SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended Commission file number:
December 31, 1996 333-02302
ALLBRITTON COMMUNICATIONS COMPANY
[Exact name of registrant as specified in its charter]
Delaware 78-180-3105
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
808 Seventeenth Street, N.W.
Suite 300
Washington, DC 20006-3903
(Address of principal executive offices)
Registrant's telephone number, including area code: 202-789-2130
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [ X ] No [ ]
Number of shares of Common Stock outstanding as of February 14, 1997:
20,000 shares.<PAGE>
ALLBRITTON COMMUNICATIONS COMPANY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements: PAGE
Consolidated Statements of Operations and Retained
Earnings for the Three Months Ended December 31, 1995
and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consolidated Balance Sheets as of September 30, 1996 and
December 31, 1996. . . . . . . . . . . . . . . . . . . . . 2
Consolidated Statements of Cash Flows for the Three
Months Ended December 31, 1995 and 1996 . . . . . . . . . 3
Notes to Interim Consolidated Financial Statements . . . . 4
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition . . . . . . . . . . . . 6
PART II OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 11
Item 4. Submission of Matters to a Vote of Security Holders . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
ALLBRITTON COMMUNICATIONS COMPANY
(an indirectly wholly-owned subsidiary of Perpetual Corporation)
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Dollars in thousands)
(unaudited)
Three Months Ended
December 31,
------------------
1995 1996
Operating revenues, net $38,382 $47,792
------- -------
Television operating expenses, excluding
depreciation and amortization 21,193 26,404
Depreciation and amortization 1,274 4,294
Corporate expenses 829 974
------- -------
23,296 31,672
------- -------
Operating income 15,086 16,120
Nonoperating income (expense)
Interest income
Related party 553 553
Other 32 58
Interest expense (5,667) (10,659)
Other, net (90) (391)
------- -------
Income before income taxes 9,914 5,681
Provision for income taxes 3,814 2,487
------- -------
Net income 6,100 3,194
Retained earnings, beginning of period 62,940 45,102
------- -------
Retained earnings, end of period $69,040 $48,296
======= =======
See accompanying notes to interim consolidated financial statements.
<PAGE> 1<PAGE>
<TABLE>
<CAPTION>
ALLBRITTON COMMUNICATIONS COMPANY
(an indirectly wholly-owned subsidiary of Perpetual Corporation)
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
1995 1996
(unaudited)
------------- -------------
</CAPTION>
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 12,108 $ 5,335
Accounts receivable, net 29,219 38,038
Program rights 16,298 12,089
Deferred income taxes 1,473 1,675
Receivable from related party 1,578 -
Interest receivable from related party 492 1,045
Other 1,795 2,618
---------- ----------
Total current assets 62,963 60,800
Property, plant and equipment, net 52,333 51,751
Intangible assets, net 150,187 154,159
Deferred financing costs and other 11,856 11,564
Cash surrender value of life insurance 3,787 3,936
Program rights 652 533
---------- ---------
$ 281,778 $ 282,743
========== ==========
Liabilities and Stockholder's Investment
Current liabilities
Current portion of long-term debt $ 806 $ 1,204
Accounts payable 6,091 10,176
Accrued interest payable 10,724 7,854
Program rights payable 20,199 16,586
Accrued employee benefit expenses 3,043 2,300
Other accrued expenses 4,822 5,778
--------- --------
Total current liabilities 45,685 43,898
Long-term debt 402,187 407,855
Program rights payable 1,391 1,849
Deferred rent and other 3,201 2,654
Accrued employee benefit expenses 1,706 1,736
Deferred income taxes - 749
-------- -------
454,170 458,741
-------- -------
Commitments and contingent liabilities
Stockholder's investment
Preferred stock, $1 par value, 800 shares authorized,
none issued - -
Common stock, $.05 par value, 20,000 shares authorized
issued and outstanding 1 1
Capital in excess of par value 6,955 6,955
Retained earnings 45,102 48,296
Distributions to owners, net (224,450) (231,250)
--------- ---------
