<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 33-91412
---------------------------
BENEDEK BROADCASTING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------------
DELAWARE 13-2982954
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
SUBSIDIARY GUARANTOR REGISTRANT
I.R.S.
EXACT NAME OF SUBSIDIARY GUARANTOR EMPLOYER
AS SPECIFIED IN ITS STATE OF IDENTIFICATION
CERTIFICATE OF INCORPORATION INCORPORATION NUMBER
BENEDEK LICENSE CORPORATION DELAWARE 36-4081877
----------------------
STEWART SQUARE, SUITE 210
308 WEST STATE STREET, ROCKFORD, ILLINOIS 61101
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANTS' TELEPHONE NUMBER, INCLUDING AREA CODE: (815) 987-5350
---------------------------
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
--- ---
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: 148.85 shares of
common stock, without par value, were outstanding at November 1, 1996.
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION
FORM 10-Q TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM
NUMBER
- -------
PART I- FINANCIAL STATEMENTS
<S> <C> <C>
Item 1. FINANCIAL STATEMENTS
Introductory Comments ............................................................ 3
Benedek Broadcasting Corporation and Subsidiary
Consolidated Balance Sheets as of December 31, 1995 and September 30, 1996 ..... 4
Consolidated Statements of Operations for the Three Months and Nine Months
Ended September 30, 1995 and 1996 ............................................ 5
Consolidated Statements of Stockholder's Equity (Deficit) for the Nine
Months Ended September 30, 1996 .............................................. 6
Consolidated Statements of Cash Flows for the Nine Months Ended September
30, 1995 and 1996 ............................................................ 7
Notes to Financial Statements ................................................... 9
Benedek License Corporation
Balance Sheets as of December 31, 1995 and September 30, 1996 ................... 14
Statements of Operations for the Period February 28, 1995 Through
September 30, 1995, Three Months Ended September 30, 1995 and the
Three and Nine Months Ended September 30, 1996 ............................... 15
Statement of Stockholder's Equity for the Period February 28, 1995 Through
September 30, 1995 and the Nine Months Ended September 30, 1996 .............. 16
Statement of Cash Flows for the Period February 28, 1995 Through
September 30, 1995 and the Nine Months Ended September 30, 1996 .............. 17
Notes to Financial Statements .................................................. 18
Item 2 . MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ............................................... 20
PART II-OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K .................................................... 31
SIGNATURES .................................................................................. 33
</TABLE>
-2-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Introductory Comments:
The Financial Statements included herein have been prepared by Benedek
Broadcasting Corporation ("Benedek Broadcasting") without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations. It is
suggested that these Financial Statements be read in conjunction with the
financial information set forth in Benedek Broadcasting's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
-3-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
ASSETS 1995 1996
---- ----
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents .................................................................. $ 9,668,331 $ 5,177,412
Accounts receivable, net ................................................................... 12,529,696 19,531,486
Current portion of program broadcast rights ................................................ 1,575,325 5,237,707
Prepaid expenses ........................................................................... 576,697 1,452,114
------------- -------------
Total current assets ................................................................... 24,350,049 31,398,719
------------- -------------
Property and Equipment ....................................................................... 20,035,715 87,254,038
------------- -------------
Intangible Assets ............................................................................ 60,420,617 358,122,598
------------- -------------
Other Assets:
Deferred loan costs ........................................................................ 5,625,261 9,699,483
Program broadcast rights, less current portion ............................................. 687,320 2,399,652
Advance to affiliate ....................................................................... 3,000,000 --
Acquisition costs .......................................................................... 225,359 --
Other ...................................................................................... 109,000 774,363
------------- -------------
9,646,940 12,873,498
------------- -------------
$ 114,453,321 $ 489,648,853
============= =============
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current Liabilities:
Current maturities of notes and leases payable ............................................. $ 318,077 $ 9,074,052
Current maturities of program broadcast rights payable ..................................... 2,042,643 6,525,990
Accounts payable and accrued expenses ...................................................... 7,824,296 8,617,963
Deferred revenue ........................................................................... 500,000 689,094
Due to sellers ............................................................................. -- 379,819
------------- -------------
Total current liabilities .............................................................. 10,685,016 25,286,918
------------- -------------
Long-Term Liabilities:
Notes and capital leases payable ........................................................... 135,448,948 254,823,502
Program broadcast rights payable ........................................................... 632,444 1,951,859
Deferred revenue ........................................................................... 4,250,000 4,360,159
Deferred income taxes ..................................................................... -- 57,017,000
------------- -------------
140,331,392 318,152,520
------------- -------------
Stockholder's Equity (Deficit):
Common stock, no par, authorized 200 shares;
issued 179.09 shares ..................................................................... 1,046,500 1,046,500
Additional paid-in capital ................................................................. 2,758,178 150,062,353
Accumulated (deficit) ...................................................................... (38,886,616) (3,418,289)
------------- -------------
(35,081,938) 147,690,564
Less 30.24 shares held in treasury ......................................................... 1,481,149 1,481,149
------------- -------------
(36,563,087) 146,209,415
------------- -------------
$ 114,453,321 $ 489,648,853
============= =============
</TABLE>
-4-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------- ------------------------------
1995 1996 1995 1996
----- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues ................................... $ 12,191,053 $ 29,786,193 $ 36,249,711 $ 59,901,221
------------ ------------ ------------ ------------
Operating expenses:
Selling, technical and program
expenses ................................... 5,342,943 14,337,337 15,387,649 27,878,366
General and administrative ................... 1,975,322 4,983,063 5,767,239 9,676,914
Depreciation and amortization ................ 1,415,123 7,799,972 3,539,627 11,869,265
Corporate .................................... 417,980 693,375 1,115,739 1,780,809
------------ ------------ ------------ ------------
9,151,368 27,813,747 25,810,254 51,205,354
------------ ------------ ------------ ------------
Operating income ......................... 3,039,685 1,972,446 10,439,457 8,695,867
------------ ------------ ------------ ------------
Financial income (expense):
Interest expense:
Cash interest .............................. (4,028,327) (6,854,643) (11,128,222) (15,734,623)
Other interest ............................. (148,908) (343,794) (485,914) (660,322)
------------ ------------ ------------ ------------
(4,177,235) (7,198,437) (11,614,136) (16,394,945)
Interest income .............................. 121,999 34,620 331,690 247,054
------------ ------------ ------------ ------------
(4,055,236) (7,163,817) (11,282,446) (16,147,891)
------------ ------------ ------------ ------------
Net (loss) before income
tax benefit and extra-
ordinary item .......................... (1,015,551) (5,191,371) (842,989) (7,452,024)
Income tax benefit ............................. -- 1,847,474 -- 1,847,474
------------ ------------ ------------ ------------
Net (loss) before extra-
ordinary item .......................... (1,015,551) (3,343,897) (842,989) (5,604,550)
Extraordinary item:
Gain on early extinguishment
of debt .................................... -- -- 6,863,762 --
------------ ------------ ------------ ------------
Net income (loss) ........................ $ (1,015,551) $ (3,343,897) $ 6,020,773 $ (5,604,550)
============ ============ ============ ============
</TABLE>
-5-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY (DEFICIT)
NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Additional Accumulated
Common Paid-In Equity Treasury
Stock Capital (Deficit) Stock Total
----- ------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 .......... $ 1,046,500 $ 2,758,178 $ (38,886,616) $ (1,481,149) $ (36,563,087)
Contribution of Additional
Paid-In Capital by parent in
connection with acquisitions ......... -- 188,377,052 -- -- 188,377,052
Reclassification of accumulated
deficit due to change in
income tax status .................... -- (41,072,877) 41,072,877 -- --
Net (loss) ............................. -- -- (5,604,550) -- (5,604,550)
----------- ------------- ------------- ------------- -------------
Balance at September 30, 1996 .......... $ 1,046,500 $ 150,062,353 $ (3,418,289) $ (1,481,149) $ 146,209,415
=========== ============= ============= ============= =============
</TABLE>
-6-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Cash Flows From Operating Activities
Net income (loss) ...................................................................... $ 6,020,773 $ (5,604,550)
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities:
Amortization of program broadcast rights ........................................... 1,619,464 2,832,189
Depreciation and amortization ...................................................... 2,288,671 8,249,682
(Gain) on early extinguishment of debt ............................................. (6,863,762) --
