<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20479
-------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 20, 1996
------------------------------------------------------------------
New World Communications Group Incorporated
-------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-23592 13-3743606
--------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
3200 Windy Hill Road, Suite 1100-West, Atlanta, Georgia 30339
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(770) 955-0045
--------------
Registrant's telephone number, including area code
Not Applicable
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As previously reported, New World Television Incorporated ("NW
Television"), a Delaware corporation and a wholly owned subsidiary of New World
Communications Group Incorporated ("NWCG"), NW Communications of San Diego,
Inc., a Delaware corporation and a wholly owned subsidiary of NW Television
("KNSD Communications"), and KNSD License, Inc., a Delaware corporation and a
wholly owned subsidiary of KNSD Communications (together with KNSD
Communications, the "KNSD Sellers"), and NBC are parties to an Asset Purchase
Agreement dated May 22, 1996 (the "KNSD Asset Purchase Agreement").
On November 20, 1996, upon the terms set forth in the KNSD Asset Purchase
Agreement, Outlet Broadcasting, Inc., a wholly owned subsidiary of NBC,
completed its purchase from the KNSD Sellers of substantially all of the assets
of the KNSD Sellers related to the ownership and operation of television
station KNSD, Channel 39, San Diego, California for a purchase price of $225
million, subject to adjustment based on Net Working Capital (as defined in the
KNSD Asset Purchase Agreement) as of such date.
On November 20, 1996 NWCG and NBC issued a press release announcing the
consummation of the transactions contemplated by the KNSD Asset Purchase
Agreement, which is filed herewith as an exhibit and incorporated herein by
reference.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro Forma Financial Information
The information set forth in Exhibit 99.2 filed herewith is
incorporated herein by reference.
(c) The following items are filed with this report:
EXHIBIT NO. DESCRIPTION
99.1 Asset Purchase Agreement dated May 22, 1996 by and
among New World Television Incorporated, NW
Communications of San Diego, Inc., KNSD License,
Inc. and National Broadcasting Company, Inc. (1)
99.2 Pro forma financial information.
99.3 Press Release dated November 20, 1996 issued by
National Broadcasting Company, Inc. and New World
Communications Group Incorporated.
- --------------------------
(1) Incorporated herein by reference to Exhibit 99.1 filed as part of the Form
8-K dated May 22, 1996 of New World Communications Group Incorporated.
3
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
New World Communications Group Incorporated
(Registrant)
Date: December 5, 1996 By: /s/ Joseph P. Page
----------------------------
Name: Joseph P. Page
Title: Executive Vice President and
Chief Financial Officer
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
<S> <C>
99.1 Asset Purchase Agreement dated May 22, 1996 by and among New World
Television Incorporated, NW Communications of San Diego, Inc.,
KNSD License, Inc. and National Broadcasting Company, Inc. (1)
99.2 Pro forma financial information.
99.3 Press Release dated November 20, 1996 issued by National
Broadcasting Company, Inc. and New World Communications Group
Incorporated.
</TABLE>
- -------------------
(1) Incorporated herein by reference to Exhibit 99.1 filed as part of the
Form 8-K dated May 22, 1996 of New World Communications Group
Incorporated.
5
<PAGE> 1
Exhibit 99.2
New World Communications Group Incorporated
Pro Forma Financial Information
Basis of Presentation
In March 1995 the Company sold its investment in WSBK-TV (the "Boston Station")
for gross proceeds of $107.5 million. The Company repaid $19.5 million of the
Bank Credit Agreement Loans in March 1995 and $77.3 million of the Step-Up Notes
in April 1995 from the net proceeds of the Boston Station sale.
