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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A (7)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.
Date of report (Date of earliest event reported) December 28, 1995
Commission File Number 1-16914
THE E.W. SCRIPPS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 51-0304972
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1105 N. Market Street
Wilmington, Delaware 19801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (302) 478-4141
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report.)
<PAGE>
INDEX TO THE E. W. SCRIPPS COMPANY
AMENDMENT TO CURRENT REPORT ON FORM 8-K DATED DECEMBER 28, 1995
This amendment to The E.W. Scripps Company Current Report on Form 8-K
filed on December 29, 1995 provides financial information for Scripps
Cable for the quarterly and year-to-date periods ended September 30,
1996 under Item 7. Financial Statements and Exhibits.
Item No. Page
7 Financial Statements and Exhibits
(A) Index to Financial Statements and Financial
Information F - 1
(B) Index to Pro Forma Financial Information P - 1
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
THE E.W. SCRIPPS COMPANY
Dated : November 1, 1996 By: /s/ D. J. Castellini
D. J. Castellini
Senior Vice President,
Finance & Administration
<PAGE>
SCRIPPS CABLE
Index to Financial Statements and Financial Information
Item No. Page
1. Combined Balance Sheets F-2
2. Combined Statements of Income and Retained Earnings (Deficit) F-4
3. Combined Statements of Cash Flows F-5
4. Notes to Combined Financial Statements F-6
5. Management's Discussion and Analysis of Financial
Condition and Results of Operations of Scripps Cable F-8
<PAGE>
<TABLE>
SCRIPPS CABLE
COMBINED BALANCE SHEETS
<CAPTION>
( in thousands ) As of
September December September
30, 31, 30,
1996 1995 1995
(Unaudited) (Unaudited)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS :
Cash and cash equivalents $ 1,596 $ 3,085 $ 970
Accounts receivable (less allowances - $1,270, $1,288, and $1,355) 11,496 12,107 11,532
Inventories 10,670 12,822 15,314
Deferred income taxes 5,421 5,421 5,421
Miscellaneous 6,954 446 1,855
Total current assets 36,137 33,881 35,092
PROPERTY, PLANT, AND EQUIPMENT :
Land and improvements 3,804 3,691 3,700
Buildings and improvements 9,731 9,529 9,577
Equipment 631,964 587,052 570,544
Total property, plant, and equipment 645,499 600,272 583,821
Less accumulated depreciation 326,801 305,715 295,410
Net property, plant, and equipment 318,698 294,557 288,411
GOODWILL AND OTHER INTANGIBLE ASSETS :
Goodwill 41,201 40,965 40,885
Non-competition agreements 5,495 5,800 5,800
Franchise costs 209,119 158,541 159,273
Customer lists 1,719 1,719 1,719
Other intangible assets 7,071 7,100 7,100
Total goodwill and other intangible assets 264,605 214,125 214,777
Less accumulated amortization 128,141 120,629 119,502
Net goodwill and other intangible assets 136,464 93,496 95,275
OTHER ASSETS 590 639 623
TOTAL $ 491,889 $ 422,573 $ 419,401
See notes to combined financial statements.
</TABLE>
<PAGE>
<TABLE>
SCRIPPS CABLE
COMBINED BALANCE SHEETS
<CAPTION>
( in thousands ) As of
September December September
30, 31, 30,
1996 1995 1995
(Unaudited) (Unaudited)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIENCY)
CURRENT LIABILITIES :
Accounts payable $ 10,179 $ 12,244 $ 13,607
Customer deposits and unearned revenue 2,979 2,475 2,401
Accrued liabilities :
Employee compensation and benefits 1,778 1,174 1,398
Copyright and programming costs 7,783 7,164 7,302
Lawsuits and related settlements 2,157 3,784 6,100
Property taxes 2,720 1,038 3,159
Interest on advances from parent company 1,599 1,599 1,618
Income taxes 514 (22) (187)
Miscellaneous 5,018 5,818 6,088
Total current liabilities 34,727 35,274 41,486
DEFERRED INCOME TAXES 103,576 80,193 79,737
ADVANCES FROM PARENT COMPANY 340,982 312,737 308,877
OTHER LONG-TERM OBLIGATIONS 8,775 9,325 9,490
COMMITMENTS AND CONTINGENCIES (Note 3)
STOCKHOLDER'S EQUITY (DEFICIENCY) :
Capital stock 1,801 1,801 1,801
Additional paid-in capital 35,144 35,144 35,144
Retained earnings (deficit) (33,116) (51,901) (57,134)
Total stockholder's equity (deficiency) 3,829 (14,956) (20,189)
TOTAL $ 491,889 $ 422,573 $ 419,401
See notes to combined financial statements.