Amortization of intangibles and deferred loan costs ............................... 1,720,387 4,310,329
(Gain) on sale of property and equipment ........................................... (13,707) (34,862)
Payment of deferred and contingent interest ........................................ (4,405,746) --
Payment of prepayment premiums ..................................................... (2,748,896) --
Other .............................................................................. 31,691 --
Change in assets and liabilities, net of effects of station acquisitions:
Receivables ........................................................................ (952,661) 3,912,841
Due from sellers ................................................................... -- 2,821,334
Prepaid expenses ................................................................... (247,071) (307,648)
Payments on program broadcast rights payable ....................................... (1,574,133) (1,896,086)
Accounts payable and accrued expenses .............................................. 1,106,017 (3,001,126)
Deferred income .................................................................... -- (423,158)
Contingent and deferred interest payable ........................................... 567,533 --
Deferred income taxes .............................................................. -- (1,855,778)
------------- -------------
Net cash (used in) provided by operating activities .............................. (3,451,440) 9,003,167
------------- -------------
Cash Flows From Investing Activities
Purchase of property and equipment ..................................................... (856,537) (2,644,579)
Proceeds from sale of equipment ........................................................ 70,162 187,300
Payment for acquisitions of stations, net of cash ...................................... (26,686,909) (321,848,468)
Reimbursement for equipment purchases .................................................. -- 79,198
Purchase of securities ................................................................. -- (663,937)
Other .................................................................................. 10,665 3,616
------------- -------------
Net cash (used in) investing activities .......................................... (27,462,619) (324,886,870)
------------- -------------
Cash Flows From Financing Activities
Principal payments on notes, including capital lease payables .......................... (96,254,583) (249,726)
Proceeds from long term borrowing ...................................................... 135,000,000 128,000,000
Contribution of paid-in capital by parent .............................................. -- 188,377,052
Payment of debt acquisition costs ...................................................... (5,646,723) (4,734,542)
------------- -------------
Net cash provided by financing activities ........................................ 33,098,694 311,392,784
------------- -------------
Net increase (decrease) in cash and cash equivalents ............................. 2,184,635 (4,490,919)
Cash and cash equivalents:
Beginning .............................................................................. 4,617,242 9,668,331
------------- -------------
Ending ................................................................................. $ 6,801,877 $ 5,177,412
============= =============
</TABLE>
-7-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1996
(Unaudited)
<TABLE>
<CAPTION>
1995 1996
---- ----
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information
Cash payments for interest ................................................... $ 13,630,495 $ 19,450,026
============= =============
Supplemental Schedule of Noncash Investing and Financing
Activities
Acquisition of program broadcast rights ...................................... $ 2,113,646 $ 3,679,322
Note payable and capital lease obligation
incurred for purchase of equipment ......................................... 197,288 380,253
Equipment acquired by barter transactions .................................... $ 306,221 $ 62,555
============= =============
Acquisitions of stations:
Cash purchase price .......................................................... $ 26,686,909 $ 321,848,468
============= =============
Net working capital acquired, net of cash $535,810 in 1996 ................... $ 7,565 $ 9,840,537
Property and equipment acquired at fair market value ......................... 7,533,196 72,533,059
Intangible assets acquired ................................................... 21,283,326 301,351,989
Deferred income taxes assumed ................................................ -- (58,872,778)
Other, net ................................................................... (137,178) 221,020
------------- -------------
28,686,909 325,073,827
Less: Application of deposit ................................................ (2,000,000) (3,225,359)
------------- -------------
$ 26,686,909 $ 321,848,468
============= =============
</TABLE>
-8-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(NOTE A) - NATURE OF BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS: Benedek Broadcasting Corporation ("Benedek
Broadcasting") is a wholly owned subsidiary of Benedek Communications
Corporation ("BCC") and operates twenty-two television stations located
throughout the United States which operate under network affiliation contracts.
The networks provide programs to the affiliated stations and the stations sell
commercial time during the programs to national, regional, and local
advertisers. The networks also sell commercial time during the programs to
national advertisers. Credit arrangements are determined on an individual
customer basis.
BASIS OF PRESENTATION: The unaudited consolidated financial statements
include the accounts of Benedek Broadcasting and Benedek License Corporation
("BLC"), a wholly owned subsidiary. All significant intercompany items and
transactions have been eliminated in the unaudited consolidated financial
statements. The financial statements include all adjustments, consisting of
normal and recurring adjustments, which are considered necessary in the opinion
of management for the fair presentation of the financial position as of
September 30, 1996 and the results of operations and cash flows for the nine
months ended September 30, 1995 and 1996. These financial statements do not
include all the information and footnotes required by generally accepted
accounting principles.
Operating results for the three and nine month periods ended September
30, 1995 and 1996 are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1996.
(NOTE B) - ACQUISITIONS, RELATED PARTY AND BUSINESS COMBINATIONS
On April 10, 1996, the sole stockholder of Benedek Broadcasting formed
BCC as a holding company. At the closing of the acquisitions described below,
the stockholder contributed all of the outstanding shares of common stock of
Benedek Broadcasting to BCC in exchange for the issuance to him of all of the
outstanding shares of common stock of BCC.
On June 6, 1996, two acquisition agreements entered into during 1995
were consummated. The first agreement provided for the acquisition of the assets
of the television broadcasting division of Stauffer Communications, Inc., which
owned five television stations for a total purchase price of $54,500,000. The
second agreement was to acquire all the issued and outstanding shares of capital
stock of Brissette Broadcasting Corporation which owned and operated eight
television stations for a purchase price of $270,000,000. These acquisitions
have been accounted for under the purchase method of accounting. Accordingly,
the results of operations for the acquired stations are included in the
consolidated financial statements since the date of acquisition. Also, the
purchase price has been allocated to acquired assets and liabilities based on
their relative fair values as of the closing date.
-9-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(Unaudited)
The pro forma results of operations for the three months ended September
30, 1995 and 1996 and the nine months ended September 30, 1995 and 1996 assuming
the acquisitions had taken place on January 1, 1995 are as follows:
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
---------------------------- ---------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenue ............................. $ 28,091,356 $29,786,194 $ 87,845,440 $ 89,681,253
Operating expenses ...................... 25,859,503 27,813,737 77,330,984 81,131,995
Financial expenses ...................... 7,171,357 7,163,829 21,512,833 21,379,058
------------ ----------- ------------ ------------
(Loss) before income taxes
and extraordinary item ............ (4,939,504) (5,191,372) (10,998,377) (12,829,800)
Income tax benefit ..................... 1,415,802 1,016,549 4,985,293 3,526,813
------------ ----------- ------------ ------------
Net (loss) before extraordinary item (3,523,702) (4,174,823) (6,013,084) (9,302,987)
Extraordinary item ...................... -- -- 6,863,762 --
------------ ----------- ------------ ------------
Net income (loss) .................. $ (3,523,702) $(4,174,823) $ 850,678 $ (9,302,987)
============ =========== ============ ============
Broadcast cash flow(1) .................. $ 10,885,239 $11,285,131 $ 35,902,089 $ 34,112,707
============ =========== ============ ============
</TABLE>
(1)Broadcast cash flow is defined as operating income before financial
income (expense) as derived from the consolidated statements of operations plus
depreciation and amortization, amortization of program broadcast rights,
corporate expenses and noncash compensation less payments for program broadcast
rights.
The financing transactions for the acquisitions consisted of (i) BCC
issuing (a) senior subordinated discount notes, (b) units, consisting of
exchangeable preferred stock, which is exchangeable for exchange debentures, and
warrants to acquire common stock of BCC, and (c) seller junior discount
preferred stock and (ii) Benedek Broadcasting entering into a new credit
agreement, which consists of $128,000,000 term loan facilities and a $15,000,000
revolving credit facility. These financing transactions were consummated
concurrently with the acquisitions.
Since BCC derives all of its operating income and cash flow from Benedek
Broadcasting, BCC's ability to pay its obligations including (i) interest on and
principal of the notes (ii) redemption of and cash dividends on the exchangeable
preferred stock and (iii) redemption of and cash dividends on the seller junior
discount preferred stock will be dependent primarily upon receiving dividends
and other payments on advances from Benedek Broadcasting. Benedek Broadcasting
is a separate and distinct legal entity and has no obligation, contingent or
otherwise, to pay any amounts to BCC or to make funds available to BCC for debt
service or any other obligation.