The Company purchased certain debt and equity securities of Argyle Television
Holding Inc. ("Argyle") for total consideration of approximately $750.4 million,
including the $100 million in cash paid for an option in 1994 and assumption of
debt of approximately $283.6 million. Argyle controlled four VHF television
stations, KDFW-TV (Dallas, Texas), KTBC-TV (Austin, Texas), KTVI-TV (St. Louis,
Missouri) and WVTM-TV (Birmingham, Alabama). For financial reporting purposes,
the acquisition occurred on March 31, 1995. FCC approval for change in control
of the television stations occurred on April 14, 1995. The acquisition has been
accounted for as a purchase.
In July 1995 the Company purchased Cannell Entertainment Inc. for Series E
Cumulative Convertible Redeemable Preferred Stock ("Series E Preferred Stock")
valued at approximately $30 million and certain other consideration. The
acquisition has been accounted for as a purchase.
In August 1996 the Company sold substantially all of the assets of WVTM-TV and
its subsidiaries (collectively, the "Birmingham Station") to National
Broadcasting Company, Inc. ("NBC") for gross proceeds of $200 million, subject
to certain adjustments. The Company repaid $80.0 million of NWC Acquisition's
debt in August 1996 from the net proceeds of the Birmingham Station sale and an
additional $15.0 million on September 30, 1996.
In November 1996 the Company sold substantially all of the assets of KNSD-TV and
its subsidiaries (collectively, the "San Diego Station") to NBC for gross
proceeds of $225 million, subject to certain adjustments. The Company repaid in
full the outstanding balance of $27.6 million of the Bank Credit Agreement Loans
and offered to purchase up to $109.6 million of the Step Up Notes and up to
$194.3 million of the 11% Notes, less the principal amount purchased, if any,
under the Step Up Note offer.
The following condensed consolidated pro forma balance sheet gives effect to, as
of September 30, 1996, the sale of the San Diego Station, repayment of a portion
of NW Television's debt and the repayment of a portion of NWC Acquisition's
debt.
<PAGE> 2
The following condensed consolidated pro forma statement of operations for the
nine months ended September 30, 1996 gives effect to, as of January 1, 1996, the
sale of the San Diego Station, repayment of a portion of NW Television's debt,
the sale of the Birmingham Station and the repayment of a portion of NWC
Acquisition's debt. The following condensed consolidated pro forma statement of
operations for the year ended December 31, 1995 gives effect to, as of January
1, 1995, the sale of the Boston Station, the sale of the San Diego Station,
repayment of a portion of NW Television's debt, the purchase of Argyle,
borrowings necessary to fund the Argyle acquisition, the issuance of preferred
stock, the sale of the Birmingham Station, and the repayment of a portion of NWC
Acquisition's debt. The pro forma financial information does not necessarily
reflect the future results or the results that would have occurred had these
transactions actually occurred on January 1, 1996 or January 1, 1995 (in
thousands, except per share).
<PAGE> 3
New World Communications Group Incorporated
Pro Forma Balance Sheet
(dollars in thousands)
September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma
Historical KNSD Adjustments Pro Forma
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash $ 141,798 $ (1) $ 232,355 (a) $ 133,700
(240,452) (b)
Receivables 168,953 (10,411) - 158,542
Television program contract rights 31,992 (4,054) - 27,938
Film Costs 70,837 - - 70,837
Prepaid expenses 4,768 (41) - 4,727
Deferred income taxes 4,410 - - 4,410
----------------------------------- ----------
Total current assets 422,758 (14,507) (8,097) 400,154
Property, plant and equipment 201,450 (11,694) - 189,756
Long-term receivables 11,890 - - 11,890
Television program contracts rights 6,546 (218) - 6,328
Film costs 49,572 - - 49,572
Intangible assets and excess reorganization value 1,373,883 (86,098) (69,250) (c) 1,218,535
Equity investments 39,624 - - 39,624
Other assets 33,684 - - 33,684
---------- --------- --------- ---------
$2,139,407 $(112,517) $ (77,347) $1,949,543
========== ========= ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 79,444 $ (1,195) $ 1,950 (d) $ 88,805
8,606 (c)
Television program contracts payable 33,404 (5,571) - 27,833
Deferred income 25,097 (444) - 24,653
