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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20479
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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) August 14, 1996
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New World Communications Group Incorporated
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(Exact name of registrant as specified in its charter)
Delaware 0-23592 13-3743606
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
3200 Windy Hill Road, Suite 1100-West, Atlanta, Georgia 30339
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(Address of principal executive offices) (Zip Code)
(770) 955-0045
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Registrant's telephone number, including area code
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As previously reported, NWC Acquisition Corporation ("NWCAC"), a Delaware
corporation and a wholly owned subsidiary of New World Communications Group
Incorporated ("NWCG"), New World WVTM Communications of Alabama, Inc., an
Alabama corporation and a wholly owned subsidiary of NWCAC ("WVTM
Communications"), WVTM Television, Inc., a Nevada corporation and a wholly
owned subsidiary of WVTM Communications ("WVTM Television"), and WVTM License,
Inc., a Nevada corporation and a wholly owned subsidiary of WVTM Communications
(together with WVTM Communications and WVTM Television, the "WVTM Sellers"),
and NBC are parties to an Asset Purchase Agreement dated May 22, 1996 (the
"WVTM Asset Purchase Agreement").
On August 14, 1996, upon the terms set forth in the WVTM Asset Purchase
Agreement, Birmingham Broadcasting (WVTM TV), Inc., a wholly owned subsidiary
of NBC, completed its purchase from the WVTM Sellers of substantially all of
the assets of the WVTM Sellers related to the ownership and operation of
Television station WVTM, Channel 13, Birmingham, Alabama for a purchase price
of $200 million, subject to adjustment based on Net Working Capital (as defined
in the WVTM Asset Purchase Agreement) as of such date.
On August 15, 1996, NWCG and NBC issued a press release announcing the
consummation of the transactions contemplated by the WVTM Asset Purchase
Agreement, which is filed herewith as an exhibit and incorporated herein by
reference.
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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 NWC Acquisition Corporation, New World WVTM
Communications of Alabama, Inc., WVTM Television,
Inc., WVTM License, Inc. and National Broadcasting
Company, Inc. (1)
99.2 Pro forma financial information.
99.3 Press Release dated August 15,
1996 issued by National Broadcasting Company, Inc.
and New World Communications Group Incorporated.
_______________________
(1) Incorporated herein by reference to Exhibit 99.2 filed as part of the
Form 8-K dated May 22, 1996 of New World Communications Group
Incorporated.
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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: August 29, 1996 By: /s/ Joseph P. Page
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Name: Joseph P. Page
Title: Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
99.1 Asset Purchase Agreement dated May 22, 1996 by and among NWC
Acquisition Corporation, New World WVTM Communications of
Alabama, Inc., WVTM Television, Inc., WVTM License, Inc. and
National Broadcasting Company, Inc. (1)
99.2 Pro forma financial information.
99.3 Press Release dated August 15, 1996 issued by National
Broadcasting Company, Inc. and New World Communications Group
Incorporated.
______________________
(1) Incorporated herein by reference to Exhibit 99.2 filed as part of the
Form 8-K dated May 22, 1996 of New World Communications Group
Incorporated.
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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 the
Acquisition Credit Agreement debt in August 1996 from the net proceeds of
the Birmingham Station sale.
The following pro forma financial information gives effect to, as of
January 1, 1995, the sale of the Boston 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 NWCAC'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, 1995 (in thousands, except per share).
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New World Communications Group Incorporated
Pro Forma Balance Sheet
(dollars in thousands)
June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Historical
Results of
Historical WVTM Adjustments Pro Forma
---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash $ 59,376 $ (2) $123,986 (a) $ 183,360
Receivables 180,187 (5,175) - 175,012
Television program contract rights 11,599 (186) - 11,413
Film Costs 81,415 - - 81,415
Prepaid expenses 4,545 (175) - 4,370
Deferred income taxes 4,410 - - 4,410
----------------------------------- ----------
Total current assets 341,532 (5,538) 123,986 459,980
Property, plant and equipment 212,808 (8,635) - 204,173
Long-term receivables 16,292 - - 16,292
Television program contracts rights 5,132 (35) - 5,097
Film costs 35,996 - - 35,996
Intangible assets and excess reorganization value 1,499,091 (86,398) (43,995) (b) 1,368,698
Equity investments 38,106 - - 38,106
Other assets 29,203 (20) - 29,183
---------- --------- ---------- ----------
$2,178,160 $ (100,626) $ 79,991 $2,157,525
========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 77,981 $ (1,372) $ 9,569 (c) $ 86,178
Television program contracts payable 14,375 (90) - 14,285
Deferred income 20,364 (7) - 20,357
Participations and residuals payable 54,178 - - 54,178
Current portion of long-term debt and notes payable 34,092 - (4,125) (d) 29,967
---------- ---------- ---------- ----------
Total current liabilities 200,990 (1,469) 5,444 204,965
Noncurrent television program contract rights 6,611 (19) - 6,592
Long-term debt 952,877 - (75,875) (d) 877,002
Other noncurrent liabilities 23,702 (151) - 23,551
Participations and residuals payable 13,303 - - 13,303
Deferred tax credits 74,904 - 814 (e) 75,718
Redeemable preferred stock 335,698 - - 335,698
Commitments and contingencies
Stockholders' equity
Preferred stock 224,850 - - 224,850
Common stock 689 - - 689
Common stock warrants 10,500 - - 10,500
Additional paid-in capital 764,103 - - 764,103
Accumulated deficit (430,067) (98,987) 149,608 (f) (379,446)
