liquidated by payment in cash or Class A Common Stock to the IUP
participants promptly after determination of the Continental Share Value. If
the Continental Share Value is less than the Continental Closing Share Value
at the time the Continental Share Value is determined, an amount equal to
the shortfall shall be deducted from the amount paid with respect to the
Retained Stock Units. Alternatively, if, at the time of such payment, the
Continental Share Value is more than the Continental Closing Share Value,
the IUP participants will be paid in cash or Class A Common Stock an amount
equal to the incremental amount, if any, that would have been due each IUP
participant had the Continental Share Value been used instead of the
Continental Closing

</TABLE>

81
<PAGE> 85

Share Value in the valuation of Stock Units in connection with the
liquidation of eighty-five percent of the Stock Units. At the time of such
payment, all obligations regarding the IUP will have been finally and fully
satisfied. Previously, the Continental Share Value was to be determined
after the earlier of a public offering of Continental class A common stock
or the issuance by Continental of shares of its capital stock for aggregate
consideration of not less than $1 billion and, if neither event occurred
within eighteen months of the closing of the Merger, the Continental Share
Value was to be determined by independent appraisal. Since consummation of
the Merger, Continental has agreed to merge with US West. Accordingly,
pursuant to a resolution of the Compensation Committee of Company's Board of
Directors, the Continental Share Value has been re-defined as the amount
received by the holders of Continental's class A common stock (which holders
include the shareholders of the Company that were shareholders of Old PJC)
upon consummation of the US West Merger or, if the merger agreement between
Continental and US West is terminated, the average of the closing prices for
Continental class A common stock during the last 20 trading days during the
first 90 days after the later to occur of the following: (a) termination of
the merger agreement between Continental and US West; or (b) listing of
Continental's class A common stock on the NASDAQ National Market System or
on a national securities exchange.

<TABLE>
RETIREMENT BENEFITS

PENSION PLAN TABLE

<CAPTION>
EARNINGS CREDITED YEARS OF SERVICE AT RETIREMENT
FOR RETIREMENT -----------------------------------------------
BENEFITS 10 15 20 25
----------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
$ 150,000...................................... $ 28,177 $ 42,265 $ 53,353 $ 70,442
200,000...................................... 38,177 57,265 76,353 95,442
300,000...................................... 58,177 87,265 116,353 145,442
400,000...................................... 78,177 117,265 156,353 195,442
500,000...................................... 98,177 147,265 196,353 245,442
600,000...................................... 118,177 177,265 236,353 295,442
700,000...................................... 138,177 207,265 276,353 345,442
800,000...................................... 158,177 237,265 316,353 395,442
900,000...................................... 178,177 267,235 356,353 445,442
1,000,000...................................... 198,177 297,265 396,353 495,442
1,100,000...................................... 218,177 327,265 436,353 545,442
1,200,000...................................... 238,177 357,265 476,353 595,442
</TABLE>

The Company maintains a retirement income plan (the "Pension Plan") which
is a funded, qualified, non-contributory, defined benefit plan that covers all
employees, including executive officers, of the Company and its subsidiaries.
The Pension Plan provides benefits based on the participant's highest average
salary for the 60 consecutive months within the ten years last served with the
Company prior to retirement and the participant's length of service. The amounts
payable under the Pension Plan are in addition to any Social Security benefit to
be received by a participant. The Pension Plan benefit vests upon completion of
five years of service with the Company.

As of December 31, 1995, the Named Executive Officers have the following
years of credited service calculated as set forth in the Pension Plan: Mr.
Hamblett, 38 years; Mr. Myhren, 5 years; Mr. Clifford, 17 years; Mr. Bowers, 16
years; and Mr. Hammond, 3 years. For purposes of calculating their retirement
benefit in the above table, the Supplemental Retirement Plan discussed below
requires that Mr. Myhren and Mr. Clifford be deemed to have been employed by the
Company since age 35. Under such plan, the resulting benefit for each of these
two executive officers would be reduced by an amount which represents the
estimate of benefits under the provisions of the Pension Plan based upon the
executive officer's years of service with prior employers.

82
<PAGE> 86

The amounts shown in the table above have been calculated without reference
to the maximum limitations imposed by the Internal Revenue Code of 1986, as
amended (the "Code") on benefits which may be paid, or on compensation that may
be recognized, under a qualified defined benefit plan. The amounts include the
estimated total annual retirement benefits that would be paid from the Pension
Plan and, if applicable, the Excess Benefit Plan and the Supplemental Retirement
Plan.

The Company has established an Excess Benefit Plan to provide pension
benefits for certain employees, including the Named Executive Officers. The
Excess Benefit Plan provides that each participant will receive benefits
thereunder equal to the difference between the amount such participant is
entitled to receive under the Pension Plan and the amount he or she would have
been entitled to receive without regard to the maximum limitations imposed by
the Code. Participants will be vested under the Excess Benefit Plan according to
the same vesting provisions as the Pension Plan. The Excess Benefit Plan is
unfunded.

The Company has also established a Supplemental Retirement Plan to provide
full retirement benefits (less an imputed benefit for service with previous
employers) for any of the five top executive officers of the Company who retire
as employees of the Company and who would not otherwise receive full pension
benefits because of a shortened length of service with the Company. The
Supplemental Retirement Plan is unfunded. "Covered Compensation" for the Named
Executive Officers under the Supplemental Retirement Plan is the total of their
salary and bonus payments shown in the Summary Compensation Table above.

The Company has established the Journal Qualified Compensation Deferral
Plan (the "401(k) Plan") to provide a savings incentive for employees. The
401(k) Plan involves a contribution of up to $10.50 per week by the Company for
each participating employee and a matching contribution of $3 per week for each
participant who deducts 2% to 15% of pre-tax income. Employees who have
completed six months of service with the Company, including the Named Executive
Officers, are eligible to participate in the 401(k) Plan.

CHANGE OF CONTROL AND TERMINATION OF EMPLOYMENT AGREEMENTS

On October 11, 1993, the Company entered into change of control agreements
with certain executives of the Company, including the Named Executive Officers,
which agreements become effective upon a change in control of the Company (the
"Change of Control Agreements"). Mr. Myhren's Change of Control Agreement was
terminated effective March 31, 1996.

In the event of a change of control, each of the agreements with Messrs.
Hamblett, Myhren, Clifford and Bowers provides a three-year term of employment
with responsibilities, compensation and benefits at least commensurate with
those experienced by such officer during the prior six months. If terminated
involuntarily, the individual is entitled to 299% of the highest annual base
salary and average bonus received during the prior three years as a lump sum
severance payment. The agreement with Mr. Hammond provides for a two-year term
and severance of 150% of the highest annual base salary and average bonus
received during the prior three years. In the event of a voluntary resignation,
the agreement provides a severance benefit equal to six months of base salary.
Dismissal of the officer for cause results in no severance payment to the
individual.

On October 11, 1993, in a supplemental letter agreement, the Company agreed
to pay the Maximum Severance to Messrs. Hamblett, Myhren, Clifford and Bowers
(or a lesser severance for certain other executives) in the event any of these
executives were to be involuntarily terminated as a result of a corporate
restructuring even if prior to a change of control. However, the Maximum
Severance (or such lesser severance) will not apply in the case of termination
for cause, for unsatisfactory performance or as a result of a reduction in staff
for economic reasons. The Change of Control Agreements specify that if the
Company seeks to retain the executive subsequent to the restructuring, even with
diminished responsibilities, and such executive declines, a severance payment
from the Company to the executive would be discretionary.

The maximum amount that could be payable to all 20 executives pursuant to
the Change of Control Agreements or supplemental letter agreements based upon
the requisite percentage of base salary and bonus, in the event that each such
executive were to be terminated because of a change of control of the Company,
is approximately $11 million.

On February 9, 1996, the Company entered into an agreement with Trygve E.
Myhren in connection with his resignation effective March 31, 1996 as President
and Chief Operating Officer. This agreement provided

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<PAGE> 87

for severance payments of $2,434,100. In addition, this agreement provided that
Mr. Myhren's 1994 grant of 46,000 stock options (adjusted for the Stock Split)
under the Employee Option Plan would become fully vested and exercisable as of
the Effective Date and that his 98,000 Stock Units (adjusted for the Stock
Split) under the Restricted Stock Unit Plan would become fully vested and would
be distributed to him in shares of the Company, net of tax obligations. The
agreement also provided for Mr. Myhren to receive distributions under the IUP on
the same basis as all other participants and that he would receive a retirement
benefit of $143,735 per year commencing at age 65 pursuant to the Company's
Supplemental Retirement Plan. The agreement also covers certain continuing
relationships between Mr. Myhren and the Company. Mr. Myhren will continue to
serve as a member of the Board of Directors of the Company and as the Company's
representative on the Board of Directors of Peapod, L.P., in which the Company
has an interest of approximately 17%. Also, Mr. Myhren will continue to serve on
the Board of Directors of Continental as provided in the Merger Agreement. In
addition, the agreement provides that in the event that Mr. Hamblett dies,
becomes disabled or resigns prior to March 1, 1997, the Board of Directors of
the Company has the right to recall Mr. Myhren to full-time employment as the
Company's Chief Executive Officer. This recall arrangement is subject to
termination by either party on thirty days' notice.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Executive Committee of the Board of Directors of Old PJC performed the
functions of the compensation committee since Old PJC did not have a separate
committee for this function. The members of the Executive Committee during 1994
and 1995 were Messrs. Hamblett, Sharpe, Thorndike, Wall and Wilmerding. Mr.
Hamblett was the Chairman of the Board of Directors and Chief Executive Officer
of Old PJC. The Compensation Committee of the Company is comprised entirely of
non-employee Directors and held its first meeting in October 1995.

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<PAGE> 88

PRINCIPAL STOCKHOLDERS

<TABLE>

The following table sets forth information as of April 15, 1996 (giving
effect to the stock split) with respect to the shares of Class A Common Stock
and Class B Common Stock beneficially owned by (i) each person known by the
Company to own beneficially more than 5% of either class of Common Stock; (ii)
each Director of the Company; (iii) each Named Executive Officer; and (iv) all
Directors and executive officers of the Company as a group. The number of shares
beneficially owned by each stockholder, Director or executive officer is
determined according to rules of the Commission, and the information is not
necessarily indicative of beneficial ownership for any other purpose. Under such
rules, beneficial ownership includes any shares as to which the individual or
entity has sole or shared voting power or investment power. As a consequence,
several persons may be deemed to be the "beneficial owners" of the same shares.
Except as noted below, each holder has sole voting and investment power with
respect to shares of Class A Common Stock and/or Class B Common Stock listed as
owned by such person or entity. When a person is a "co-trustee" or one of a
number of Directors of a corporation that owns shares of the Company's Common
Stock, he or she has shared voting and investment power.

<CAPTION>
PERCENTAGE PERCENTAGE
NUMBER OF OF NUMBER OF OF
SHARES OF OUTSTANDING SHARES OF OUTSTANDING
NAME AND ADDRESS CLASS A CLASS A CLASS B CLASS B AGGREGATE
OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK VOTING POWER
------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Rhode Island Hospital Trust
National Bank(1)................ 3,670,800 23.8% 5,034,800 26.9% 26.4%
One Hospital Trust Tower
Providence, RI 02903
Fiduciary Trust Company
International(2)................ 1,003,200 6.5% 1,249,600 6.7% 6.6%
Two World Trade Center
New York, NY 10048
Southland Communications, Inc. ... 966,400 6.3% 836,800 4.5% 4.8%
127 Dorrance Street
Providence, RI 02903
Helen D. Buchanan(3).............. 952,000 6.2% 899,200 4.8% 5.0%
c/o Manasett Corporation
127 Dorrance Street Providence,
RI 02903
Murray S. Danforth, III(4)........ 971,200 6.3% 923,200 4.9% 5.2%
c/o Manasett Corporation
127 Dorrance Street
Providence, RI 02903
Esther E. M. Mauran(5)............ 1,064,000 6.9% 960,800 5.1% 5.4%
c/o Manasett Corporation
127 Dorrance Street
Providence, RI 02903
Frank Mauran(6)................... 1,783,200 11.6% 1,880,000 10.0% 10.3%
c/o Manasett Corporation
127 Dorrance Street
Providence, RI 02903
Pauline C. Metcalf(7)............. 1,208,000 7.8% 1,135,600 6.1% 6.4%
c/o Manasett Corporation
127 Dorrance Street
Providence, RI 02903
Jane P. Watkins(8)................ 941,200 6.1% 990,400 5.3% 5.4%
c/o Manasett Corporation
127 Dorrance Street
Providence, RI 02903

<CAPTION>
NAME OF DIRECTOR/
EXECUTIVE OFFICER(9)
--------------------
Stephen Hamblett.................. 165,600 1.1% 59,200 0.3% 0.4%
F. Remington Ballou............... 18,400 0.1% 9,600 0.1% 0.1%
Henry P. Becton, Jr. ............. 5,600 0.0% -- -- 0.0%
Fanchon M. Burnham(10)............ 148,400 1.0% 150,400 0.8% 0.8%
</TABLE>

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<PAGE> 89

<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
NUMBER OF OF NUMBER OF OF
SHARES OF OUTSTANDING SHARES OF OUTSTANDING
NAME AND ADDRESS CLASS A CLASS A CLASS B CLASS B AGGREGATE
OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK VOTING POWER
------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Kay K. Clarke..................... -- -- -- -- --
Peter B. Freeman.................. 126,400 0.8% 160,000 0.9% 0.8%
Benjamin P. Harris, III........... 18,800 0.1% 19,200 0.1% 0.1%
Paul A. Maeder(11)................ 72,000 0.5% 136,000 0.7% 0.7%
Trygve E. Myhren.................. 150,000 1.0% -- -- 0.2%
John W. Rosenblum................. 5,600 0.0% -- -- 0.0%
Henry D. Sharpe, Jr.(12).......... 2,000 0.0% -- -- 0.0%
W. Nicholas Thorndike(13)......... 2,030,800 13.2% 2,159,600 11.5% 11.8%
John W. Wall...................... 19,600 0.1% 28,800 0.2% 0.1%
Patrick R. Wilmerding(14)......... 187,200 1.2% 241,600 1.3% 1.3%
John A. Bowers.................... 10,400 0.1% -- -- 0.0%
Jack C. Clifford.................. 34,400 0.2% -- -- 0.0%
John L. Hammond................... 1,200 0.0% -- -- --
Directors and Executive Officers
as a Group (25 Persons)......... 3,008,800 19.5% 2,964,400 15.8% 16.5%

<FN>
- ---------------
(1) Hospital Trust, as a fiduciary, possesses sole voting and investment power
as to 279,600 shares of Class A Common Stock and 1,011,200 shares of Class
B Common Stock and shared voting and investment power as to 3,391,200
shares of Class A Common Stock and 4,023,600 shares of Class B Common Stock
under a number of wills, trusts and agency arrangements. A substantial
majority of the shares so held are reflected elsewhere in this table, and
include some of the shares reported as beneficially owned by Helen D.
Buchanan, Frank Mauran, Esther E. M. Mauran, Pauline C. Metcalf and Jane P.
Watkins. Also, Hospital Trust is a co-trustee of several trusts for the
benefit of the family of the late Michael P. Metcalf holding 615,600 shares
of Class A Common Stock and 760,000 shares of Class B Common Stock.

(2) Fiduciary Trust Company International holds shares and acts as trustee
under trusts created by Henry D. Sharpe, Jr. (a Director of the Company)
and his wife, Peggy Boyd Sharpe, for the benefit of members of the Sharpe
family and, in certain cases, designated charitable organizations.
Fiduciary Trust Company International shares voting and investment power
with Mr. Sharpe's children as to 120,000 shares of Class A Common Stock; as
to all other shares, Fiduciary Trust Company International possesses sole
voting and investment power.

(3) Helen D. Buchanan is co-trustee with Hospital Trust and her daughter, Jane
P. Watkins, of the Helen M. Danforth 1935 Trust, which holds 886,400 shares
of Class A Common Stock and 886,400 shares of Class B Common Stock; is
co-trustee with Hospital Trust of the Helen M. Danforth 1941 Trust, which
holds 10,800 shares of Class B Common Stock; is one of the directors of two
corporations holding 62,400 shares of Class A Common Stock and 2,000 shares
of Class B Common Stock; and holds 3,200 shares of Class A Common Stock
through a revocable trust.

(4) Murray S. Danforth, III owns 447,200 shares of Class A Common Stock and
420,000 shares of Class B Common Stock; is sole trustee of a trust for the
benefit of his sister, which holds 452,000 shares of Class A Common Stock
and 424,800 shares of Class B Common Stock; is co-trustee of a trust for
the benefit of his sister which holds 65,600 shares of Class B Common
Stock; is one of four co-trustees of the Murray S. Danforth, Jr. Grantor
Trust No. 2 which holds 72,000 shares of Class A Common Stock and 4,800
shares of Class B Common Stock; and is co-trustee of the Manasett
Corporation Retirement Plan, which holds 8,000 shares of Class B Common
Stock.

(5) Esther E. M. Mauran is one of the Directors of Southland Communications,
Inc., which owns the shares indicated in the foregoing table. In addition,
Mrs. Mauran owns 97,600 shares of Class A Common Stock and 124,000 shares
of Class B Common Stock.

</TABLE>

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<PAGE> 90

(6) Frank Mauran, the husband of Esther E. M. Mauran, owns 16,000 shares of
Class B Common Stock; is co-trustee with Hospital Trust (and another
individual in one case) of several trusts created by Mrs. Mauran's father,
George P. Metcalf, for the benefit of Mrs. Mauran and her sister, Pauline
C. Metcalf, which trusts hold 1,411,200 shares of Class A Common Stock and
1,492,800 shares of Class B Common Stock; and is co-trustee of the Esther
E. M. Mauran Family Trust, which holds 372,000 shares of Class A Common
Stock and 371,200 shares of Class B Common Stock.

(7) Pauline C. Metcalf is one of the Directors of Southland Communications,
Inc., which owns the shares indicated in the foregoing table. In addition,
through a revocable trust, Ms. Metcalf owns 241,600 shares of Class A
Common Stock and 298,800 shares of Class B Common Stock.

(8) Jane P. Watkins owns 46,800 shares of Class A Common Stock and 104,000
shares of Class B Common Stock; is a co-trustee with Hospital Trust and her
mother, Helen D. Buchanan, of the Helen M. Danforth 1935 Trust, which holds
886,400 shares of Class A Common Stock and 886,400 shares of Class B Common
Stock; and is co-trustee of a trust created by Mrs. Buchanan which holds
8,000 shares of Class A Common Stock.

(9) Includes maximum number of shares subject to purchase within sixty days
upon the exercise of stock options and, for Mr. Myhren, Restricted Stock
Units, as follows: Mr. Hamblett, 15,200; Mr. Myhren, 108,800; Mr. Ballou,
2,000; Mr. Becton, 2,000; Ms. Burnham, 2,000; Mr. Freeman, 2,000; Mr.
Harris, 2,000; Mr. Rosenblum, 2,000; Mr. Sharpe, 2,000; Mr. Thorndike,
2,000; Mr. Wall, 2,000; Mr. Wilmerding, 2,000; Mr. Bowers, 3,600; Mr.
Hammond, 1,200; and Directors and Executive Officers as a Group, 158,800.

(10) Fanchon M. Burnham owns 46,800 shares of Class A Common Stock, 58,800
shares of Class B Common Stock, and holds vested options exercisable within
sixty days to purchase an additional 2,000 shares of Class A Common Stock.
She serves as a co-trustee of trusts for her brother, which hold 84,400
shares of Class A Common Stock and 75,600 shares of Class B Common Stock.
In addition, Mrs. Burnham's children own a total of 15,200 shares of Class
A Common Stock and 16,000 shares of Class B Common Stock.

(11) Paul A. Maeder is one of four co-trustees of the Murray S. Danforth, Jr.
Grantor Trust No. 2 which holds 72,000 shares of Class A Common Stock and
4,800 shares of Class B Common Stock. He is co-trustee of two trusts, one
for the benefit of Murray S. Danforth, III and the other for the benefit of
Mr. Danforth's sister, with each trust holding 65,600 shares of Class B
Common Stock.

(12) In addition to the shares shown in the table, the shares indicated as
beneficially owned by Fiduciary Trust Company International are held by
trusts for the benefit of Mr. Sharpe and members of his family.

(13) W. Nicholas Thorndike owns 57,600 shares of Class A Common Stock, 43,200
shares of Class B Common Stock, and holds vested options exercisable within
sixty days to purchase an additional 2,000 shares of Class A Common Stock.
He is a co-trustee of several trusts for the benefit of members of another
family holding 1,004,800 shares of Class A Common Stock and 1,279,600
shares of Class B Common Stock. Mr. Thorndike is one of the Directors of
Southland Communications, Inc., which owns the shares indicated in the
foregoing table.

(14) Patrick R. Wilmerding owns 52,400 shares of Class A Common Stock, 115,200
shares of Class B Common Stock, and holds vested options exercisable within
sixty days to purchase an additional 2,000 shares of Class A Common Stock.
He is a co-trustee of several trusts for the benefit of his family holding
132,800 shares of Class A Common Stock and 126,400 shares of Class B Common
Stock.

CERTAIN TRANSACTIONS

The law firm of Edwards & Angell, of which Mr. Harris is a senior partner,
regularly performs legal services for the Company. Edwards & Angell has acted as
the Company's principal counsel for over 60 years.

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<PAGE> 91

DESCRIPTION OF CAPITAL STOCK

The Company is currently authorized to issue 226,825,000 shares of capital
stock consisting of: (i) 180,000,000 shares of Class A Common Stock, $1.00 par
value per share, of which 15,410,400 shares were outstanding as of April 15,
1996, and 135,000,000 shares are reserved for issuance upon the exercise of the
rights issued pursuant to the Rights Agreement (as defined herein) and (ii)
46,825,000 shares of Class B Common Stock, of which 18,726,800 shares were
outstanding as of April 15, 1996 and 35,118,750 shares are reserved for issuance
upon the exercise of rights issued pursuant to the Rights Agreement. In
addition, the Company has 4,158,800 shares of Class A Common Stock reserved for
issuance pursuant to the Stock Incentive Plans and 18,726,800 shares of Class A
Common Stock reserved for issuance upon conversion of the Class B Common Stock.
The Board of Directors has recommended to the stockholders for consideration at
the Company's 1996 Annual Meeting an amendment to the Charter decreasing the
number of authorized shares of Class A Common Stock from 180,000,000 to
150,000,000 and decreasing the number of shares of Common Stock reserved in the
Charter for issuance under the Rights Agreement. Such amendment is necessary to
permit the Company to effect the Stock Split prior to the consummation of the
Offerings.

The following description of the capital stock of the Company and certain
provisions of the Company's Certificate of Incorporation (the "Charter") and
By-Laws is a summary, does not purport to be complete and is subject to detailed
provisions of, and is qualified in its entirety by reference to, the Charter and
By-Laws, copies of which have been filed as exhibits to the Registration
Statement of which this Prospectus is a part and are available as set forth
under "Additional Information".

COMMON STOCK

VOTING. The holders of Class A Common Stock are entitled to one vote per
share held of record on all matters submitted to a vote of the stockholders and
the holders of Class B Common Stock are entitled to four votes per share held of
record on all such matters. Except as set forth below and except as may
otherwise be required by law, all actions submitted to a vote of stockholders
will be voted on by holders of Class A Common Stock and Class B Common Stock
together as a single class. The affirmative vote of the holders of a majority of
the outstanding shares of Class A Common Stock and Class B Common Stock, voting
separately as a class, is required (i) to approve any amendment to the Charter
that would alter or change the powers, preferences or special rights of such
series so as to affect it adversely and (ii) to approve such other matters as
may require class votes under the General Corporation Law of the State of
Delaware ("DGCL").

CONVERSION RIGHTS. Each share of Class B Common Stock is convertible at
the holder's option at all times, without cost to the stockholder, into one
share of Class A Common Stock. In addition, Class B Common Stock is subject to
automatic conversion in the event of a purported transfer in violation of the
transfer restrictions described below.

DIVIDENDS AND OTHER DISTRIBUTIONS (INCLUDING DISTRIBUTIONS UPON
LIQUIDATION). Each share of Class A Common Stock and Class B Common Stock are
equal in respect of dividends and other distributions in cash, stock or property
(including distributions upon liquidation of the Company), except that a
dividend payable in shares of Class B Common Stock to holders of Class B Common
Stock and in shares of Class A Common Stock to the holders of Class A Common
Stock shall be deemed to be shared equally among both classes. No dividend shall
be declared or paid in shares of Class B Common Stock except to holders of Class
B Common Stock, but dividends may be declared and paid, as determined by the
Board of Directors, in shares of Class A Common Stock to all holders of Common
Stock.

TRANSFERABILITY OF SHARES. The shares of Class A Common Stock offered
hereby are freely transferable, subject to certain restrictions on resale
imposed on affiliates of the Company and the Alien Ownership Restriction
described below. Class B Common Stock is not transferable by a stockholder
except to or among, principally, such holder's spouse, parents or a lineal
descendant of a parent, certain trusts established for their benefit and
beneficiaries thereof and certain entities, all of the outstanding ownership
interests of which are owned by Permitted Transferees (collectively, "Permitted
Transferees"). Further, any securities convertible into shares of Class B Common
Stock or which carry a right to subscribe to or acquire shares of Class B Common
Stock are subject to the transfer restrictions described above. Any purported
transfer of Class B

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<PAGE> 92

Common Stock other than to a Permitted Transferee shall be null and void and of
no effect and the purported transfer by a holder of Class B Common Stock, other
than to a Permitted Transferee, will result in the immediate and automatic
conversion of such holder's shares of Class B Common Stock into shares of Class
A Common Stock.