Total stockholder's investment (172,392) (175,998)
--------- ---------
$ 281,778 $ 282,743
========= =========
See accompanying notes to interim consolidated financial statements
</TABLE>
<PAGE> 2<PAGE>
<TABLE>
<CAPTION>
ALLBRITTON COMMUNICATIONS COMPANY
(an indirectly wholly-owned subsidiary of Perpetual Corporation)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
Three Months Ended
December 31,
------------------
1995 1996
----------------------
</CAPTION>
<S> <C> <C>
Cash flows from operating activities:
Net income $6,100 $3,194
------ ------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,274 4,294
Other noncash charges 104 297
Provision for doubtful accounts 111 121
Loss on disposal of assets 1 58
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (7,040) (8,940)
Program rights 3,636 4,327
Interest receivable from related party (553) 553
Other current assets 495 ( 553)
Other noncurrent assets (1,966) ( 131)
Increase (decrease) in liabilities:
Accounts payable 1,381 (1,263)
Accrued interest payable 1,781 (2,870)
Program rights payable (2,805) (3,155)
Accrued employee benefit expenses 68 ( 713)
Other accrued expenses 429 954
Deferred rent and other liabilities 166 278
------- ------
Total adjustments (2,918) (6,743)
------- ------
Net cash provided by (used in) operating activities 3,182 (3,549)
------- -----
Cash flows from investing activities:
Capital expenditures (875) (1,874)
Purchase of option (10,000) -
Proceeds from disposal of assets 24 12
------ -----
Net cash used in investing activities (10,851) (1,862)
------ -----
Cash flows from financing activities:
Draws under lines of credit, net 13,000 5,500
Principal payments on long-term debt and capital lease
obligations (1,463) ( 62)
Distributions to owners, net of certain charges (7,366) (17,420)
Repayments of distributions to owners 2,300 10,620
----- ------
Net cash provided by (used in) financing activities 6,471 (1,362)
----- -----
Net decrease in cash and cash equivalents (1,198) (6,773)
Cash and cash equivalents, beginning of period 3,816 12,108
----- ------
Cash and cash equivalents, end of period $2,618 $5,335
====== ======
See accompanying notes to interim consolidated financial statements
</TABLE>
<PAGE> 3<PAGE>
ALLBRITTON COMMUNICATIONS COMPANY
(an indirectly wholly-owned subsidiary of Perpetual Corporation)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
(unaudited)
NOTE 1 - The accompanying unaudited interim consolidated financial
statements of Allbritton Communications Company (an indirectly wholly-owned
subsidiary of Perpetual Corporation) and its subsidiaries (collectively, the
"Company"), included herein have been prepared pursuant to instructions for
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information
and footnote disclosures normally included in financial statements prepared
in conformity with generally accepted accounting principles have been omitted
or condensed where permitted by regulation. In management's opinion, the
accompanying financial statements reflect all adjustments, which were of a
normal recurring nature, and disclosures necessary for a fair statement of
the consolidated financial statements for the interim periods presented. The
results of operations for the three months ended December 31, 1996 are not
necessarily indicative of the results that can be expected for the entire
fiscal year ending September 30, 1997. The interim consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended September 30, 1996
which are contained in the Company's Form 10-K.
NOTE 2 - On December 29, 1995, the Company, through an 80% owned subsidiary,
entered into a ten-year local marketing agreement ("LMA") with RKZ, Inc.,
which owns WJSU, an ABC affiliated television station serving Anniston,
Alabama. In connection with the LMA, the Company also entered into an option
("Option") to acquire WJSU. The cost of the Option totalled $15,348 of
which $10,000 was paid in December 1995 and $5,348 became payable within 40 days
of December 16, 1996 and was paid in January 1997. The Option is
exercisable over a ten-year period for additional consideration of $3,337. The
results of operations of WJSU are included in the consolidated financial
statements since December 29, 1995.