-10-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(Unaudited)
On April 18, 1996, Benedek Broadcasting formed BLC for the purpose of
holding the licenses and authorizations issued by the FCC, in connection with
the operations of the Stations. Concurrently with the acquisitions described
above, Benedek Broadcasting Company, L.L.C., which had been formed in 1995 for
the same purposes and was holding the licenses of Benedek Broadcasting stations,
was merged into BLC with the result that all licenses of the acquired stations
were transferred to BLC. This was accounted for in a manner similar to that in
pooling-of-interests accounting.
(NOTE C) - LONG-TERM DEBT
As part of the financing transactions described in (Note B), on June 6,
1996 Benedek Broadcasting entered into a new credit agreement which includes two
Term Loan Facilities consisting of (i) a Series A Facility of $70,000,000 at a
fluctuating rate per annum (currently 8.81%) and (ii) a Series B Facility of
$58,000,000 at a fluctuating rate per annum (currently 9.31%). The Term Loan
Facilities provide for quarterly principal payments until final maturity (except
in the first year during which payments will be on a semiannual basis). The
Series A Facility and the Series B Facility will mature five years and six and
one-half years, respectively, after the closing. Benedek Broadcasting will be
required to make scheduled aggregate amortization payments on the Series A and
Series B Facilities, as follows: during the first year after closing, $6.0
million; during the second year after closing, $11.0 million; during the third
year after closing, $14.5 million; during the fourth year after closing, $16.0
million; during the fifth year after closing, $27.5 million; during the sixth
year after closing, $15.0 million; and during the first half of the seventh year
after closing, $38.0 million.
The credit agreement also includes a Revolving Credit Facility of
$15,000,000, which would bear interest at a base rate plus a spread. There were
no borrowings on the revolver as of September 30, 1996.
The Term Loan Facilities and the Revolving Credit Facility are
guaranteed by BCC and secured by certain of the BCC's and Benedek Broadcasting's
present and future property and assets. The Term Loan Facilities are also
guaranteed by BLC and secured by all of the stock of BLC. The facility contains
various restrictive covenants relating to, among, others, limitations on
dividends, transactions with affiliates, further issuance of debt and sales of
assets and required compliance with certain financial ratios and covenants.
At September 30, 1996, Benedek Broadcasting did not meet certain
financial ratios contained in its credit agreement. The lenders under the credit
agreement have agreed to waive such noncompliance. In connection with such
waiver, Benedek Broadcasting agreed that for so long as its ratio of debt to
Adjusted EBITDA (as defined in the credit agreement) is in excess of 7.00:1.00,
the Term Loan Facilities will bear interest at an additional spread of 25 basis
points from that originally provided for in the credit agreement.
During 1995, Benedek Broadcasting issued $135,000,000 of 11 7/8% Senior
Secured Notes due 2005 (the "Senior Secured Notes"). The net proceeds of the
Senior Secured Notes were used, together with available cash, to (i) refinance
certain indebtedness, (ii) finance the acquisition of WTVY-TV (the "Dothan
Station") and (iii) pay fees and expenses in connection with the offering. The
Senior Secured Notes have been registered with the Securities and Exchange
Commission in a registration statement declared effective in November 1995.
-11-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(Unaudited)
The Senior Secured Notes bear interest at the rate of 11 7/8% payable
semiannually on March 1 and September 1 of each year and mature in March 2005.
The Senior Secured Notes may be redeemed by Benedek Broadcasting in whole or in
part after March 1, 2000 subject to certain prepayment premiums. The Senior
Secured Notes contain various restrictive covenants relating to limitations on
dividends, transactions with affiliates, further issuance of debt, and sales of
assets, among others. Benedek Broadcasting was in compliance with these
covenants at September 30, 1996.
The Senior Secured Notes are collateralized by Benedek Broadcasting's
100% interest in BLC, certain agreements and contract rights related to the
stations which include network affiliation agreements and certain general
intangibles.
Notes payable consist of the following:
<TABLE>
<CAPTION>
September 30,
1996
-----
<S> <C>
Senior Secured Notes .................................. $135,000,000
Term loan Series A .................................... 70,000,000
Term loan Series B .................................... 58,000,000
Capital leases and other .............................. 897,554
------------
263,897,554
Less current maturities ............................... 9,074,052
------------
$254,823,502
------------
------------
</TABLE>
(NOTE D) - INCOME TAX MATTERS AND CHANGE IN TAX STATUS
Prior to the consummation of the acquisitions and the related financing,
Benedek Broadcasting, with the consent of its stockholder, elected to be taxed
under sections of federal and state income tax law as an "S Corporation", which
provided that, in lieu of corporation income taxes, the stockholder separately
accounted for Benedek Broadcasting's income, deductions, losses and credits.
Benedek Broadcasting's election to be taxed as an "S" Corporation automatically
terminated concurrently with the consummation of the acquisitions described in
Note B. Benedek Broadcasting is now subject to federal and state income taxes.
As a result, on June 6, 1996 Benedek Broadcasting recorded a net deferred tax
asset of approximately $3,550,000 which was offset by a valuation allowance of
the same amount. Management believes a benefit will be realized to the extent of
this net deferred tax asset as a result of the acquisition. Thus, the valuation
allowance was eliminated and accounted for as part of the acquisition.
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences, operating losses and
tax credit carryforwards. Deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.
-12-
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(Unaudited)
Under the provision of Statement of Financial Accounting Standards
(SFAS) No. 109, the deferred tax assets and liabilities, resulting principally
from the acquisitions explained in Note B, consist of the following components:
<TABLE>
<CAPTION>
September 30,
1996
----
<S> <C>
Deferred tax assets:
Loss carryforwards ................................................ $ 3,501,225
Nondeductible allowances and other ................................ 1,089,644
Network agreement ................................................ 1,750,000
-----------
6,340,869
-----------
Deferred tax liabilities:
Property and equipment ........................................... 15,252,026
Intangibles ....................................................... 48,105,843
-----------
63,357,869
-----------
Net deferred tax liability ........................................... $(57,017,000)
===========
</TABLE>
At September 30, 1996, a valuation allowance has not been established
since in the opinion of management, it is more likely than not that the deferred
tax assets will be realized.
Under the provisions of the Internal Revenue Code, Benedek Broadcasting
has approximately $7,200,000 of net operating loss carryforwards available to
offset future tax liabilities of Benedek Broadcasting.