Participations and residuals payable 47,753 - - 47,753
Current portion of long-term debt and notes
payable 36,467 - (16,289) (b) 20,178
---------- --------- --------- ---------
Total current liabilities 222,165 (7,210) (5,733) 209,222
Noncurrent television program contract rights 9,678 (532) - 9,146
Long-term debt 854,170 - (224,163) (b) 630,007
Other noncurrent liabilities 22,575 (973) - 21,602
Participations and residuals payable 7,859 - - 7,859
Deferred tax credits 89,424 - (19,251) (c) 70,173
Redeemable preferred stock 311,551 - - 311,551
Stockholders' equity
Preferred stock 224,850 - - 224,850
Common stock 717 - - 717
Common stock warrants 10,500 - - 10,500
Additional paid-in capital 790,632 - - 790,632
Accumulated deficit (404,714) (103,802) (58,605) (c) (336,716)
230,405 (e)
---------- --------- --------- ---------
Total stockholders' equity 621,985 (103,802) 171,800 689,983
---------- --------- --------- ---------
$2,139,407 $(112,517) $ (77,347) $1,949,543
========== ========= ========= ==========
</TABLE>
<PAGE> 4
New World Communications Group Incorporated
Pro Forma Statement of Operations
(dollars in thousands)
Nine Months Ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Historical
NBC
Historical Stations Adjustments Pro Forma
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net revenues $478,405 $(46,005) $ - $432,400
Operating Expenses
Technical and programming 277,849 (15,397) - 262,452
Selling, general and administrative 97,294 (8,245) - 89,049
Depreciation and amortization of intangible assets 57,584 (5,841) (3,700) (f) 48,043
Corporate expenses 16,967 - - 16,967
-------- -------- --------- -------
Income from operations 28,711 (16,522) 3,700 15,889
Other income (expense):
Interest expense (68,464) - 19,784 (h) (48,680)
Gain on sale of broadcast station 103,227 (103,227) (i) -
Merger costs (3,026) - (3,026)
Interest and investment income 4,527 - - 4,527
Other (580) - - (580)
-------- -------- --------- -------
35,684 - (83,443) (47,759)
-------- -------- ---------- --------
Income (loss) before income taxes 64,395 (16,522) (79,743) (31,870)
Benefit (provision) for income taxes) (51,708) - 62,283 (j) 10,575
Equity in earnings of affiliates 2,815 - - 2,815
-------- -------- ---------- --------
Net income (loss) $ 15,502 $(16,522) $ (17,460) $(18,480)
======== ======== ========= ========
Earnings (loss) per common and common equivalent
share $ .12 $ (.34)
======== ========
Weighted average common and common equivalent
shares 88,358 69,008
======== ========
</TABLE>
<PAGE> 5
New World Communications Group Incorporated
Pro Forma Statement of Operations
(dollars in thousands)
Year Ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Historical
Historical Historical NBC
Historical WSBK Argyle Stations Adjustments Pro Forma
---------- --------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net revenues $605,010 $(5,741) $29,628 $(56,199) $ - $572,698
Operating Expenses
Technical and programming 362,088 (5,189) 10,130 (21,778) - 345,251
Selling, general and administrative 113,123 (1,058) 6,474 (10,012) - 108,527
Depreciation and amortization of intangible assets 67,028 (798) 6,951 (7,404) (1,997) (f) 63,780
Corporate expenses 20,432 0 9,761 0 (9,761) (g) 20,432
-------- ------- ------- -------- -------- --------
Income from operations 42,339 1,304 (3,688) (17,005) 11,758 34,708
Other income (expense):
Interest expense (86,420) - - - 23,092 (h) (63,328)
Interest and investment income 8,155 - 2 - - 8,157
Gain on sale of WSBK 41,671 - - - (41,671) (i) -
Other 413 - - - - 413
-------- ------- ------- -------- -------- --------
(36,181) - 2 - (18,579) (54,758)
-------- ------- ------- -------- -------- --------
Income (loss) before income taxes 6,158 1,304 (3,686) (17,005) (6,821) (20,050)
Benefit (provision) for income taxes (34,500) - (145) - 31,254 (j) (3,391)
Equity in loss of affiliates (607) - - - - (607)
-------- ------- ------- -------- -------- --------
Net income (loss) $(28,949) $ 1,304 $(3,831) $(17,005) $ 24,433 $(24,048)
======== ======= ======= ======== ======== ========
Earnings (loss) per common and common
equivalent share $ (.50) $ (.44)
======== ========
Weighted average shares outstanding 68,461 68,461
======== ========
</TABLE>
<PAGE> 6
Notes to Pro Forma Condensed Consolidated Financial Information
(amounts in thousands)
(a) Reflects cash estimated to be received on the sale of the San
Diego Station.