In March of 1996, the Company acquired an 80% interest in the assets and certain
liabilities of WHTM, an ABC affiliated television station serving
Harrisburg-York-Lancaster-Lebanon, Pennsylvania, and WCFT, an ABC
affiliated television station serving Tuscaloosa, Alabama, for approximately
$135,657 (collectively, the "Acquisitions"). The Acquisitions were
accounted for as purchases and accordingly, the cost of the entities was
assigned to the identifiable tangible and intangible assets and liabilities
assumed based on their fair values at the respective dates of the purchases.
The results of operations of WHTM and WCFT are included for the period
subsequent to the acquisitions.
<PAGE> 4
<PAGE>
The acquisitions of WHTM and WCFT and the purchase of the Option were
financed using a portion of the proceeds of an offering of $275,000 9.75%
Senior Subordinated Debentures due 2007 (the "Debentures") which were issued
in February 1996 at a discount of $1,375. The Company also used a
portion of the proceeds of the offering to repay approximately $74,704 of
debt, and pay a related prepayment penalty of $12,934, which resulted in
an extraordinary loss, net of income tax benefit, of $7,750 on the early
repayment of debt.
The following pro forma summary presents the unaudited consolidated results of
operations of the Company for the three months ended December 31, 1995 as if
the offering of the Debentures and the application of the net proceeds thereof,
(including the Acquisitions and LMA and excluding the prepayment penalty), had
occurred at the beginning of the three month period. The results presented in
the pro forma summary do not necessarily reflect the results that would have
been obtained if the offering, Acquisitions and LMA had occurred at the
beginning of the three month period.
Three Months Ended
December 31, 1995
------------------
Operating revenues, net $44,851
Net income 3,434
NOTE 3 - For the three months ended December 31, 1995 and 1996,
distributions to owners were as follows:
Three Months Ended December 31,
-------------------------------
1995 1996
---- ----
Distributions to owners, beginning of period $203,775 $224,450
Cash advances 10,618 18,969
Repayment of cash advances (2,300) (10,620)
Charge for income taxes (3,252) (1,549)
-------- --------
Distributions to owners, end of period $208,841 $231,250
======== ========
Weighted average amount of non-interest bearing
advances outstanding during the period $187,563 $211,465
======== ========
Included in distributions to owners is the principal amount of a $20,000 loan
made by the Company in 1991 to ALLNEWSCO, Inc. (Allnewsco), an affiliate of the
Company which is owned by Mr. Joe L. Allbritton. This amount has been included
in the consolidated financial statements on a consistent basis with other cash
advances to related parties. The $20,000 note receivable from Allnewsco is
payable in annual principal installments of $2,225 commencing January 11, 1997
through January 11, 2004 with a final payment of $2,200 on January 11, 2005.
The note has a stated interest rate of 11.06% and interest is payable
semi-annually. Allnewsco is current on its interest payments. During the
second quarter of fiscal 1997, the Company deferred the January 11, 1997 payment
and anticipates that it will amend the note to defer all principal payments to
January 11, 2005.
<PAGE> 5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
OVERVIEW
Allbritton Communications Company and its subsidiaries (on a consolidated basis,
the "Company") own and operate seven network-affiliated television stations:
WJLA in Washington, D.C.; WHTM in Harrisburg, Pennsylvania; KATV in Little Rock,
Arkansas; KTUL in Tulsa, Oklahoma; WSET in Lynchburg, Virginia; WCIV in
Charleston, South Carolina; and WCFT in Tuscaloosa, Alabama. The
consolidated financial information included herein includes the amounts for
the television stations listed above, with the amounts for WHTM and WCFT
included only since March 1, 1996 and March 15, 1996, respectively, the dates
on which the acquisitions of those entities were completed. The consolidated
financial information also includes operating revenues and certain operating
expenses of WJSU since December 29, 1995, pursuant to the terms of the local
marketing agreement ("LMA"). WHTM, WCFT and WJSU, collectively, are referred
to throughout as the "New Stations."