Reconciliation of the statutory federal income tax rate to the Benedek
Broadcasting's effective tax rate is as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- --------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Computed "expected" income tax benefit ....................... (35.0)% (35.0)% (35.0)% (35.0)%
State income taxes, net of federal effect .................... -- (5.0) -- (5.0)
Loss allocated to stockholder due to "S"
Corporation status ........................................ 26.5 -- 4.0 8.3
Intangible amortization not deductible for
tax purposes .............................................. 7.3 6.0 26.4 6.5
Other, net ................................................... 1.2 (1.6) 4.6 0.4
---- ---- ---- ----
Effective tax rate ........................................... --% (35.6)% --% (24.8)%
==== ==== ==== ====
</TABLE>
-13-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
ASSETS 1995 1996
---- ----
(Unaudited)
<S> <C> <C>
Federal Communication Commission (FCC)
Licenses, at cost, less accumulated amortization of $326,312
and $1,524,955 for 1995 and 1996, respectively .............................. $ 15,304,138 $ 124,294,374
Goodwill, less accumulated amortization of $216,030 .............................. -- 34,348,770
------------- -------------
$ 15,304,138 $ 158,643,144
============= =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Deferred tax liability ........................................................... $ -- $ 33,999,000
------------- -------------
Stockholder's Equity:
Common stock, $0.01 par authorized 3,000 shares,
issued 100 shares, outstanding 99 shares .................................... -- 1
Additional paid-in capital ....................................................... 16,211,650 126,400,528
Note receivable .................................................................. (581,200) --
Accumulated deficit .............................................................. (326,312) (1,175,185)
------------- -------------
15,304,138 125,225,344
Less one share held in treasury .................................................. -- 581,200
------------- -------------
15,304,138 124,644,144
------------- -------------
$ 15,304,138 $ 158,643,144
============= =============
</TABLE>
-14-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Period Nine Months
February 28, Ended
Three Months 1995 Through Sept. 30,
Ended Sept. 30, Sept. 30, 1995 1996
-------------------------- -----------------------------
1995 1996
---- ----
<S> <C> <C> <C> <C>
Operating expense, amortization ................... $ 121,880 $ 1,013,482 $ 220,291 $ 1,414,673
---------- ---------- --------- ----------
Net (loss) before income tax
benefit ......................................... $ (121,880) $(1,013,482) $ (220,291) $(1,414,673)
Income tax benefit ................................ -- 565,800 -- 565,800
---------- ---------- ---------- ----------
Net (loss) .................................... $ (121,880) $ (447,682) $ (220,291) $ (848,873)
========== ========== ========== ==========
</TABLE>
-15-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENT OF STOCKHOLDER'S EQUITY
Nine Months Ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Additional
Common Paid-in Note Accumulated Treasury
Stock Capital Receivable Deficit Stock Total
----- ------- ---------- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995 .... $ -- $ 16,211,650 $ (581,200) $ (326,312) $ -- $ 15,304,138
Acquisition of treasury stock
through cancellation of note
receivable .................... -- -- 581,200 -- (581,200) --
Exchange of common stock for
membership interests in LLC ... 1 (1) -- -- -- --
Capital contribution of FCC
Licenses from parent .......... -- 110,188,879 -- -- -- 110,188,879
Net (loss) ...................... -- -- -- (848,873) -- (848,873)
----- ------------ ----------- ------------ ---------- -------------
Balance at September 30, 1996 ... $ 1 $126,400,528 $ -- $(1,175,185) $ (581,200) $ 124,644,144
===== ============ =========== =========== ========== =============
</TABLE>
-16-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Period
February 25, Nine Months
1995 Through Ended
Sept. 30, 1995 Sept. 30, 1996
--------------- --------------
<S> <C> <C>
Cash flows from operating activities
Net (loss) ...................................................................... $ (220,291) $ (848,873)
Adjustment to reconcile net (loss) to net cash provided by
operating activities:
Amortization ................................................................ 220,291 1,414,673
Decrease in deferred tax liability .......................................... -- (565,800)
------------ ------------
Net cash provided by operating activities ................................. -- --
------------ ------------
Net change in cash ........................................................ -- --
Cash:
Beginning ....................................................................... -- --
------------ ------------
Ending .......................................................................... $ -- $ --
============ ============
Supplemental schedule of noncash investing and
financing activities
FCC licenses acquired by issuing membership certificates ........................ $ 15,630,450 $ --
FCC licenses acquired by contribution of capital ................................ -- 110,188,879
Notes received for issuance of membership certificates .......................... 581,200 --
Acquisition of treasury stock through cancellation of note
receivable .................................................................... $ -- $ 581,200
============ ============
</TABLE>
-17-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(NOTE A) - NATURE OF THE BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS: Benedek License Corporation ("BLC") is a wholly
owned subsidiary of Benedek Broadcasting Corporation ("Benedek Broadcasting").
BLC was formed on April 18, 1996 to own and hold the Federal Communication
Commission ("FCC") licenses for the twenty-two television stations owned by
Benedek Broadcasting which are located throughout the United States.
BASIS OF PRESENTATION: The financial statements include all adjustments,
consisting of normal and recurring adjustments, which are considered necessary
in the opinion of management for the fair presentation of the financial position
as of September 30, 1996 and the results of operations and cash flows for the
period February 28, 1995 through September 30, 1995 and the nine months ended
September 30, 1996. These financial statements do not include all the
information and footnotes required by generally accepted accounting principles.
Operating results for the three and nine month periods ended September
30, 1996 are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 1996.
(NOTE B) - BUSINESS COMBINATION
On June 6, 1996, Benedek Broadcasting Company, L.L.C. (the "LLC"), a 99%
owned subsidiary of Benedek Broadcasting, was merged into BLC. Since these
entities had identical stockholder ownership, this was accounted for in a manner
similar to a pooling-of-interests and the results of operations are included for
the above mentioned periods since the formation of the LLC on February 28, 1995.
(NOTE C) - ACQUISITIONS
On June 6, 1996, Benedek Broadcasting acquired thirteen television
stations including their respective FCC licenses. These licenses and the related
goodwill and deferred tax liabilities were transferred on that day to BLC as
contributed capital based on the pro rata share of the allocated purchase price
paid by Benedek Broadcasting.
(NOTE D) - INCOME TAX MATTERS AND CHANGE IN TAX STATUS
BLC is subject to federal and state income taxes. Prior to the
consummation of the acquisitions and the related financing, the LLC filed a
partnership income tax return and the members reported their respective shares
of the income, deductions, losses and credits of the LLC on their income tax
returns.
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences, operating losses and
tax credit carryforwards. Deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases. Deferred tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.
-18-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Under the provision of Statement of Financial Accounting Standards (SFAS)
No. 109, the deferred tax assets and liabilities, consist of the following
components:
<TABLE>
<CAPTION>
September 30,
1996
-------------
<S> <C>
Deferred tax assets:
Loss carryforwards .............................. $ 615,300
Deferred tax liability:
FCC licenses .................................... 34,614,300
------------
Net deferred tax liability... ............. $(33,999,000)
============
</TABLE>
At September 30, 1996, a valuation allowance has not been established
since in the opinion of management, it is more likely than not that the deferred
tax assets will be realized.
Under the provisions of the Internal Revenue Code, BLC has approximately
$1,533,000 of net operating loss carryforwards available to offset future tax
liabilities of the BLC and its parent.
Reconciliation of the statutory federal income tax rate to the BLC's
effective tax rate is as follows:
<TABLE>
<CAPTION>
For the Period
February 28, Nine Months
Three Months 1995 Through Ended
Ended September September
September 30, 30, 1995 30, 1996
----------------------- --------- ---------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Computed "expected" income tax benefit .................... (35.0)% (35.0)% (35.0)% (35.0)%
State income taxes, net of federal effect ................. -- (5.0) -- (5.0)
Loss allocated to member of LLC ........................... 35.0 -- 35.0 11.3
Intangible amortization not deductible for
tax purposes ............................................ -- 8.5 -- 6.1
Other, net ................................................ -- (24.3) -- (17.4)
----- ----- ----- -----
Effective tax rate ........................................ --% (55.8)% --% (40.0)%
===== ===== ===== =====
</TABLE>
(NOTE E) - STOCKHOLDER'S EQUITY
Benedek Broadcasting has pledged 100% of the outstanding common stock of
BLC as collateral for the Senior Secured Notes and the Term Loan Facilities
issued by Benedek Broadcasting.
BLC has guaranteed the obligations of Benedek Broadcasting with respect
to the Senior Secured Notes and the Term Loan Facilities.
-19-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
This Quarterly Report on Form 10-Q contains forward-looking statements
that involve risks and uncertainties. Actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including changes in national and regional economies,
competition in the television business, successful integration of acquired
television stations, pricing fluctuations in local and national advertising,
program ratings and changes in programming costs, among other factors.
Except as otherwise provided, the financial data set forth below is
derived from the historical financial statements of Benedek Broadcasting
prepared in accordance with generally accepted accounting principles. Such
historical financial data includes the results of operations of five television
stations acquired from Stauffer Communications, Inc. (the "Stauffer Stations")
and eight television stations acquired from Brissette Broadcasting Corporation
(the "Brissette Stations," and together with the Stauffer Stations, the
"Acquired Stations") from the date of the acquisition thereof on June 6, 1996.
As used herein, "Same Station" data refers to the historical results of
operations of all 22 television stations currently owned by Benedek Broadcasting
as if such stations were owned by Benedek Broadcasting throughout the periods
indicated with pro forma adjustments only for corporate expenses, depreciation
and amortization.
As used herein, "Adjusted EBITDA" is defined as operating income before
financial income as derived from the consolidated statements of operations plus
depreciation and amortization, amortization of program broadcast rights and
noncash compensation less payments for program broadcast rights. "Adjusted
EBITDA" as defined in Benedek Broadcasting's Credit Agreement excludes from the
foregoing definition certain noncash revenues used in determining operating
income. As used herein, "broadcast cash flow" is defined as Adjusted EBITDA plus
corporate expenses.
The operating revenues of Benedek Broadcasting are derived primarily
from the sale of advertising time and, to a lesser extent, from compensation
paid by the networks for broadcasting network programming and from barter
transactions for goods and services. Revenue depends on the ability of Benedek
Broadcasting to provide popular programming which attracts audiences in the
demographic groups targeted by advertisers, thereby allowing Benedek
Broadcasting to sell advertising time at satisfactory rates. Revenue also
depends significantly on factors such as the national and local economy and the
level of local competition.