(b) Reflects the reduction of a portion of NW Television's and NWC
Acquisition's debt with the net proceeds from the sale of the NBC
Stations. Although NW Television will make an offer to repurchase an
aggregate of approximately $85,000 principal amount of 11% Notes at
100% of the principal amount thereof plus accrued and unpaid interest,
New World has not assumed any holders will tender 11% Notes pursuant
to such offer because the current market price of the 11% Notes
exceeds their par value.
(c) Reflects the income tax effect of the sale of the San Diego
Station. The adjustment to intangible assets reflects a reduction of
the valuation allowance recorded for restricted net operating losses
("NOLs") whose realization did not previously meet the "more likely
than not" test of probability contained in Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" ("SFAS
109") due to restrictions on their use. The sale of the San Diego
Station will allow the Company to utilize a portion of these
previously restricted NOLs to reduce the tax liability associated with
the gain on the sale of the San Diego Station.
(d) Reflects the estimated costs associated with the sale of the San
Diego Station.
(e) Reflects adjustments to the gain on the sale of the San Diego
Station. The pre-tax gain on the sale of the San Diego Station is
estimated to be approximately $126,603.
(f) Reflects the adjustment of amortization of intangible assets and
depreciation of property, plant and equipment associated with the sale
of the Boston Station and the purchase of the Argyle stations in 1995
and the sale of the NBC Stations in 1996.
(g) Reflects the elimination of Argyle-related corporate expenses as
a result of the consolidation of operations.
(h) Reflects adjustments to interest expense for the repayment of a
portion of NW Television's debt with the net proceeds of the sale of
the Boston Station in 1995, additional borrowings under NWC
Acquisition's debt agreement to finance the purchase of Argyle and
repay Argyle's debt assumed in 1995, and for the repayment of a
portion of NW Television's and NWC Acquisition's debt with the net
proceeds from the sale of the NBC Stations in 1996.
<PAGE> 7
(i) Reflects adjustment to eliminate the gain recorded on the sale of
the Boston Station in 1995 and to eliminate the gain recorded on the
sale of the Birmingham Station in 1996.
(j) Reflects adjustment of the provision for income taxes in
accordance with SFAS No. 109.
<PAGE> 1
EXHIBIT 99.3
NEW WORLD
COMMUNICATIONS GROUP INCORPORATED
- -------------------------------------------------------------------------------
NBC AND NEW WORLD ANNOUNCE CLOSING OF SALE
OF SAN DIEGO TV STATION TO NBC
New York, N.Y. and Atlanta, Ga., November 20, 1996 -- National
Broadcasting Company, Inc. and New World Communications Group Incorporated
(NASDAQ: NWCG) announced today the completion of the previously announced sale
by New World of its San Diego television station (KNSD, Channel 39) to NBC for
$225 million plus working capital.
--END--
FOR NEW WORLD: Media Relations: Michael Diamond of New World Communications
Group at 310-444-8266. Investor Relations: Gary Fishman at 212-685-6890. FOR
NBC: Paul Rosengren, Communications Manager, Corporate Communications, NBC, at
212-664-2756.