RESULTS OF OPERATIONS
Set forth below are selected consolidated financial data for the three months
ended December 31, 1995 and 1996 in actual dollars and the percentage change
between the periods:
Three Months Ended December 31,
--------------------------------
1995 1996 % Change
---- ---- --------
(Dollars in thousands)
Operating revenues, net $38,382 $47,792 24.5
Total operating expenses 23,296 31,672 86.0
Operating income 15,086 16,120 6.9
Nonoperating expenses, net 5,172 10,439 101.8
Income taxes 3,814 2,487 (34.8)
Net income 6,100 3,194 (47.6)
NET OPERATING REVENUES
The following table depicts the principal types of operating revenues, net of
agency commissions, earned by the Company for each of the three months ended
December 31, 1995 and 1996, and the percentage contribution of each to the
total broadcast revenues earned by the Company, before fees:
Three Months Ended December 31,
1995 % 1996 %
----------------- ---------------
(Dollars in thousands)
Local/regional (1) $19,044 48.1 $22,525 45.7
National (2) 16,403 41.5 18,639 37.8
Network compensation (3) 593 1.5 1,420 2.9
Political (4) 404 1.0 3,376 6.9
Trade & barter (5) 1,619 4.1 1.915 3.9
Other revenue (6) 1,502 3.8 1,376 2.8
------ ----- ------ -----
Broadcast revenues 39,565 100.0 49,251 100.0
===== =====
Fees (7) (1,317) (1,580)
------- -------
Broadcast revenue,
net of fees 38,248 47,671
Non-Broadcast revenue (8) 134 121
------ ------
Total net operating revenue $38,382 $47,792
======= =======
<PAGE> 6
<PAGE>
(1) Represents sale of advertising time to local and regional advertisers or
agencies representing such advertisers.
(2) Represents sale of advertising time to agencies representing national
advertisers.
(3) Represents payment by networks for broadcasting or promoting network
programming.
(4) Represents sale of advertising time to political advertisers.
(5) Represents value of commercial time exchanged for goods and services
(trade) or syndicated programs (barter).
(6) Represents miscellaneous revenue, principally receipts from tower
rental, production of commercials and revenue from the sales of
University of Arkansas sports programming to advertisers and radio
stations.
(7) Represents fees paid to national sales representatives and fees paid for
music licenses.
(8) Represents revenues from program syndication sales and other
miscellaneous non-broadcast revenues.
Net operating revenues for the three months ended December 31, 1996 totaled
$47,792,000, an increase of $9,410,000, or 24.5% when compared to net
operating revenues of $38,382,000 for the three months ended December 31,
1995. This includes a $3,481,000 increase in local/regional advertising, a
$2,236,000 increase in national advertising, a $827,000 increase in network
compensation, and a $2,972,000 increase in political advertising. Of the
$9,410,000 increase, approximately $7,309,000 is attributable to the New
Stations.
Local/regional and national advertising constitute the Company's largest
categories of operating revenues, collectively representing over 80% of the
Company's total broadcast revenues in the periods presented. Although the
total percentage contribution of local/regional and national advertising has
been relatively constant, the growth rate of local/regional and national
advertising revenues varies based upon the demand and rates for
local/regional advertising time versus national advertising time in each of
the Company's markets.
The increase in local/regional advertising revenues for the three months
ended December 31, 1996 of $3,481,000, or 18.3%, over the three months
ended December 31, 1995 is largely attributable to $3,708,000 of
local/regional advertising revenue generated by the New Stations.
Local/regional advertising revenue in the Company's remaining markets
decreased 1.2% from the amounts in the same period of the prior year
principally due to a shift in advertising to political advertisers.
National advertising revenue increased $2,236,000, or 13.6%, for the three
months ended December 31, 1996 over the comparable period in the prior year.
The increase for the three months ended December 31, 1996 is a result of
$2,465,000 in national advertising revenues generated by the New Stations,
offset by a shift in advertising to political advertisers and by a decrease
in the Washington, D.C. and Little Rock, Arkansas markets for national
advertisers.
Political revenue, which comprised 1.0% of the Company's total operating
revenues during the three months ended December 31, 1995, increased by
$2,972,000 during the three months ended December 31, 1996 due primarily to
the national presidential election and various high-profile political races
in the Washington, DC metropolitan area as well as in Little Rock and Tulsa
in November 1996 with no comparable political elections occurring in November
1995.