Approximately 54.9% of the gross revenues of Benedek Broadcasting in the
nine months ended September 30, 1996 was generated from local and regional
advertising, which is sold primarily by a station's sales staff, and the
remainder of the advertising revenues is comprised primarily of national
advertising, which is sold by national sales representatives retained by Benedek
Broadcasting. Benedek Broadcasting generally pays commissions to advertising
agencies on local, regional and national advertising and to national sales
representatives on national advertising. Net revenues reflect deductions from
gross revenues for commissions payable to advertising agencies and national
sales representatives.
-20-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW (CONTINUED)
Local/regional advertising and national advertising constitute the
largest categories of Benedek Broadcasting's operating revenues and represent
approximately 82.2% of gross revenues for the nine months ended September 30,
1996 as compared to 87.1% for the nine months ended September 30, 1995. Although
relatively constant as a total percentage of gross revenues, the mix of
advertising revenue can vary depending on the level of political advertising
revenue. Excluding political advertising revenue, the percentage of gross
revenues attributable to local/regional advertising and national advertising of
Benedek Broadcasting was 86.1% for the nine months ended September 30, 1996 as
compared to 87.9% for the nine months ended September 30, 1995. The decrease was
the result of an increase in network compensation of $2.6 million or 125.5%,
representing 7.2% of gross revenues (excluding political advertising revenues)
for the nine months ended September 30, 1996 as compared to 5.1% of gross
revenues (excluding political advertising revenues) for the nine months ended
September 30, 1995. For the nine months ended September 30, 1996, Benedek
Broadcasting reported net revenues of $59.9 million compared to net revenues of
$36.2 million for the nine months ended September 30, 1995. Benedek Broadcasting
had a net loss of $5.6 million for the nine months ended September 30, 1996
compared to a net income of $6.0 million (after an extraordinary gain of $6.9
million) for the nine months ended September 30, 1995. Adjusted EBITDA for the
nine months ended September 30, 1996 was $21.5 million as compared to $14.0
million for the nine months ended September 30, 1995.
In December 1995, Benedek Broadcasting entered into new long-term
affiliation agreements with CBS effective retroactive to July 1, 1995. In
connection with such arrangements, CBS paid Benedek Broadcasting bonus payments
of $2.5 million in the fourth quarter of 1995 and $2.5 million in the first
quarter of 1996. These payments are being recognized as revenue by the Company
at the rate of $0.5 million per year over the ten-year term of the affiliation
agreements. In connection with these payments, Benedek Broadcasting also agreed
with CBS that, upon the acquisition of the Acquired Stations, the terms of the
affiliation agreements for the Acquired Stations which are CBS affiliates would
be extended through 2005.
Benedek Broadcasting's primary operating expenses are employee
compensation, programming and depreciation and amortization. Changes in
compensation expense result primarily from adjustments to fixed salaries based
on employee performance and inflation and, to a lesser extent, from changes in
sales commissions paid based on levels of advertising revenues. Programming
expense consists primarily of amortization of program rights. Benedek
Broadcasting purchases first run and off-network syndicated programming on an
ongoing basis and has a policy of closely matching payments for and amortization
of program rights in each period. A network-affiliated station receives
approximately two-thirds of its required daily programming from the network at
no cost. Depreciation and amortization expense has generally declined from
period to period as assets acquired at the time of the acquisition of a station
are fully depreciated. However, for the nine months ended September 30, 1996,
depreciation and amortization increased $8.3 million due to the acquisition of
the Acquired Stations. Barter expense generally offsets barter revenue and
reflects the fair market value of goods and services received. Benedek
Broadcasting's operating expenses (excluding depreciation and amortization) have
remained fairly constant and represent approximately 65.7% of net revenues for
the nine months ended September 30, 1996 as compared to 61.4% of net revenues
for the nine months ended September 30, 1995.
-21-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW (CONTINUED)
On March 31, 1995, Benedek Broadcasting acquired for a cash purchase
price of $28.7 million, substantially all of the assets (excluding cash and
accounts receivable) of the CBS affiliate serving both Dothan, Alabama and
Panama City, Florida (the "Dothan Station").
On June 6, 1996, Benedek Broadcasting acquired substantially all of the
broadcast television assets (including working capital of approximately $1.6
million) of the Stauffer Stations consisting of five principal broadcast
television stations and four satellite broadcast television stations for a
purchase price of $54.5 million. The principal stations acquired by Benedek
Broadcasting were KCOY-TV, Santa Maria, California; WIBW-TV, Topeka, Kansas;
KMIZ-TV, Columbia, Missouri; KGWC-TV. Casper, Wyoming; and KGWN-TV, Cheyenne,
Wyoming. KGWC-TV operates two satellite stations, KGWL-TV, Lander, Wyoming, and
KGWR-TV, Rock Springs, Wyoming, both of which rebroadcast the programming of
KGWC-TV. KGWN-TV operates two satellite stations, KSTF-TV, Scottsbluff, Nebraska
and KTVS-TV, Sterling, Colorado, both of which rebroadcast the programming of
KGWN-TV. All of the Stauffer Stations are affiliated with CBS, except for
KMIZ-TV, Columbia, Missouri, which is affiliated with ABC.
On June 6, 1996, Benedek Broadcasting acquired all of the capital stock
of Brissette Broadcasting Corporation ("Brissette") for $270.0 million in cash
and preferred stock. All of the outstanding indebtedness of Brissette was paid
in full by the sellers at the closing. Pursuant to the Brissette purchase
agreement, at the closing Brissette was required to have working capital of at
least $8.8 million and any amount in excess thereof was to be paid to the
sellers. By acquiring all of the capital stock of Brissette, Benedek
Broadcasting acquired eight network-affiliated television stations including
WMTV-TV, the NBC affiliate serving Madison, Wisconsin; WWLP-TV, the NBC
affiliate serving Springfield, Massachusetts; WILX-TV, the NBC affiliate serving
Lansing, Michigan; WHOI-TV, the ABC affiliate serving Peoria, Illinois; WSAW-TV,
the CBS affiliate serving Wausau, Wisconsin; WTRF-TV, the CBS affiliate serving
Wheeling, West Virginia and Steubenville, Ohio; KAUZ-TV, the CBS affiliate
serving Wichita Falls, Texas; and KOSA-TV, the CBS affiliate serving Odessa,
Texas. Of the $270.0 million paid for the capital stock of Brissette, $225.0
million was paid in cash and $45.0 million was paid by the issuance to GECC and
Mr. Paul Brissette of the junior preferred stock of BCC.
Benedek Broadcasting has included Adjusted EBITDA and broadcast cash
flow data because such data is used by certain investors to measure a company's
ability to service debt. Adjusted EBITDA is used to pay principal and interest
on long-term debt and to fund capital expenditures. Adjusted EBITDA does not
purport to represent cash provided by operating activities as reflected in
Benedek Broadcasting's Consolidated Financial Statements, is not a measure of
financial performance under generally accepted accounting principles and should
not be considered in isolation or as a substitute for measures of performance
prepared in accordance with generally accepted accounting principles.
-22-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW (CONTINUED)
The following table sets forth certain historical results of operations
(in thousands) for the three and nine months ended September 30, 1995 and 1996.
The table includes the results of operations of the Acquired Stations only from
the closing date of June 6, 1996.
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
---------------------------- ---------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating income ......................................................... $ 3,040 $ 1,972 $ 10,439 $ 8,696
Add:
Amortization of program
broadcast rights ................................................... 537 1,530 1,619 2,832
Depreciation and amor-
tization ........................................................... 1,416 7,800 3,540 11,869
Corporate expenses ................................................... 418 693 1,116 1,781
Less:
Payments for program
broadcast liabilities ................................................ (537) (710) (1,574) (1,896)
-------- -------- -------- --------
Broadcast cash flow ...................................................... $ 4,874 $ 11,285 $ 15,140 $ 23,282
======== ======== ======== ========
</TABLE>
The following Same Station information (in thousands) gives effect to the
acquisitions of the Dothan Station and Brissette and Stauffer Stations as if
such transactions were consummated on January 1, 1995. The Same Station
information for the three months and nine months ended September 30, 1995 and
1996 does not purport to represent what Benedek Broadcasting's results of
operations would have been if such transactions had been effected at such date
and do not purport to project results of operations of Benedek Broadcasting in
any future period.