ALIEN OWNERSHIP RESTRICTIONS. The Company's Charter restricts the
ownership, voting and transfer of the Company's capital stock in accordance with
the Communications Act and the rules and regulations of the FCC, to prohibit
ownership of more than 25% of the Company's outstanding capital stock by or for
the account of aliens (the "Alien Ownership Restriction"). Aliens include: (a) a
person who is citizen of a country other than the United States; (b) an entity
organized under the laws of a government other than the government of the United
States or any state, territory or possession of the United States; (c) a
government other than the government of the United States or of any state,
territory, or possession of the United States; or (d) a representative of, or an
individual or entity controlled by, any of the foregoing ("Alien"). No more than
25% of the Company's directors may be Aliens and Aliens cannot serve as officers
of the Company.

In addition, the Charter authorizes the Board of Directors of the Company
to adopt such provisions as it deems necessary to enforce these prohibitions.
The Company has established certain procedures and controls designed to
determine the amount of capital stock owned at any time by Aliens and to
restrict the right of transfer if the capital stock of the Company held by
Aliens reaches 25%. Specifically, at the time shares of capital stock are
presented for transfer, the Company's transfer agent will inquire as to whether
the new shares are to be issued to or for the account of an Alien. If so, the
new shares will be issued on a different form of share certificate, designated a
"foreign share certificate." The transfer agent will keep the Company informed
as to the volume of shares represented by such foreign share certificates.

DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS

Certain provisions of the DGCL and of the Charter and By-Laws, summarized
in the following paragraphs, may be considered to have an anti-takeover effect
and may delay, deter or prevent a tender offer, proxy contest or other takeover
attempt that a stockholder might consider to be in such stockholder's best
interest, including such an attempt as might result in payment of a premium over
the market price for shares held by stockholders.

DELAWARE ANTI-TAKEOVER LAW. As a Delaware corporation, the Company is
subject to the provisions of the DGCL, including Section 203. In general,
Section 203 prohibits a public Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which such person became an interested
stockholder unless: (i) prior to such time, the Board of Directors approved
either the business combination or transaction which resulted in the stockholder
becoming an interested stockholder; or (ii) upon becoming an interested
stockholder, the stockholder then owned at least 85% of the voting stock, as
defined in Section 203; or (iii) at or subsequent to such time, the business
combination is approved by both the Board of Directors and by the holders of at
least 66 2/3% of the corporation's outstanding voting stock, excluding shares
owned by the interested stockholder. For these purposes, the term "business
combination" includes mergers, asset sales and other similar transactions with
an "interested stockholder." An "interested stockholder" is a person who,
together with affiliates and associates, owns (or, within the prior three years,
did own) 15% or more of the corporation's voting stock. Although Section 203
permits a corporation to elect not to be governed by its provisions, the Company
to date has not made this election.

INCREASED STOCKHOLDER VOTE REQUIRED IN CERTAIN BUSINESS COMBINATIONS AND
OTHER TRANSACTIONS AND RELEVANT FACTORS TO BE CONSIDERED BY THE BOARD OF
DIRECTORS. The Charter provides that in addition to any vote ordinarily
required under Section 203 of the DGCL, the affirmative vote of (i) not less
than two-thirds of the entire Board of Directors or (ii) if subsection (i) above
is not fully complied with, the holders of at least 80% of the combined voting
power of the then outstanding shares of stock of all classes entitled to vote
generally in the election of Directors, would be required to approve certain
business combinations.

The Charter also empowers the Board of Directors, when voting with regard
to any business combination, to take into account any factors that the Board of
Directors determines to be relevant, including, without

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<PAGE> 93

limitation, (i) the working conditions, job security or compensation of the
employees of the Company and its subsidiaries, (ii) the short-term and long-term
financial stability of the Company, (iii) the ability of the Company to publish
an independent, high-quality, comprehensive newspaper and to freely conduct its
other operations and those of its subsidiaries to the advantage of the customers
and markets served, (iv) the economic strength, business reputation, managerial
ability and recognized integrity of the party proposing the business combination
and (v) the effects on the communities served by the Company's newspapers and by
its other operations.

The Charter requires the affirmative vote of holders of at least 80% of the
combined voting power of the then outstanding shares of stock of all classes
entitled to vote generally in the election of Directors cast at a meeting of the
stockholders called for the purpose to amend or repeal these business
combination Charter provisions; however, if the adoption of the change is
recommended to the stockholders by the vote of not less than two-thirds of the
entire Board of Directors, then the Charter instead requires the vote, if any,
required by the DGCL.

SPECIAL MEETINGS OF STOCKHOLDERS. The By-Laws provide that special
meetings of stockholders may be called by the Chairman of the Board of
Directors, President or by order of the Board of Directors and shall be called
by the Secretary at the request in writing of holders of 20% of the outstanding
shares of stock entitled to vote at such meeting.

CLASSIFIED BOARD OF DIRECTORS, REMOVAL OF DIRECTORS AND RELATED
MATTERS. The Charter and the By-Laws provide for the division of the Board of
Directors into three classes as nearly equal in size as possible with staggered
three-year terms. At each annual meeting of stockholders, successors to the
Directors whose terms expire at that annual meeting shall be elected for a
three-year term, with each Director to hold office until a successor has been
duly elected and qualified. As a result, approximately one-third of the Board of
Directors will be elected each year. See "Management -- Executive Officers and
Directors". Any director may be removed without cause only by the vote of at
least 80% of the shares entitled to vote for the election of directors;
provided, however, such 80% vote shall not be required for any such removal
recommended to the stockholders by the vote of not less than two-thirds of the
whole Board of Directors. The Charter and By-Laws require the affirmative vote
of holders of at least 80% of the combined voting power of the then outstanding
shares of stock of all classes entitled to vote generally in the election of
Directors cast at a meeting of the stockholders called for the purpose to amend
or repeal these Charter provisions; however, if the adoption of the change is
recommended to the stockholders by the vote of not less than two-thirds of the
entire Board of Directors, then the Charter and By Laws instead require the
vote, if any, required by the DGCL.

NO ACTION BY WRITTEN CONSENT OF STOCKHOLDERS. The Board of Directors of
the Company has recommended to the stockholders for consideration at the
Company's 1996 Annual Meeting an amendment to the Charter which eliminates the
right of stockholders to take action by written consent. Under Delaware law,
unless otherwise provided in a company's certificate of incorporation, any
action required or permitted to be taken by stockholders may be taken without
advance notice to stockholders, without a meeting and without a stockholder vote
if a written consent setting forth the action to be taken is signed by the
holders of shares of outstanding stock having the requisite number of votes that
would be necessary to authorize such action at a meeting of stockholders.
Currently, the Charter does not contain any provision providing otherwise. This
amendment, if approved, may have certain anti-takeover effects. The elimination
of action by written consent may deter acquisitions of the Company's stock and
may delay, deter or impede stockholder action not approved by the Board of
Directors.

DIRECTOR LIABILITY AND INDEMNIFICATION

The Charter and the By-Laws, taken together, provide that the Company
shall, to the fullest extent permitted by the DGCL as then in effect, indemnify
any person who was or is involved in any manner or was or is threatened to be
made so involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative, or investigative, by reason
of the fact that he is or was a director, officer, employee or agent of the
Company or is or was serving at the request of the Company as director, officer,
employee or agent of another corporation or other enterprise against all
expenses, judgments, fines and

90
<PAGE> 94

amounts paid in settlement actually and reasonably incurred by him in connection
with such proceeding. The Charter provides that no director of the Company will
be personally liable to the Company or to its stockholders for monetary damages
for breach of fiduciary duty as a director. This right to indemnification
includes the right to receive payment of any expenses incurred by the person
being indemnified in connection with such proceeding in advance of the final
disposition of the proceeding consistent with applicable law as then in effect.
All rights to indemnification conferred in the Charter shall be contract rights.
The right of indemnification, including the right to receive payment in advance
of expenses, conferred by the Charter and By-Laws are not exclusive of any other
rights to which any person seeking indemnification may otherwise be entitled. By
reference to Delaware law, the Charter also specifies certain procedures,
presumptions and remedies that apply with respect to the right to
indemnification and the advancement of expenses provided for therein. The
Charter requires the affirmative vote of holders of at least 80% of the combined
voting power of the then outstanding shares of stock of all classes entitled to
vote generally in the election of Directors to amend or repeal the Charter
indemnification provisions.

RIGHTS AGREEMENT

Subject to the approval of the Company's Board of Directors, the Company
intends to declare a dividend of one class A right (a "Class A Right") for each
outstanding share of Class A Common Stock, and one Class B right (a "Class B
Right"; and together with the Class A Rights, the "Rights") for each outstanding
share of Class B Common Stock. If so approved, the dividend will be payable
before the Offerings to stockholders of record on the declaration date (the
"Declaration Date"). Each Class A Right will entitle the registered holder to
purchase from the Company one share of Class A Common Stock of the Company at a
price of $80 per share of Class A Common Stock (the "Class A Purchase Price"),
subject to adjustment. Each Class B Right will entitle the registered holder to
purchase from the Company one share of Class B Common Stock of the Company at a
price of $80 per share of Class B Common Stock (the "Class B Purchase Price";
and together with the Class A Purchase Price, the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") to be entered into between the Company and
The First National Bank of Boston, as Rights Agent (the "Rights Agent").

Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") have acquired beneficial ownership of (A) 15% or more of the Voting
Power (as defined in the Rights Agreement) of the Common Stock or (B) 35% or
more of the Voting Power of the Class A Common Stock or (ii) 10 business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer the consummation of which would result
in the beneficial ownership by a person or group of either 15% or more of the
Voting Power of the Common Stock or 35% or more of the Voting Power of the Class
A Common Stock (the earlier of such dates being the "Distribution Date"), the
Class A Rights and the Class B Rights will be evidenced, with respect to any of
the Class A Common Stock certificates or Class B Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificate with a copy
of the Summary of Rights attached thereto.

The Rights Agreement provides that, until the Distribution Date (or earlier
redemption or expiration of the Rights), the Rights will be transferred with and
only with the Common Stock. Until the Distribution Date (or earlier redemption
or expiration of the Rights), new Common Stock certificates issued after the
Record Date upon transfer or new issuance of Common Stock will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Stock outstanding as of the Record Date,
even without such notation or a copy of the Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the applicable Rights
("Right Certificates") will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date

91
<PAGE> 95

and such separate Right Certificates alone will evidence the Rights. Class B
Rights may only be transferred to Permitted Transferees (as such term is defined
in the Rights Agreement).

The Rights are not exercisable until the Distribution Date. The Rights will
expire on the day prior to the tenth anniversary of the Declaration Date (the
"Final Expiration Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed or exchanged by the Company, in each case as
described below.

The Purchase Price payable, and the number of shares of Class A Common
Stock, Class B Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision, combination
or reclassification of, such Common Stock, (ii) upon the grant to holders of
such Common Stock of certain rights or warrants to subscribe for or purchase
such Common Stock at a price, or securities convertible into such Common Stock
with a conversion price, less than the then-current market price of such Common
Stock or (iii) upon the distribution to holders of such Common Stock of
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Common Stock)
or of subscription rights or warrants (other than those referred to above).

The number of outstanding Class A Rights and Class B Rights and the number
of shares of Class A Common Stock or Class B Common Stock issuable upon exercise
of each such Right are also subject to adjustment in the event of a stock split
of the Class A Common Stock or Class B Common Stock, as applicable, or a stock
dividend on the Class A Common Stock or Class B Common Stock, as applicable,
payable in the related Common Stock or subdivisions, consolidations or
combinations of the Common Stock occurring, in any such case, prior to the
Distribution Date.

In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold after a person or group has become an Acquiring Person, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then-current exercise price
of the Right, that number of shares of common stock of the acquiring company,
which, at the time of such transaction, will have a market value of two times
the exercise price of the Right. In the event that any person or group of
affiliated or associated persons becomes an Acquiring Person, proper provision
shall be made so that each holder of a Class A Right and a Class B Right, other
than Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise that number of
shares of Class A Common Stock or Class B Common Stock, as applicable, having a
market value of two times the exercise price of such Right.

At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the Voting Power of
the Common Stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one share of Class A Common Stock
or Class B Common Stock per related Right (subject to adjustment).

With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional share of Common Stock will be issued and in
lieu thereof, an adjustment in cash will be made based on the market price of
the Common Stock on the last trading day prior to the date of exercise.

At any time prior to the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the Voting Power of
the Common Stock or 35% or more of the Voting Power of the Class A Common Stock,
the Board of Directors of the Company may redeem the rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The redemption of
the Rights may be made effective at such time on such basis with such conditions
as the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.

The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds with respect to the Voting Power of the Common Stock
described above to not less than 10% and with respect to the Voting Power of the

92
<PAGE> 96

Class A Common Stock to not less than 25%, except that from and after such time
as any person or group of affiliated or associated persons becomes an Acquiring
Person, no such amendment may adversely affect the interests of the holders of
the Rights.

Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.

A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A and
will be available free of charge from the Company. This summary description of
the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock of the Company is The
First National Bank of Boston.

93
<PAGE> 97

SHARES AVAILABLE FOR FUTURE SALE

The shares of Class A Common Stock sold by the Company in the Offerings
will be freely tradable without restriction or further registration under the
Securities Act, except for shares held by "affiliates" of the Company (as that
term is defined in Rule 144 under the Securities Act), whose sales would be
subject to certain limitations and restrictions described below.

Upon completion of the Offerings, the Company will have outstanding
shares of Class A Common Stock and 18,726,800 shares of Class B Common
Stock. Each share of Class B Common Stock is convertible into a share of Class A
Common Stock at any time at the option of the holder. All of these shares,
including the shares sold in the Underwritten Offering, the
shares sold in the Direct Placement and the shares of Class A Common
Stock issued pursuant to the Stock Incentive Plans, will be tradable without
restriction unless they are held by directors, executive officers or other
affiliates of the Company. Any such shares held by affiliates of the Company may
be sold only if they are registered under the Securities Act or are sold
pursuant to an applicable exemption from the registration requirements of the
Securities Act, including Rule 144 thereunder. In general, under Rule 144 as
currently in effect, a person (or persons whose shares are aggregated),
including an affiliate, who has beneficially owned shares for at least two years
is entitled to sell, within any three-month period, a number of shares that does
not exceed the greater of (i) 1% of the then outstanding shares of Common Stock
( shares immediately after the Offerings) or (ii) the average weekly
trading volume in the Common Stock during the four calendar weeks preceding such
sale, subject to the filing of a Form 144 with respect to such sale and certain
other limitations and restrictions. In addition, a person who is not deemed to
have been an affiliate of the Company at any time during the 90 days preceding a
sale and who has beneficially owned the shares proposed to be sold for at least
three years would be entitled to sell such shares under Rule 144(k) without
regard to the requirements described above. To the extent that shares were
acquired from an affiliate of the Company, such stockholder's holding period for
the purpose of effecting a sale under Rule 144 commences on the date of transfer
from the affiliate. The Commission has recently proposed to amend Rule 144 to
shorten each of the two-year and three-year holding periods by one year.

In accordance with certain adjustments to be made pursuant to the Company's
existing Stock Incentive Plans, up to approximately $21 million of additional
consideration could be issued to participants in such plans in 1996, $14 million
of which could be payable to participants in the IUP. Of such $14 million
additional consideration, the Company currently anticipates that payment will be
made approximately two-thirds in cash and the remaining one-third in shares of
Class A Common Stock. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Stock-Based Compensation Payouts".

The Company's directors, executive officers and holders of more than 5% of
the Class A Common Stock will agree not to offer, sell, contract to sell or
otherwise dispose of any shares of Class A Common Stock (or securities
convertible into, or exchangeable or exercisable for, such shares) held by them
(other than shares of Class A Common Stock offered hereby) for 180 days after
the date of this Prospectus, without the prior written consent of Merrill Lynch,
Pierce, Fenner & Smith Incorporated. In addition, the shares of Common Stock
received by shareholders of Old PJC in the Spin-Off are subject to the Transfer
Restrictions which terminate on October 5, 1996.

No prediction can be made as to the effect, if any, that market sales of
such shares or the availability of such shares for future sale will have on the
market price of shares of Class A Common Stock prevailing from time to time.
Future sales of substantial amounts of Class A Common Stock by existing
stockholders could adversely affect the prevailing market price of the Class A
Common Stock after the Offerings and the Company's ability to raise additional
capital through the sale of equity securities or equity-related securities in
the future at a time and price which it deems appropriate.

94
<PAGE> 98

UNDERWRITING

<TABLE>

Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Company has agreed to sell to each of the
underwriters named below (the "Underwriters"), and each of the Underwriters, for
whom Merrill Lynch, Pierce, Fenner & Smith Incorporated, Bear, Stearns & Co.
Inc. and Donaldson, Lufkin & Jenrette Securities Corporation are acting as
representatives (the "Representatives"), severally has agreed to purchase, the
aggregate number of shares of Class A Common Stock set forth opposite its name
below.

<CAPTION>
NUMBER OF
UNDERWRITER SHARES
---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
Bear, Stearns & Co. Inc...........................................
Donaldson, Lufkin & Jenrette Securities Corporation...............

-------
Total................................................
=======
</TABLE>

In the Purchase Agreement, the Underwriters named therein have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
shares of Class A Common Stock being sold pursuant to such Purchase Agreement if
any of the shares of Class A Common Stock being sold are purchased. Under
certain circumstances, the commitments of non-defaulting Underwriters may be
increased under the Purchase Agreement.

The Representatives have advised the Company that the Underwriters propose
to offer the shares of Class A Common Stock offered hereby to the public
initially at the public offering price set forth on the cover page of this
Prospectus and to certain dealers at such price less a concession not in excess
of $ per share of Class A Common Stock, and that the Underwriters may
allow, and such dealers may reallow, a discount not in excess of $ per
share of Class A Common Stock on sales to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.

The Company has granted to the Underwriters an option to purchase up to an
aggregate of shares of Class A Common Stock at the initial public
offering price, less the underwriting discount. Such option, which will expire
30 days after the date of this Prospectus, may be exercised solely to cover
over-allotments. To the extent that the Underwriters exercise such option, each
of the Underwriters will have a firm commitment, subject to certain conditions,
to purchase approximately the same percentage of the option shares that the
number of shares to be purchased initially by that Underwriter is of the
shares of Class A Common Stock initially purchased by the
Underwriters.

The Company, its Directors, Executive Officers and holders of more than 5%
of the Class A Common Stock will agree not to sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any shares of Class A Common
Stock or securities convertible into or exercisable or exchangeable for Class A
Common Stock (except for the shares offered hereby) for a period of 180 days
after the date of this Prospectus without the prior written consent of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, subject to certain limited
exceptions included in the Purchase Agreement.

In addition to the Underwritten Offering contemplated hereby, the Company
is also offering an additional shares of Class A Common Stock to eligible
employees of the Company and its subsidiaries pursuant to the Direct Placement
at a price per share equal to the initial public offering price per share for
the Class A Common Stock less an amount equal to the underwriting discount per
share.

95
<PAGE> 99

Prior to the Offerings, there has been no public market for the shares of
Class A Common Stock. The initial public offering price of the Class A Common
Stock was determined by negotiations between the Company and the
Representatives. Among the factors considered in such negotiations, in addition
to prevailing market conditions, were current market valuations of
publicly-traded companies that the Company and the Underwriters believe to be
reasonably comparable to the Company, an assessment of the Company's results of
operations in recent periods, estimates of the business potential and earnings
prospects of the Company, the current state of the Company's development and the
current state of the Company's industry and the economy as a whole. The initial
public offering price set forth on the cover of the Prospectus should not,
however, be considered an indication of the actual value of the Class A Common
Stock. Such price will be subject to change as a result of market conditions and
other factors. There can be no assurance that an active trading market will
develop for the Class A Common Stock or that the Class A Common Stock will trade
in the public market subsequent to the Offerings at or above the initial public
offering price.

The Company has agreed to indemnify the several underwriters against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments the Underwriters may be required to make in respect
thereof.

Certain of the Underwriters have provided various investment banking
services to the Company and certain of its subsidiaries.

LEGAL MATTERS

Certain legal matters relating to the shares of Class A Common Stock will
be passed upon for the Company by Edwards & Angell, Providence, Rhode Island.
Certain legal matters under the Communications Act and the rules and regulations
promulgated thereunder by the FCC will be passed upon for the Company by
Covington & Burling, Washington, D.C. Certain legal matters in connection with
the Underwritten Offering will be passed upon for the Underwriters by Brown &
Wood, New York, New York. Partners and of-counsel attorneys of Edwards & Angell
own 44,400 (adjusted for the Stock Split) shares of Common Stock. Benjamin P.
Harris, III, a Director of the Company, is a senior partner of Edwards & Angell
and beneficially owns 18,800 and 19,200 shares of the Class A Common Stock and
the Class B Common Stock, respectively (adjusted for the Stock Split).

EXPERTS

The consolidated financial statements and schedule of The Providence
Journal Company and Subsidiaries as of December 31, 1994 and 1995 and for each
of the years in the three-year period ended December 31, 1995 have been included
herein and in the Registration Statement in reliance upon the reports of KPMG
Peat Marwick LLP and Deloitte & Touche LLP, independent auditors, appearing
herein and elsewhere in this registration statement, given upon the authority of
said firms as experts in accounting and auditing.

The report of KPMG Peat Marwick, LLP covering the December 31, 1995
financial statements contains an explanatory paragraph that states that the
Company completed the merger and related transactions with Continental
Cablevision, Inc. and the Kelso Buyout on October 5, 1995 which resulted in the
disposal of the Company's cable operations, and the acquisition of the Company's
joint venture partner's interest in King Holding Corp.

The consolidated financial statements of King Holding Corp. and
subsidiaries included in this prospectus and the related financial statement
schedule included elsewhere in the registration statement have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports
appearing herein and elsewhere in the registration statement, and are included
in reliance upon the reports of such firm given upon their authority as experts
in accounting and auditing.

96
<PAGE> 100

AVAILABLE INFORMATION

The Company is subject to the information requirements of the Exchange Act,
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Reports, proxy statements and other information
concerning the Company can be inspected and copied at the Commission's office at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and
the Commission's Regional Offices in New York (Suite 1300, Seven World Trade
Center, New York, New York 10048) and Chicago (Citicorp Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661), and copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. This
Prospectus does not contain all information set forth in the Registration
Statement and exhibits thereto which the Company has filed with the Commission
under the Securities Act, which may be obtained from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the prescribed fees, and to which
reference is hereby made.

97
<PAGE> 101
<TABLE>

INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS AND SCHEDULE OF THE COMPANY
THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

Independent Auditors' Report........................................................ F-2
Consolidated Balance Sheets, December 31, 1994 and 1995............................. F-3
Consolidated Statements of Operations, for the Years Ended
December 31, 1993, 1994, and 1995................................................ F-4
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1994, and 1995................................................ F-5
Consolidated Statements of Stockholders' Equity for the Years Ended December 31,
1993, 1994, and 1995............................................................. F-6
Notes to Consolidated Financial Statements.......................................... F-7

FINANCIAL STATEMENTS AND SCHEDULE OF THE COMPANY'S SIGNIFICANT UNCONSOLIDATED AFFILIATE
KING HOLDING CORP. AND SUBSIDIARIES*

Independent Auditors' Report........................................................ F-29
Consolidated Balance Sheet, December 31, 1994....................................... F-30
Consolidated Statements of Operations, for the Years Ended December 31, 1993 and
1994............................................................................. F-31
Consolidated Statements of Cash Flows for the Years Ended December 31, 1993 and
1994............................................................................. F-32
Consolidated Statements of Stockholders' Equity for the Years Ended December 31,
1993
and 1994......................................................................... F-33
Notes to Consolidated Financial Statements.......................................... F-34
<FN>
- ---------------
* King Holding Corp. was acquired and consolidated by the Company in 1995.
</TABLE>

F-1
<PAGE> 102

WHEN THE STOCK SPLIT REFERRED TO IN NOTE 17 OF THE NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS BECOMES EFFECTIVE, WE WILL BE IN A POSITION TO
RENDER THE FOLLOWING REPORT.

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders of The Providence Journal Company:

We have audited the consolidated financial statements of The Providence
Journal Company and Subsidiaries (the Company) as listed in the accompanying
index. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We did not audit the
consolidated financial statements of King Holding Corp. (a 50% owned investee
company prior to October 5, 1995) as of December 31, 1994 and for each of the
years in the two-year period then ended. The Company's investment in King
Holding Corp. at December 31, 1994 was $76,829,000 and its equity in losses of
King Holding Corp. was $7,244,000 and $8,325,000 for the years ended December
31, 1993 and 1994, respectively. The consolidated financial statements of King
Holding Corp. were audited by other auditors whose report has been furnished to
us, and our opinion, insofar as it relates to the amounts included for King
Holding Corp. is based solely on the report of the other auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.

As discussed more fully in Note 2 to the consolidated financial statements,
the Company completed the Merger and related transactions with Continental
Cablevision, Inc. and the Kelso Buyout on October 5, 1995 which resulted in the
disposal of the Company's cable operations, and the acquisition of the Company's
joint venture partner's interest in King Holding Corp.

In our opinion, based on our audits and the report of the other auditors,
the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of The Providence Journal Company and
Subsidiaries as of December 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1995, in conformity with generally accepted accounting
principles.

Providence, Rhode Island
February 16, 1996, except for
Notes 2, 13 and 17 which are dated
March 4, 1996, February 27, 1996
and , 1996, respectively.