<PAGE> 7
<PAGE>
The increase in network compensation for the three months ended December 31,
1996 is primarily attributable to network compensation contributed by the New
Stations and new ABC affiliation agreements at higher compensation levels for
certain of the remaining stations which were completed subsequent to December
31, 1995.
No individual advertiser accounted for more than 5% of the Company's
broadcast revenues during the three months ended December 31, 1996 or 1995.
TOTAL OPERATING EXPENSES
Total operating expenses for the three months ended December 31, 1996 totaled
$31,672,000 an increase of $9,376,000, or 42.1%, compared to total operating
expenses of $23,296,000 for the three month period ended December 31, 1995.
Television operating expenses (before depreciation, amortization, and corporate
expenses) totaled $26,404,000 for the three months ended December 31, 1996, an
increase of $5,211,000, or 24.6 %, compared to $21,193,000 for the three months
ended December 31, 1995. The increase in television operating expenses is
directly attributable to the New Stations. Television operating expenses at the
remaining stations were flat compared to the same period in the prior year.
Depreciation and amortization expense of $4,294,000 for the three months
ended December 31, 1996 increased $3,020,000, or 237.1%, due principally to
the increased amount of depreciable assets and intangible assets arising from
the acquisitions of WHTM and WCFT as well as from the option to acquire the
assets of WJSU.
Corporate expenses of $974,000 for the three months ended December 31, 1996
increased $145,000 or 17.4%, compared to $829,000 for the three months ended
December 31, 1995. The increase was primarily due to an increase in
compensation expense.
OPERATING INCOME
For the three months ended December 31, 1996, operating income of $16,120,000
increased $1,034,000 or 6.9%, when compared to operating income of
$15,086,000 for the three months ended December 31, 1995. The increase was
due primarily to increased revenue offset by increased operating,
depreciation and amortization expense, and corporate expenses as discussed
above. For the three months ended December 31, 1996, the operating margin
decreased to 33% from 39% for the comparable period in 1995. The decrease
in the operating margin is principally attributable to increased depreciation
and amortization arising from the acquisition of the New Stations.
NONOPERATING EXPENSES, NET
Interest expense of $10,659,000 for three months ended December 31, 1996
increased $4,992,000, or 88.1%, as compared to $5,667,000 for the three month
period ended December 31, 1995. This increase is primarily due to the
incremental interest expense associated with the issuance of the Company's
$275,000,000 9.75% Senior Subordinated Debentures due 2007 (the "9.75%
Debentures") on February 6, 1996.
<PAGE> 8
<PAGE>
The weighted average balances of debt were $202,325,000 and $408,001,000 for
the three months ended December 31, 1995 and 1996, respectively, and the
weighted average interest rate on debt was 11.1% and 10.4% for the three
months ended December 31, 1995 and 1996, respectively.
INCOME TAXES
The provision for income taxes for the three months ended December 31, 1996
totaled $2,487,000, a decrease of $ 1,327,000, or 34.8%, when compared to the
provision for income taxes of $3,814,000 for the three months ended December 31,
1995. The decrease is directly attributable to the $4,323,000, or 42.7%,
decrease in income before income taxes which declined for reasons previously
discussed. The Company's effective tax rate was 38.5% and 43.8% for the three
months ended December 31, 1995 and 1996, respectively. The increase in the
effective rate is principally due to certain state tax net operating loss
carryforwards generated in the current period for which no tax benefit has been
recognized due to the uncertainty surrounding their realizability.
NET INCOME
Net income for the three months ended December 31, 1996 was
$3,194,000, compared to net income of $6,100,000 for the three months ended
December 31, 1995, a decrease of $2,906,000, or 47.6%. The decrease results
primarily from an increase in interest expense of $4,992,000, offset by
increases in income from operations of $1,034,000 and a decrease in income
taxes of $1,327,000.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1996, the Company's cash and cash equivalents aggregated
$5,335,000, and the Company had an excess of current assets over current
liabilities of $16,902,000.