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
---------------------------- ---------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues ........................................... $28,092 $29,786 $87,845 $89,681
Operating expenses:
Selling, technical and
program expenses ................................... 12,672 14,337 38,027 41,764
General and administrative ........................... 4,590 4,984 13,964 14,761
Depreciation and amorti-
zation ............................................. 7,965 7,800 23,319 22,564
Corporate ............................................ 635 693 2,021 2,043
------- ------- ------- -------
25,862 27,814 77,331 81,132
------- ------- ------- -------
Operating income ....................................... $ 2,230 $ 1,972 $10,514 $ 8,549
======= ======= ======= =======
</TABLE>
-23-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW (CONTINUED)
<TABLE>
<CAPTION>
Three Months Ended Sept. 30, Nine Months Ended Sept. 30,
---------------------------- ----------------------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Broadcast cash flow ........ $ 10,885 $ 11,285 $ 35,902 $ 34,113
Broadcast cash flow margin . 38.7% 37.9% 40.9% 38.0%
Adjusted EBITDA ............ 10,250 10,592 33,881 32,069
Adjusted EBITDA margin ..... 36.5% 35.6% 38.6% 35.8%
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995
Net revenues for the three months ended September 30, 1996 increased
$17.6 million or 144.3% to $29.8 million from $12.2 million for the three months
ended September 30, 1995 primarily as a result of the acquisition on June 6,
1996 of the Acquired Stations which increased net revenue by $17.8 million. On a
Same Station basis, net revenues for the three months ended September 30, 1996
increased $1.7 million or 6.0% from the three months ended September 30, 1995.
On a Same Station basis, political advertising revenue for the three months
ended September 30, 1996 increased by $2.1 million to $2.3 million. Gross
revenues on a Same Station basis excluding political advertising revenue
decreased $0.2 million or 0.5% from the three months ended September 30, 1995.
Net revenues during the three month period ended September 30, 1996 were
adversely affected by unexpected weakness in advertising revenues for Benedek
Broadcasting's 12 CBS affiliated stations and six ABC affiliated stations which
experienced a decline in audience shares. On a Same Station basis, net revenues
of Benedek Broadcasting's CBS affiliated stations increased by 0.3% and net
revenues of Benedek Broadcasting's ABC affiliated stations increased by 0.3%,
while net revenues of Benedek Broadcasting's NBC affiliated stations increased
by 23.8%.
Operating expenses for the three months ended September 30, 1996
increased $18.6 million or 203.9% to $27.8 million from $9.2 million for the
three months ended September 30, 1995. Of the increase in operating expenses,
$17.4 million was attributable to the acquisition of the Acquired Stations. As a
percentage of net revenues, operating expenses increased to 93.4% from 75.0% in
the three months ended September 30, 1995, primarily as a result of an increase
of $6.4 million in depreciation and amortization expense. On a Same Station
basis, operating expenses for the three months ended September 30, 1996
increased $2.0 million or 7.6% from the three months ended September 30, 1995.
Operating expenses as a percentage of net revenues on a Same Station basis
increased from 92.0% for the three months ended September 30, 1995 to 93.4% in
the three months ended September 30, 1996.
Operating income for the three months ended September 30, 1996 decreased
$1.0 million or 35.1% to $2.0 million from $3.0 million for the three months
ended September 30, 1995.
Financial (expenses), net for the three months ended September 30, 1996
increased $3.1 million or 76.7% to $7.2 million from $4.1 million in the three
months ended September 30, 1995, due to Benedek Broadcasting's higher debt level
following the completion of the financing of the purchase price for the Acquired
Stations in June 1996.
-24-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW (CONTINUED)
Income tax benefit for the three months ended September 30, 1996 was
$1.8 million compared to none for the three months ended September 30, 1995.
Reductions in the deferred tax liabilities related to the acquisitions and the
creation of deferred tax assets generated the income tax benefit for the three
months ended September 30, 1996. For the three months ended September 30, 1995
Benedek Broadcasting recognized no income tax benefit due to its "S" Corporation
status.
Net loss for the three months ended September 30, 1996 was $3.3 million
as compared to net loss of $1.0 million for the three months ended September 30,
1995.
Broadcast cash flow for the three months ended September 30, 1996
increased $6.4 million or 131.5% to $11.3 million from $4.9 million for the
three months ended September 30, 1995 primarily as a result of the acquisition
of the Acquired Stations. As a percentage of net revenues, broadcast cash flow
margin decreased to 37.9% for the three months ended September 30, 1996 from
40.0% for the three months ended September 30, 1995. On a Same Station basis,
broadcast cash flow for the three months ended September 30, 1996 increased $0.4
million or 3.7% to $11.3 million from $10.9 million for the three months ended
September 30, 1995. As a percentage of net revenues, broadcast cash flow margin
on a Same Station basis decreased to 37.9% for the three months ended September
30, 1996 from 38.7% for the three months ended September 30, 1995.
The decrease in broadcast cash flow and broadcast cash flow margin on a
Same Station basis for the three month period ended September 30, 1996 was
primarily related to an increase in operating expenses used in determining
broadcast cash flow and to lower than expected net revenues. Such operating
expenses increased by $1.6 million or 15.7% at the Acquired Stations for the
three months ended September 30, 1996 from the comparable period in 1995 and by
$0.5 million or 6.8% at Benedek Broadcasting's previously owned stations.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1995
Net revenues for the nine months ended September 30, 1996 increased
$23.6 million or 65.2% to $59.9 million from $36.3 million for the nine months
ended September 30, 1995 primarily as a result of the acquisition on June 6,
1996 of the Acquired Stations which increased net revenue by $22.8 million. On a
Same Station basis, net revenues for the nine months ended September 30, 1996
increased $1.8 million or 2.1% from the nine months ended September 30, 1995.
Political advertising revenue on a Same Station basis for the nine months ended
September 30, 1996 increased by $3.4 million to $3.9 million. Gross revenues on
a Same Station basis excluding political advertising revenue decreased $1.1
million or 1.1% from the nine months ended September 30, 1995.
Net revenues during the nine month period ended September 30, 1996 were
adversely affected by unexpected weakness in advertising revenues for Benedek
Broadcasting's 12 CBS affiliated stations and six ABC affiliated stations which
experienced a decline in audience shares. On a Same Station basis, net revenues
of Benedek Broadcasting's CBS affiliated stations decreased by 2.8% and net
revenues of Benedek Broadcasting's ABC affiliated stations increased by 3.4%,
while net revenues of Benedek Broadcasting's NBC affiliated stations increased
by 9.2%.
-25-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1995 (CONTINUED)
Operating expenses for the nine months ended September 30, 1996
increased $25.4 million or 98.4% to $51.2 million from $25.8 million for the
nine months ended September 30, 1995. As a percentage of net revenues, operating
expenses increased to 85.5% from 71.2% in the nine months ended September 30,
1995, as a result of the acquisition of the Acquired Stations. On a Same Station
basis, operating expenses for the nine months ended September 30, 1996 increased
$3.8 million or 4.9% from the nine months ended September 30, 1995. Operating
expenses as a percentage of net revenues on a Same Station basis increased from
88.0% for the nine months ended September 30, 1995 to 90.5% in the nine months
ended September 30, 1996. The increases in operating expenses and operating
expense as a percentage of net revenues on a Same Station basis resulted in part
from increased expenses at certain of the Acquired Stations during the second
quarter prior to their acquisition by Benedek Broadcasting.
Operating income for the nine months ended September 30, 1996 decreased
$1.7 million or 16.7% to $8.7 million from $10.4 million for the nine months
ended September 30, 1995.
Financial (expenses), net for the nine months ended September 30, 1996
increased $4.9 million or 43.1% to $16.1 million from $11.3 million in the nine
months ended September 30, 1995 due to Benedek Broadcasting's higher debt level
following the completion of the financing of the purchase price for the Acquired
Stations in June 1996 and the offering of the Senior Secured Notes in March
1995.
Income tax benefit for the nine months ended September 30, 1996 was $3.1
million compared to none for the nine months ended September 30, 1995. The
income tax benefit for the nine months ended September 30, 1996 was attributable
to the reduction in deferred tax liabilities assumed in the acquisitions and the
creation of deferred tax assets. The income tax benefit was less than expected
for the nine months ended September 30, 1996 due to Benedek Broadcasting's "S"
Corporation status prior to the acquisitions. There was no income tax benefit
for the nine months ended September 30, 1995 due to Benedek Broadcasting's "S"
Corporation status.