</TABLE>
<PAGE>
<TABLE>
SCRIPPS CABLE
COMBINED STATEMENTS OF INCOME AND RETAINED EARNINGS (DEFICIT)
<CAPTION>
( in thousands ) (Unaudited) (Unaudited)
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 77,976 $ 71,110 $ 231,408 $ 207,855
OPERATING EXPENSES :
Employee compensation and benefits 11,246 10,349 33,536 32,359
Programming and copyright costs 20,230 18,394 62,329 54,385
Other operating expenses 13,245 13,888 37,189 36,427
Depreciation and amortization 12,887 13,243 40,810 41,105
Total operating expenses 57,608 55,874 173,864 164,276
OPERATING INCOME 20,368 15,236 57,544 43,579
OTHER CREDITS (CHARGES) :
Interest on advances from parent company (8,666) (8,334) (26,045) (25,571)
Other interest expense (34) (27) (252)
Gain on sale of cable television system 1,502 1,502
Miscellaneous, net (28) (14) (79) 812
Net other credits (charges) (8,694) (6,880) (26,151) (23,509)
INCOME BEFORE INCOME TAXES 11,674 8,356 31,393 20,070
PROVISION FOR INCOME TAXES 4,683 3,360 12,608 7,613
NET INCOME 6,991 4,996 18,785 12,457
RETAINED EARNINGS (DEFICIT) :
Beginning of period (40,107) (62,130) (51,901) (69,591)
End of period $ (33,116) $ (57,134) $ (33,116) $ (57,134)
See notes to combined financial statements.
</TABLE>
<PAGE>
<TABLE>
SCRIPPS CABLE
COMBINED STATEMENTS OF CASH FLOWS
<CAPTION>
( in thousands ) (Unaudited)
Nine months ended
September 30,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 18,785 $ 12,457
Adjustments to reconcile net income
to net cash flows from operating activities:
Depreciation and amortization 40,810 41,105
Gain on sale of cable television system (1,502)
Deferred income taxes (216) (905)
Prepaid franchise fees 1,932
Refundable property taxes 10,400
Changes in certain working capital accounts (4,195) (7,547)
Miscellaneous, net 181 154
Net operating activities 55,365 56,094
Cash Flows From Investing Activities:
Additions to property, plant, and equipment (46,901) (30,119)
Acquisition of cable television systems (62,099) (259)
Miscellaneous, net 927 2,752
Net investing activities (108,073) (27,626)
Cash Flows From Financing Activities:
Increase (decrease) in advances from parent company 53,738 (25,384)
Payments on advances from parent company (1,894) (1,717)
Miscellaneous, net (625) (2,500)
Net financing activities 51,219 (29,601)
Increase (Decrease) in Cash and Cash Equivalents (1,489) (1,133)
Cash and Cash Equivalents:
Beginning of year 3,085 2,103
End of period $ 1,596 $ 970
Supplemental Cash Flow Disclosures:
Interest paid $ 26,072 $ 25,722
Income taxes paid 12,213 9,222
See notes to combined financial statements.
</TABLE>
<PAGE>
NOTES TO COMBINED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The combined financial statements of Scripps Cable include EWS Cable
Company ("EWSCC") - 100 shares of no-par capital stock authorized, 50
shares issued and outstanding; L-R Cable Company ("LRCC") - 100 shares
of no-par capital stock authorized, 50 shares issued and outstanding;
Scripps Howard Cable Company ("SHCC") - 100 shares of no-par capital
stock authorized, 80 shares issued and outstanding; Scripps Howard
Cable Company of Sacramento ("SHCCS") - 2,000 shares of no-par capital
stock authorized, 100 shares issued and outstanding, and cable
television operations owned and operated by Scripps Howard
Broadcasting Company ("SHB").