F-2
<PAGE> 103
<TABLE>

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

ASSETS

<CAPTION>
DECEMBER 31,
---------------------
1994 1995
-------- --------
<S> <C> <C>
Current assets:
Cash................................................................. $ 1,319 $ 87
Accounts receivable, net of allowance for doubtful accounts of $1,950
in 1994 and $4,328 in 1995........................................ 24,916 56,321
Television program rights, net....................................... 4,699 16,536
Federal and state income taxes receivable............................ 1,661 24,146
Deferred income taxes (note 9)....................................... 20,526 7,112
Inventory, prepaid expenses and other current assets................. 4,593 5,019
-------- --------
Total current assets......................................... 57,714 109,221
Investments in affiliated companies (note 3)........................... 83,407 22,171
Notes receivable (note 4).............................................. 19,513 19,174
Television program rights, net......................................... 2,670 3,817
Property, plant and equipment, net (note 5)............................ 130,287 171,649
License costs, goodwill and other intangible assets, net (note 6)...... 35,222 354,411
Other assets (notes 10 and 14)......................................... 26,110 26,787
Net assets of discontinued operations (note 2)......................... 369,790 --
-------- --------
$724,713 $707,230
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................... $ 10,202 $ 16,837
Accrued expenses and other current liabilities (note 7).............. 92,840 49,504
Current installments of long-term debt (note 10)..................... 13,588 100
Current portion of television program rights payable (note 11)....... 4,542 16,463
-------- --------
Total current liabilities.................................... 121,172 82,904
Long-term debt (note 10)............................................... 247,173 243,998
Television program rights payable (note 11)............................ 2,822 5,509
Deferred income taxes (note 9)......................................... 11,944 52,298
Deferred compensation (note 13)........................................ 11,287 10,204
Other liabilities (notes 13 and 14 )................................... 44,428 49,078
-------- --------
Total liabilities............................................ 438,826 443,991
Commitments and contingencies (notes 2, 3, 12, 14, and 16)
Stockholders' equity (notes 2 and 17):
Class A common stock, par value $1.00 per share; authorized
180,000,000 shares; issued 15,405,600 shares in 1995.............. -- 15,406
Class B common stock, par value $1.00 per share; authorized
46,825,000 shares; issued 18,726,800 shares in 1995............... -- 18,727
Class A common stock, par value $2.50 per share; issued 15,347,600
shares in 1994.................................................... 38,369 --
Class B common stock, par value $2.50 per share; issued 18,912,400
shares in 1994.................................................... 47,281 --
Additional paid in capital........................................... -- 65
Retained earnings (note 2)........................................... 207,580 230,294
Unrealized gain (loss) on securities held for sale, net.............. 105 (1,253)
Treasury stock at cost-384,400 shares in 1994........................ (7,448) --
-------- --------
Total stockholders' equity................................... 285,887 263,239
-------- --------
$724,713 $707,230
======== ========
</TABLE>

See accompanying notes to consolidated financial statements

F-3
<PAGE> 104

<TABLE>
THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
Revenues:
Broadcasting......................................... $ 45,506 $ 54,024 $ 180,547
Publishing advertising............................... 93,886 97,006 96,340
Publishing circulation............................... 31,028 30,887 32,151
Programming and New Media............................ -- 2,300 3,468
----------- ----------- -----------
Total net revenues........................... 170,420 184,217 312,506
----------- ----------- -----------
Expenses:
Operating............................................ 84,925 77,543 161,283
Selling, general and administrative.................. 72,356 83,129 87,259
Newspaper consolidation and restructuring costs (note
8)................................................ -- -- 14,222
Stock-based compensation............................. 5,735 15,138 2,387
Depreciation and amortization........................ 20,613 19,983 33,969
----------- ----------- -----------
Total expenses............................... 183,629 195,793 299,120
----------- ----------- -----------
Operating income (loss)................................ (13,209) (11,576) 13,386
Other income (expense):
Interest expense (notes 2 and 10).................... (2,578) (2,426) (11,395)
Equity in loss of affiliated companies (note 3)...... (8,763) (13,380) (7,835)
Management fees from related parties (note 3)........ 3,781 3,525 --
Other income (expense), net.......................... (1,599) 2,578 4,797
----------- ----------- -----------
Total other expense, net..................... (9,159) (9,703) (14,433)
----------- ----------- -----------
Loss from continuing operations before income tax
expense (benefit).................................... (22,368) (21,279) (1,047)
Income tax expense (benefit) (note 9).................. (6,097) 1,950 3,956
----------- ----------- -----------
Loss from continuing operations........................ (16,271) (23,229) (5,003)
Discontinued operations (note 2):
Loss from operations of discontinued segments, net of
income tax benefits............................... (6,413) (1,798) --
Loss on disposal of segments, net of income tax
benefits.......................................... -- (34,764) --
----------- ----------- -----------
Loss before extraordinary items........................ (22,684) (59,791) (5,003)
Extraordinary items, net (note 10)..................... 1,551 -- (2,086)
----------- ----------- -----------
Loss before minority interests......................... (21,133) (59,791) (7,089)
Minority interests..................................... -- -- (2,559)
----------- ----------- -----------
Net loss............................................... $ (21,133) $ (59,791) $ (9,648)
=========== =========== ===========
Net loss per common share:
From continuing operations........................... $ (0.48) $ (0.68) $ (0.15)
From discontinued operations......................... (0.19) (1.08) --
Extraordinary items.................................. 0.05 -- (0.06)
Minority interests................................... -- -- (0.07)
----------- ----------- -----------
Net loss per common share.............................. $ (0.62) $ (1.76) $ (0.28)
=========== =========== ===========
Weighted average shares outstanding.................... 34,120,800 33,952,800 34,228,000
=========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements

F-4
<PAGE> 105
<TABLE>

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1993 1994 1995
-------- -------- ---------
<S> <C> <C> <C>
Operating activities:
Net loss................................................ $(21,133) $(59,791) $ (9,648)
Adjustments to reconcile net loss to cash flows provided
by continuing operations:
Extraordinary items.................................. (1,551) -- 2,086
Discontinued operations.............................. 6,413 36,562 --
Minority interests................................... -- -- 2,559
Depreciation and amortization........................ 20,613 19,983 33,969
Program rights amortization.......................... 7,674 7,356 17,318
Equity in loss of affiliated companies............... 8,763 13,380 7,835
Deferred income taxes................................ (4,846) (3,258) 11,008
Increase (decrease) in deferred compensation......... 5,767 7,740 (1,531)
Changes in assets and liabilities, net of effects of
acquisitions
Accounts receivable.................................. (1,451) (484) (4,604)
Inventories, prepaid expenses and other current
assets............................................. (660) (1,868) (34,870)
Accounts payable..................................... (3,128) 2,545 1,172
Accrued expenses and other current liabilities....... 1,629 (697) (15,095)
Other, net.............................................. 5,293 3,459 1,776
-------- -------- ---------
Cash flows provided by continuing operations......... 23,383 24,927 11,975
-------- -------- ---------
Investing activities:
Purchase of Kelso interest, less cash acquired
$3,578............................................. -- -- (261,422)
Investment in securities held for sale............... (5,551) -- (397)
Investments in and advances to affiliated
companies.......................................... (5,783) (6,555) (23,647)
Additions to property, plant and equipment........... (11,597) (6,481) (15,276)
Collections on notes receivable...................... 2,751 3,086 339
Proceeds from sale of assets......................... 1,073 594 8,739
Cash proceeds in sale of cable operations, net of
taxes paid......................................... -- -- 693,058
(Increase) decrease in discontinued operations
through disposal date.............................. (4,528) 24,838 (66,459)
-------- -------- ---------
Cash flows provided by (used in) investing
activities......................................... (23,635) 15,482 334,935
-------- -------- ---------
Financing activities:
Proceeds from syndicated long-term debt.............. 30,000 -- 233,000
Net increase in syndicate line of credit............. -- -- 1,298
Proceeds from refinanced syndicated long-term debt... -- -- 90,711
Principal payments on long-term debt including
prepayment penalty................................. (11,153) (19,345) (638,224)
Payments of debt issue costs......................... -- -- (1,748)
Payments on television program rights payable........ (7,296) (6,760) (16,166)
Dividends paid....................................... (8,872) (9,711) (9,706)
Issuance of Class A stock............................ -- -- 46
Purchases and adjustments to basis of treasury
stock.............................................. (2,387) (4,291) (7,353)
-------- -------- ---------
Cash flows provided by (used in) financing
activities......................................... 292 (40,107) (348,142)
-------- -------- ---------
Increase (decrease) in cash............................... 40 302 (1,232)
Cash at beginning of year................................. 977 1,017 1,319
-------- -------- ---------
Cash at end of year....................................... $ 1,017 $ 1,319 $ 87
======== ======== =========
</TABLE>

See accompanying notes to consolidated financial statements

F-5
<PAGE> 106
<TABLE>

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<CAPTION>
CLASS A CLASS B UNREALIZED
COMMON STOCK COMMON STOCK ADDITIONAL GAIN (LOSS)
-------------------- -------------------- PAID IN RETAINED ON SECURITIES
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS HELD FOR SALE
---------- ------- ---------- ------- ---------- -------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1992............. 15,191,600 $37,979 19,068,400 $47,671 $ -- $307,087 --
Treasury stock activity:
Tender offer and other purchases....... -- -- -- -- -- -- --
Issuance of common stock from
treasury............................. -- -- -- -- -- -- --
Conversion upon sale of Class B to Class
A common stock......................... 149,600 374 (149,600) (374) -- -- --
Dividends declared, $0.26 per share...... -- -- -- -- -- (8,872) --
Net loss................................. -- -- -- -- -- (21,133) --
---------- ------ ---------- ------ ------ ------- -------
Balances at December 31, 1993............. 15,341,200 38,353 18,918,800 47,297 -- 277,082 --
Purchases of treasury stock.............. -- -- -- -- -- -- --
Conversion upon sale of Class B to Class
A common stock......................... 6,400 16 (6,400) (16) -- -- --
Dividends declared, $0.29 per share...... -- -- -- -- -- (9,711) --
Cumulative effect of change in accounting
principle (note 1(c)).................. -- -- -- -- -- -- 5,120
Net change in unrealized gain (loss)..... -- -- -- -- -- -- (5,015)
Net loss................................. -- -- -- -- -- (59,791) --
---------- ------ ---------- ------ ------ ------- -------
Balances at December 31, 1994............. 15,347,600 38,369 18,912,400 47,281 -- 207,580 105
Conversion upon sale of Class B to Class
A common stock......................... 52,400 131 (52,400) (131) -- -- --
Reissuance of treasury stock in
connection with stock based
compensation plans..................... -- -- -- -- 2,738 -- --
Treasury stock adjustments to basis (note
16).................................... -- -- -- -- -- -- --
Dividends declared $0.29 per share....... -- -- -- -- -- (9,706) --
Net change in unrealized gain (loss)..... -- -- -- -- -- -- (1,358)
Excess of proceeds over net assets held
for sale in disposal of cable
operations (note 2).................... -- -- -- -- -- 582,510 --
Deemed distribution to shareholders of
Continental capital stock in connection
with disposal of cable operations (note
2)..................................... -- -- -- -- -- (584,769) --
Recapitalization in connection with PJC
Spin-Off (notes 2 and 17).............. -- (23,100) (133,200) (28,423) (2,738) 44,327 --
Exercised options........................ 5,600 6 -- -- 65 -- --
Net loss................................. -- -- -- -- -- (9,648) --
---------- ------ ---------- ------ ------- --------- -------
Balances at December 31, 1995............. 15,405,600 $15,406 18,726,800 $18,727 $ 65 $ 230,294 $ (1,253)
========== ======= ========== ======= ======= ========= ========

TREASURY STOCK
------------------
SHARES AMOUNT TOTAL
-------- ------- ---------
<S> <C> <C> <C>
Balances at December 31, 1992............. (40,000) $ (770) $ 391,967
Treasury stock activity:
Tender offer and other purchases....... (134,800) (2,460) (2,460)
Issuance of common stock from
treasury............................. 4,000 73 73
Conversion upon sale of Class B to Class
A common stock......................... -- -- --
Dividends declared, $0.26 per share...... -- -- (8,872)
Net loss................................. -- -- (21,133)
-------- ------- ---------
Balances at December 31, 1993............. (170,800) (3,157) 359,575
Purchases of treasury stock.............. (213,600) (4,291) (4,291)
Conversion upon sale of Class B to Class
A common stock......................... -- -- --
Dividends declared, $0.29 per share...... -- -- (9,711)
Cumulative effect of change in accounting
principle (note 1(c)).................. -- -- 5,120
Net change in unrealized gain (loss)..... -- -- (5,015)
Net loss................................. -- -- (59,791)
-------- ------- ---------
Balances at December 31, 1994............. (384,400) (7,448) 285,887
Conversion upon sale of Class B to Class
A common stock......................... -- -- --
Reissuance of treasury stock in
connection with stock based
compensation plans..................... 251,200 4,867 7,605
Treasury stock adjustments to basis (note
16).................................... -- (7,353) (7,353)
Dividends declared $0.29 per share....... -- -- (9,706)
Net change in unrealized gain (loss)..... -- -- (1,358)
Excess of proceeds over net assets held
for sale in disposal of cable
operations (note 2).................... -- -- 582,510
Deemed distribution to shareholders of
Continental capital stock in connection
with disposal of cable operations (note
2)..................................... -- -- (584,769)
Recapitalization in connection with PJC
Spin-Off (notes 2 and 17).............. 133,200 9,934 --
Exercised options........................ -- -- 71
Net loss................................. -- -- (9,648)
-------- ------- ---------
Balances at December 31, 1995............. -- $ -- $ 263,239
======== ======= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 107

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1994 AND 1995
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Description of Business and Basis of Consolidation

The consolidated financial statements present the financial position and
results of operations of The Providence Journal Company ("Registrant") and its
subsidiaries (collectively the "Company"). Registrant is the successor to
Providence Journal Company ("Old PJC") which reorganized itself, acquired all of
its joint venture partner's interest in King Holding Corp. ("KHC"), and disposed
of its cable operations on October 5, 1995 in a series of transactions as
described in Note 2. The Company is a diversified communications company with
operations and investments in several media and electronic communications
businesses. The principal areas of the Company's activities are television
broadcasting ("Broadcasting"), newspaper publishing ("Publishing") and
programming and new media ventures ("Programming and New Media"). Prior to the
consummation of the Merger (defined below) and other transactions described
below, these businesses were conducted by Old PJC which was also engaged in the
ownership and operation of cable television systems ("PJC Cable Business").

All significant intercompany balances and transactions have been eliminated
and appropriate minority interests have been recorded in consolidation. The
results of operations for KHC have been consolidated in the accompanying
statement of operations since January 1, 1995 with appropriate adjustments for
minority interests for the period from January 1, 1995 to October 5, 1995 the
date of the Kelso Buyout, as discussed in Note 3.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Certain prior year amounts have been reclassified to conform with the
current year presentation.

(b) Cash

The Company has a cash management program whereby outstanding checks in
excess of cash in the concentration account are not accounted for as reductions
of cash until presented to the bank for payment. At December 31, 1994 and 1995,
the Company reclassified $2,805 and $2,162 respectively, of net outstanding
checks to accounts payable.

<TABLE>

Supplemental cash flow information is as follows:

<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------
1993 1995 1994
------- ------- -------
<S> <C> <C> <C>
Income taxes paid during the year (excluding IRS
settlements, see Note 9)........................ $ 9,815 $ 2,588 $12,679
------- ------- -------
Interest paid during the year (including amounts
allocated to discontinued operations), net of
amounts capitalized............................. $20,285 $20,911 $47,891
------- ------- -------
Obligations incurred for acquisition of television
program rights (non-cash transactions).......... $ 5,898 $ 6,627 $21,520
------- ------- -------
</TABLE>

F-7
<PAGE> 108

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>

In connection with the acquisition of the joint venture partner's interest
in King Holding Corp. in 1995, assets acquired and liabilities assumed were as
follows:

<S> <C>

Assets acquired.......................................... $243,186
--------
Goodwill and other intangibles........................... $206,740
--------
Liabilities assumed...................................... $184,926
========
</TABLE>

Investments in Affiliates

Investments in affiliates in which the Company has significant influence
(generally ownership of 20% to 50% of voting stock) and investments in
partnerships are accounted for using the equity method. Other investments
(generally ownership of less than 20% of voting stock) are carried at the lower
of cost or net realizable value. The following investments are accounted for
under the equity method as of December 31, 1995:

Television Food Network, G.P.
America's Health Network
Peapod, L.P.
Partner Stations Network, L.P.
Linkatel Pacific, L.P.

Information about these investments is presented in Note 3.

Investments in Marketable Equity Securities

Investments in marketable equity securities consist of one common stock
investment, StarSight Telecast, Inc., in which the Company owns approximately 5%
of the outstanding common stock. This marketable equity security is included in
other assets on the accompanying consolidated balance sheets.

Prior to January 1, 1994, marketable equity securities were stated at cost.
Effective January 1, 1994, the Company adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities". Under this standard, the Company's marketable equity securities are
considered to be "held for sale" and unrealized gains and losses, net of the
related tax effect, are recorded as a separate component of stockholders'
equity. A decline in the market value of any marketable equity security below
cost that is deemed other than temporary results in an adjustment to the cost
basis of the security which is charged to the consolidated statement of
operations.

At December 31, 1994 and 1995, the cost of marketable equity securities
totaled and $5,552 and $5,949, respectively; fair market value totaled and
$5,727 and $3,861 respectively.

(d) Inventories

Inventories, principally comprising raw materials, are stated at the lower
of cost or market. Cost is determined principally on the last-in, first-out
(LIFO) basis. Replacement cost of inventories was $1,945 and $2,806 at December
31, 1994 and 1995, respectively.

(e) Television Program Rights

Television program rights acquired under license agreements are recorded as
assets at the gross value of the related liabilities at the time the programs
become available for showing. The rights are amortized using

F-8
<PAGE> 109

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accelerated methods over the term of the applicable contract. Amortized costs
are included in operating expenses in the accompanying consolidated statements
of operations.

Program rights classified as a current asset represent the total amount
estimated to be amortized within a year. Related liabilities due to licensers
are classified as current or long-term in accordance with the payment terms.

Television program rights are reviewed periodically for impairment and, if
necessary, adjusted to estimated net realizable value.

(f) Property, Plant and Equipment

<TABLE>

Property, plant and equipment are stated at cost. Expenditures for
maintenance and repairs are charged to income as incurred; significant
improvements are capitalized. The Company provides for depreciation using the
straight-line method over the following estimated useful lives:

<S> <C>
Buildings and improvements.............................................. 2 - 45 years

Machinery and equipment................................................. 3 - 15

Furniture and fixtures.................................................. 5 - 11

Broadcast equipment..................................................... 6 - 15

</TABLE>

When the Company determines that certain property, plant and equipment is
impaired, a loss for impairment is recorded for the excess of the carrying value
over the fair value of the asset. Fair value is determined by independent
appraisal, if an active market exists for the related asset. Otherwise, fair
value is estimated through forecasts of expected cash flows.

(g) License Costs, Goodwill and Other Intangible Assets

License costs and other intangible assets are stated at cost. Goodwill
represents the excess of purchase price over fair value of net assets acquired.
The Company provides for amortization using the straight-line method over
periods ranging from 5 to 40 years.

The Company periodically reviews its intangible assets to determine whether
any impairment has occurred. The Company assesses the recoverability of
intangible assets by reviewing the performance of the underlying operations, in
particular the operating cash flows (earnings before income taxes, depreciation,
and amortization) of the operation.

(h) Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the period that includes the enactment
date.

(i) Pension and Other Postretirement Benefits

The Company has defined benefit pension plans covering substantially all
employees of Publishing and certain employees of Broadcasting. The plans are
funded in accordance with the requirements of the Employee Retirement Income
Security Act.

F-9
<PAGE> 110

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company sponsors a defined life insurance and medical plan for its
newspaper and one of its broadcast operations, respectively. The plans are
accounted for under Statement of Financial Accounting Standards ("SFAS") No.
106, "Employer's Accounting for Postretirement Benefits Other than Pensions".

(j) Derivative Financial Instruments

The Company has only limited involvement with derivative financial
instruments and does not use them for trading purposes. Derivative financial
instruments are only used to manage interest rate risks.

The Company has entered into an interest rate swap agreement which is
accounted for as a hedge of the obligation and, accordingly, the net swap
settlement amount is recorded as an adjustment to interest expense in the period
incurred (see note 10). Gains and losses upon settlement of a swap agreement are
deferred and amortized over the remaining term of the agreement.

(k) Net Loss Per Share

Net loss per share is based on the weighted average number of Class A and
Class B shares of common stock outstanding. 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.

(l) Stock-Based Compensation

Effective January 1, 1996, the Company will adopt SFAS No. 123, "Accounting
for Stock-Based Compensation." The Statement encourages, but does not require, a
fair value based method of accounting for stock-based compensation plans. SFAS
No. 123 allows an entity to continue to measure compensation cost for those
plans using the intrinsic value based method prescribed by APB Opinion No. 25.
For those entities electing to use the intrinsic value based method, SFAS No.
123 requires pro forma disclosures of net income and earnings per share computed
as if the fair value based method had been applied. The Company intends to
continue to account for stock-based compensation costs under APB Opinion No. 25
and will provide the additional required disclosures relating to 1995 and 1996
stock options in its 1996 Annual Report.

NOTE 2 -- REORGANIZATION AND DISCONTINUED CABLE OPERATIONS

(a) Reorganization

On October 5, 1995, Old PJC 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"), completed the
transfer of all non-cable operations from Old PJC to the Company in a
substantially tax-free reorganization pursuant to which the shares of capital
stock of the Company were distributed to the shareholders of Old PJC (the "PJC
Spin-Off"), and, following the PJC Spin-Off, at which point it held only Old
PJC's cable television businesses and assets, Old PJC was merged ("the Merger")
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 these
transactions, the Company, in substance, became successor to Old PJC, in the
same lines of businesses, simultaneously spinning off its cable subsidiaries to
its shareholders who then merged them into Continental.

Proceeds from the disposal of the cable operations discussed above
consisted of a combination of Continental stock, which was received directly
from Continental by Old PJC's shareholders in connection with the Merger,
assumption of a portion of the Old PJC's debt by Continental (see Note 10), and
cash. The total combined consideration 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 $582,510 and is

F-10
<PAGE> 111

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reflected in the consolidated statement of stockholders' equity. The receipt by
the Old PJC Shareholders of the Continental shares, valued at $584,769, is
recorded as a deemed distribution to shareholders in the statement of
stockholders' equity.

The Merger agreement between Old PJC and Continental provides that the
total combined consideration received from the disposal of the Company's cable
operations will be adjusted for certain working capital items of the cable
operations acquired by Continental. On March 4, 1996, the Company agreed to pay
Continental $4,250 in full settlement of this working capital adjustment which
was accrued in the accompanying balance sheet as of December 31, 1995 and
included in discontinued operations of 1995.

In connection with the Merger, the Company agreed to indemnify Continental
from any and all liabilities arising from the non-cable television businesses,
and is responsible for all federal and state income tax liabilities for periods
ending on or before the closing date.

(b) Discontinued Cable Operations

<TABLE>
The results of operations of the cable television segment, the cellular
system and the paging subsidiary have been reported as discontinued in the
accompanying consolidated statements of operations. Prior year financial
statements have been reclassified to present these businesses as discontinued
operations. Operating results of these discontinued operations were as follows:

<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1993 1994 1995
--------- --------- ---------
<S> <C> <C> <C>
Revenues........................................ $ 177,417 $ 177,953 $ 148,268
Costs and expenses.............................. (185,998) (180,597) (154,741)
Equity in income of affiliate................... 1,413 2,417 1,373
--------- --------- ---------
Loss before income taxes........................ (7,168) (227) (5,100)
Income tax (expense) benefit.................... 755 (1,571) (2,017)
--------- --------- ---------
Net loss........................................ $ (6,413) $ (1,798) $ (7,117)
========= ========= =========
</TABLE>

The net loss for discontinued operations in 1995 was accrued in 1994 as
part of the costs to dispose of the cable operations. No amounts were required
to be recorded in the loss from operations of discontinued segments in the
consolidated statement of operations for 1995.

Loss from operations of discontinued segments includes allocated interest
expense totaling $19,807, $20,674 and $17,265 (excluding $12,380 allocated to
KVC operations) in 1993, 1994 and 1995, respectively. Interest allocated to
discontinued segments was limited to the associated interest on debt that was
repaid in connection with the Merger. The estimated loss on disposal of segments
in 1994 of $34,764, which is net of income tax benefits of $8,038, includes
severance packages, transaction costs and a provision for loss during the
phase-out period.

In addition, in 1994 the Company sold its remaining cellular system
investment and its paging subsidiary. As a result of these transactions, the
Company recorded gains of $1,390 (net of phase-out period operating losses and
income taxes).

Included in discontinued operations is a 50% equity investment in
Copley/Colony, Inc. ("Copley/ Colony"), a joint venture between Colony
Communications, Inc. ("Colony") (a subsidiary of Old PJC) and Copley Press
Electronics Company ("Copley"), engaged in cable television operations. In
connection with the Merger agreement with Continental, in May, 1995 Copley sold
all of its interests in Copley/Colony to Colony for a fixed aggregate purchase
price of $47,790 in cash. As a result, Colony owned all of the outstanding
shares of Copley/Colony at the time of the Merger with Continental.

F-11
<PAGE> 112

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The net assets of the cable television businesses acquired by Continental
are presented in the accompanying consolidated balance sheets as "net assets of
discontinued operations" prior to the disposal. Discontinued assets acquired
consisted primarily of plant and equipment, and intangible assets. Liabilities
assumed consisted primarily of accounts payable and accrued expenses.

NOTE 3 -- INVESTMENTS IN AFFILIATED COMPANIES

(a) King Holding Corp.

The Kelso Buyout as discussed in Note 2 (a), was recorded in the fourth
quarter of 1995 as a step acquisition under the purchase method of accounting.
The excess of the purchase price over the net book value of assets acquired
including deferred taxes was $206,740, of which approximately $88,000 was
allocated to identifiable intangibles and the remainder to goodwill, together to
be amortized over an average life of approximately 30 years.