Net loss for the nine months ended September 30, 1996 was $5.6 million
as compared to net income of $6.0 million for the nine months ended September
30, 1995. The nine months ended September 30, 1995 also included an
extraordinary gain of $6.9 million on the early extinguishment of debt.
Broadcast cash flow for the nine months ended September 30, 1996
increased $8.2 million or 53.8% to $23.3 million from $15.1 million for the nine
months ended September 30, 1995 primarily as a result of the acquisition on June
6, 1996 of the Acquired Stations. As a percentage of net revenues, broadcast
cash flow margin decreased to 38.9% for the nine months ended September 30, 1996
from 41.8% for the nine months ended September 30, 1995. On a Same Station
basis, broadcast cash flow for the nine months ended September 30, 1996
decreased $1.8 million or 5.0% to $34.1 million from $35.9 million for the nine
months ended September 30, 1995. As a percentage of net revenues, broadcast cash
flow margin on a Same Station basis decreased to 38.0% for the nine months ended
September 30, 1996 from 40.9% for the nine months ended September 30, 1995.
-26-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1995 (CONTINUED)
The decrease in broadcast cash flow and broadcast cash flow margin on a
Same Station basis for the nine month period ended September 30, 1996 was
primarily related to an increase in operating expenses used in determining
broadcast cash flow and to lower than expected net revenues. Such operating
expenses increased by $3.8 million or 10.6% at the Acquired Stations for the
nine month period ended September 30, 1996 from the comparable period in 1995,
while such operating expenses at Benedek Broadcasting's previously owned
stations remained flat.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities is the primary source of liquidity
for Benedek Broadcasting and were $9.0 million for the nine months ended
September 30, 1996 compared to $(3.5) million for the nine months ended
September 30, 1995. For the nine months ended September 30, 1996 cash flows from
operating activities included $2.5 million from the bonus payment from CBS. Cash
flows from operating activities included $2.8 million of collections on net
accounts receivable provided by Stauffer Communications, Inc. Noncash
operating expenses, including depreciation and amortization, increased due to
the acquisition. Depreciation and amortization caused operating income to
decrease by $12.6 million without an effect on cash flow. For the nine months
ended September 30, 1995 cash flows from operating activities primarily resulted
from the refinancing of substantially all of Benedek Broadcasting's existing
long-term debt in March 1995 and the payment of $4.4 million of deferred and
contingent interest and $2.7 million of prepayment premiums. In addition, cash
used by operations included $6.9 million of noncash gain on early extinguishment
of debt.
Cash Flows from Investing Activities were $(324.9) million for the nine
months ended September 30, 1996, compared to $(27.5) million for the nine months
ended September 30, 1995. For the nine months ended September 30, 1996, cash
flows from investing activities primarily resulted from the payment of $321.8
million for the Acquired Stations. For the nine months ended September 30, 1995
cash flows used in investing activities included $26.7 million paid to acquire
the Dothan Stations.
Cash Flows from Financing Activities were $311.4 million for the nine
months ended September 30, 1996 compared to $33.1 million for the nine months
ended September 30, 1995. For the nine months ended September 30, 1996 cash
flows from financing activities resulted from the proceeds of financing
acquisitions. For the nine months ended September 30, 1995 cash flows from
financing activities primarily resulted from the issuance in March 1995 of
$135.0 million of Benedek Broadcasting's Senior Secured Notes to refinance
existing indebtedness and finance the acquisition of the Dothan Station, offset
by $96.0 million of principal payments on existing indebtedness.
THE FINANCING PLAN
Benedek Broadcasting, together with its parent BCC, implemented a
financing plan in order to finance the acquisitions of the Acquired Stations and
to pay fees and expenses related thereto. The financing plan consisted of (i)
the offer and sale by BCC of the Senior Subordinated Discount Notes to generate
gross proceeds of $90.2 million, (ii) the sale by BCC of units consisting of
redeemable preferred
-27-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FINANCING PLAN (CONTINUED)
stock and warrants to generate gross proceeds of $60.0 million, (iii) Benedek
Broadcasting borrowing $128.0 million pursuant to the Term Loan Facilities of
the Credit Agreement and (iv) BCC issuing an aggregate of $45.0 million initial
liquidation preference of seller junior discount preferred stock to the sellers
of the Brissette Stations. Benedek Broadcasting also has available to it $15.0
million under the Revolving Credit Facility of the Credit Agreement.
The Term Loan Facilities consist of (i) Series A Facility of $70.0
million and (ii) Series B Facility of $58.0 million. The Term Loan Facilities
provide for quarterly amortization until final maturity (except in the first
year during which amortization will be on a semiannual basis). The Series A
Facility will mature five years and the Series B Facility will mature six and
one-half years after the closing. Benedek Broadcasting will be required to make
scheduled amortization payments on the Term Loan Facilities, on an aggregate
basis for Series A and Series B Facilities, as follows: during the first year
after closing, $6.0 million; during the second year after closing, $11.0
million; during the third year after closing, $14.5 million; during the fourth
year after closing, $16.0 million; during the fifth year after closing, $27.5
million; during the sixth year after closing, $15.0 million; and during the
first half of the seventh year after closing, $38.0 million.
In addition, Benedek Broadcasting will be required to make prepayments
on the Term Loan Facilities under certain circumstances, including upon certain
asset sales and issuance of debt or equity securities. Benedek Broadcasting will
also be required to make prepayments on the Term Loan Facilities in an amount
equal to 50% of Benedek Broadcasting's excess cash flow (as defined). These
mandatory prepayments will be applied to prepay, on a pro rata basis, the Series
A and Series B Facilities. The Series A Facility bears interest, at the
Company's option, at a base rate plus a spread or at a Eurodollar rate plus a
spread. The Series B Facility bears interest, at Benedek Broadcasting's option,
at a base rate plus a spread or at a Eurodollar rate plus a spread. The margins
above the base rate and the Eurodollar rate at which the Term Loan Facilities
and Revolving Credit Facility will bear interest are subject to reductions at
such times as certain leverage ratio performance tests are met.
Benedek Broadcasting will have the ability, subject to a borrowing base
and compliance with certain covenants and conditions, to borrow up to an
additional $15.0 million for general corporate purposes pursuant to the
revolving credit facility. The revolving credit facility has a term of five
years and is fully revolving until final maturity. The revolving credit facility
bears interest, at Benedek Broadcasting's option, at a base rate plus a spread
or at a Eurodollar rate plus a spread.
The Term Loan Facilities and the revolving credit facility are secured
by certain of Benedek Broadcasting's present and future property and assets. The
Term Loan Facilities are also guaranteed by BLC and will be secured by all of
the stock of BLC.
The Term Loan Facilities and the revolving credit facility contains
certain financial covenants, including, but not limited to, covenants related to
cash interest coverage, fixed charge coverage, bank debt/Adjusted EBITDA ratio,
total debt/Adjusted EBITDA ratio and minimum Adjusted EBITDA. In addition, the
Term Loan Facilities and the revolving credit facility contain other affirmative
and negative covenants relating to (among other things) liens, payments on other
debt, restricted junior payments
-28-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FINANCING PLAN (CONTINUED)
(excluding distributions from Benedek Broadcasting to BCC) transactions with
affiliates, mergers and acquisitions, sales of assets, leases, guarantees and
investments. The Term Loan Facilities and the revolving credit facility contain
customary events of default for highly-leveraged financings, including certain
changes in ownership or control of Benedek Broadcasting or BCC.
As a result of the lower than expected increases in net revenues on a
Same Station basis and the increases in operating expenses on a Same Station
basis at certain of the Acquired Stations during the second quarter prior to
their acquisition by Benedek Broadcasting as described above, at September 30,
1996, Benedek Broadcasting did not meet certain financial ratios contained in
the Credit Agreement. The lenders under the Credit Agreement have agreed to
waive such noncompliance. In connection with such waiver, Benedek Broadcasting
agreed that for so long as its ratio of debt to Adjusted EBITDA (as defined in
the Credit Agreement) is in excess of 7.00:1.00, the Term Loan Facilities will
bear interest at an additional spread of 25 basis points from that originally
provided for in the Credit Agreement. In addition, the results for the second
and third quarters of fiscal 1996 will continue to affect the ability of Benedek
Broadcasting to meet financial ratios in the Credit Agreement for the full
fiscal 1996 year and during fiscal 1997. During the fourth quarter of 1996,
Benedek Broadcasting intends to discuss with its bank lenders a further
amendment to the Credit Agreement. Benedek Broadcasting believes such an
amendment will be required in order to avoid further noncompliance with
financial ratios contained in the Credit Agreement.