The historical basis in assets and liabilities of the cable television
systems has been carried over. The historical combined financial
statements do not necessarily reflect the results of operations or
financial position that would have existed if Scripps Cable were an
independent company. Scripps Howard, Inc. ("SHI" a wholly-owned subsidiary
of Scripps) provides certain legal, treasury, accounting, tax, risk management
and other corporate services to Scripps Cable.
On October 28, 1995, Scripps and Comcast Corporation ("Comcast")
reached an agreement pursuant to which Scripps will contribute all
of its non-cable television assets to SHI and Scripps Cable will be
transferred to and held directly by Scripps. Scripps Cable will be
acquired by Comcast through a tax-free merger (the "Merger") of
Scripps into Comcast. The remaining SHI business will continue as
"New Scripps", which will be distributed in a tax-free "spin-off" to
Scripps shareholders (the "Spin-Off") prior to the Merger and
thereafter renamed The E.W. Scripps Company. The Merger and Spin-
off are collectively referred to as the "Transactions."
The closing date of the Transactions is expected to occur prior to the
end of 1996, subject to certain conditions and rights, including
termination and "top-up" rights described fully in the Joint Proxy
Statement - Prospectus included in Comcast's registration statement on
Form S-4 filed with the Securities and Exchange Commission and
declared effective on September 30, 1996. The accompanying financial
statements and the notes thereto have been prepared assuming
consummation of the Transactions.
The financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. The information disclosed in the notes to combined
financial statements for the year ended December 31, 1995 included
in the fifth amendment to The E.W. Scripps Company's Current Report
on Form 8-K dated December 28, 1995 has not changed materially
unless otherwise disclosed herein. Financial information as of
December 31, 1995 included in these financial statements has been
derived from the audited combined financial statements included in
that report. In management's opinion all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of the
interim periods have been made.
Results of operations are not necessarily indicative of the results
that may be expected for future interim periods or for the full
year.
Certain liabilities included in these combined financial statements
(primarily income taxes payable, accruals for lawsuits and related
settlements, and amounts due Scripps) will not be assumed by Comcast.
At September 30, 1996 those liabilities totaled approximately
$351,900,000.
<PAGE>
2. ACQUISITIONS AND DIVESTITURES
Acquisitions
1996 - In 1995 SHB reached an agreement to acquire cable television
systems adjacent to the Knoxville and Chattanooga systems for
$62,500,000 (the "Mid-Tenn Purchase"). The acquisitions were
completed in January 1996.
1995 - SHCC acquired a cable television system.
The following table presents additional information about the
acquisitions:
<TABLE>
<CAPTION>
( in thousands ) Nine months ended
September 30,
1996 1995
<S> <C> <C>
Goodwill and other intangible assets acquired $ 50,606 $ 167
Other assets acquired 11,681 92
Total 62,287 259
Liabilities assumed (188)
Cash paid $ 62,099 $ 259
</TABLE>
The acquisitions have been accounted for as purchases. The acquired
operations have been included in the Combined Statements of Income
from the acquisition date. Pro forma results are not presented
because the combined results of operations would not be significantly
different from the reported amounts.
Divestitures
Scripps Cable sold its cable television system in Barbourville,
Kentucky. The sale resulted in a pre-tax gain of $1,502,000.
3. COMMITMENTS AND CONTINGENCIES
In 1994 Scripps Cable accrued an estimate of the ultimate costs,
including attorneys' fees and settlements, of certain lawsuits
against the Sacramento cable television system related primarily to
employment issues and to the timing and amount of late-payment fees
assessed to subscribers. In the third quarter of 1995 Scripps Cable
accrued an additional $1,400,000 based upon a reassessment of the
probable cost of these and additional employment related lawsuits.
In May 1996 Scripps Cable agreed to settle the late-payment fee
lawsuits. The settlement did not result in an additional charge.
Management believes the possibility of incurring a loss greater than
the amount accrued for the employment issues lawsuits is remote.
Pursuant to the terms of the Merger, New Scripps will indemnify
Comcast against losses related to these lawsuits.