<TABLE>
The following table presents unaudited pro forma summary results of
operations as if the Kelso Buyout and Merger had occurred on January 1, 1994,
and accordingly, include adjustments for additional amortization and interest
expense and related income tax benefits. It does not purport to be indicative of
what would have actually occurred had the acquisition occurred on January 1,
1994 nor is it indicative of results which may occur in the future:

<CAPTION>
PRO FORMA (UNAUDITED)
YEARS ENDED DECEMBER 31,
------------------------
1994 1995
-------- --------
<S> <C> <C>
Revenues....................................................... $301,276 $312,506
Loss from continuing operations................................ (19,136) (14,893)
Net loss....................................................... $(19,136) $(16,979)
======== ========
Net loss per common share...................................... $ (0.56) $ (0.50)
======== ========
</TABLE>

Prior to the acquisition of all outstanding interests, the Company received
annual governance fees and management fees from KHC totaling $3,781 and $3,525
in 1993 and 1994 respectively, which had been included in management fees from
related parties. The Company charged KHC $330 and $1,130 for accounting services
in 1993 and 1994, respectively, and was also reimbursed $2,842 and $3,240 by KHC
for expenses in its capacity as manager in 1993 and 1994, respectively. In 1995,
the annual governance, management, and accounting fees and expenses reimbursed
have been eliminated in consolidation.

F-12
<PAGE> 113

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>

Summary combined information for King Holding Corp. as of December 31, 1994
and for each of the years in the two year period then ended is summarized below:

<CAPTION>
1994
---------
<S> <C>
Current assets.............................................. $ 39,978
Current liabilities......................................... (48,804)
---------
Working capital deficiency................................ (8,826)
Property, plant and equipment, net.......................... 58,131
Intangible and other assets................................. 138,453
Net assets of discontinued operations....................... 255,902
Long-term liabilities....................................... (289,669)
---------
Net assets................................................ $ 153,991
=========
</TABLE>

<TABLE>
<CAPTION>
1993 1994
-------- ---------
<S> <C> <C>
Revenues.................................................... $102,340 $ 117,059
-------- ---------
Operating income............................................ $ 16,371 $ 24,776
-------- ---------
Income from continuing operations........................... $ 900 $ 7,263
-------- ---------
Loss from discontinued operations, net...................... $(15,389) $ (23,915)
-------- ---------
Net loss.................................................. $(14,489) $ (16,652)
======== =========
</TABLE>

(b) Television Food Network, G.P.

As of December 31, 1995, the Company, controlled a 21% interest in
Television Food Network, G.P. ("TVFN"). The partnership was formed specifically
to own and operate the Television Food Network channel. TVFN is a 24-hour
advertising supported network service that provides television programming
related to the preparation, enjoyment and consumption of food, as well as
programs focusing on nutrition and topical news areas. TVFN is a general
partnership consisting of eight media companies with cable television, broadcast
television and programming holdings. TVFN is distributed predominantly through
cable television stations to approximately 15.5 million subscribers throughout
the United States. The Company is the general partner in the managing partner of
TVFN and has invested approximately $12,650 through December 31, 1995. In
addition, the Company is negotiating with three of its partners to purchase
interests which, when combined with the Company's current interest, would give
the Company majority ownership of TVFN. In addition, the Board approved
additional investments in TVFN of up to an additional $20,000 to fund operating
losses of TVFN through 1997.

Effective March 1994 the Company entered into a sub-lease agreement with
TVFN for use of the Company's C-band primary transponder. The lease is effective
through March 1999. The Company recorded $1,700 and $1,090 in rental revenue
from TVFN in 1994 and 1995, respectively.

During 1995, the Company invested $10,250 in America's Health Network
("AHN"), a development stage cable programming network service intending to
provide health-related information and products. The channel launched on March
25, 1996 with 750,000 subscribers. The Company's Board of Directors has approved
additional investments up to $12,000, expected to made in 1996. In early 1996,
AHN, Inc. was reorganized and became America's Health Network, L.L.C. ("AHN
LLC"), a limited liability corporation which is the general partner in AHN
Partners, L.P. ("AHN Partners"), a limited partnership formed to carry on the
operations of the network. The Company has invested approximately $15,300
collectively in AHN LLC and AHN Partners as of February 29, 1996, representing a
59% interest, which is considered temporary until

F-13
<PAGE> 114

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the full funding by investors is completed, which is expected to occur in the
second quarter of 1996. Although consolidation is not material to the Company's
financial statements, to the extent the Company attains control over this
investment, it will be consolidated in 1996.

The Company also entered into a sub-lease agreement with AHN for use of the
Company's C-band primary transponder. The lease term is from November 1, 1995
through October 31, 2000. The Company recorded revenue of $410 related to this
agreement during 1995.

(d) Peapod, L.P.

On July 27, 1995, the Company purchased a 17.1% interest in Peapod, L.P.,
which currently provides an interactive computer on-line grocery ordering,
shopping and delivery service in Chicago and San Francisco and will expand such
services to Boston and Providence in 1996. Total investments in the partnership
during 1995 were $5,335. The Company has committed to invest an additional
$1,000 in 1996 as part of a $15 million private placement. No additional
investments have been committed to.

Summary Financial Information -- TVFN, AHN, and Peapod, L.P

<TABLE>

Summary combined financial information for TVFN, AHN and Peapod L.P., as of
December 31, 1995 and 1994 and for the years ended December 31, 1995 and 1994 is
presented below. Information for 1993 presented below is for TVFN only:

<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Current assets...................................... $ 8,511 $14,935
Current liabilities................................. (2,489) (8,418)
------- -------
Working capital................................... 6,022 6,517
Property, plant and equipment, net.................. 6,052 7,996
Intangible and other assets......................... 3,356 11,248
Long-term liabilities............................... (373) (3,009)
------- -------
Net assets........................................ $15,057 $22,752
======= =======
</TABLE>

<TABLE>
<CAPTION>
1993 1994 1995
------- -------- --------
<S> <C> <C> <C>
Revenues............................................ $ 13 $ 10,307 $ 22,579
------- -------- --------
Operating loss...................................... $(6,526) $(25,513) $(31,863)
------- -------- --------
Net loss.......................................... $(6,648) $(25,223) $(31,614)
======= ======== ========
</TABLE>

(e) Partner Stations Network, L.P.

The Company is a limited partner with four other television group
broadcasters in Partner Stations Network, L.P. ("PSN"). PSN was formed in 1994
to develop and produce television programming for broadcast on their own
stations and for potential national distribution to other television broadcast
stations. Each of the limited partners has a 16% interest and the general
partner, Lambert Television Management, Inc. has a 20% interest. Through
December 31, 1995, the Company has invested $1,810.

(f) Linkatel Pacific, L.P.

In July 1993, the Company, through its wholly-owned subsidiary
Colony/Linkatel Networks, Inc., invested in Linkatel Pacific, L.P. (a
development stage enterprise), with two other communications companies. The
Company has a 45% limited interest in the partnership, which was formed to
pursue the development of alternative access networks. Through December 31,
1995, the Company has invested $6,531 in Linkatel Pacific, L.P. The Company
intends to sell this investment in 1996 for an amount at least equal to the
amounts invested to date, although no firm commitments are in place as of
December 31, 1995.

F-14
<PAGE> 115

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Linkatel Pacific, L.P.'s net loss approximated $1,262 and $2,319 for the
years ended December 31, 1994 and 1995. Net assets approximated $7,367 and
$9,088 as of December 31, 1994 and 1995.

NOTE 4 -- NOTES RECEIVABLE

In September 1990, the Company advanced the Lowell Sun Publishing Company
and Lowell Sun Realty Company (collectively the "Lowell Sun Companies") $25,650
and agreed to provide a $6,500 revolving credit facility. The loan and revolving
credit facility which were originally due in March 1996 are subject to a
forbearance until January 2, 1997. Amounts outstanding bear interest at a
floating rate of prime plus 1.25%. The advance is collateralized by all assets
of the Lowell Sun Companies and an interest in Lowell Sun Companies stock. The
principal balance receivable at December 31, 1994 and 1995 was $23,675 and
$23,575, respectively.

NOTE 5 -- PROPERTY, PLANT AND EQUIPMENT, NET

<TABLE>

Property, plant and equipment, at cost, consist of the following at
December 31:

<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Land......................................................... $ 17,054 $ 24,338
Machinery and equipment...................................... 78,503 84,733
Buildings and improvements................................... 75,608 116,790
Broadcast equipment.......................................... 38,307 104,147
Furniture and fixtures....................................... 39,871 45,076
Construction in progress..................................... 1,564 1,445
-------- --------
250,907 376,529
Less accumulated depreciation................................ 120,620 204,880
-------- --------
$130,287 $171,649
======== ========
</TABLE>

Depreciation expense on property, plant and equipment used in continuing
operations totaled $16,964, $16,617 and $22,346 in 1993, 1994 and 1995,
respectively.

NOTE 6 -- INTANGIBLE ASSETS

<TABLE>
As of December 31, 1994 and 1995, intangible assets consist of:

<CAPTION>
1994 1995
------- --------
<S> <C> <C>
Goodwill........................................................ $28,219 $166,594
Licenses........................................................ 1,303 165,836
Advertiser Relations............................................ 41,395 88,595
Other........................................................... 307 411
------- --------
Total................................................. $71,224 $421,436
======= ========
</TABLE>

Amortization expense on intangible assets charged to continuing operations
totaled $3,649, $3,366 and $11,623 in 1993, 1994, and 1995, respectively.
Accumulated amortization on intangible assets totaled $36,002 and $67,025 at
December 31, 1994 and 1995, respectively. See also Note 3.

F-15
<PAGE> 116

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 7 -- ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

<TABLE>

Significant components of accrued expenses and other current liabilities
consisted of the following amounts at December 31:

<CAPTION>
1994 1995
------ -------
<S> <C> <C>
Accrued costs on disposal of the cable television segment........ $35,075 $12,278
Deferred compensation............................................ 31,266 4,806
Accrued interest................................................. 7,263 872
Salaries, wages and other employee benefits...................... 7,033 11,626
Unearned revenue................................................. 4,024 3,709
Newspaper restructuring.......................................... -- 6,800
Other............................................................ 8,179 9,413
------- -------
$92,840 $49,504
======= =======
</TABLE>

NOTE 8 -- NEWSPAPER CONSOLIDATION AND RESTRUCTURING COSTS

(a) Newspaper Consolidation Costs

Included in the 1995 consolidated statement of operations are one-time
charges related to the consolidation of the Company's afternoon newspaper (The
Evening Bulletin) with the morning newspaper (The Providence Journal). This
consolidation was effective June 5, 1995 and resulted in the publishing of
Providence Journal-Bulletin, a morning newspaper. This consolidation is referred
to as the Newspaper Consolidation. In connection with the Newspaper
Consolidation, the Company offered early retirement benefits and voluntary
separation assistance to affected employees. As of December 31, 1995, 61
employees accepted early retirement benefits and 19 employees accepted voluntary
separation amounting to a charge to operations of approximately $3,826 and
$1,071, respectively, including benefits. In addition, the Company incurred
costs of approximately $2,525 for promotion, training, and other costs of the
conversion. The early retirement benefits will be paid from the Company's
retirement plans. As of December 31, 1995 approximately $700 remains unpaid
under the voluntary separation plans. This amount is expected to be paid in
1996.

(b) Newspaper Restructuring Costs

During the fourth quarter of 1995, management approved a plan of
reorganization and restructuring of most departments of Publishing in an effort
to improve efficiencies. Under the plan, the Company has targeted a reduction in
workforce of approximately 100 full time equivalents through a combination of
early retirement and voluntary and involuntary separation assistance plans. Of
the 100 full time equivalents, approximately 62 are from the news and operations
departments with the remainder coming from other departments. Salaries and
related payroll taxes associated with these reductions amounted to approximately
$6,800 and has been included as a restructuring charge in the accompanying
consolidated statement of operations for 1995. Early retirement and voluntary
separation benefits will be paid out of the Company's pension plans (in which
plan assets exceed plan obligations) and all other costs are expected to be paid
out in 1996.

F-16
<PAGE> 117

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 9 -- FEDERAL AND STATE INCOME TAXES

<TABLE>

Income tax expense (benefit) has been allocated as follows:

<CAPTION>
1993 1994 1995
------- ------- ------
<S> <C> <C> <C>
Continuing operations.................................. $(6,097) $ 1,950 $3,956
Operations of discontinued segments.................... (755) 1,571 2,017
Loss on disposal of segments........................... -- (8,038) --
Extraordinary items.................................... 799 -- (417)
Stockholders' equity................................... -- 70 (905)
------- ------- ------
$(6,053) $(4,447) $4,651
======= ======= ======
</TABLE>

<TABLE>
Income tax expense (benefit) attributable to income from continuing
operations consists of:
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- -------
<S> <C> <C> <C>
Year ended December 31, 1993:
U.S. Federal........................................ $ (879) $(4,886) $(5,765)
State............................................... (372) 40 (332)
-------- ------- -------
$(1,251) $(4,846) $(6,097)
======== ======= =======
Year ended December 31, 1994:
U.S. Federal........................................ $ 5,855 $(3,258) $ 2,597
State............................................... (647) -- (647)
-------- ------- -------
$ 5,208 $(3,258) $ 1,950
======== ======= =======
Year ended December 31, 1995:
U.S. Federal........................................ $(8,523) $11,162 $ 2,639
State............................................... 1,471 (154) 1,317
-------- ------- -------
$(7,052) $11,008 $ 3,956
======== ======= =======
</TABLE>

During 1995, the Company paid $15,023 in additional taxes and interest in
final settlement with the Internal Revenue Service ("IRS") relating to
examinations of its income tax returns for the years 1984 through 1989. In
anticipation of the interest on these settlements and in providing for various
contingencies on income tax exposures identified during on-going examinations,
the Company recorded additional income tax expense of $6,000 in 1994.

During 1994, the Company also agreed to a settlement in connection with the
IRS initiative for settlement of intangible asset issues. Consequently, deferred
tax liabilities previously recorded for uncertainties related to income taxes in
connection with prior purchase business combinations were adjusted to reflect
the revised tax basis resulting from the settlement of these intangible asset
issues. As a result of these adjustments, deferred tax liabilities and goodwill
associated with the purchase business combinations were reduced by approximately
$12,500.

F-17
<PAGE> 118

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>

Income tax expense (benefit) differed from the amounts computed by applying
the U.S. federal income tax rate of 34% to pretax loss from continuing
operations as a result of the following:

<CAPTION>
1993 1994 1995
------- ------- ------
<S> <C> <C> <C>
Computed "expected" tax benefit........................ $(7,605) $(7,235) $ (356)

Increase (decrease) in income taxes resulting from:

Reserve for tax contingencies and interest on
settlements....................................... -- 6,000 --

Equity in net loss of affiliates..................... 2,463 2,831 623

State and local income taxes, net of federal income
tax............................................... (219) (427) 804

Rehabilitation credit................................ (1,248) -- --

Amortization of goodwill............................. 271 231 2,223

Other, net........................................... 241 550 662
------- ------- ------
$(6,097) $ 1,950 $3,956
======= ======= ======
</TABLE>

<TABLE>

The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December 31,
1994 and 1995 are presented below:

<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Gross deferred tax assets:

Deferred compensation........................................ $ 14,915 $ 5,678

State net operating loss carryforwards....................... 3,252 3,329

Investment and other reserves................................ 5,117 5,535

Self-insurance reserves...................................... 1,027 1,357

Vacation accrual............................................. 702 935

Postretirement benefits...................................... 1,897 3,767

Accounts receivable, principally due to allowance for
doubtful accounts......................................... 438 1,163

Accrued costs on disposal of segments........................ 7,021 2,968

Other........................................................ 3,510 3,765
-------- --------
Total gross deferred tax assets...................... 37,879 28,497

Less valuation allowance............................. (3,252) (3,329)
-------- --------
Net deferred tax assets.............................. 34,627 25,168
-------- --------
Gross deferred tax liabilities:

Plant and equipment, principally due to differences in
depreciation and capitalized interest..................... (15,477) (29,771)

Net intangibles, principally due to differences in basis..... (4,140) (33,288)

Prepaid pension costs........................................ (4,016) (3,544)

Partnership investment....................................... (486) (213)

Other........................................................ (1,926) (3,538)
-------- --------
Total gross deferred tax liabilities................. (26,045) (70,354)
-------- --------
Net deferred tax asset (liability)................... $ 8,582 $(45,186)
======== ========
</TABLE>

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible, or the recovery of taxes
paid in the carryback period. Based upon certain assumptions, such as the
scheduled reversal of deferred tax liabilities, available taxes in the carryback

F-18
<PAGE> 119

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

period, projected future taxable income, (the realizaton of which there can be
no assurance) in determining management has determined that it is more likely
than not that the deferred tax assets will be realized.

The valuation allowance for deferred tax assets as of December 31, 1994 and
1995 was $3,252 and $3,329. The net change in the total valuation allowance was
an increase of $394 in 1993, a decrease of $1,283 in 1994, and an increase of
$77 in 1995. Changes to the valuation allowance relate principally to deferred
tax assets recorded for state net operating loss carryforwards.

At December 31, 1995, the Company had net operating loss carryforwards for
state income tax purposes of approximately $59,401 which are available to offset
future state taxable income, if any, expiring in various years ending in 2007.

NOTE 10 -- LONG-TERM DEBT

<TABLE>

At December 31, 1994 and 1995, long-term debt consists of the following:

<CAPTION>
1994 1995
-------- --------
<S> <C> <C>
Revolving credit and term loan facility at rates of interest
averaging 7.2% in 1995...................................... $ -- $234,298

Revolving credit and term loan facility at rates of interest
averaging 5.8% and 7.52% in 1994 and 1995, repaid
October 1995................................................ 243,655 --

Industrial Revenue Bonds ("IRB") payable at various rates of
interest averaging 3.5% payable through December 2022........ 9,900 9,800

Note payable at an annual rate of interest equal to 18% payable
through April 2002, retired in July 1995..................... 7,123 --

Other.......................................................... 83 --
-------- --------
Total long-term debt................................. 260,761 244,098

Less current installments...................................... 13,588 100
-------- --------
Long-term debt, excluding current installments....... $247,173 $243,998
======== ========
</TABLE>

Scheduled principal payments on outstanding debt total $244,098 and are due
as follows: IRB payments of $100 in each of the years 1996 through 2000.
Thereafter scheduled principal payments on the IRB continue at $100 annually
until increasing to $200 in 1998 through 2005; to $300 in 2006 through 2010; to
$400 in 2011 through 2014; to $500 in 2015 through 2017; to $600 in 2018 through
2019; to $700 in 2020 and 2021, and a final payment of $800 in 2022. Of the
revolver and term loan outstanding at December 31, 1995, $75,000 is a term loan
with a balloon payment due in 2004. The revolver commitment decreases quarterly
on a schedule commencing December 31, 1996 in accordance with the Credit
Agreement as described below.

Costs of obtaining debt financing have been deferred and are being
amortized using the straight-line method over the period of the related debt.
Deferred financing costs totaled $7,097 and $1,748 at December 31, 1994 and
1995, respectively. Accumulated amortization at December 31, 1994 and 1995
aggregated $1,876 and $50, respectively. On October 5, 1995 the Company
refinanced its debt in connection with the transactions described in Note 2.
Accordingly, unamortized deferred financing costs of $4,554 associated with the
debt refinanced was written off and allocated to discontinued operations in the
fourth quarter of 1995.

On October 5, 1995, in connection with the transactions discussed in Note
2, Old PJC (net of $2 million in certain costs shared with Continental), prior
to the PJC Spin-Off, incurred indebtedness to a subsidiary of Continental in a
principal amount of approximately $408 million ("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 Registrant Indebtedness
(defined below) to (i) consummate the Kelso Buyout (ii) to

F-19
<PAGE> 120

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

repay substantially all outstanding indebtedness of Old PJC and KHC in an
aggregate amount of approximately $623 million, and (iii) to pay other costs
associated with the transactions discussed in Notes 2 and 16. Additional
indebtedness (the "Company Indebtedness") required to meet the foregoing
obligations, among others, was incurred by Old PJC and the Company in the
principal amount of $105 million. 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 Company
Indebtedness. In connection with the sale of KVC, KBC paid approximately $121
million in taxes.

The Company Indebtedness was incurred pursuant to a Credit Agreement
entered into by the Company on October 5, 1995 (the "Credit Agreement"). The
Credit Agreement, consists of a $75,000 term loan and a $300,000 revolving
credit facility. The $75,000 term loan provided for under the Credit Agreement
is due 2004. The revolving credit facility provides for under the terms of the
Credit Agreement decreases by the following amounts in the years indicated:
1996-$4,000; 1997-$10,500; 1998-$14,500; 1999-$21,500; 2000-$53,250;
2001-$65,750; 2002-$67,750; 2003- $62,750. 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, plus the "spread" over such
rates. The "spread" 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 July, 1995, the Company retired its 18% note payable for $8,734. The
loss on the early retirement of this debt amounted to $2,086 (net of income
taxes of $417) and is included as an extraordinary item in the Company's
consolidated statement of operations.

In January 1993, the Company retired an industrial revenue bond with a face
value of $9,500 for $7,150. The gain resulting from this transaction, totaling
$1,551 net of tax, has been presented as an extraordinary item in the 1993
statement of operations. These retirements were funded through additional
borrowings under the revolving credit and term loan facility.

In November 1992, the Company entered into an interest rate swap agreement
to reduce the impact of changes in interest rates on its revolving credit and
term loan facilities described above. The interest rate under the swap agreement
is equal to 6.71% plus an applicable margin as defined in the revolving credit
and term loan facility which presently sets the fixed interest rate at 8.1% on
the first $200,000 of outstanding debt. The Company recorded additional interest
expense during 1993, 1994 and 1995 totaling approximately $6,883, $4,880, and
$1,121, respectively, which represents the excess of the swap agreement rate
over the original contractual rate. In accordance with certain covenants under
the Credit Agreement, the Company will maintain its existing interest rate swap
arrangements with The First National Bank of Chicago through December 31, 1999.
<TABLE>

The notional amounts and respective periods covered under the interest rate
swap agreement are as follows:

<CAPTION>
AMOUNT PERIOD
------ ------
<S> <C>
$200,000...................................... December 30, 1992 -- December 30, 1996
$175,000...................................... December 30, 1996 -- December 30, 1997
$150,000...................................... December 30, 1997 -- December 30, 1999
</TABLE>

F-20
<PAGE> 121

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company is exposed to credit loss in the event of nonperformance by the
other party to the interest rate swap agreement, however, the Company does not
anticipate nonperformance under the agreement.

NOTE 11 -- TELEVISION PROGRAM RIGHTS PAYABLE

Television program rights payable consist of the gross value of cash
payments due on the acquisition of program rights as well as amounts due in the
amount of approximately $3,805 at December 31, 1995 for programs purchased
through barter transactions. Future cash payments total $18,167 and are due in
the following years: 1996 -- $12,658; 1997 -- $3,128; 1998 -- $1,814; and
1999 -- $567. The barter obligations are scheduled to be fulfilled in 1996.

NOTE 12 -- OPERATING LEASES

The Company has certain noncancelable operating leases with renewal options
for land, buildings, machinery and equipment. Future minimum lease payments
under noncancelable operating leases are due in the following years:
1996 -- $6,037; 1997 -- $5,362; 1998 -- $4,711; 1999 -- $4,253; 2000 -- $4,229;
and thereafter -- $15,228. Gross rental expense for the years ended December 31,
1993, 1994 and 1995, was $2,173, $5,167 and $5,993, respectively.

Future minimum rental income under noncancelable satellite subleases is as
follows: 1996 -- $4,030; 1997 -- $4,030; 1998 -- $3,220; 1999 -- $1,923; and
2000 -- $900. Sublease satellite rental income totaled $2,100 and $3,349 in 1994
and 1995 and is included in Programming and New Media revenue. There was no
sublease satellite rental income in 1993.

NOTE 13 -- STOCK-BASED COMPENSATION PLANS

(a) Incentive Compensation Plans

The Company has a deferred incentive compensation plan which is
administered by the Compensation Committee of the Board of Directors. The
expense under this plan was $5,330, $12,747, and $773 in 1993, 1994 and 1995,
respectively. As of December 31, 1994 and 1995, the amounts accrued under this
plan equaled $31,266 and $4,806 respectively. 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 in cash and stock totaling $27,233.

(b) Restricted Stock Unit Plan

During 1993, the Company established a Restricted Stock Unit Plan for
certain key executives. Participants were awarded restricted stock units with
each unit being equivalent to one share of Class A Common Stock. Restricted
stock units, including additional units accrued as a result of dividends and
reinvested dividends, will be 100% vested at the end of three years from the
date of the award. Upon vesting, the restricted stock units will be paid out,
net of taxes, in actual shares of Class A Common Stock. Participants will be
offered an opportunity to defer such payout. Vesting is accelerated for death,
total disability, termination other than for cause, and for retirement
(pro-rata). In connection with the disposal of its cable operations, the Company
fully vested 102,800 units of which 53,600 units were paid in cash and stock
totaling $1,653 prior to the Merger. In connection with the reorganization and
transactions described in Note 2, and as provided under the terms of the plans,
the number of units awarded to participants holding units immediately after the
closing of the transaction were adjusted upward by a factor of approximately
2.3876 (the "Conversion Factor") in order to preserve the economic value of the
outstanding units. In connection with the Plan, a total of 649,600 Class A
shares (after considering the Conversion Factor) have been reserved. As of
December 31, 1994 and 1995, 266,400 units and 504,400 (after the Conversion
Factor),

F-21
<PAGE> 122

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

respectively, were issued and outstanding. Compensation expense, included in
continuing operations, totaled $405, $2,400, and $1,173 during 1993, 1994 and
1995, respectively.

Effective October 1, 1994, the Board of Directors of the Company adopted
the "1994 Employee Stock Option Plan" and the "1994 Non-Employee Director Stock
Option Plan", (The "Option Plans"). The Option Plans were approved by the
stockholders of the Company at its Annual Meeting in 1995. The Option Plans will
remain in effect until the earlier of October 1, 1999 or termination of the
aforementioned Option Plans by the Board of Directors of the Company.