Cash Provided by Operations. The Company's principal sources of working
capital are internally generated cash flow from operations and borrowings under
its revolving credit facility. As reported in the consolidated statements of
cash flows, the Company used 3,549,000 of net cash in operating activities
during the three months ended December 31, 1996 and generated $3,182,000 of net
cash in operating activities during the three months ended December 31,1995.
The decrease is attributable primarily to the timing of interest and other
payments.
Transactions with Owners. For the three months ended December 31, 1996 and
1995, the Company made cash advances to owners net of repayments and certain
charges totaling $6,800,000 and $5,066,000, respectively. The Company
periodically makes advances in the form of distributions to its parent. At
present, the primary source of repayment of the net advances is through the
ability of the Company to pay dividends or make other distributions to
its parent, and there is no immediate intent for the amounts to be repaid.
Accordingly, these advances have been treated as a reduction of Stockholder's
investment and described as "distributions" in the Company's consolidated
financial statements.
<PAGE> 9
<PAGE>
Stockholder's deficit amounted to $175,998,000 at December 31, 1996, an
increase of $3,606,000, or 2.1%, from the September 30, 1996 deficit of
$172,392,000. The increase is primarily due to a net increase in
distributions to owners of $6,800,000 offset by net income for the period of
$3,194,000.
Indebtedness. The Company's total debt, including the current portion of
long-term debt, increased from $402,993,000 at September 30, 1996 to
$409,059,000 at December 31, 1996. This debt, net of applicable discounts,
consists of $273,731,000 of 9.75% Debentures, $122,734,000 of 11.50%
debentures, $4,994,000 of capital lease obligations and $7,600,000 under a
revolving credit agreement. The increase of $6,066,000 in total debt from
September 30 to December 31, 1996 is primarily due to a $530,000 net increase
in capital lease obligations to fund capital expenditures for WCFT/WJSU
and a $5,500,000 increase in the revolving credit facility to fund working
capital. ACC's $40,000,000 revolving credit facility is secured by the
pledge of stock of ACC and its subsidiaries and matures April 16, 2001.
Under the existing borrowing agreements, the Company agrees to abide by
restrictive covenants that place limitations upon payments of cash dividends,
issuance of capital stock, investment transactions, incurrence of additional
obligations and transactions with affiliates. In addition, the Company must
maintain specified levels of operating cash flow and/or working capital and
comply with other financial covenants.
Other Uses of Cash. Management estimates that capital expenditures for
fiscal year 1997 will approximate $9,500,000 of which approximately 60% will
be funded by cash generated from operations and the remaining amount financed
under existing credit facilities. Capital expenditures during the three
months ended December 31, 1996, totaled $2,465,000, which included cash
expenditures of $1,874,000. Fiscal year 1997 planned capital expenditures
include facility construction and equipment additions to complete the
consolidation of the operations of WCFT and WJSU and technical equipment
improvements and capital additions at the other stations.
The Company anticipates that its existing cash position, together with cash
flows generated by operating activities and amounts available under its
revolving credit facility will be sufficient to finance the operating cash flow
requirements of its stations, debt service requirements and anticipated
capital expenditures.
<PAGE> 10
<PAGE>
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company currently and from time to time is involved in
litigation incidental to the conduct of its business, including
suits based on defamation. The Company is not currently a party to
any lawsuit or proceeding which, in the opinion of management, if
decided adverse to the Company, would be likely to have a material
adverse effect on the Company's consolidated financial condition,
results of operations or cash flows.
In October 1995, a former employee of WJLA filed a lawsuit against
WJLA in The Superior Court for the District of Columbia alleging
discrimination under the District of Columbia Human Rights Statute
and breach of the implied covenant of good faith and fair dealing
under District of Columbia law. The lawsuit sought $10,000,000 in
actual damages and $2,000,000 in punitive damages from WJLA.