Amounts accrued, less payments for settlements and attorneys fees,
are included in accrued lawsuits and related settlements in the
Combined Balance Sheets.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF SCRIPPS CABLE
Scripps Cable's revenues are primarily earned from subscriber fees for
basic, cable programming and premium television services (including
pay-per-view programming), and the rental of converters and remote
control devices. Historically Scripps Cable's revenue growth has been
primarily achieved through internal subscriber growth, additional
services offered subscribers, acquisitions, and increases in rates for
services provided to cable television subscribers. Regulations
adopted by the Federal Communications Commission ("FCC") pursuant to
the 1992 Cable Act have affected Scripps Cable's ability to increase
rates for certain subscriber services or to restructure its rates for
certain services. The Telecommunications Act of 1996 provides some
significant relief from the burdens of rate regulation by, among other
things, expanding the flexibility of operators to set differing rates
for providing services to multiple dwelling units and by modifying the
threshold for the filing of a complaint that would trigger review of
new non-basic cable programming rates. Most importantly, the new law
sets a maximum threshold of three years for the elimination of all
rate regulation of non-basic cable programming services.
RESULTS OF OPERATIONS
Earnings before interest, income taxes, corporate management fees,
depreciation, and amortization ("EBITDA") is included in the
discussion of results of operations because:
Changes in depreciation and amortization are often unrelated to
current performance. Management believes the year-over-year change in
EBITDA is a more useful measure of year-over-year performance than the
change in operating income because, combined with information on
capital spending plans, it is a more reliable indicator of results
that may be expected in future periods. However, management's belief
that EBITDA is a more useful measure of year-over-year performance is
not shared by the accounting profession.
Financial analysts use EBITDA to value cable television
businesses.
Acquisitions of cable television businesses are based on
multiples of EBITDA.
EBITDA should not, however, be construed as an alternative measure of
the amount of Scripps Cable's income or cash flow from operating
activities as EBITDA excludes significant costs of doing business.
<PAGE>
Combined results of operations are as follows:
<TABLE>
<CAPTION>
( in thousands, except per subscriber information ) Quarterly Period Year-to-Date
1996 Change 1995 1996 Change 1995
<S> <C> <C> <C> <C> <C> <C>
Operating revenues:
Basic and cable programming services $ 52,557 11.5 % $ 47,144 $ 156,048 13.0 % $ 138,139
Premium and pay-per-view services 14,154 5.0 % 13,485 42,438 9.3 % 38,814
Other monthly services 4,260 11.5 % 3,821 12,515 3.1 % 12,141
Advertising 3,539 3.9 % 3,405 10,218 8.4 % 9,428
Installation and miscellaneous 3,466 6.5 % 3,255 10,189 9.2 % 9,333
Total operating revenues 77,976 9.7 % 71,110 231,408 11.3 % 207,855
Operating expenses:
Employee compensation and benefits 11,246 8.7 % 10,349 33,536 3.6 % 32,359
Programming and copyright costs 20,230 10.0 % 18,394 62,329 14.6 % 54,385
Other 13,245 6.1 % 12,486 37,189 6.2 % 35,025
Depreciation and amortization 12,887 (2.7)% 13,243 40,810 (0.7)% 41,105
Total operating expenses 57,608 5.8 % 54,472 173,864 6.7 % 162,874
Operating income excluding unusual items 20,368 22.4 % 16,638 57,544 27.9 % 44,981
Unusual items (1,402) (1,402)
Operating income 20,368 15,236 57,544 43,579
Interest expense (8,666) (8,368) (26,072) (25,823)
Gain on sale of cable television system 1,502 1,502
Miscellaneous, net (28) (14) (79) 812
Income taxes (4,683) (3,360) (12,608) (7,613)
Net income $ 6,991 $ 4,996 $ 18,785 $ 12,457
Other Financial and Statistical Data
EBITDA (excluding unusual items) $ 33,255 11.3 % $ 29,881 $ 98,354 14.3 % $ 86,086
Percent of operating revenues:
Operating income 26.1 % 23.4 % 24.9 % 21.6 %
EBITDA 42.6 % 42.0 % 42.5 % 41.4 %
Capital expenditures $ 15,523 37.2 % $ 11,311 $ 46,901 55.7 % $ 30,119
Average number of basic subscribers 796.8 5.8 % 753.0 801.7 6.9 % 750.0
Average monthly revenue per
monthly subscriber $32.62 3.6 % $31.48 $32.07 4.2 % $30.79
Program costs as a percent of
basic and premium revenue 31.40% 30.73%
Homes passed at end of period 1,261.1 6.5 % 1,184.4
Basic subscribers at end of period 809.1 6.7 % 758.5
Penetration at end of period 64.16% 64.04%
</TABLE>
<PAGE>
In January Scripps Cable acquired cable television systems adjacent to
the Knoxville and Chattanooga systems for $62,500,000 (the "Mid-Tenn
Purchase"). The acquired cable systems increased quarterly and year-
to-date operating revenues approximately 4%. The remaining increase
in operating revenues is due to subscriber growth and higher average
monthly revenue per subscriber.