---------- ---------- ---------- ----------
Total stockholders' equity 570,075 (98,987) 149,608 620,696
---------- ---------- ---------- ----------
$2,178,160 $ (100,626) $ 79,991 $2,157,525
========== ========== ========== ==========
</TABLE>
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New World Communications Group Incorporated
Pro Forma Statement of Operations
(dollars in thousands)
Six Months Ended June 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Historical
Results of
Historical WVTM Adjustments Pro Forma
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<S> <C> <C> <C> <C>
Net revenues $ 335,474 $ (10,987) $ - $324,487
Operating Expenses
Technical and programming 192,222 (2,606) - 189,616
Selling, general and administrative 64,782 (2,163) - 62,619
Depreciation and amortization of intangible assets 38,381 (1,594) (969) (g) 35,818
Corporate expenses 10,251 - - 10,251
--------- -------- ------ --------
Income from operations 29,838 (4,624) 969 26,183
Other income (expense):
Interest expense (45,912) - 3,200 (h) (42,712)
Interest and investment income 2,479 - 1,946 (i) 4,425
Other (388) - - (388)
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(43,821) - 5,146 (38,675)
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Income (loss) before income taxes (13,983) (4,624) 6,115 (12,492)
Income tax benefit 1,159 - 398 (j) 1,557
Equity in earnings of affiliates 1,397 - - 1,397
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Net income (loss) $ (11,427) $ (4,624) $6,513 $ (9,538)
========= ======== ====== ========
Earnings per common and common
equivalent share $ (.22) $ (.19)
========= ========
Weighted average shares outstanding 68,678 68,678
========= ========
</TABLE>
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New World Communications Group Incorporated
Pro Forma Statement of Operations
(dollars in thousands)
Year Ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Historical Historical Historical
Results Results Results
of of of Adjustments
Historical WSBK Argyle WVTM $ Pro Forma
---------- ---------- ---------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net revenues $ 605,010 $ (5,741) $ 29,628 $ (19,097) $ - $ 609,800
Operating Expenses
Technical and programming 362,088 (5,189) 10,130 (5,432) - 361,597
Selling, general and administrative 113,123 (1,058) 6,474 (3,570) - 114,969
Depreciation and amortization of intangible assets 67,028 (798) 6,951 (2,291) (3,738) (g) 67,152
Corporate expenses 20,432 0 9,761 0 (9,761) (k) 20,432
--------- -------- --------- ---------- ---------- ---------
Income from operations 42,339 1,304 (3,688) (7,804) 13,499 45,650
Other income (expense):
Interest expense (86,420) - - - 2,424 (h) (83,996)
Interest and investment income 8,155 - 2 - 3,892 (i) 12,049
Gain on sale of WSBK 41,671 - - - (41,671) (l) -
Other 413 - - - - 413
--------- -------- --------- ---------- ---------- ---------
(36,181) - 2 - (35,355) (71,534)
--------- -------- --------- ---------- ---------- ---------
Income (loss) before income taxes 6,158 1,304 (3,686) (7,804) (21,856) (25,884)
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) $ (7,804) $ 9,398 $ (29,882)
========= ======== ========= ========== ========== =========
Earnings per common and common
equivalent share $ (.50) $ (.52)
========= =========
Weighted average shares outstanding 68,461 68,461
========= =========
</TABLE>
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Notes to Pro Forma Financial Information
(a) Reflects cash received on the sale of the Birmingham Station, net
of cash paid to reduce a portion of NWCAC's debt.
(b) Reflects an adjustment to intangible assets as a result of a
reduction in the valuation allowance recorded for net operating
losses.
(c) Reflects income taxes payable related to the sale of the
Birmingham Station, the reduction of accrued interest associated with
the reduction of a portion of NWCAC's debt and costs accrued
associated with the sale of the Birmingham Station.
(d) Reflects the reduction of a portion of NWCAC's debt with the net
proceeds from the sale of the Birmingham Station.
(e) Reflects the estimated deferred tax effect of the sale of the
Birmingham Station.
(f) Reflects adjustment for the sale of the Birmingham Station.
(g) Reflects the increase of amortization of intangible assets and
depreciation of property, plant and equipment based on the fair value
assets acquired from Argyle, net of a reduction associated with the
sale of the Birmingham Station.
(h) Reflects adjustments to interest expense for the sale of the
Boston Station in 1995, additional borrowings under the Acquisition
Credit Agreement to finance the purchase of Argyle and repay Argyle's
debt assumed in 1995, and for the sale of the Birmingham Station in
1996.
(i) Reflects interest income earned on net proceeds from the sale of
the Birmingham Station.
(j) Reflects adjustment of the provision for income taxes in
accordance with SFAS No. 109; in 1995, the adjustment is primarily
related to the sale of the Boston Station.
(k) Reflects the elimination of Argyle-related corporate expenses as
a result of the consolidation of operations and the adjustment of
total corporate expenses based on management's estimate of total
corporate expenses.
(l) Reflects elimination of the gain for the sale of the Boston
Station.
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EXHIBIT 99.3
NEW WORLD
COMMUNICATIONS GROUP INCORPORATED
NBC AND NEW WORLD ANNOUNCE CLOSING OF SALE
OF BIRMINGHAM TV STATION TO NBC
New York, N.Y. and Atlanta, Ga., August 15, 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 Birmingham television station (WVTM, Channel 13) to NBC for $200 million
plus working capital.
As previously announced, New World has also agreed to sell to NBC its San
Diego television station (KNSD, Channel 39). Applications for approval of the
transfer of this station are pending with the Federal Communications
Commission, and this transaction is expected to close later this year.
--END--
FOR NEW WORLD: Media Relations: Michael Diamond of New World Communications
Group at 310-444-8266 or Dick Lippin of The Lippin Group at 213-965-1990.
Investor Relations: Gary Fishman at 212-685-6890. FOR NBC: Paul Rosengren,
Communications Manager, Corporate Communications, NBC, at 212-664-2756.