Under the terms of the Option Plans, key employees recommended by the
Compensation Committee of the Board of Directors (or by any other committee
appointed by the Board consisting of two or more non-employee Directors) and all
12 non-employee directors, are eligible to receive grants of stock options. The
maximum number of shares of Class A Common Stock that can be used for purposes
of the Option Plans is 1,660,000. Shares may be awarded from authorized and
unissued shares or from treasury shares, as determined by the Compensation
Committee.

Options granted under the "1994 Employee Stock Option Plan" are exercisable
in four equal annual installments beginning one year after the grant date.
Options under the "1994 Non-Employee Director Stock Option Plan" are exercisable
on the first anniversary date of the grant. Options granted under both plans
have a term of ten years.

Upon a "Change of Control" as defined in the Option Plans, all options
granted will become immediately vested and exercisable. In 1994, 254,800 options
were granted, at an exercise price of $19.25. In 1995, an additional 24,000
options were granted to the non-employee directors, and an additional 310,400
options were granted to key employees at an exercise price of $12.68. 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 the 254,800
options issued in 1994 were adjusted to $1.655 in order to preserve the economic
value of the outstanding options. During 1995, 5,600 options were exercised at
an exercise price of $1.655. As of December 31, 1995, there were 583,600 options
outstanding of which 72,800 are exercisable.

Amounts paid to participants in the liquidation of 85% of the IUP Plan and
the remaining units in the IUP Plan, 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. A
similar adjustment is applicable to certain options and units issued prior to
the Merger in the Option Plans and the Restricted Stock Unit Plan. As a result
of a planned merger of Continental with and into USWest Media Group (the USWest/
Continental Merger"), jointly announced by these entities on February 27, 1996,
participants in these plans may receive the adjustment as additional payments in
cash or stock reflecting the increase in the price of Continental Class A Common
Stock since the Merger. The final amounts of additional consideration is subject
to approval by the Compensation Committee of the Company's Board of Directors
and the closing of the USWest/Continental Merger but could approximate $21
million. It is currently anticipated that following the payout of any additional
consideration, the IUP Plan will be fully liquidated and terminated.

NOTE 14 -- PENSIONS AND OTHER EMPLOYEE BENEFITS

(a) Defined Benefit Pension Plans

The Company has three noncontributory defined benefit retirement plans
(including one funded by KHC acquired in the Kelso Buyout). The Company's
funding policy for the defined benefit plans is to contribute such amounts as
are deductible for federal income tax purposes. Benefits are based on the
employee's years of service and average compensation immediately preceding
retirement.

F-22
<PAGE> 123

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
The funded status of the defined benefit plans is as follows:

<CAPTION>
1994 1995
-------- ---------
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligations................................ $(49,956) $ (86,502)
-------- ---------
Accumulated benefit obligations........................... $(54,169) $ (91,968)
-------- ---------
Projected benefit obligations............................... $(71,227) $(109,985)
Plan assets at fair value (primarily corporate equity and
debt securities, government securities and real estate)... 89,106 132,779
-------- ---------
Excess of plan assets over projected benefit
obligations.......................................... $ 17,879 $ 22,794
-------- ---------
</TABLE>
<TABLE>

The assumptions used in the above valuations are as follows:

<CAPTION>
1994 1995
---- ----
<S> <C> <C>
Discount rate............................................... 7.5% 7.0%
Rate of increase in compensation levels..................... 5.0% 4.5%
</TABLE>
<TABLE>

Certain changes in the items shown above are not recognized as they occur,
but are amortized systematically over subsequent periods. Unrecognized amounts
to be amortized and amounts included in the consolidated balance sheets are
shown below:

<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Unrecognized net loss.......................................... $(8,336) $(2,874)
Unrecognized net transition asset being amortized principally
over 18 years................................................ 11,956 10,727
Unrecognized prior service cost due to plan amendment.......... (3,504) (3,029)
Prepaid pension cost (included in other assets)................ 17,763 17,970
------- -------
Excess of plan assets over projected benefit
obligations........................................ $17,879 $22,794
======= =======
</TABLE>
<TABLE>

The components of 1993, 1994 and 1995 pension expense (income) and the
assumptions used as determined by the plans' actuary, are as follows:

<CAPTION>
1993 1994 1995
------- -------- --------
<S> <C> <C> <C>
Service cost.................................... $ 1,971 $ 2,017 $ 3,185
Interest cost................................... 5,022 5,093 7,480
Actual return on plan assets.................... (8,681) 2,724 (25,674)
Net amortization of unrecognized net assets and
deferrals..................................... 691 (11,304) 15,041
------- -------- --------
Pension expense (income)...................... $ (997) $ (1,470) $ 32
======= ======== ========
</TABLE>

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- ----
<S> <C> <C> <C>
Discount rate................................... 7.5% 7.5% 7.5%
Rate of increase in compensation levels......... 5.0 5.0 5.0
Expected long-term rate of return on assets..... 8.5 8.5 8.5
</TABLE>

The effects of the special termination benefits of $3,701 and curtailment
gain of $531 associated with the Newspaper Consolidation and early retirement
program are included in the Newspaper Consolidation Costs discussed in Note 8
(a).

F-23
<PAGE> 124

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(b) Defined Contribution Plan

The Company contributes to defined contribution plans based on the amount
of each employee's plan contribution, not to exceed a predetermined amount as
defined by each plan. The total expense of these plans was $1,086, $1,150 and
$1,312 in 1993, 1994 and 1995, respectively.

In addition to the Company's defined benefit pension plans, one of
Broadcasting stations provides postretirement medical benefits to its group of
employees. The Registrant provides postretirement life insurance benefits to
substantially all of its employees. These plans are non-contributory and are not
funded.

The Company's accrued postretirement benefit cost as of December 31, 1994
and 1995 was $3,086 and $3,461, respectively, consisting primarily of
accumulated postretirement benefit obligations for retirees. Net periodic
postretirement benefit cost for 1993, 1994 and 1995 totaled $252, $300 and $204,
respectively, consisting primarily of interest costs.

For measurement purposes relating to the medical plan, a medical trend rate
of 13.0% was used grading to 6.0% by the year 2002. A 1% change in the medical
trend rate does not result in a material impact to the Company's reported
postretirement benefits. The discount rate used in determining the accumulated
postretirement benefit obligation for the medical and life insurance plans was
7.5% and 7.0 % in 1994 and 1995, respectively.

(d) Supplemental Retirement Plan

The Company maintains an unfunded supplemental retirement plan which
provides supplemental benefits to a select group of senior management employees.
At December 31, 1994 and 1995, the vested benefit obligation was $1,220 and
$3,933, respectively, and the accumulated benefit obligation was $3,437 and
$4,684, respectively. The projected benefit obligation totaled $5,799 and
$6,065, respectively, at December 31, 1994 and 1995.

The net periodic pension cost for 1993, 1994, and 1995 was $1,501, $997 and
$1,000, respectively, consisting of service and interest costs. An assumed
discount rate of 7.5% and 7.0% and compensation level increase rate of 5.0% and
4.5% were used in determining the benefit obligations at December 31, 1994 and
1995, respectively.

(e) Change in Control Agreements

In October, 1993, the Company executed various management agreements which
only become effective upon a change-in-control of the Company. The terms of the
agreements vary, with the maximum agreement providing a three year term of
employment with responsibilities, compensation, and benefits at least
commensurate as those during the prior six (6) months. If terminated
involuntarily, the individuals are entitled to a maximum of 299% of their
highest base pay and average bonus received during the prior three years as a
lump sum severance payment. In a supplemental agreement, executed in October
1993, the Company committed to paying the severance stated above in the event an
individual was involuntarily terminated as a result of corporate restructuring,
even if prior to a change-in-control.

NOTE 15 -- DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS

(a) Current Assets and Liabilities

The carrying amount of cash, trade receivables, trade accounts payable and
accrued expenses approximates fair value because of the short maturity of these
instruments.

F-24
<PAGE> 125

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(b) Notes Receivable

The fair values of the Company's notes receivable are based on the amount
of future cash flows associated with each instrument, discounted using current
rates at which similar loans would be made to borrowers with similar credit
ratings and for the same maturities.

The fair values of each of the Company's long-term debt instruments are
based on the amount of future cash flows associated with each instrument
discounted using the Company's current borrowing rate, for similar debt
instruments of comparable maturity.

The fair value of obligations for television program rights are based on
future cash flows, discounted using the Company's current borrowing rate, over
the term of the related contract.

(d) Interest Rate Swaps

The fair value of interest rate swaps is the amount at which they could be
settled, based on estimates obtained from dealers. At December 31, 1994
settlement approximated a $9,400 receivable to the Company. The amount of
payment required to settle outstanding interest rate swaps at December 31, 1995
approximated $8,000.

(e) Limitations

Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument.
These estimates are subjective in nature and involve uncertainties and matters
of significant judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.

<TABLE>

The estimated fair value of the Company's financial instruments are
summarized as follows:

<CAPTION>
AT DECEMBER 31, 1994 AT DECEMBER 31, 1995
----------------------- -----------------------
CARRYING ESTIMATED CARRYING ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Notes receivable........................ $ 19,513 $ 19,513 $ 19,174 $ 19,174
======== ======== ======== ========

Long-term debt.......................... $260,761 $263,430 $244,098 $244,098
======== ======== ======== ========

Television program rights payable....... $ 7,364 $ 6,458 $ 21,972 $ 20,467
======== ======== ======== ========
</TABLE>

NOTE 16 -- COMMITMENTS AND CONTINGENCIES

The Company has outstanding payment commitments for broadcast television
programming totaling $45,511 at December 31, 1995, which under the licensing
agreements are not yet available for showing. Such programming becomes available
at various times over the years 1996 through 2000, at which point the Company
records the asset and related liability.

The Company has various talent contract commitments primarily with its
newscast employees covering up to three years together totaling $28,743.

The Company has insurance programs for workers' compensation, general
liability, auto and certain health coverages which comprise a form of
self-insurance. The Company's liability for large losses is capped, individually
and in the aggregate, through contracts with insurance companies. In addition,
the Company is self-insured for environmental hazards. An estimate for claims
incurred but not paid is accrued annually.

F-25
<PAGE> 126

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has a letter of credit commitment in an amount not to exceed
$12,000 in support of industrial revenue bonds of a wholly-owned subsidiary.

In 1987, the Company repurchased approximately 8% of its outstanding shares
of common stock from an unaffiliated party with a provision that additional
consideration be paid to the unaffiliated party in the event of a significant
change in ownership of the Company. The Company paid this unaffiliated party
approximately $7,353 on October 5, 1995 in full settlement of the redemption
agreement, and has recorded the additional consideration in the consolidated
statement of stockholders' equity.

On August 12, 1994, Department of Insurance regulators seized control of
Confederation Life Insurance Company. The Company's Qualified Compensation
Deferral Plan has an investment contract with Confederation Life Insurance
Company. The contract was entered into in 1991 and was scheduled to mature on
January 2, 1996. As a result of the seizure, the value of the contract as of
August 11, 1994, has been frozen at $3,840. The Company has agreed to guarantee
the difference between the amount eventually paid by the regulators and the
contract value on the seizure date. To date this amount cannot be quantified but
is not expected to have a material effect on the consolidated financial position
or results of operations of the Company.

On January 17, 1995, Cable LP I, Inc. ("Cable LP") brought a declaratory
judgment action against Old PJC, Colony and Dynamic Cablevision of Florida, Inc.
("Dynamic") in the Circuit Court of Dade County, Florida. Colony and Dynamic
were cable television subsidiaries of Old PJC, which became units of Continental
in connection with the Merger. 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 Old PJC 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.

Old PJC, Colony and Dynamic made a motion to strike allegations of bad
faith and breach of fiduciary duty filed against them, 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. The case was tried with testimony given on
December 11 through December 13, 1995 with final arguments heard on January 12,
1996. The decision of the Court is expected shortly. The Company believes that
the claims asserted by Cable LP are without merit and intends to continue to
vigorously defend this matter through the appeal process in the event of an
unfavorable ruling.

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 Company is party to various claims, legal actions and complaints
arising in the ordinary course of business. In the opinion of management, all
such matters are adequately covered by insurance or, if not so covered, are
without merit or are of such kind, or involve such amounts, that unfavorable
disposition would not have a material effect on the consolidated financial
position or results of operations of the Company.

F-26
<PAGE> 127

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17 -- STOCKHOLDERS' EQUITY

Prior to the effectiveness of this Registration Statement, the Company
intends to declare a 400 for 1 stock split to be effective concurrently with
this Registration Statement. Such stock split has been reflected throughout
these financial statements.

The Company has two classes of common stock: Class A and Class B. Each
class has the same rights and privileges, except that Class A common stock is
entitled to one vote per share, whereas Class B common stock is entitled to four
votes per share. In addition, the transfer of Class B common stock is limited to
"Permitted Transferees" only, otherwise the shares convert to Class A common
stock upon sale. In connection with the Merger agreement, trading of all shares
is restricted for a period of one year from the date of the closing.

Effective September 26, 1990, pursuant to a shareholder rights agreement,
the Company issued to shareholders one common stock right for each share of
Class A or Class B common stock then outstanding. The right entitles the holder
to purchase one share of Class A or Class B common stock at a purchase price of
$87.50 per share. Upon the occurrence of certain events, as defined in the
rights agreement, the Board of Directors may order the exchange of three common
shares for each right held. The shareholder rights agreement was terminated in
connection with the closing under the Merger Agreement. A substantially similar
agreement was entered into by the Company.

Treasury stock at December 31, 1994, consisted of 256,400 Class A shares
and 128,000 Class B shares. In connection with the PJC Spin-off, all treasury
stock was canceled as of the effective time of the closing.

NOTE 18 -- BUSINESS SEGMENT INFORMATION

The Company primarily operates in Broadcasting, Publishing, and Programming
and New Media. Broadcasting consists of nine owned network-affiliated television
stations and two television stations for which the Company provides programming
and marketing service for under local marketing agreements ("LMA"s) serving the
following markets: Seattle, Portland, Charlotte, Albuquerque, Louisville,
Honolulu, Spokane, Tucson, and Boise. Prior to the Kelso Buyout, Broadcasting
consisted of five stations (including one station under an LMA). Publishing
consists primarily of the publication and sale of the major daily newspaper
serving Rhode Island and parts of southeastern Massachusetts. The Programming
and New Media segment consists of wholly owned subsidiaries or equity
investments in cable television programming networks, electronic and interactive
media, programming ventures, and other new media. It currently consists of the
Company's investments in AHN and TVFN (cable programming networks); interactive
media investments: Peapod and StarSight; its electronic on-line information
service, Rhode Island Horizons; its broadcast programming venture: Partner
Stations Network; and its recently launched cable news network: NorthWest Cable
News Network ("NWCN"). NWCN is a 24-hour regional cable news network serving
cable subscribers in the Pacific Northwest. It was launched on December 18, 1995
and currently reaches 1.2 million subscribers.

Operating results and other financial data for the principal business
segments of the Company for 1993, 1994 and 1995 are presented in the table which
follows. Operating income (loss) by business segment is total revenue less
operating expenses. Other income (expense), income taxes and extraordinary items
have all been excluded from the computation of operating income (loss) by
segment. Identifiable assets by business segment are those assets used in
Company operations in each segment. Capital expenditures are reported exclusive
of acquisitions.

F-27
<PAGE> 128

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
1993 1994 1995
-------- -------- --------
<S> <C> <C> <C>
Revenues:

Broadcasting................................................. $ 45,506 $ 54,024 $180,547

Publishing................................................... 124,914 127,893 128,491

Programming and New Media.................................... -- 2,300 3,468
-------- -------- --------
$170,420 $184,217 $312,506
======== ======== ========
Operating income (loss):

Broadcasting................................................. $ (1,472) $ 6,219 $ 42,535

Publishing................................................... 9,891 9,270 (10,264)

Programming and New Media.................................... -- (315) (1,831)

Corporate.................................................... (21,628) (26,750) (17,054)
-------- -------- --------
$(13,209) $(11,576) $ 13,386
======== ======== ========
Identifiable assets

Broadcasting................................................... $106,992 $ 84,278 $502,024

Publishing................................................... 162,848 161,743 152,890

Programming and New Media:

Investments in affiliated companies....................... 3,786 2,708 17,315

Other..................................................... 1,312 8,364 10,719

Discontinued operations, net................................. 396,707 369,790 --

Investments in affiliates -- Other........................... 86,451 80,699 4,856

Other........................................................ 17,589 17,131 19,426
-------- -------- --------
$775,685 $724,713 $707,230
======== ======== ========
Depreciation and amortization:

Broadcasting................................................. $ 8,682 $ 7,856 $ 21,884

Publishing................................................... 11,426 11,198 10,850

Programming and New Media.................................... -- 33 167

Other........................................................ 505 896 1,068
-------- -------- --------
$ 20,613 $ 19,983 $ 33,969
======== ======== ========
Capital expenditures

Broadcasting................................................. $ 1,368 $ 1,587 $ 7,951

Publishing................................................... 9,962 2,356 3,200

Programming and New Media.................................... -- 1,138 3,670

Other........................................................ 267 1,400 455
-------- -------- --------
$ 11,597 $ 6,481 $ 15,276
======== ======== ========
</TABLE>

F-28
<PAGE> 129

INDEPENDENT AUDITORS' REPORT

King Holding Corp.:

We have audited the consolidated balance sheet of King Holding Corp. and
subsidiaries (the Company) as of December 31, 1994 and the related consolidated
statements of operations, stockholders' equity, and of cash flows for each of
the two years in the period ended December 31, 1994. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of King Holding Corp. and
subsidiaries at December 31, 1994, and the results of their operations and their
cash flows for each of the two years in the period ended December 31, 1994 in
conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Boston, Massachusetts
February 10, 1995

F-29
<PAGE> 130
<TABLE>

KING HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1994
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<CAPTION>
1994
--------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents....................................................... $ 3,578
Accounts receivable, net........................................................ 26,801
Film and syndication rights, current portion.................................... 7,995
Prepaid expenses and other current assets....................................... 1,604
--------
Total current assets.................................................... 39,978
--------
Property and Equipment, net....................................................... 58,131
--------
Other Assets:
Film and syndication rights, long-term portion.................................. 787
Deferred financing costs, net................................................... 10,625
Intangible assets, net.......................................................... 124,070
Long-term pension asset......................................................... 2,927
Other assets.................................................................... 44
--------
Total other assets...................................................... 138,453
--------
Net Assets of Discontinued Operations............................................. 255,902
--------
$492,464
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt............................................... $ 28,804
Current portion of film and syndication rights.................................. 7,753
Accounts payable and other accrued expenses..................................... 12,247
--------
Total current liabilities............................................... 48,804
Long-term Obligations:
Long-term debt.................................................................. 265,245
Film and syndication rights obligations......................................... 1,501
Deferred income taxes........................................................... 17,202
Other........................................................................... 5,721
--------
Total liabilities....................................................... 338,473
--------
Commitments and Contingencies
Stockholders' Equity:
Common stock, Class A; $0.10 par value; 200 shares authorized issued and
outstanding.................................................................. --
Common stock, Class B (nonvoting); $0.10 par value; 240,000 shares authorized;
211,000 issued and outstanding............................................... 21
Additional paid in capital...................................................... 210,314
Accumulated deficit............................................................. (56,344)
--------
Total stockholders' equity.............................................. 153,991
--------
$492,464
========
</TABLE>

See accompanying notes to consolidated financial statements

F-30
<PAGE> 131
<TABLE>

KING HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<CAPTION>
1993 1994
-------- --------
<S> <C> <C>
Revenues:
Gross broadcast revenue.............................................. $117,967 $135,177
Less agency commissions.............................................. 15,627 18,118
-------- --------
Net revenues................................................. 102,340 117,059
-------- --------
Costs and Expenses:
Operating............................................................ 44,005 48,734
Selling, general and administrative.................................. 25,233 27,179
Management and other fees paid to related parties.................... 2,034 2,624
Depreciation and amortization........................................ 14,697 13,746
-------- --------
Total........................................................ 85,969 92,283
-------- --------
Operating income....................................................... 16,371 24,776
Other income (expense):
Interest expense, net of allocation to discontinued operations....... (8,972) (8,694)
Other, net........................................................... 288 24
-------- --------
Total other expense.......................................... (8,684) (8,670)
-------- --------
Income from continuing operations before income taxes.................. 7,687 16,106
Income tax provision................................................... 6,787 8,843
-------- --------
Income from continuing operations...................................... 900 7,263
Loss from discontinued cable operations, net of taxes.................. (15,389) (11,837)
Provision for loss on discontinued cable operations during phaseout
period, net of taxes................................................. -- (12,078)
-------- --------
Net loss..................................................... $(14,489) $(16,652)
======== ========
Net loss per common share:
Income from continuing operations.................................... $ 4.26 $ 34.38
Discontinued operations.............................................. (72.86) (113.23)
-------- --------
Net loss per common share.............................................. $ (68.60) $ (78.85)
======== ========
Weighted average shares outstanding.................................... 211,198 211,198
======== ========
</TABLE>

See accompanying notes to consolidated financial statements

F-31
<PAGE> 132
<TABLE>

KING HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994
(DOLLARS IN THOUSANDS)

<CAPTION>
1993 1994
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from continuing operations.................................... $ 900 $ 7,263
Adjustments to reconcile income from continuing operations to net
cash flows provided by continuing operating activities:
Depreciation and amortization..................................... 14,697 13,746
Loss on disposal of fixed assets.................................. -- 464
Compensation costs related to warrant bonuses..................... 335 --
Deferred income taxes............................................. 18 (746)
Changes in assets and liabilities:
Accounts receivable............................................... (4,695) (3,116)
Prepaid expenses and other current assets......................... 905 533
Accounts payable and other accrued expenses....................... 838 2,491
Other, net........................................................ 575 2,595
Film rights assets and liabilities................................ (1,286) 489
-------- --------
Total adjustments............................................ 11,387 16,456
-------- --------
Net cash flows provided by continuing operating activities... 12,287 23,719
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment................................... (3,086) (7,136)
Increase in other assets, net........................................ (250) --
Net decrease in investments in discontinued operations............... 7,238 7,113
-------- --------
Net cash provided by (used in) investing activities.......... 3,902 (23)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of notes payable............................................ (16,000) (20,951)
-------- --------
Net cash used in financing activities........................ (16,000) (20,951)
-------- --------
Increase in cash and cash equivalents.................................. 189 2,745
Cash and cash equivalents, beginning of year (including cash and cash
equivalents included in net assets of discontinued operations)....... 687 876
-------- --------
Cash and cash equivalents, end of year:
Continuing operations................................................ 833 3,578
Included in net assets of discontinued operations.................... $ 43 $ 43
======== ========
</TABLE>

See accompanying notes to consolidated financial statements

F-32
<PAGE> 133
<TABLE>

KING HOLDING CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994
(DOLLARS IN THOUSANDS)

<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------------- PAID-IN ACCUMULATED STOCKHOLDERS'
CLASS A CLASS B CAPITAL DEFICIT EQUITY
------- ------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1992.......... $ -- $ 21 $209,979 $(25,203) $184,797

Compensation costs related to
warrant bonuses.................. 335 335

Net loss............................ (14,489) (14,489)
--
----- --- -------- -------- --------
BALANCE AT DECEMBER 31, 1993.......... -- 21 210,314 (39,692) 170,643

Net loss............................ (16,652) (16,652)
--
----- ---- -------- -------- --------
BALANCE AT DECEMBER 31, 1994.......... $ -- $ 21 $210,314 $(56,344) $153,991
===== ==== ======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-33
<PAGE> 134

KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business -- King Holding Corp. (the "Company") owns and operates certain
television stations and cable television properties throughout the central and
western United States and Hawaii. The Company was formed as a joint venture
between the Providence Journal Company and subsidiaries ("Providence Journal")
and an investment banking organization (the "Investor Stockholder"). The
Providence Journal and Investor Stockholder each own a 50% interest in the
Company. On February 25, 1992, the Company acquired the outstanding capital
stock of King Broadcasting Company ("KBC"), the parent company of King
Videocable Company ("KVC"), for a purchase price of approximately $364,000 plus
assumed liabilities aggregating $183,000 (the "Acquisition"). The Acquisition
has been accounted for as a purchase, and accordingly, the accompanying
consolidated statements of operations, stockholders' equity, and cash flows
include the operations of the Company and its subsidiaries commencing February
25, 1992. The purchase price was funded through the initial capitalization of
the Company and proceeds received from debt financing with a syndicate of banks
(see Note 5). As part of the initial capitalization of the Company, the
Providence Journal was awarded a warrant allowing for the purchase of 2,012
shares of Class B nonvoting common stock at $.10 per share.

During 1994 the Company entered into a plan to dispose of its Cable
operations (see Note 2).

Summary of Significant Accounting Policies

Basis of Presentation -- The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiaries. The accompanying
consolidated financial statements differ from those previously issued by the
Company due to the reporting of its discontinued cable operations (see Note 2).
All significant transactions between the consolidated entities have been
eliminated (see Note 9).

Revenue Recognition -- Revenues from broadcast activities are recognized as
advertisements are broadcast. Revenues from cable activities are recognized as
the services are provided.

Investment in Nonconsolidated Partnerships -- The Company has made certain
investments in media partnerships as a limited and general partner with voting
interests of approximately 10% and 50%, respectively. These investments are
accounted for using the equity method and are included in net assets of
discontinued operations. Income attributable to the Company's proportional share
of the partnership earnings is reported within other expense.

Allowance for Doubtful Accounts -- The allowance for doubtful accounts
related to continuing operations at December 31, 1994 aggregated $1,200.