Program costs have increased due to the growth in the number of
subscribers, additional programming offered subscribers, and increased
costs to produce or purchase programming. Other operating expenses
and depreciation and amortization increased primarily due to the Mid-
Tenn Purchase. The acquired cable systems increased EBITDA
approximately 5%.
In 1994 Scripps Cable accrued an estimate of the ultimate costs,
including attorneys' fees and settlements, of certain lawsuits against
the Sacramento cable television system related primarily to employment
issues and to the timing and amount of late-payment fees assessed to
subscribers. In the third quarter of 1995 Scripps Cable accrued an
additional $1,400,000 based upon a reassessment of the probable cost
of these and additional employment related lawsuits. The additional
accrual reduced 1995 third quarter and year-to-date net income
$900,000.
Scripps Cable sold its cable television system in Barbourville,
Kentucky in the third quarter of 1995. The sale resulted in a pre-tax
gain of $1,502,000.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from operating activities was $55.4 million in 1996 and
$56.1 million in 1995. Cash flow from operating activities in 1995
included an $11.3 million refund of disputed Sacramento property
taxes, including interest.
Scripps Cable invests heavily in its cable plant, continually
replacing and modernizing its technology by rebuilding and upgrading
its systems with fiber optic cable. Capital expenditures in 1996
increased primarily due to the rebuild of the Sacramento system.
Acquisitions of cable television systems and capital expenditures are
financed through cash flow from operating activities and, if
necessary, additional advances from Scripps. Advances from Scripps
increased in 1996 due to the Mid-Tenn Purchase.
<PAGE>
THE E.W. SCRIPPS COMPANY
Index to Pro Forma Financial Information
Item No. Page
1. Pro Forma Balance Sheet as of September 30, 1996. P - 2
2. Pro Forma Statements of Income for the Nine Months Ended
September 30, 1996. P - 3
3. Notes to Pro Forma Financial Information. P - 4
<PAGE>
<TABLE>
THE E.W. SCRIPPS COMPANY
PRO FORMA BALANCE SHEET
AS OF SEPTEMBER 30, 1996
<CAPTION>
( in thousands )
REPORTED SCRIPPS PRO FORMA PRO FORMA
AMOUNTS CABLE ADJUSTMENTS AMOUNTS
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 16,334 $ (8,000) (A) $ 8,334
Accounts and notes receivable 150,578 150,578
Program rights and production costs 70,805 70,805
Refundable income taxes 17,019 17,019
Inventories 9,932 9,932
Deferred income taxes 21,545 21,545
Miscellaneous 20,856 20,856
Total current assets 307,069 (8,000) 299,069
NET ASSETS OF DISCONTINUED CABLE OPERATIONS 354,951 $ 354,951
INVESTMENTS 54,494 54,494
PROPERTY, PLANT, AND EQUIPMENT 433,076 433,076
GOODWILL AND OTHER INTANGIBLE ASSETS 591,746 591,746
OTHER ASSETS:
Program rights and production costs (less current portion) 27,622 27,622
Miscellaneous 21,386 21,386
Total other assets 49,008 49,008
TOTAL ASSETS $ 1,790,344 $ 354,951 $ (8,000) $ 1,427,393
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 112,540 $ 112,540
Accounts payable 76,132 76,132
Customer deposits and unearned revenue 33,298 33,298
Accrued liabilities:
Employee compensation and benefits 32,855 32,855
Artist and author royalties 10,209 10,209
Interest 3,510 3,510
Income taxes 1,220 1,220
Lawsuits and related settlements 4,387 4,387
Miscellaneous 24,748 24,748
Total current liabilities 298,899 298,899
DEFERRED INCOME TAXES 71,868 71,868
LONG-TERM DEBT (LESS CURRENT PORTION) 31,804 31,804
OTHER LONG-TERM OBLIGATIONS AND MINORITY INTERESTS 106,153 106,153
STOCKHOLDERS' EQUITY 1,281,620 $ 354,951 $ (8,000) (A) 918,669