Summary judgment was rendered in favor of WJLA on December 11,
1996. The decision has been appealed.
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of stockholders of the Company held on
December 9, 1996, each of the directors of the Company was re-
elected to serve until the next annual meeting and until his or her
successor is elected and qualified.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
27. Financial Data Schedule (Electronic Filing Only)
b. Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
<PAGE> 11<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALLBRITTON COMMUNICATIONS COMPANY
(Registrant)
February 14, 1997 /s/ Lawrence I. Hebert
Date Name: Lawrence I. Hebert
Title: President
/s/ James R. Vergin
February 14, 1997 Name: James R. Vergin
Date Title: Chief Accounting Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page No.
3.1 Certificate of Incorporation of ACC. *
(Incorporated by reference to Exhibit 3.1 of
Company's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.)
3.2 Bylaws of ACC. (Incorporated by reference to *
Exhibit 3.2 of Registrant's Registration
Statement on Form S-4, No. 333-02302, dated
March 12, 1996.)
4.1 Indenture dated as of February 6, 1996 between *
ACC and State Street Bank and Trust Company,
as Trustee, relating to the Debentures.
(Incorporated by reference to Exhibit 4.1 of
Company's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.)
4.2 Indenture dated as of August 26, 1992 between *
ACC and the First National Bank of Boston, as
Trustee, relating to 11.5% Senior Subordinated
Debentures due 2004. (Incorporated by
reference to Exhibit 4.2 of Company's
Registration Statement on Form S-4, No.
333-02302, dated March 12, 1996.)
4.3 Form of 9.75% Series B Senior Subordinated *
Debentures due 2007. (Incorporated by
reference to Exhibit 4.3 of Company's
Registration Statement on Form S-4, No.
333-02302, dated March 12, 1996.)
4.4 Revolving Credit Agreement dated as of April *
16, 1996 by and among Allbritton
Communications Company certain Banks, and The
First National Bank of Boston, as agent.
(Incorporated by reference to Exhibit 4.4 of
Company's Quarterly Report on Form 10-Q, No.
333- 02302, dated August 14, 1996.)
10.1 Registration Rights Agreement by and among *
ACC, Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated and
Salomon Brothers, Inc., dated February 6,
1996. (Incorporated by reference to Exhibit
10.1 of Company's Registration Statement on
Form S-4, No. 333-02302, dated March 12,
1996.)
10.2 Network Affiliation Agreement (Harrisburg *
Television, Inc.). (Incorporated by reference
to Exhibit 10.3 of Company's Pre-effective
Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996.)
10.3 Network Affiliation Agreement (First *
Charleston, Corp.). (Incorporated by reference
to Exhibit 10.4 of Company's Pre-effective
Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996.)
10.4 Network Affiliation Agreement (WSET, *
Incorporated). (Incorporated by reference to
Exhibit 10.5 of Company's Pre-effective
Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996.)
10.5 Network Affiliation Agreement (WJLA-TV). *
(Incorporated by reference to Exhibit 10.6 of
Company's Pre-effective Amendment No. 1 to
Registration Statement on Form S-4, dated
April 22, 1996.)
10.6 Network Affiliation Agreement (KATV *
Television, Inc.). (Incorporated by reference
to Exhibit 10.7 of Company's Pre-effective
Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996.)
10.7 Network Affiliation Agreement (KTUL *
Television, Inc.). (Incorporated by reference
to Exhibit 10.8 of Company's Pre-effective
Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996.)
10.8 Network Affiliation Agreement (TV Alabama, *
Inc.). (Incorporated by reference to Exhibit
10.9 of Company's Pre-effective Amendment No.
1 to Registration Statement on Form S-4, dated
April 22, 1996.)
10.9 Tax Sharing Agreement effective as of *
September 30, 1991 by and among Perpetual
Corporation, Inc., ACC and Allnewsco, Inc., as
amended. (Incorporated by reference to
Exhibit 10.11 of Company's Registration
Statement on Form S-4, No. 333-02302, dated
March 12, 1996.)