Property and Equipment -- Property and equipment are recorded at cost, or
in the case of property and equipment acquired as a result of the Acquisition,
at appraised fair value at the date of purchase. Cable system betterments,
including materials, labor and interest, are recorded at cost. Depreciation and
amortization are provided using the straight-line method over the estimated
useful lives of the related assets, generally three to twenty years.

In 1993, due to provisions of the Cable Television Consumer Protection and
Competition Act of 1992 ("Cable Act") which effectively transferred ownership of
wiring and additional outlets installed in a customer's residence, KVC
accelerated the depreciation of these items based upon the estimated customer
churn rate and expensed all costs of installation and wiring in the home as
incurred effective January 1, 1993. The charge recorded in December 1993 related
to these items aggregated $4,607 and is reflected in discontinued operations.

F-34
<PAGE> 135

KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred Financing Costs -- Costs of obtaining debt financing have been
deferred and are being amortized using the straight-line method over the
amortization period of the related debt (ten years). Included in such costs are
$12,000 of fees paid to the Company's stockholders to assist in the arrangement
of the financing. Accumulated amortization at December 31, 1994 aggregated
$4,201.

Intangible Assets -- Intangible assets are recorded at their appraised fair
value at the date of Acquisition. Amortization is provided using the
straight-line method over the estimated useful lives of the related assets,
generally fifteen to forty years. The Company evaluates the recoverability of
intangible assets by reviewing the performance of the underlying operations, in
particular the future undiscounted operating cash flows. The Company also
evaluates the amortization periods of the intangible assets to determine whether
events or circumstances warrant revised estimates of useful lives.

Film and Syndication Rights -- Assets and liabilities related to film and
syndication rights are recorded at cost, when the related film or television
series is available for broadcast. Film rights assets are amortized using
principally accelerated methods, based on the anticipated value of each film
showing and the number of anticipated showings. Syndication rights are amortized
ratably over the term of the series expected showing.

Cash and Cash Equivalents -- The Company considers all short-term, highly
liquid investments purchased with remaining maturities of three months or less
to be cash equivalents.

<TABLE>

Supplemental cash flow information for the years ended December 31, 1993
and 1994 is as follows:

<CAPTION>
1993 1994
------- -------
<S> <C> <C>
Cash paid for interest........................................... $25,453 $25,165

Cash paid for income taxes....................................... 3,021 4,736

</TABLE>

Income Taxes -- Deferred income taxes are provided to recognize temporary
differences between book and tax bases of the Company's assets and liabilities
and the effects of credits and other items not yet recognized for tax purposes.

Interest Rate Swaps -- The Company has only limited involvement with
derivative financial instruments and does not use them for trading purposes.
Derivative financial instruments are used only to manage well-defined interest
rate risks.

The Company has entered into interest rate swap agreements which are
accounted for as a hedge of the obligation and accordingly, the net swap
settlement amount is recorded as an adjustment to interest expense in the period
incurred. Gains and losses upon settlement of a swap agreement are deferred and
amortized over the remaining term of the agreement.

Net Loss Per Common Share -- Net loss per common share is computed using
the weighted average number of common shares outstanding during the year.

Reclassifications -- The accompanying statements of cash flows have been
reclassified to present cash flows from discontinued operations in investing
activities.

2. DISCONTINUED OPERATIONS (INFORMATION SUBSEQUENT TO FEBRUARY 10, 1995 IS
UNAUDITED)

In November 1994, the Providence Journal entered into an agreement with
Continental Cablevision, Inc. ("Continental") whereby Continental would acquire
all of the Providence Journal's cable operations, both wholly and partly owned.
Under the terms of the agreement, as modified in August 1995 (the "August
Modification"), in an integrated transaction, KBC sold its entire interest in
KVC to Continental for proceeds which approximated $405 million. Simultaneously
with this transaction, the Providence Journal acquired the remaining 50%
interest in the Company held by the Investor Stockholder, thus becoming sole
owner of the

F-35
<PAGE> 136

KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Company. Immediately thereafter, the remaining cable operations of the
Providence Journal were merged into Continental in accordance with the terms of
the agreement in a tax-free transaction.

Prior to the August Modification, the transaction had been structured to
qualify as a tax-free exchange effected through a distribution of assets to the
shareholders, which would have resulted in no gain or loss for the Company.
Accordingly, the Company provided for the anticipated operating losses of KVC
through the expected date of its disposal in the Company's 1994 financial
statements. The provision for loss during the phase-out period, recorded by the
Company during 1994, including allocated interest of $18,258, net of taxes was
$12,078. Proceeds of the transaction were used to repay all of the Company's
existing longterm debt and to settle the outstanding interest rate swaps.

The net assets of KVC have been segregated in the accompanying consolidated
balance sheets as "net assets of discontinued operations". Net assets to be
acquired consist primarily of property and equipment, and intangible assets.
Such amounts have been reported net of costs and expenses expected to be
incurred through the disposal date.

<TABLE>
The results of operations of KVC have been reported as discontinued
operations in the accompanying consolidated statements of operations. Prior year
financial statements have been reclassified to conform to the current year
presentation. The condensed statements of operations relating to the
discontinued cable operations are presented below:

<CAPTION>
1993 1994
--------- ---------
<S> <C> <C>
Revenues..................................................... $ 83,538 $ 84,174

Costs and expenses........................................... (106,342) (101,261)
--------- ---------
(Loss) before income taxes................................... (22,804) 17,087)

Income tax benefit........................................... 7,415 5,250
--------- ---------
Net (loss)......................................... $ (15,389) $ (11,837)
========= =========
</TABLE>

3. PROPERTY AND EQUIPMENT

<TABLE>

Property and equipment of continuing operations consisted of the following
at December 31:

<CAPTION>
1994
--------
<S> <C>
Land and buildings........................................................ $ 40,225

Broadcast equipment....................................................... 30,352

Office equipment.......................................................... 2,979

Leasehold improvements.................................................... 1,207

Construction-in-process................................................... 4,343
--------
Total........................................................... 79,106

Less accumulated depreciation and amortization............................ (20,975)
--------
Property and equipment -- net............................................. $ 58,131
========
</TABLE>

F-36
<PAGE> 137
KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. INTANGIBLE ASSETS

<TABLE>

Intangible assets of continuing operations consisted of the following at
December 31:
<CAPTION>
1994
--------
<S> <C>
FCC license agreements.................................................... $ 59,780
Goodwill.................................................................. 28,774
Advertiser relations...................................................... 47,200
Other..................................................................... 7,669
--------
Total........................................................... 143,423
Less accumulated amortization............................................. (19,353)
--------
Intangible assets -- net.................................................. $124,070
========
</TABLE>

5. FINANCING AGREEMENTS

The Company has a credit agreement (the "Credit Agreement") with a
syndicate of banks which consists of a revolving credit facility, "swing" loans
(as defined), and a term loan.

The revolving credit facility provides for borrowings of up to $50,000 of
which $10,800 was outstanding on December 31, 1994. Borrowings outstanding under
the facility are payable in full in February 2000. The term loan of $283,249 is
payable in 32 quarterly installments commencing in March 1994.

"Swing" loans are available to the Company from the lead bank of the
syndicate. "Swing" loans are available up to a maximum aggregate borrowing level
of $5,000 at any one time, and are generally subject to the same repayment terms
as the revolving credit facility.

Borrowings under the Credit Agreement bear interest at either a bank's CD
rate plus an applicable margin (as defined), the LIBOR rate plus the applicable
margin or an alternate base rate determined as the greater of a bank's prime
rate, the Federal Funds rate plus 1/2% or a secondary market determined rate
plus 1 1/4% all determined at the Company's option. At December 31, 1994, the
interest rate on the revolving credit facility was 7.375%. During 1994, interest
rates on the term loan ranged between 4.88% and 7.75%, based on the one and
three month LIBOR rates, respectively.

In connection with the Credit Agreement, the Company is required to pay an
annual fee of 3/8 of 1% of the average daily unused availability under the
revolving credit facility. In addition, the Company is required to pay the lead
bank an annual fee of 3/8 of 1% of the average daily unused "swing" loan
availability. Such fees aggregated $187, $194 in 1993 and 1994, respectively.

The Credit Agreement contains certain limitations on additional
indebtedness, capital expenditures, payments to affiliates and disposition of
assets and requires the Company to maintain certain leverage and interest
coverage ratios, all as defined in the Agreement.

At December 31, 1994, long-term debt was due as follows: 1995 -- $28,804;
1996 -- 38,408; 1997 -- $38,408; 1998 -- $38,408; 1999 -- $28,804;
thereafter -- $121,217.

In March 1992, the Company entered into two interest rate swap agreements
to minimize interest rate risk on its revolving and term credit facilities
described above and to access lower interest rates in certain markets. The
interest rate under the swap agreements is equal to 7.23%, plus an applicable
margin as defined in the revolving credit and term loan facility, which
effectively sets the interest rate at 8.6%. The agreements expire March 25, 1999
and cover $250,000 of notional principal amount.

F-37
<PAGE> 138

KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>

The Company recorded additional interest expense during 1993 and 1994
totaling approximately, $9,915 and $7,427, respectively, which represents the
excess of the swap agreement rate over the original contractual rate. The
notional amounts and respective periods covered under the agreements are as
follows:

<CAPTION>
AMOUNT
------
<S> <C>
$250,000........................................... March 25, 1992 -- March 25, 1995
$200,000........................................... March 25, 1995 -- March 25, 1996
$160,000........................................... March 25, 1996 -- March 25, 1997
$110,000........................................... March 25, 1997 -- March 25, 1998
$ 50,000........................................... March 25, 1998 -- March 25, 1999
</TABLE>

The Company is exposed to credit loss in the event of nonperformance by the
other parties to the interest rate swap agreements, however, the Company does
not anticipate nonperformance under the agreement.

KVC has been allocated interest (including amortization of deferred
financing costs) of $19,054 and $18,224 for the years ended December 31, 1993
and 1994, respectively. Interest expense has been allocated to KVC based upon
intercompany financing in connection with the Acquisition. The effective
interest rate used in these allocations was 8.36% during these periods. The
common stock and assets of the Company are pledged to collateralize all external
financing arrangements.

6. EMPLOYEE BENEFIT PLANS

In connection with the Acquisition described in Note 1, the Company assumed
a defined benefit pension plan (the Plan). The Plan covers all qualified
employees who meet certain employment service and age requirements and are not
covered by union pension plans. Net periodic pension cost is comprised of the
components listed below, as determined using the actuarial cost aggregate
method. The Company's funding policy is to make annual contributions to the Plan
in such amounts necessary to fund benefits provided by the Plan on the basis of
information provided by the Plan's actuary.
<TABLE>

Consolidated net periodic pension cost without regard to the effect of the
discontinued operations for the years ended December 31, 1993 and 1994 is as
follows:

<CAPTION>
1993 1994
------- -------
<S> <C> <C>
Service cost for benefits earned during the period............... $ 852 $ 908
Interest cost on projected benefit obligation.................... 1,804 1,896
Return on Plan assets............................................ (2,481) 774
Net deferral..................................................... 323 (3,030)
Amortization of prior service cost............................... -- (18)
------- -------
Total.................................................. $ 498 $ 530
======= =======
</TABLE>

F-38
<PAGE> 139

KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>

The following table sets forth the Plan's funded status and obligations at
December 31, 1994 without regard to the effect of the discontinued operations:

<CAPTION>
1994
--------
<S> <C>
Actuarial present value of accumulated benefit obligations, including
vested benefits of $20,012.............................................. $(23,146)
========
Projected benefit obligation.............................................. $(26,596)
Plan assets at fair value, consisting of cash and equity securities....... 28,226
--------
Plan assets in excess of projected benefit obligation..................... 1,630
Prior service cost........................................................ (176)
Unrecognized net loss..................................................... 1,955
--------
Pension asset............................................................. $ 3,409
========
</TABLE>

<TABLE>
The assumptions used in the above valuations are as follows:

<CAPTION>
1993 1994
---- ----
<S> <C> <C>
Discount rate.......................................................... 7.5% 7.5%
Rate of increase in compensation levels................................ 5.0 5.0
Expected long-term rate of return on assets............................ 8.5 8.5
</TABLE>

In 1993, the Company instituted an employee savings plan (401(k) Plan) to
provide benefits for substantially all employees of the Company meeting certain
eligibility requirements. The Plan requires the Company to match 25% of employee
contributions, up to a maximum of 1% of covered compensation. Expense related to
the Plan without regard to the effect of the discontinued operations aggregated
$228 and $252 for the years ended December 31, 1993 and 1994, respectively.

Pension expense allocated to KVC, pursuant to these plans, aggregated $60
and $54 for 1993 and 1994, respectively. Further, prepaid pension costs with
respect to the defined benefit plan of $457 and $384 have been allocated to KVC
at December 31, 1993 and 1994, respectively.

7. INCOME TAXES

<TABLE>
The income tax provision for continuing operations recorded for the years
ended December 31, 1993 and 1994 consists of the following:

<CAPTION>
1993 1994
------ ------
<S> <C> <C>
Currently payable:
Federal.......................................................... $5,577 $8,103
State............................................................ 579 1,486
------ ------
Total.................................................... 6,156 9,589
------ ------
Deferred:
Federal.......................................................... 651 (886)
State............................................................ (20) 140
------ ------
Total.................................................... 631 (746)
------ ------
Income tax provision -- net........................................ $6,787 $8,843
====== ======
</TABLE>

F-39
<PAGE> 140

KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>

A reconciliation of the net income tax provision computed using the U.S.
federal statutory rate of 35% (34% in 1993) to pretax income from continuing
operations was as follows:

<CAPTION>
1993 1994
------ ------
<S> <C> <C>
Computed "expected" tax expense.................................... $2,614 $5,637
Amortization of goodwill........................................... 1,800 1,850
State and local taxes, net of federal tax benefit.................. 362 1,057
Enacted future rate change......................................... 1,880 362
Other.............................................................. 131 (63)
------ ------
Effective tax...................................................... $6,787 $8,843
====== ======
</TABLE>

<TABLE>
The significant components of deferred income tax provision attributable to
income from continuing operations for the years ended December 31, 1993 and 1994
are as follows:

<CAPTION>
1993 1994
------- -------
<S> <C> <C>
Deferred income tax (exclusive of the effects of other
components below).............................................. $(1,950) $(4,899)
(Increase) decrease in alternative minimum tax................... 701 3,845
State net operating loss benefit, net of federal tax............. -- 244
Federal net operating loss benefit............................... -- 64
Enacted future rate change....................................... 1,880 --
------- -------
Total deferred tax provision (benefit)........................... $ 631 $ (746)
======= =======
</TABLE>

<TABLE>
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities at December 31,
1994 are presented below:

<CAPTION>
1994
-------
<S> <C>
Deferred tax assets:
Accounts receivable, principally due to allowance for doubtful
accounts.............................................................. $ 279
Film and syndication rights, principally due to different accounting
methods............................................................... 511
Compensated absences, principally due to accrual for financial reporting
purposes.............................................................. 212
Net operating loss carryforwards......................................... 13
Alternative minimum tax credit carryforwards............................. --
Other.................................................................... 1,186
-------
Gross deferred tax assets.................................................. 2,201
-------
Deferred tax liabilities:
Property and equipment, principally due to basis differences............. 17,778
Retirement plan, principally due to accrual for financial reporting
purposes.............................................................. 1,256
Enacted future rate increases............................................ --
Other.................................................................... 369
-------
Gross deferred tax liabilities............................................. 19,403
-------
Net deferred tax liabilities............................................... $17,202
=======
</TABLE>

At December 31, 1994, the Company has net operating loss carryforwards of
$75,000 for state income tax purposes which are available to offset future state
taxable income, if any, through 2009. Approximately $54,000 of these net
operating loss carryforwards were present at Acquisition and, due to uncertainty
of eventual realization, a full valuation reserve was provided against these
assets at that time. Should these net

F-40
<PAGE> 141

KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

operating loss carryforwards be realized in the future, the effect would be to
reduce the recorded value of certain intangible assets.

8. COMMITMENTS
<TABLE>

Film and Syndication Rights -- The Company has entered into certain film
and syndication rights' agreements which allow for showings of certain programs
over various periods. At December 31, 1994, film and syndication rights
liabilities related to programs available for broadcast are due as follows:

<S> <C>
1995........................................................ $7,753
1996........................................................ 787
1997........................................................ 487
1998........................................................ 189
1999........................................................ 38
Thereafter.................................................. --
------
Total............................................. $9,254
======
</TABLE>

In addition, the Company has entered into film and syndication rights'
agreements covering programs not yet available for broadcast. No asset or
liability related to these programs has been reflected in the financial
statements. At December 31, 1994, the Company had executed contracts aggregating
$36,745 (net of deposits) for programs not yet available for broadcast.

<TABLE>

Operating Leases -- The Company leases office and other facilities under
operating leases expiring at various dates through 2004. At December 31, 1994,
minimum payments required under noncancelable leases with terms in excess of one
year for continuing operations are as follows:

<S> <C>
1995........................................................ $ 888
1996........................................................ 880
1997........................................................ 812
1998........................................................ 567
1999........................................................ 309
Thereafter.................................................. 899
------
Total..................................................... $4,355
======
</TABLE>

Rent expense under operating leases from continuing operations aggregated
$383 and $490 for the years ended December 31, 1993 and 1994, respectively.

9. RELATED-PARTY TRANSACTIONS

The Company has entered into a management agreement (the "Management
Agreement") with the Providence Journal, under the terms of which the Providence
Journal will operate and manage the Company's cable systems and KBC's television
stations through February 1997. The Management Agreement provides for a base
management fee of $2,525 per year and payment of bonuses based on operating cash
flow (as defined in the Management Agreement) at the end of each fiscal year for
managing both the Company and KBC. No bonus was earned during 1994 and 1993. In
addition, the Management Agreement provides for the awarding of certain warrant
bonuses, both on an annual and cumulative basis, based on operating cash flow at
the end of defined periods. Through December 31, 1994, the Providence Journal
had been awarded warrant bonuses providing for the purchase of 1,552 shares, of
the Company's Class B nonvoting common stock at $0.10 per share. Compensation
expense recorded related to these warrant issuances aggregated $335 in 1993.
Based upon the purchase and sale agreement (See note 2) whereby the Providence
Journal will buy out the

F-41
<PAGE> 142

KING HOLDING CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Investor Stockholder for a fixed price, it is not probable that the Providence
Journal will exercise any outstanding warrants and accordingly, the Company has
not recorded compensation expense during 1994.

The Providence Journal is also entitled to compensation for out-of-pocket
costs incurred in its capacity as manager of the cable systems for which the
Company reimbursed the Providence Journal $2,842 and $3,844 during 1993, and
1994, respectively.

The Company is also obligated to pay the Providence Journal an annual
$1,000 governance fee, in advance, on December 20 of each year.

The Company entered into a consulting and advisory services agreement (the
"Services Agreement") with the Investor Stockholder. Under the terms of the
Services Agreement, the Company is obligated to pay the Investor Stockholder an
annual fee of $1,000, in advance, on January 1 of each year.

For the years ended December 31, 1993 and 1994, KVC has been allocated
expenses under the terms of the Management Agreement, and other related fees
discussed above, aggregating $2,034 and $1,901, respectively.

10. FAIR VALUE DISCLOSURE

Current Assets and Liabilities -- The carrying amount of cash, trade
receivables, trade accounts payable and accrued expenses approximates fair value
because of the short maturity of these instruments.

Long-term Debt -- The fair values of each of the Company's long-term debt
instruments are based on the amount of future cash flows associated with each
instrument discounted using current borrowing rates for similar debt instruments
of comparable maturity. The fair value of long-term debt approximated carrying
value at December 31, 1994.

Interest Rate Swaps -- The fair value of interest rate swaps is the amount
at which they could be settled based on estimates obtained from dealers. The
amount required to settle outstanding interest rate swaps at December 31, 1994
approximated $3,575 (gain).

11. COMMITMENTS AND CONTINGENCIES

The Company is the defendant in a number of legal actions, the outcome of
which management believes, based upon the advice of counsel, will not have a
material effect on the Company's financial position or results of operations.

The Company has outstanding letter of credit commitments amounting to $756
as of December 31, 1994.

In October 1992, the Congress of the United States passed the Cable Act. As
a result of the Cable Act, several cable television systems of the Company are
subject to regulation by local franchise authorities and/or the FCC. Regulations
imposed by the Cable Act, among other things, allow regulators to limit and
reduce the rates that cable operators can charge for certain basic cable
television services and equipment rental charges. The Company has been notified
by certain franchise authorities that various regulated rates charged to
subscribers were in excess of the rates permitted. The Company has reviewed the
notifications as well as the disputed rates and has accrued for amounts it
believes it may be required to refund. Further rules and regulations are being
considered by the FCC, however, these regulations have not yet been finalized.
The ultimate impact on the operations of the Company resulting from existing
rules and regulations and proposed rules and regulations, if any, cannot be
determined.

F-42
<PAGE> 143

- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE CLASS A COMMON STOCK IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

------------------
<TABLE>

TABLE OF CONTENTS

<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 12
The Company........................... 17
Use of Proceeds....................... 18
Dividend Policy....................... 18
Dilution.............................. 19
Capitalization........................ 20
Selected Financial Data............... 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 29
Business.............................. 42
Management............................ 74
Principal Stockholders................ 85
Certain Transactions.................. 87
Description of Capital Stock.......... 88
Shares Available for Future Sale...... 94
Underwriting.......................... 95
Legal Matters......................... 96
Experts............................... 96
Available Information................. 97
Index to Historical Financial
Statements.......................... F-1
</TABLE>

- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------

[LOGO]

THE PROVIDENCE
JOURNAL COMPANY

CLASS A COMMON STOCK

---------------------------

P R O S P E C T U S

---------------------------

MERRILL LYNCH & CO.

BEAR, STEARNS & CO. INC.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

, 1996

- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<PAGE> 144

[ALTERNATE PAGE FOR DIRECT PLACEMENT PROSPECTUS]
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED APRIL 22, 1996

PROSPECTUS

[LOGO]

THE PROVIDENCE JOURNAL COMPANY
CLASS A COMMON STOCK
($1.00 PAR VALUE)

------------------------

All of the shares of Class A Common Stock, $1.00 par value (the
"Class A Common Stock"), offered hereby are being offered by The Providence
Journal Company (the "Company") to eligible employees of the Company and its
subsidiaries in this public offering (the "Direct Placement") at a price per
share equal to $ , the initial public offering price per share for the
Class A Common Stock in the underwritten offering described below (the
"Underwritten Offering," and, together with the Direct Placement, the
"Offerings") less an amount equal to the underwriting discount per share in such
Underwritten Offering. Prior to the Offerings, there has been no public market
for the Class A Common Stock. It is currently anticipated that the initial
public offering price for the Class A Common Stock will be between $ and
$ per share. See "Plan of Distribution" for information relating to the
determination of the initial public offering price.

In addition to the Direct Placement contemplated hereby, the Company is
also issuing and selling through certain underwriters (the "Underwriters")
shares of Class A Common Stock in the Underwritten Offering. See "Plan of
Distribution".

Application has been made to list the shares of Class A Common Stock on the
New York Stock Exchange under the symbol " ".

SEE "RISK FACTORS" BEGINNING ON PAGE 12 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE CLASS A COMMON STOCK
OFFERED HEREBY.

------------------------

The date of this Prospectus is , 1996.
<PAGE> 145

[ALTERNATE PAGE FOR DIRECT PLACEMENT PROSPECTUS]

[GRAPHICS]

X-2
<PAGE> 146

[ALTERNATE PAGE FOR DIRECT PLACEMENT PROSPECTUS]

NO PRIOR PUBLIC MARKET FOR CLASS A COMMON STOCK; POSSIBLE VOLATILITY OF
STOCK PRICE. Prior to the Offerings, there has been no public market for the
Class A Common Stock. Consequently, the initial public offering price of the
Class A Common Stock will be determined by negotiations among the Company and
the Underwriters in the Underwritten Offering and may not be indicative of the
price at which the Class A Common Stock will trade after the Offerings. See
"Plan of Distribution" for a discussion of the factors considered in determining
the initial public offering price of the Class A Common Stock. There can be no
assurance that any active public market for the Class A Common Stock will
develop or be sustained after the Offerings, or that the market price of the
Class A Common Stock will not decline below the initial public offering price.
The trading price of the Class A Common Stock may fluctuate significantly based
upon a number of factors, including actual or anticipated business performance,
announcements by the Company or changes in general industry or securities market
conditions. See "Plan of Distribution".

SHARES ELIGIBLE FOR FUTURE SALE. Upon completion of the Offerings, the
Company will have outstanding shares of Class A Common Stock and 18,726,800
shares of Class B Common Stock. All of the shares of Class B Common Stock are
convertible into shares of Class A Common Stock on a share-for-share basis at
any time at the option of the holder. Shares held by affiliates of the Company
may be sold only if they are registered under the Securities Act or are sold
pursuant to an applicable exemption from the registration requirements of the
Securities Act, including Rule 144 thereunder. The Company's directors,
executive officers and holders of more than 5% of the Class A Common Stock will
agree not to offer, sell, contract to sell or otherwise dispose of such shares
(or securities convertible into, or exchangeable or exercisable for, such
shares) for 180 days after the date of this Prospectus, without the prior
written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated. See "Plan
of Distribution". In addition, the shares of Common Stock

X-3
<PAGE> 147

[ALTERNATE PAGE FOR DIRECT PLACEMENT PROSPECTUS]

received by shareholders of Old PJC in the Spin-Off are subject to transfer
restrictions which terminate on October 5,

X-4
<PAGE> 148

[ALTERNATE PAGE FOR DIRECT PLACEMENT PROSPECTUS]

PLAN OF DISTRIBUTION

The Company is offering the shares of Class A Common Stock offered
hereby to eligible employees of the Company and its subsidiaries at a price per
share equal to $ , the initial public offering price per share for the
Class A Common Stock in the Underwritten Offering less an amount equal to the
underwriting discount per share.

Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), the Company has also agreed in the Underwritten Offering
to sell to each of the underwriters named therein (the "Underwriters"), and each
of the Underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Bear, Stearns & Co. Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation are acting as representatives (the "Representatives"),
severally has agreed to purchase, an aggregate of shares of Class A
Common Stock.

The Representatives have advised the Company that the Underwriters propose
to offer the shares of Class A Common Stock offered in the Underwritten Offering
to the public initially at a public offering price of $ and to certain
dealers at such price less a concession not in excess of $ per share of
Class A Common Stock, and that the Underwriters may allow, and such dealers may
reallow, a discount not in excess of $ per share of Class A Common
Stock on sales to certain other dealers. After the initial public offering, the
public offering price, concession and discount may be changed.

The Company has granted to the Underwriters an option in the Underwritten
Offering to purchase up to an aggregate of shares of Class A Common
Stock at the initial public offering price, less the underwriting discount. Such
option, which will expire 30 days after the date of this Prospectus, may be
exercised solely to cover over-allotments. To the extent that the Underwriters
exercise such option, each of the Underwriters will have a firm commitment,
subject to certain conditions, to purchase approximately the same percentage of
the option shares that the number of shares to be purchased initially by that
Underwriter is of the shares of Class A Common Stock initially
purchased by the Underwriters.

X-5
<PAGE> 149

[ALTERNATE PAGE FOR DIRECT PLACEMENT PROSPECTUS]

Prior to the Offerings, there has been no public market for the shares of
Class A Common Stock. The initial public offering price of the Class A Common
Stock was determined by negotiations between the Company and the Representatives
in the Underwritten Offering. Among the factors considered in such negotiations,
in addition to prevailing market conditions, were current market valuations of
publicly-traded companies that the Company and the Underwriters believe to be
reasonably comparable to the Company, an assessment of the Company's results of
operations in recent periods, estimates of the business potential and earnings
prospects of the Company, the current state of the Company's development and the
current state of the Company's industry and the economy as a whole. The initial
public offering price should not, however, be considered an indication of the
actual value of the Class A Common Stock. Such price will be subject to change
as a result of market conditions and other factors. There can be no assurance
that an active trading market will develop for the Class A Common Stock or that
the Class A Common Stock will trade in the public market subsequent to the
Offerings at or above the initial public offering price.

Certain of the Underwriters have provided various investment banking
services to the Company and certain of its subsidiaries.

LEGAL MATTERS

EXPERTS

X-6
<PAGE> 150

[ALTERNATE PAGE FOR DIRECT PLACEMENT PROSPECTUS]

===============================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, THE CLASS A COMMON STOCK IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

------------------
<TABLE>
TABLE OF CONTENTS

<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 12
The Company........................... 17
Use of Proceeds....................... 18
Dividend Policy....................... 18
Dilution.............................. 19
Capitalization........................ 20
Selected Financial Data............... 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 29
Business.............................. 42
Management............................ 74
Principal Stockholders................ 85
Certain Transactions.................. 87
Description of Capital Stock.......... 88
Shares Available for Future Sale...... 94
Plan of Distribution.................. 95
Legal Matters......................... 96
Experts............................... 96
Available Information................. 97
Index to Historical Financial
Statements.......................... F-1
</TABLE>

===============================================================================

[LOGO]

THE PROVIDENCE
JOURNAL COMPANY

CLASS A COMMON STOCK

---------------------------

P R O S P E C T U S

---------------------------

, 1996

===============================================================================

X-7
<PAGE> 151

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>

The following table sets forth the expenses (other than underwriting
discounts and commissions) expected to be incurred in connection with the
offering described in this Registration Statement. All amounts are estimated
except the registration, NASD and New York Stock Exchange fees.

<S> <C>
Registration Fee.......................................................... $ 47,587
NASD Fee.................................................................. 14,300
New York Stock Exchange Listing Fee....................................... *
Printing Expenses......................................................... *
Accounting Fees and Expenses.............................................. *
Legal Fees and Expenses................................................... *
Transfer Agent and Registrar -- Fees and Expenses......................... *
Blue Sky Fees and Expenses................................................ 15,000
Miscellaneous............................................................. *
--------
Total..................................................................... $ 76,887
========
<FN>
- ---------------
* To be provided by Amendment
</TABLE>

All of the above expenses of the offering will be paid by the Company.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Delaware General Corporation Law and the Company's charter and bylaws
provide for indemnification of the Company's directors and officers for
liabilities and expenses that they may incur in such capacities. In general,
directors and officers are indemnified with respect to actions taken in good
faith in a manner reasonably believed to be in, or not opposed to, the best
interests of the Company, and with respect to any criminal action or proceeding,
actions that the indemnitee had no reasonable cause to believe were unlawful.
Reference is made to the Company's charter and bylaws filed as Exhibits 3.1 and
3.2 respectively. The Company maintains directors and officers liability
insurance for the benefit of its directors and certain of its officers.

Reference is made to the Purchase Agreement to be filed as Exhibit 1 to the
Registration Statement for the Company's and the Underwriters' respective
agreements to indemnify each other and to provide contribution in circumstances
where indemnification is unavailable.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In connection with the incorporation of the Company in November 1994, one
share of unregistered Class A Common Stock was sold to Old PJC. The
consideration paid for such share was $10.00. The Company relied on Section 4(2)
of the Securities Act of 1933 for exemption from registration. No brokers or
underwriters were engaged in connection with such sale. The above information
does not give effect to the Stock Split which will occur immediately prior to
the date of the Prospectus.

II-1
<PAGE> 152
<TABLE>

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<C> <S>
1 Form of Purchase Agreement (to be filed by Amendment).

2.1 Agreement and Plan of Merger dated as of November 18, 1994 by and among Continental
Cablevision, Inc., Providence Journal Company, The Providence Journal Company, King
Holding Corp. and King Broadcasting Company, as amended and restated as of August 1,
1995 (incorporated by reference to Exhibit 2.1 of the Registrant's Registration
Statement on Form S-4 (File No. 33-57479)).

2.2 Contribution and Assumption Agreement (incorporated by reference to Exhibit 2.2 of
the Registrant's Registration Statement on Form S-4 (File No. 33-57479)).

3.1 Certificate of Incorporation of The Providence Journal Company (incorporated by
reference to Exhibit 1 of the Registrant's Registration Statement on Form 8-A dated
September 29, 1995).

3.2 Bylaws of The Providence Journal Company (incorporated by reference to Exhibit 3.2
of the Registrant's Annual Report on Form 10-K for the year ended December 31,
1995).

4 Credit Agreement dated as of October 5, 1995 among Providence Journal Company, The
Providence Journal Company, 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).

4.1 Form of Rights Agreement between The Providence Journal Company and The First
National Bank of Boston, as Rights Agent (to be filed by amendment).

5 Opinion of Edwards & Angell (to be filed by amendment).

10.1 The Providence Journal Company 1994 Employee Stock Option Plan (incorporated by
reference to Exhibit 4(a) of the Registrant's Registration Statement on Form S-8
(No. 33-63833) dated November l, 1995).

10.2 The Providence Journal Company 1994 Non-Employee Director Stock Option Plan
(incorporated by reference to Exhibit 4(b) of the Registrant's Registration
Statement on Form S-8 (No. 33-63833) dated November l, 1995).

10.3 Form of Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit
10.5 of the Registrant's Registration Statement on Form S-4 (File No. 33-57479)).

10.4 Form of Restricted Stock Unit Grant Agreement (incorporated by reference to Exhibit
10.2 of the Registrant's Registration Statement on Form S-4 (No. 33-57479) dated
August 31, 1995).

10.5 Incentive Stock Units Plan as amended and restated on December 31, 1993
(incorporated by reference to Exhibit 10.1 of the Registrant's Registration
Statement on Form S-4 (File No. 33-57479)).

10.6 Form of Change of Control Agreement (incorporated by reference to Exhibit 10.6 of
the Registrant's Registration Statement on Form S-4 (File No. 33-57479)).

10.7 Stock Purchase Agreement dated as of January 18, 1995 between Providence Journal
Company and Kelso Investment Associates IV, L.P., Kelso Partners IV, L.P. and Kelso
Equity Partners II, L.P. (incorporated by reference to Exhibit 10.8 of the
Registrant's Registration Statement on Form S-4 (File No. 33-57479)).

10.8 Separation Agreement and Release between The Providence Journal Company and Trygve
E. Myhren dated February 9, 1996. (incorporated by reference to Exhibit 10.6 of the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1995).

10.9 Affiliation Agreement dated November 3, 1994, between Registrant and National
Broadcasting Company, Inc. as to KING-TV.

</TABLE>

II-2
<PAGE> 153

23.1 Consent of Edwards & Angell (to be included in Exhibit 5).

23.2 Independent Auditors' Consent and Report on Schedule of KPMG Peat Marwick LLP.

23.3 Independent Auditors' Consent of Deloitte & Touche LLP.

24 Powers of Attorney (included on the signature page hereto).

27 Financial Data Schedule (incorporated by reference to Exhibit 27 of the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1995).

99.1 Schedule II -- Valuation and Qualifying Accounts and Reserves for the Years Ended
December 31, 1993, 1994 and 1995 -- Registrant and Subsidiaries.

99.2 Schedule II -- Valuation and Qualifying Accounts and Reserves for the Years Ended
December 31, 1993 and 1994 -- King Holding Corp. and Subsidiaries.
</TABLE>

(b) Financial Statement Schedules.

II. Valuation and Qualifying Accounts and Reserve -- The Providence Journal
Company and Subsidiaries

II. Valuation and Qualifying Accounts and Reserve -- King Holding Corp. and
Subsidiaries

All other schedules for which provisions are made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b) (l) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-3
<PAGE> 154

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Providence,
State of Rhode Island, on the 19th day of April, 1996.

THE PROVIDENCE JOURNAL COMPANY

By: /S/ STEPHEN HAMBLETT
----------------------------------
Stephen Hamblett
Chairman of the Board and
Chief Executive Officer

Each person whose signature appears below hereby constitutes and appoints
the Chairman and Chief Executive Officer, the Vice President-Finance and Chief
Financial Officer or the Vice President-General Counsel & Chief Administrative
Officer of the Corporation, or any of them, acting alone, as his true and lawful
attorney-in-fact, with full power and authority to execute in the name, place
and stead of each such person in any and all capacities and to file, an
amendment or amendments to the Registration Statement (and all exhibits thereto)
and any documents relating thereto, which amendments may make such changes in
the Registration Statement as said officer or officers so acting deem(s)
advisable.

<TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below on April 19, 1996 by the
following persons in the capacities indicated.

<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/S/ STEPHEN HAMBLETT Director; Chairman of the
--------------------------- Board and Chief
Stephen Hamblett Executive Officer
(principal executive
officer)

/S/ THOMAS N. MATLACK Vice President -- Finance
---------------------------- and Chief Financial
Thomas N. Matlack Officer (principal
financial and accounting
officer)

/S/ F. REMINGTON BALLOU Director
-----------------------------
F. Remington Ballou

/S/ HENRY P. BECTON, JR. Director
-----------------------------
Henry P. Becton, Jr.

/S/ FANCHON M. BURNHAM Director
-----------------------------
Fanchon M. Burnham

Director
-----------------------------
Kay K. Clarke

/S/ PETER B. FREEMAN Director
-----------------------------
Peter B. Freeman

/S/ BENJAMIN P. HARRIS, III Director
-----------------------------
Benjamin P. Harris, III
</TABLE>

II-4
<PAGE> 155

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/S/ PAUL A. MAEDER Director
----------------------------
Paul A. Maeder
Director
----------------------------
Trygve E. Myhren

Director
----------------------------
John W. Rosenblum

/S/ HENRY D. SHARPE, JR. Director
----------------------------
Henry D. Sharpe, Jr.

/S/ W. NICHOLAS THORNDIKE Director
----------------------------
W. Nicholas Thorndike

Director
----------------------------
John W. Wall

/S/ PATRICK R. WILMERDING Director
----------------------------
Patrick R. Wilmerding
</TABLE>

II-5
<PAGE> 156
<TABLE>

EXHIBIT INDEX

<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<C> <S>
1 Form of Purchase Agreement (to be filed by Amendment).
2.1 Agreement and Plan of Merger dated as of November 18, 1994 by and among Continental
Cablevision, Inc., Providence Journal Company, The Providence Journal Company, King
Holding Corp. and King Broadcasting Company, as amended and restated as of August 1,
1995 (incorporated by reference to Exhibit 2.1 of the Registrant's Registration
Statement on Form S-4 (File No. 33-57479)).
2.2 Contribution and Assumption Agreement (incorporated by reference to Exhibit 2.2 of
the Registrant's Registration Statement on Form S-4 (File No. 33-57479)).
3.1 Certificate of Incorporation of The Providence Journal Company (incorporated by
reference to Exhibit 1 of the Registrant's Registration Statement on Form 8-A dated
September 29, 1995).
3.2 Bylaws of The Providence Journal Company (incorporated by reference to Exhibit 3.2
of the Registrant's Annual Report on Form 10-K for the year ended December 31,
1995).
4 Credit Agreement dated as of October 5, 1995 among Providence Journal Company, The
Providence Journal Company, 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).
4.1 Form of Rights Agreement between The Providence Journal Company and The First
National Bank of Boston, as Rights Agent (to be filed by amendment).
5 Opinion of Edwards & Angell (to be filed by amendment).
10.1 The Providence Journal Company 1994 Employee Stock Option Plan (incorporated by
reference to Exhibit 4(a) of the Registrant's Registration Statement on Form S-8
(No. 33-63833) dated November l, 1995).
10.2 The Providence Journal Company 1994 Non-Employee Director Stock Option Plan
(incorporated by reference to Exhibit 4(b) of the Registrant's Registration
Statement on Form S-8 (No. 33-63833) dated November l, 1995).
10.3 Form of Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit
10.5 of the Registrant's Registration Statement on Form S-4 (File No. 33-57479)).
10.4 Form of Restricted Stock Unit Grant Agreement (incorporated by reference to Exhibit
10.2 of the Registrant's Registration Statement on Form S-4 (No. 33-57479) dated
August 31, 1995).
10.5 Incentive Stock Units Plan as amended and restated on December 31, 1993
(incorporated by reference to Exhibit 10.1 of the Registrant's Registration
Statement on Form S-4 (File No. 33-57479)).
10.6 Form of Change of Control Agreement (incorporated by reference to Exhibit 10.6 of
the Registrant's Registration Statement on Form S-4 (File No. 33-57479)).
10.7 Stock Purchase Agreement dated as of January 18, 1995 between Providence Journal
Company and Kelso Investment Associates IV, L.P., Kelso Partners IV, L.P. and Kelso
Equity Partners II, L.P. (incorporated by reference to Exhibit 10.8 of the
Registrant's Registration Statement on Form S-4 (File No. 33-57479)).
10.8 Separation Agreement and Release between The Providence Journal Company and Trygve
E. Myhren dated February 9, 1996. (incorporated by reference to Exhibit 10.6 of the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1995).
10.9 Affiliation Agreement dated November 3, 1994, between Registrant and National
Broadcasting Company, Inc. as to KING-TV.
</TABLE>
<PAGE> 157

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
<C> <S>
21 Subsidiaries of the Company (incorporated by reference to Exhibit 21 of the
Registrant's Annual Report on Form 10-K for the year ended December 31, 1995).
23.1 Consent of Edwards & Angell (to be included in Exhibit 5).
23.2 Independent Auditors' Consent and Report on Schedule of KPMG Peat Marwick LLP.
23.3 Independent Auditors' Consent of Deloitte & Touche LLP.
24 Powers of Attorney (included on the signature page hereto).
27 Financial Data Schedule (incorporated by reference to Exhibit 27 of the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1995).
99.1 Schedule II -- Valuation and Qualifying Accounts and Reserves for the Years Ended
December 31, 1993, 1994 and 1995 -- Registrant and Subsidiaries.
99.2 Schedule II -- Valuation and Qualifying Accounts and Reserves for the Years Ended
December 31, 1993 and 1994 -- King Holding Corp. and Subsidiaries.
</TABLE>

<PAGE> 1

EXHIBIT 10.9

November 3, 1994

King Broadcasting Company
c/o KING-TV
333 Dexter Avenue North
Seattle, Washington 98109

Re: KING-TV (Seattle, Washington)
-----------------------------

Gentlemen:

The following shall comprise the agreement between us for the affiliation
of your television broadcasting station KING-TV (you and KING-TV collectively
herein called "Station") with the NBC Television Network (herein called "NBC")
and shall supersede and replace our prior agreement dated March 16, 1989, except
for the most recent amendment with respect to network non-duplication protection
under Federal Communications Commission ("FCC") Rules Section 76.92.

1. Term. This Agreement shall become effective as of the 1st day of
October, 1994 (the "Effective Time"), and, unless sooner terminated as provided
in this Agreement, it shall remain in effect for a period of seven (7) years
thereafter. It shall then be renewed on the same terms and conditions for a
further period of five (5) years and for successive further periods of five (5)
years each, unless and until either party shall, at least twelve (12) months
prior to the expiration of the then current term, give the other party written
notice that it does not desire to have this Agreement renewed for a further
period.

2. NBC Programming.

(a) NBC shall deliver to Station for free, over-the-air television
broadcasting all programming which NBC makes available for broadcasting in the
community to which Station is presently licensed by the FCC, except as otherwise
expressly provided herein.

(b) NBC commits to supply sufficient programming throughout the term of
this Agreement for the hours presently programmed by it (the "Programmed Time
Periods"), which Programmed Time Periods are as follows (the specified times are
all local time in Station's community of license):

<TABLE>
<S> <C>
Prime Time: Monday thru Saturday - 8:00-11:00 P.M.
Sunday - 7:00-11:00 P.M.

Late Night: Monday thru Thursday - 11:35 P.M.-2:05 A.M.
Friday - 11:35 P.M.-2:35 A.M.
Saturday - 11:30 P.M.-1:00 A.M.

News: Monday thru Friday - 4:30-5:00 A.M.,
7:00-9:00 A.M. and 6:00-6:30 P.M.
Saturday - 6:00-6:30 P.M.
Sunday - 6:00-8:00 A.M.
and 6:00-6:30 P.M.

Daytime: Monday thru Friday - 9:00-10:00 A.M.,
11:00 A.M. -12:00 Noon and 1:00-2:00 P.M.
Saturday - 10:30 A.M.-1:00 P.M.
</TABLE>

The selection, scheduling, substitution and withdrawal of any program or
portion thereof delivered to Station during the Programmed Time Periods shall at
all times remain within the sole discretion and control of NBC. The parties
acknowledge that local and network programming needs may change during the term
of this Agreement, and each party agrees throughout the term to negotiate in
good faith with the other party any proposed modification of the Programmed Time
Periods.

1
<PAGE> 2

(c) In addition to the programming supplied pursuant to Paragraph 2(b)
above, NBC shall offer Station throughout the term of this Agreement a variety
of sports, special events and overnight news programming for television
broadcast at times other than the Programmed Time Periods. Station shall have
the right of first refusal with respect to any such programming good for
seventy-two (72) hours as against any other television station located in
Station's community of license or any television program transmission service
furnishing a television signal to Station's community of license, including, but
not limited to, any cable television system, multichannel distribution system,
telephone system, subscription television service, multipoint distribution
system and satellite transmission service. Station shall notify NBC of its
acceptance or rejection of NBC's offer of such programming as promptly as
possible. Station's acceptance of NBC's offer shall constitute Station's
agreement to broadcast such programming in accordance with the terms of such
offer and this Agreement. Notwithstanding any other provision in this Agreement,
no pre-existing acceptance of NBC programming shall be superseded or otherwise
affected by this Agreement, and those acceptances shall remain in full force and
effect. With respect to NBC programs outside the Programmed Time Periods (either
offered or already contracted for pursuant to this Agreement), nothing herein
contained shall prevent or hinder NBC from (i) substituting one or more
sponsored or sustaining programs, in which event NBC shall offer such
substituted program or programs to Station in accordance with the provisions of
this Paragraph 2(c), or (ii) canceling one or more such NBC programs; provided,
however, that NBC shall exercise all reasonable efforts to give Station at least
three (3) weeks prior written notice of such substitution or cancellation.
Station shall not be obligated to broadcast, and NBC shall not be obligated to
continue to deliver, subsequent to the termination of this Agreement, any
programs which NBC may have offered and which Station may have accepted during
the term hereof.

3. Station Carriage in Programmed Time Periods.

(a) Station agrees that, subject only to Authorized Preemptions (as
hereinafter defined), including Station's unqualified right to preempt for local
live coverage of news events, Station shall broadcast over Station's facilities
all NBC programming supplied to Station for broadcast in the Programmed Time
Periods on the dates and at the times the programs are scheduled by NBC, except
to the extent that Station is actually broadcasting programming pursuant to (and
within the specified limits of) a commitment contemplated by Paragraph 3(b)
below.

(b) As an inducement for NBC to enter into this Agreement, Station
covenants, represents and warrants to NBC that during any Broadcast Year (as
hereinafter defined) during the term hereof, Station shall preempt no more than
twenty (20) hours in the aggregate of NBC programs during the Prime Time
Programmed Time Period for any reason other than for the live coverage of news
events; provided, however, that Station shall be permitted to make additional
preemptions for the broadcast of Seahawks pre-season football games as set forth
in Paragraph 3(c) below, subject to the provisions thereof. For the purposes of
this Agreement, a "Broadcast Year" shall mean a twelve (12) month period during
the term hereof which commences on any September 1 during the term hereof and
which ends on August 31 of the immediately following year. Station hereby
confirms that its rights and obligations under this Paragraph 3(b) are
consistent with its rights and obligations referred to in Paragraph 4(c) below.
(c) Station shall have the right to preempt NBC programming for the broadcast of
Seahawks pre-season football games (the "Seahawks Games"); provided, however,
that in each Broadcast Year during the term of this Agreement, the number of
programming hours included for purposes of determining such preemption amount
shall not exceed the aggregate number of programming hours scheduled by Station
for the broadcast of six (6) Seahawks Games during the 1993-1994 Broadcast Year
(the "Seahawks Preemption Amount"); and provided, further, that in each
Broadcast Year during the term of this Agreement, the number of hours of
programming included in such Seahawks Preemption Amount utilized in a specific
daypart shall be approximately the same as the number of hours of such
programming scheduled for broadcast by Station during the 1993-1994 Broadcast
Year.

(c) The Station hereby agrees to accept and clear all sports programming
offered to the Station by NBC outside the Programmed Time Periods ("NBC Sports
Programming"), to the extent cleared by the Station prior to the date hereof,
except for (i) NBC sports programming which directly conflicts with Station's
coverage of sports events and special events of particular local interest
(collectively, such coverage of such sports events and special events other than
the Station's broadcast of Seahawks Games are referred to below

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<PAGE> 3

as "Special Programs") and (ii) as provided above in Paragraph 3(c) with respect
to the Seahawks Preemption Amount. Station agrees not to broadcast more than
three (3) hours of Special Programs outside the Programmed Time Periods (which
number of hours is based upon Station's historical clearance levels for such
Special Programs) in the aggregate during any Broadcast Year during the term of
the Agreement which would conflict with NBC sports programming outside the
Programmed Time Periods (the "Sports Preemption Amount").

(d) Notwithstanding the foregoing provisions of subparagraphs (b) and (d)
above and without limiting the provisions thereof, Station agrees that, in any
three (3) month period during a Broadcast Year, Station's preemptions of NBC
Prime Time programs and NBC Sports Programming shall not exceed 50% of,
respectively, the Prime Time Preemption Amount and the Sports Preemption Amount,
unless otherwise consistent with Station's programming practice.

(e) Upon the expiration of the existing term (without giving effect to any
renewal) or termination of any of Station's contractual commitments in existence
as of the date hereof with respect to Station's broadcast of at least one (l)
hour of non-NBC Network programs during the daytime hours of 9:00 A.M.-4:00
P.M., Station' agrees to accept and clear "Another World" (or replacement
programming); at such time as
Station clears such additional NBC program, such clearance hour shall then
become part of the Daytime Programmed Time Period for purposes of Paragraphs
2(b) and 3(a) hereof.

4. Preemptions.

(a) In the event that Station, for any reason, fails to broadcast or
advises NBC that it will not broadcast any NBC programming as provided herein,
then, in each case, Station, upon notice from NBC to Station, shall broadcast
such omitted programming and the commercial announcements contained therein (or
any replacement programming and the commercial announcements contained therein)
during a time period or periods which the parties shall promptly and mutually
agree upon and which shall, to the extent possible, be of a quality and rating
value comparable to that of the time period or periods at which such omitted
programming was not broadcast as provided herein. In the event that the parties
do not promptly agree upon a time period or periods as provided in the preceding
sentence, then, without limitation to any other rights of NBC under this
Agreement or otherwise, NBC shall have the right to license the broadcast rights
to the applicable omitted programming (or replacement programming) to another
television station located in Station's community of license.

(b) For the purposes of this Agreement, an "Authorized Preemption" shall
mean: any failure to broadcast due to force majeure as provided for in Paragraph
11 below, any preemption permitted by Paragraphs 3(a), 3(b), 3(c) or 3(d) above,
and any preemption permitted by Paragraph 4(c) below. Any other preemption or
failure to broadcast any NBC programming shall be deemed an "Unauthorized
Preemption" and, without limiting any other rights of NBC under this Agreement
or otherwise, upon NBC's request, Station shall pay NBC, or NBC may deduct or
offset from any amounts payable to Station hereunder or under any other
agreement between Station and NBC (or an entity controlling, controlled by or
under common control with NBC), an amount equivalent to NBC's loss in net
advertising revenues attributable to the failure of Station to broadcast such
program in Station's market as scheduled by NBC, which amount shall be
calculated in accordance with Exhibit A hereto; provided, however, that the
maximum amounts payable by Station to NBC pursuant to this Paragraph 4(b) shall
not exceed an amount equal to (x) two (2) times (y) the aggregate of the
compensation that would have been payable by NBC to Station pursuant to
Paragraph 5 hereof if Station had not preempted such NBC programming. Any
failure by Station to pay any amount due under this Paragraph 4(b) shall be
deemed a material breach of this Agreement, and NBC shall have the option,
exercisable in its sole discretion upon thirty (30) days' written notice to
Station, to either (i) terminate station's right to broadcast any one or more
series or other NBC programs, as NBC shall elect, and, to the extent and for the
period(s) that NBC elects, thereafter license the broadcast rights to such
series or other NBC program(s) to any other television station or stations
located in Station's community of license or (ii) unless the breach is cured
within such thirty (30) day period, terminate this Agreement.