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,790,344 $ 354,951 $ (8,000) $ 1,427,393
</TABLE>
<PAGE>
<TABLE>
THE E.W. SCRIPPS COMPANY
PRO FORMA STATEMENT OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
<CAPTION>
( in thousands, except per share data )
REPORTED SCRIPPS PRO FORMA PRO FORMA
AMOUNTS CABLE ADJUSTMENTS AMOUNTS
<S> <C> <C> <C>
OPERATING REVENUES:
Advertising $ 353,865 $ 353,865
Circulation 97,459 97,459
Other newspaper revenue 38,204 38,204
Total newspapers 489,528 489,528
Broadcast television 230,250 230,250
Entertainment 77,274 77,274
Total operating revenues 797,052 797,052
OPERATING EXPENSES:
Employee compensation and benefits 266,294 266,294
Newsprint and ink 96,732 96,732
Program, production and copyright costs 50,824 50,824
Other operating expenses 194,332 194,332
Depreciation 36,697 36,697
Amortization of intangible assets 15,029 15,029
Total operating expenses 659,908 659,908
OPERATING INCOME 137,144 137,144
OTHER CREDITS (CHARGES):
Interest expense (6,350) (6,350)
Miscellaneous, net 614 614
Net other credits (charges) (5,736) (5,736)
INCOME BEFORE TAXES AND MINORITY INTERESTS 131,408 131,408
PROVISION FOR INCOME TAXES 56,603 56,603
INCOME BEFORE MINORITY INTERESTS 74,805 74,805
MINORITY INTERESTS 2,326 2,326
INCOME FROM CONTINUING OPERATIONS 72,479 72,479
INCOME FROM DISCONTINUED OPERATIONS 34,645 $ 34,645
NET INCOME $ 107,124 $ 34,645 $ 72,479
AVERAGE WEIGHTED SHARES 80,328 80,328 80,328
PER SHARE OF COMMON STOCK:
Income from continuing operations $.90 $.90
Income from discontinued operations .43 $.43
Net income $1.33 $.43 $.90
</TABLE>
<PAGE>
THE E.W. SCRIPPS COMPANY
NOTES TO PRO FORMA FINANCIAL INFORMATION
On October 28, 1995, The E.W. Scripps Company ("Scripps") and
Comcast Corporation ("Comcast") reached an agreement pursuant to
which Scripps will contribute all of its non-cable television assets
to Scripps Howard, Inc. ("SHI" - a wholly-owned subsidiary of
Scripps and the direct or indirect parent of all of Scripps'
operations) and SHI's cable television subsidiaries ("Scripps Cable")
will be transferred to and held directly by Scripps. Scripps Cable
will be acquired by Comcast through a tax-free merger (the "Merger")
of Scripps into Comcast. The remaining SHI business will continue
as "New Scripps", which will be distributed in a tax-free "spin-off"
to Scripps shareholders (the "Spin-Off") prior to the Merger and
thereafter renamed The E.W. Scripps Company. The Merger and Spin-
off are collectively referred to as the "Transactions."
The closing date of the Transactions is expected to occur prior to the
end of 1996, subject to certain conditions and rights, including
termination and "top-up" rights described fully in the Joint Proxy
Statement - Prospectus included in Comcast's registration statement on
Form S-4 filed with the Securities and Exchange Commission and
declared effective on September 30, 1996. The accompanying financial
statements and the notes thereto have been prepared assuming
consummation of the Transactions.
The pro forma balance sheet as of September 30, 1996 assumes the
Transactions occurred as of that date. The pro forma statement of
income assumes the Transactions were completed at the beginning of
the period. Pro forma adjustments represent fees on the
Transactions. Earnings per share is based on the weighted average
shares outstanding for the period.
The pro forma financial information is not necessarily indicative of
the results which actually would have occurred had the Transactions
been completed as of the dates indicated or which may occur in the
future.
Explanation of specific pro forma adjustments are as follows:
(A) Effect of estimated expenses of $8.0 million on Stockholders' Equity.
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