10.10 Time Brokerage Agreement dated as of December *
21, 1995 by and between RKZ Television, Inc.
and ACC. (Incorporated by reference to
Exhibit 10.11 of Company's Registration
Statement on Form S-4, No. 333-02302, dated
March 12, 1996.)
10.11 Option Agreement dated December 21, 1995 by *
and between ACC and RKZ Television, Inc.
(Incorporated by reference to Exhibit 10.12 of
Company's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.)
10.12 Amendment dated May 2, 1996 by and among TV *
Alabama, Inc., RKZ Television, Inc. and Osborn
Communications Corporation to Option Agreement
dated December 21, 1995 by and between ACC and
RKZ Television, Inc. (Incorporated by
reference to exhibit 10.13 of Company's Form
10-K, No. 333-02302, dated December 30, 1996.)
10.13 Master Lease Finance Agreement dated as of *
August 10, 1994 between BancBoston Leasing,
Inc. and ACC, as amended. (Incorporated by
reference to Exhibit 10.16 of Company's
Registration Statement on Form S-4, No.
333-02302, dated March 12, 1996.)
10.14 Representation Agreement dated as of July 1, *
1995 by and between 78 inc. and WJLA-TV.
(Incorporated by reference to Exhibit 10.17 of
Company's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.)
10.15 Amendment to Network Affiliation Agreement (TV
Alabama, Inc.) dated January 23, 1997.
27. Financial Data Schedule (Electronic Filing Only)
*Previously filed
<PAGE>
January 23, 1997
WBMA-TV/Birmingham, AL
RIDER ONE
You shall be entitled to network non-duplication protection,
with respect to network non-duplication protection, as defined by
Rule 76.92 of the Federal Communications Commission Rules, as
follows:
a. The geographic zone of network non-duplication
protection shall be the Area of Dominant Influence ("ADI") (as
defined by Arbitron) or the Designated Market Area ("DMA") (as
defined by Nielsen) in which your station is located, or any
lesser zone pursuant to any geographic restrictions contained
in the Federal Communications Commission rules and
regulations, now or as subsequently modified.
b. Network non-duplication protection shall extend to all
ABC television network programs that you broadcast in
accordance with this Agreement. Protection shall not extend
to individually pre-empted programs of an otherwise cleared
series.
c. Network non-duplication protection shall begin 48 hours
prior to the live time period designated by us for broadcast
of that network program by your station, and shall end at
12:00 Midnight on the seventh day following that designated
time period.
You are under no obligation to exercise in whole or in part the
network non-duplication rights granted under this Agreement.
TV Alabama, Inc. American Broadcasting
Companies, Inc.
By: /s/ James R. Vergin By: /s/ Michael Nissenblatt
Name: James R. Vergin Name: Michael Nissenblatt
Title:Vice President Title: Vice President-Affiliate Research
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ALLBRITTON COMMUNICATIONS COMPANY
FINANCIAL DATA SCHEDULE
IN ACCORDANCE WITH ITEM 601(C)
OR REGULATIONS S-K AND S-B
(In thousands)
This schedule contains summary financial information extracted from the
consolidated Statement of Operations and Retained Earnings for the three
months ended December 31, 1996 and the Consolidated Balance Sheet as of
September 30, 1996 and is qualified in its entirety by reference to such
consolidated financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 5,335
<SECURITIES> 0
<RECEIVABLES> 39,492
<ALLOWANCES> 1,454
<INVENTORY> 0
<CURRENT-ASSETS> 60,800
<PP&E> 119,510
<DEPRECIATION> 67,759
<TOTAL-ASSETS> 282,743
<CURRENT-LIABILITIES> 43,898
<BONDS> 396,465
<COMMON> 1
0
0
<OTHER-SE> (231,250)
<TOTAL-LIABILITY-AND-EQUITY> 282,743
<SALES> 0
<TOTAL-REVENUES> 47,792
<CGS> 0
<TOTAL-COSTS> 31,672
<OTHER-EXPENSES> 391
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,659
<INCOME-PRETAX> 5,681
<INCOME-TAX> 2,487
<INCOME-CONTINUING> 3,194
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,194
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