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<PAGE> 4

(c) With respect to programs offered or already contracted for pursuant to
this Agreement, nothing herein contained shall be construed to prevent or hinder
Licensee from: (i) rejecting or refusing any NBC program which Station
reasonably believes to be unsatisfactory or unsuitable or contrary to the public
interest, or (ii) substituting a program which, in Station's opinion, is of
greater local or national importance; provided, however, that Station shall give
NBC written notice of each such rejection, refusal or substitution, and the
justification therefor, at least three (3) weeks in advance of the scheduled
broadcast, or as soon thereafter as possible (including an explanation of the
cause for any lesser notice). Programming shall be deemed to be unsatisfactory
or unsuitable or contrary to the public interest only if: (A) it is delivered in
a form which does not meet accepted standards of good engineering practice; (B)
it does not comply with the rules and regulations of the FCC; or (C) Station
reasonably believes that such programming would not meet prevailing contemporary
standards of good taste in its community of license. Station acknowledges that
NBC programming previously broadcast by Station has been consistent with the
foregoing standards; Station also agrees that Station's reasonable belief that
an NBC program does not meet such standards will be based on a substantial
difference in such program's style and content from NBC programs previously
broadcast by Station, unless the relevant standards in the Station's community
of license have changed. Station confirms that no NBC programming shall be
deemed to be unsatisfactory, unsuitable or contrary to the public interest based
on programming performance or ratings, advertiser reaction or the availability
of alternative programming (including, but not limited to, sporting events,
program length commercials and infomercials, and other paid programming) which
Station believes to be more profitable or more attractive. Station acknowledges
the substantial investment in network programming to be incurred during the term
of this Agreement in order to provide Station with network-quality news, public
affairs, entertainment, sports, children's and other programming during the
Programmed Time Periods. Station further acknowledges that in view of NBC's
substantial investment in network programming, the amount of broadcast time
available to Station outside the Programmed Time Periods and Station's rights
under Paragraph 3(b) above, Station does not foresee any need to substitute
programming of any kind for NBC programming, except in those circumstances
requiring local live coverage of news events.

5. Station Compensation. In further consideration of Station's
performance of its obligations under this Agreement, NBC shall compensate
Station as follows:

(a) (i) NBC shall pay Station for Station's broadcast of each
network-sponsored program or portion thereof (except those specified in
Paragraph 5(b) below) which is broadcast during the Live Time Period therefor
the amount resulting from multiplying the following:

(A) Station's Network Station Rate, which is $2710; by

(B) The percentage set forth in the compensation matrix table attached
hereto as Exhibit B (the "Compensation Table") opposite the
applicable time period; by

(D) The fraction of the aggregate length of all Commercial
Availabilities during such program or portion thereof occupied by
Network Commercial Announcements.

As used herein, "Live Time Period" shall mean the time period or periods as
specified by NBC for the broadcast of a program by Station; "Commercial
Availability" shall mean a period of time made available by NBC during a
network-sponsored program for one or more Network Commercial Announcements; and
"Network Commercial Announcement" shall mean a commercial announcement broadcast
over Station during a Commercial Availability and paid for by or on behalf of
one or more of NBC's network advertisers, not including, however, announcements
consisting of billboards, credits, public service announcements, promotional
announcements and announcements required by law.

(ii) For each network sponsored program or portion thereof (except
those specified in Paragraph 5(b) below) which is broadcast by Station
during a time period other than the Live Time Period therefor, NBC reserves
the right, in its sole discretion, to withhold payment of compensation for
such program. If NBC does not withhold payment of compensation for such
program, NBC shall pay Station as if Station had broadcast the program or
portion thereof during such Live Time Period, except that if the percentage

4
<PAGE> 5

set forth in the Compensation Table opposite the time period during which
Station broadcasts the program or portion thereof is less than that set
forth opposite such Live Time Period, NBC shall pay Station on the basis of
the time period during which Station broadcasts the program or portion
thereof.

(b) NBC shall pay Station such amounts as NBC and Station shall agree upon
for all network-sponsored programs broadcast by Station consisting of:

(i) Sports programs;

(ii) Special events programs, and

(iii) Programs for which NBC specifies a Live Time Period which
straddles any of the time period categories in the Compensation Table.

(c) (i) On or about the fifteenth day of the last month of each calendar
quarter during the term hereof, subject to the timely receipt of reports
requested under Paragraph 9 below, NBC shall pay Station, by electronic transfer
or such other means as NBC shall determine, an estimate of the amounts due
hereunder for such calendar quarter. NBC shall make the appropriate adjustment
for the payment actually due for such calendar quarter in the payment of the
estimated amount due for the next calendar quarter. NBC shall calculate the
amounts due hereunder on a weekly basis and shall report such amounts to Station
within a reasonable period of time after the close of each month during the
term.

(ii) From the amounts otherwise payable to Station hereunder, NBC shall
deduct for each calendar quarter during the term hereof a sum equal to 217% of
Station's Network Station Rate (the "Waiver Percentage"). This deduction shall
be calculated on a weekly basis, with 4.2857 as the agreed number of weeks per
month, and shall be reported to Station with the reports due under subparagraph
5(c) (i) above. NBC shall make other deductions from the amounts otherwise
payable to Station hereunder for additional services made available by NBC and
utilized by Station such as, but not limited to, NBC News Channel.

(d) (i) NBC reserves the right as part of a general rate revision to
reevaluate and change at any time the Waiver Percentage set forth in
subparagraph 5(c) (ii) above, by giving written notice to Station at least
thirty (30) days prior to the effective date of such change; provided, however,
that the parties agree that NBC may only increase the Waiver Percentage by
reason of an increase in NBC's technical costs of delivering programming to the
NBC Television Network; provided, further, that any such increase shall be
subject to review by the NBC Affiliate Board. NBC and the Station further agree
that Station's Network Station Rate as set forth in Paragraph 5(a)(i)(A) hereof
and the Compensation Table attached hereto as Exhibit B shall only be modified
during the term of this Agreement as may be mutually agreed to by NBC and
Station.

(ii) The parties acknowledge that the payment of compensation to Station
hereunder is in consideration of certain commitments by Station, including
commitments regarding Station's local news program schedule and promotion of NBC
programming as respectively set forth in Exhibits C and D attached hereto, which
Exhibits are incorporated herein by this reference. In the event that Station
does not fulfill the commitments set forth in Exhibits C and D, NBC reserves the
right to decrease Station's Network Station Rate and the percentages in the
Compensation Table and to increase Station's Waiver Percentage by notifying
Station in writing at least ninety (90) days prior to the effective date of such
change.

6. Local Commercial Announcements. Station shall at all times during the
term of this Agreement be entitled to the same number of local commercial
announcements in and adjacent to NBC programming as are made available to NBC
affiliates generally at such time. In the event of a material reduction in the
total aggregate duration in minutes of all local commercial announcements
available to Station in any Broadcast Year (as compared with the prior Broadcast
Year) in and adjacent to regularly scheduled NBC programming then offered (not
including national sports programming and other special events), NBC agrees to
offset the effects of such reduction by granting comparable economic benefit to
the Station.

7. Delivery. NBC shall transmit the programming hereunder by satellite
and shall notify Station as to both the satellite and transponder being used for
such transmission, and the programming shall be deemed delivered to Station when
transmitted to the satellite. Where, in the opinion of NBC, it is impractical or
undesirable to furnish a program over satellite facilities, NBC may deliver the
program to Station in a form

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<PAGE> 6

reasonably acceptable to Station in sufficient time for Station to broadcast the
program at the time scheduled. Such recordings shall be used only for a single
television broadcast over Station, and Station shall comply with all NBC
instructions concerning the disposition to be made of each such recording
received by Station hereunder.

8. Conditions of Station's Broadcast. Station's broadcast of NBC
programming shall be subject to the following terms and conditions:

(a) Station shall not make any deletions from, or additions or
modifications to, any NBC program furnished to Station hereunder or any
commercial, NBC identification, program promotional or production credit
announcements or other interstitial material contained therein, nor broadcast
any commercial or other announcements (except emergency bulletins) during any
such program, without NBC's prior written authorization: Station may, however,
delete announcements promoting any NBC program which is not to be broadcast by
Station, provided that such deletion shall be permitted only in the event and to
the extent that Station substitutes for any such deleted promotional
announcements other announcements promoting NBC programs to be broadcast by
Station. Station's broadcast of NBC programming does not contemplate, without
Station's prior written approval, the incidental use by NBC of the Vertical
Blanking Interval ("VBI") of Station's standard television signal for
non-broadcast or ancillary transmissions or signals.

(b) For purposes of identification of Station with the NBC programs, and
until written notice to the contrary is given by NBC, Station may superimpose on
various Entertainment programs, where designated by NBC, a single line of type,
not to exceed fifty (50) video lines in height and situated in the lower eighth
raster of the video screen, which single line shall include (and be limited to)
Station's call letters, community of license or home market, broadcast and/or
cable, channel number, and the NBC logo. No other addition to any Entertainment
program is contemplated by this consent, and the authorization contained herein
specifically excludes and prohibits any addition whatsoever to News and Sports
programs, except identification of Station as provided in the preceding sentence
as required by the FCC.

(c) The placement and duration of station-break periods provided for
locally originated announcements between NBC programs or segments thereof shall
be designated by NBC. Station shall broadcast each NBC program delivered to
Station hereunder from the commencement of network origination until the
commencement of the terminal station break.

(d) In the event of the confirmation by NBC of any violation by Station of
any of the provisions of this Paragraph 8, NBC may, in its reasonable
discretion, withhold an amount of compensation otherwise due Station under
Paragraph 5 above which is appropriate in view of the nature of the specific
violation, it being understood that the amount withheld for any violation shall
not exceed the total compensation due Station for the week in which such
violation occurs. Nothing herein contained shall limit the rights of Station
under Paragraph 4(c) above.

9. Station Reports. Station shall submit to NBC in writing, upon forms
provided by NBC, such reports as NBC may reasonably request covering the
broadcast by Station of programs furnished to Station hereunder.

10. Music Performance Rights. All programs delivered to Station pursuant
to this Agreement shall be furnished with all music performance rights necessary
for broadcast by Station included. Station shall have no responsibility for
obtaining such rights from ASCAP, BMI or other music licensing societies insofar
as the programs delivered by NBC to Station for broadcasting are concerned. As
used in this paragraph, "programs" shall include, but shall not be limited to,
program and promotional material and commercial and public service announcements
furnished by NBC. Station shall be responsible for all music license
requirements for any commercial and public service announcements or other
material inserted by Station within or adjacent to the programs as permitted
under the terms of this Agreement, except for cut-ins produced by or on behalf
of NBC and inserted by Station at NBC's direction.

11. Force Majeure. Neither Station nor NBC shall incur any liability
hereunder because of NBC's failure to deliver, or the failure of Station to
broadcast, any or all programs due to failure of facilities, labor disputes,
government regulations or causes beyond the reasonable control of the party so
failing to deliver or to

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<PAGE> 7

broadcast. Without limiting the generality of the foregoing, NBC's failure to
deliver a program for any of the following reasons shall be deemed to be for
causes beyond NBC's reasonable control: cancellation of a program because of the
death, illness or refusal to appear or perform of a star or principal performer
thereon, or because of such person's failure to conduct himself or herself with
due regard to social conventions and public morals and decency, or because of
such person's commission of any act or involvement in any situation or
occurrence tending to degrade him or her in society, or bringing him or her into
public disrepute, contempt, scandal or ridicule, or tending to shock, insult or
offend the community, or tending to reflect unfavorably upon NBC or the program
sponsor.

12. Indemnification. NBC shall indemnify, defend and hold Station, its
parent, subsidiary and affiliated companies, and their respective directors,
officers and employees, harmless from and against all claims, damages,
liabilities, costs and expenses (including reasonable attorneys' fees) arising
out of the use by Station, in accordance with this Agreement, of any program or
other material as furnished by NBC hereunder, provided that Station promptly
notifies NBC of any claim or litigation to which this indemnity shall apply, and
that Station cooperates fully with NBC in the defense or settlement of such
claim or litigation. Similarly, Station shall indemnify, defend and hold NBC,
its parent, subsidiary and affiliated companies, and their respective directors,
officers and employees, harmless with respect to material added to or deleted
from any program by Station, except for cut-ins produced by or on behalf of NBC
and inserted by Station at NBC's direction. These indemnities shall not apply to
litigation expenses, including attorneys' fees, which the indemnified party
elects to incur on its own behalf. Except as otherwise provided herein, neither
Station nor NBC shall have any rights against the other for claims by third
persons, or for the non-operation of facilities or the non-furnishing of
programs for broadcasting, if such non-operation or non-furnishing is due to
failure of equipment, actions or claims by any third person, labor disputes, or
any cause beyond such party's reasonable control.

13. Station's Right of First Negotiation. Throughout the term of this
Agreement, NBC shall give Station prompt notice of any determination by NBC to
engage in new over-the-air broadcast ventures within Station's community of
license (whether or not involving the transmission of television programs, but
excluding any acquisition of an ownership interest in any broadcast television
station) (a "Broadcast Venture"). NBC shall negotiate exclusively with Station
in good faith, for a period of time following such notice to Station as shall be
determined by NBC to be appropriate to the circumstances and as shall be
specified in such notice, with respect to Station's participation on a financial
and/or operational basis in any such Broadcast Venture within Station's
community of license before NBC may enter into any such negotiations with a
Third Party (as defined below) within such community of license. "Third Party"
shall mean any person or entity other than an NBC Party; "NBC Party" shall mean
any of NBC, National Broadcasting Company, Inc. or their respective parent,
subsidiary, affiliated, related or successor entities.

14. Change in Operations. Station represents and warrants that it holds a
valid license granted by the FCC to operate the Station as a television
broadcast station; such representation and warranty shall constitute a
continuing representation and warranty by Station. In the event that Station's
transmitter location, power, frequency, programming format or hours of operation
are materially changed at any time so that Station is of less value to NBC as a
broadcaster of NBC programming than at the date of this Agreement, then NBC
shall have the right to terminate this Agreement upon thirty (30) days prior
written notice to Station.

15. Assignment.

(a) This Agreement shall not be assigned by Station without the prior
written consent of NBC, which consent shall not be unreasonably withheld, and
any permitted assignment shall not relieve Station of its obligations hereunder.
Any purported assignment by Station without such consent shall be null and void
and not enforceable against NBC.

(b) Station agrees to include as a condition of any proposed assignment or
transfer a contractually binding provision that the assignee or transferee shall
assume and become bound by this Agreement for (i) the remainder of the
then-current term of this Agreement or (ii) three (3) years from the date of
said assignment or transfer, whichever period is greater. Station acknowledges
that any such assignment or transfer which does

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<PAGE> 8

not so provide for such assumption and for NBC's right to extend the term of
this Agreement will cause NBC irreparable injury for which damages are not an
adequate remedy. Therefore, Station agrees that NBC shall be entitled to seek an
injunction or similar relief from any court of competent jurisdiction
restraining Station from committing any violation of this Paragraph 15(b).

(c) Station agrees that if any application is made to the FCC pertaining to
an assignment or a transfer of control of Station's license, or any interest
therein, Station shall immediately notify NBC in writing of the filing of such
application. Except as to "short form" assignments or transfers of control made
pursuant to Section 73.3540(f) of the FCC Rules, NBC shall have the right to
terminate this Agreement in the event of any assignment or transfer as to which
NBC does not consent in accordance with Paragraph 15(a). Station agrees, except
in the case of "short form" assignments or transfers of control, that promptly
following Station's notice to NBC, Station (i) shall arrange for a meeting
between NBC and the proposed assignee or transferee to review the financial and
operating plans of the proposed assignee or transferee, and (ii) shall procure
and deliver to NBC, in form satisfactory to NBC, the agreement of the proposed
assignee or transferee that, upon consummation of the assignment or transfer of
control of the Station's license, the assignee or transferee will assume and
perform this Agreement in its entirety without limitation of any kind. If
Station complies with its obligations set forth in the preceding sentence and
NBC does not terminate this Agreement upon written notice to Station within the
thirty (30) day period following the later of the meeting with the proposed
assignee or transferee or the delivery to NBC of a satisfactory assumption
agreement, NBC shall be deemed to have consented to the assignment or transfer
of control.

16. Unauthorized Copying and Transmission. Station shall not authorize,
cause, or permit, without NBC's consent, any program or other material furnished
to Station hereunder to be recorded, duplicated, rebroadcast or otherwise
transmitted or used for any purpose other than broadcasting by Station as
provided herein. Notwithstanding the foregoing, Station shall not be restricted
in the exercise of its signal carriage rights pursuant to any applicable rule or
regulation of the FCC with respect to retransmission of its broadcast signal by
any cable system or multichannel video program distributor ("MVPD"), as defined
in Section 76.64(d) of the FCC Rules, which (a) is located within the Area of
Dominant Influence ("ADI"), as defined by Arbitron, in which Station is located,
or (b) was actually carrying Station's signal as of April 1, 1993, or (c) with
respect to cable systems, serving an area in which Station is "significantly
viewed" (as determined by the FCC) as of April 1, 1993; provided, however, that
any such exercise pursuant to FCC Rules with respect to NBC programs shall not
be deemed to constitute a license by NBC; and provided, further, that at such
time as NBC adopts a term in substitution for the term "ADI" by reason of any
similar action by the FCC or other appropriate authority, such substitute term
shall replace the references to "ADI" herein. NBC reserves the right to restrict
such signal carriage with respect to NBC programming as is consistent with any
change in applicable law, rule or regulation.

17. Limitations on Retransmission Consent. In consideration of the grant
by NBC to Station of the non-duplication protection provided in the most recent
amendment to this Agreement, Station hereby agrees as follows:

(a) Station shall not grant consent to the retransmission of its broadcast
signal by any cable television system, or, except as provided in Paragraph 17(b)
below, to any other MVPD whose carriage of broadcast signals requires
retransmission consent, if such cable system or MVPD is located outside the ADI
to which Station is assigned, unless Station's signal was actually carried by
such cable system or MVPD as of April 1, 1993, or, with respect to such cable
system, is "significantly viewed" (as determined by the FCC) as of April 1,
1993; provided, however, that at each renewal of the Agreement, in the event
Station can demonstrate to NBC that it is "significantly viewed" (as determined
by the FCC) in areas in addition to those in which it was "significantly viewed"
as of April 1, 1993 ("Additional Viewing Areas"), NBC agrees that it will
negotiate in good faith with Station regarding a possible extension of Station's
grant of the right to retransmit its broadcast signal to cable systems in the
Additional Viewing Areas.

(b) Station shall not grant consent to the retransmission of its broadcast
signal by any MVPD that provides such signal to any home satellite dish user,
unless such user is located within Station's own ADI or is

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<PAGE> 9

an "unserved household" as defined in Section 119(d) or any successor provision
of Title 17 of the United States Code.

18. Remedies for Unauthorized Copying and Transmission. If Station
violates any of the provisions set forth in Paragraphs 16 and 17 above, NBC may,
in addition to any other of its rights or remedies at law or in equity under
this Agreement or any amendment thereto, terminate this Agreement by written
notice to Station given at least ninety (90) days prior to the effective date of
such termination.

19. Applicable Law. The obligations of Station and NBC under this
Agreement are subject to all applicable federal, state, and local laws, rules
and regulations (including, but not limited to, the Communications Act of 1934,
as amended, and the rules and regulations of the FCC), and this Agreement and
all matters or issues collateral thereto shall be governed by the law of the
State of New York applicable to contracts negotiated, executed and performed
entirely therein.

20. Waiver. A waiver by either of the parties hereto of a breach of any
provision of this Agreement shall not be deemed to constitute a waiver of any
preceding or subsequent breach of the same provision or any other provision
hereof.

21. Notices. Any notices hereunder shall be in writing and shall be given
by personal delivery, overnight courier service, or registered or certified
mail, addressed to the respective addresses set forth on the first page of this
Agreement or at such other address or addresses as may be specified in writing
by the party to whom the notice is given. Such notices shall be deemed given
when personally delivered, delivered to an overnight courier service or mailed,
except that notice of change of address shall be effective only from the date of
its receipt.

22. Captions. The captions of the paragraphs in this Agreement are for
convenience only and shall not in any way affect the interpretation hereof.

23. Entire Agreement. The foregoing constitutes the entire agreement
between Station and NBC with respect to the subject matter hereof, all prior
understandings being merged herein, except for the most recent amendment with
respect to network non-duplication protection under FCC Rules Section 76.92.
This Agreement may not be changed, modified, renewed, extended or discharged,
except as specifically provided herein or by an agreement in writing signed by
the parties hereto.

24. Confidentiality. The parties agree to use their best efforts to
preserve the confidentiality of this Agreement and of the terms and conditions
set forth herein, and the exhibits annexed hereto, to the fullest extent
permissible by law. The parties recognize that Section 73.3613 of the FCC's
Rules and Regulations requires the filing with the FCC of television network
affiliation agreements by each affiliate, but are unaware of any requirement for
the filing of exhibits annexed to such affiliation agreements. In the event that
the FCC should request either party to file said exhibits, that party shall give
prompt notice to the other, and shall submit said exhibits to the FCC with a
request that said exhibits be withheld from public inspection pursuant to
Section 0.459 of the FCC's Rules and Regulations on the grounds that said
exhibits contain confidential commercial or financial information that would
customarily be guarded from competitors and not be released to the public.

25. Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature to each such counterpart
were upon the same instrument.

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If the foregoing is in accordance with your understanding, please indicate
your acceptance on the copy of this Agreement enclosed for that purpose and
return that copy to NBC.

Very truly yours,

NATIONAL BROADCASTING COMPANY, INC.

By: /S/ NATIONAL BROADCASTING COMPANY, INC.
-----------------------------------------
NATIONAL BROADCASTING COMPANY, INC.

AGREED:

KING BROADCASTING COMPANY

By: /S/ KING BROADCASTING COMPANY
----------------------------------
KING BROADCASTING COMPANY

<PAGE> 1

EXHIBIT 23.2

WHEN THE STOCK SPLIT REFERRED TO IN NOTE 17 TO THE CONSOLIDATED FINANCIAL
STATEMENTS BECOMES EFFECTIVE, WE WILL BE IN A POSITION TO RENDER THE FOLLOWING
CONSENT AND REPORT ON SCHEDULE.

/S/ KPMG PEAT MARWICK LLP

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE

The Board of Directors and
Shareholders of The Providence
Journal Company:

The audits referred to in our report dated February 16, 1996, except for
notes 2, 13 and 17 which are dated March 4, 1996, February 27, 1996 and
, 1996, respectively, included the related financial
statement schedule as of December 31, 1995, and for each of the years in the
three-year period ended December 31, 1995, included in the registration
statement. This report contains an explanatory paragraph that states that the
Company completed the Merger and related transactions with Continental
Cablevision, Inc. and the Kelso Buyout on October 5, 1995 which resulted in the
disposal of the Company's cable operations, and the acquisition of the Company's
joint venture partner's interest in King Holding Corp. This financial statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion on this financial statement schedule based on our
audits. In our opinion, based on our audits and the reports of other auditors,
such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

We consent to the use of our report included herein and to the reference to
our firm under the heading "Experts" in the prospectus.

Providence, Rhode Island
April 19, 1996

<PAGE> 1

EXHIBIT 23.3

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE

King Holding Corp.:

We consent to the use in this Registration Statement of The Providence
Journal Company on Form S-1 of our report dated February 10, 1995 relating to
the consolidated financial statements of King Holding Corp. for the two years
ended December 31, 1994, appearing in the Prospectus, which is a part of this
Registration Statement, and to the reference to us under the heading "Experts"
in such Prospectus.

Our audits of the financial statements referred to in our aforementioned
report also included the financial statement schedule of King Holding Corp.,
listed in Item 16. This financial statement schedule is the responsibility of
King Holding Corp.'s management. Our responsibility is to express an opinion
based on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.

/S/ DELOITTE & TOUCHE LLP

Boston, Massachusetts
April 18, 1996

EXHIBIT 99.1

THE PROVIDENCE JOURNAL COMPANY AND SUBSIDIARIES

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVE
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
(IN THOUSANDS)

<CAPTION>
1993 1994 1995
------- ------- -------
<S> <C> <C> <C>
Balances at Beginning of Year................................. $ 1,441 $ 2,134 $ 1,950
Acquisition of King Holding Corp.............................. -- -- 1,200
Additions:
Charged to operations....................................... 1,921 473 2,516
Recoveries.................................................. 363 339 336
Deductions:
Accounts written off........................................ (1,591) (996) (1,674)
------- ------- -------
Balance at End of Year........................................ $ 2,134 $ 1,950 $ 4,328
======= ======= =======
</TABLE>

EXHIBIT 99.2

KING HOLDING CORP. AND SUBSIDIARIES

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994
(IN THOUSANDS)

<CAPTION>
1993 1994
----- ------
<S> <C> <C>
Balances at Beginning of Year............................................ $ 932 $ 715
Additions:
Charged to operations.................................................. 489 676
Recoveries............................................................. 89 46
Deductions:
Accounts written off................................................... (795) (237)
----- ------
Balance at End of Year................................................... $ 715 $1,200
===== ======
</TABLE>