Benedek Broadcasting believes that the financing plan will provide for a
long-term financing structure that will allow management to concentrate its
efforts on maximizing results of operations. Benedek Broadcasting anticipates
that Adjusted EBITDA of Benedek Broadcasting will be sufficient to finance the
operating requirements of the Stations, debt service requirements of BCC and
presently anticipated capital expenditures until such time that the debt matures
or requires payment in full for at least the period until BCC is required to
make cash payments in respect of the Notes, the Exchangeable Preferred Stock and
the Seller Junior Discount Preferred Stock (approximately five years). Benedek
Broadcasting anticipates that capital expenditures of approximately $6.0 million
will be required in the aggregate at the Acquired Stations. Such capital
expenditures will be financed either from cash provided by operations,
borrowings under the Revolving Credit Facility or purchase money financing.
BCC is a holding company that will derive all of its operating income
and Adjusted EBITDA from its sole subsidiary, Benedek Broadcasting, the common
stock of which, together with all other assets of BCC, have been pledged to
secure BCC's senior guarantee of all indebtedness of Benedek Broadcasting
outstanding under the Credit Agreement and in respect of the Senior Secured
Notes. As a holding company, BCC's ability to pay its obligations, including its
obligation to pay interest on and principal of the Notes, whether at maturity,
upon a change of control or otherwise, will be dependent primarily upon
receiving dividends and other payments or advances from Benedek Broadcasting.
Benedek Broadcasting is a separate and distinct legal entity and has no
obligation, contingent or otherwise, to pay any amounts to BCC or to make funds
available to BCC for debt service or any other obligation. Although the Credit
Agreement does not limit the ability of Benedek Broadcasting to pay dividends or
make other payments to BCC, the Senior Secured Note Indenture does contain such
limitations. As a result of the implementation of the financing plan on June 6,
1996, Benedek Broadcasting received a capital contribution from BCC in the
amount of approximately $188.8 million, which was used to complete the
acquisitions and which is the limit of the amount which can be distributed to
BCC under the Senior Secured Note Indenture.
-29-
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SEASONALITY
Net revenues and Adjusted EBITDA of Benedek Broadcasting are generally
higher during the fourth quarter of each year, primarily due to increased
expenditures by advertisers in anticipation of holiday season consumer spending
and an increase in viewership during this period, and, to a lesser extent,
during the second quarter of each year.
INCOME TAXES
Historically, Benedek Broadcasting had elected to be taxed as an S
Corporation. Benedek Broadcasting's election to be taxed as an S Corporation
automatically terminated concurrently with the consummation of the acquisition
of the Acquired Stations and as a result will now be subject to federal and
state income taxes.
EMERGING ACCOUNTING STANDARDS
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 123, Accounting for Stock Based Compensation in
October 1995, which establishes financial accounting and reporting standards for
stock based employee compensation plans, including stock purchase plans, stock
options, restricted stock, and stock appreciation rights. The Company has
elected to continue accounting for stock based compensation under Accounting
Principles Board Opinion No. 25. The disclosure requirements of SFAS No. 123
will be effective for the Company's financial statements beginning in 1996.
Management does not believe that the implementation of SFAS 123 will have a
material effect on its consolidated financial statements.
-30-
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit
No. Description of Exhibits
- ------ -----------------------
3.1 - Certificate of Incorporation of the Registrant, as amended,
incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1, File No. 33-91412, filed on April
20, 1995 (the "S-1 Registration Statement").
3.2 - By-laws of the Registrant, as amended, incorporated by reference to
Exhibit 3.2 to the S-1 Registration Statement, incorporated by
reference to Exhibit 3.3 to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1996 (the "Second Quarter 1996
10-Q").
3.3 - Certificate of Incorporation of Benedek License Corporation, incorpor-
ated by reference to Exhibit 3.3 to the Second Quarter 1996 10-Q.
3.4 - By-laws of Benedek License Corporation, incorporated by reference to
Exhibit 3.4 to the Second Quarter 1996 10-Q.
4.1 - Indenture dated as of March 1, 1995 between the Registrant and The
Bank of New York, relating to the 11 7/8% Senior Secured Notes due
2005, incorporated by reference to Exhibit 4.1 to the S-1 Registration
Statement.
4.2 - Form of 11 7/8% Senior Secured Note due 2005 (included in Exhibit 4.1
hereof), incorporated by reference to Exhibit 4.2 to the S-1
Registration Statement.
4.3 - First Supplemental Indenture dated as of June 6, 1996 among the
Registrant, Benedek License Corporation and The Bank of New York,
incorporated by reference to Exhibit 4.3 to the Second Quarter 1996
10-Q.
10.1 - Credit Agreement dated as of June 6, 1996 among the Registrant,
Benedek Communications Corporation, the Lenders listed therein, Pearl
Street L.P., Goldman, Sachs & Co. and Canadian Imperial Bank of
Commerce, New York Agency, incorporated by reference to Exhibit 10.1
to the Second Quarter 1996 10-Q.
10.2 - Guaranty dated as of June 6, 1996 by Benedek License Corporation in
favor of Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.2 to the Second Quarter 1996
10-Q.
10.3 - Acquired Assets Security Agreement dated as of June 6, 1996 between
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency, incorporated by reference to Exhibit 10.3 to the Second
Quarter 1996 10-Q.
10.4 - Tangible Assets Security Agreement dated as of June 6, 1996 between
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency, incorporated by reference to Exhibit 10.4 to the Second
Quarter 1996 10-Q.
-31-
<PAGE>
<PAGE>
EXHIBIT AND REPORTS ON FORM 8-K-(CONTINUED)
Exhibit
No. Description of Exhibits
- -------- -----------------------
10.5 - Accounts Receivable Security Agreement dated as of June 6, 1996 among
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency, incorporated by reference to Exhibit 10.5 to the Second
Quarter 1996 10-Q.
10.6 - Merger Agreement dated as of June 6, 1996 between the Registrant and
each of Brissette Broadcasting Corporation, Brissette TV of Lansing,
Inc., Brissette TV of Madison, Inc., Brissette TV of Odessa, Inc.,
Brissette TV of Wichita Falls, Inc., Brissette TV of Springfield,
Inc., Brissette TV of Wausau, Inc., Brissette TV of Wheeling, Inc. and
Brissette TV of Peoria, Inc., incorporated by reference to Exhibit
10.6 to the Second Quarter 1996 10-Q. 10.7 - Employment Agreement
dated as of June 6, 1996 between Registrant and A. Richard Benedek,
incorporated by reference to Exhibit 10.6 to the Second Quarter 1996
10-Q.
10.7 - Employment Agreement dated as of June 6, 1996 between Registrant and
A. Richard Benedek, incorporated by reference to Exhibit 10.7 to the
Second Quarter 1996 10-Q.
10.8 - Employment Agreement dated as of June 6, 1996 between Registrant and
K. James Yager, incorporated by reference to Exhibit 10.8 to the
Second Quarter 1996 10-Q.
10.9 - Employment Agreement dated as of March 8, 1996 between Registrant and
Douglas E. Gealy, incorporated by reference to Exhibit 10.9 to the
Second Quarter 1996 10-Q.
10.10- Employment Agreement dated as of June 6, 1996 between Registrant and
Ronald L. Lindwall, incorporated by reference to Exhibit 10.10 to the
Second Quarter 1996 10-Q.
10.11- Employment Agreement dated as of June 6, 1996 between Registrant and
Terrance F. Hurley, incorporated by reference to Exhibit 10.11 to the
Second Quarter 1996 10-Q.
*10.12- Limited Waiver and First Amendment to Credit Agreement dated as of
October 31, 1996 among the Registrant, Benedek Communications
Corporation, Goldman Sachs Credit Partners L.P., the lenders listed
therein and Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent.
* 27 - Financial Data Schedule Pursuant to Article 5 of Regulation
S-X.
- -----------------
*Filed herewith
(b) Reports on Form 8-K.
None
-32-
<PAGE>
<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.
BENEDEK BROADCASTING CORPORATION
(Registrant)
By: /S/ RONALD L. LINDWALL
----------------------------------
(Signature)
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
Date: November 14, 1996
------------------
-33-
<PAGE>
<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.
BENEDEK LICENSE CORPORATION
(Subsidiary Guarantor Registrant)
By: /S/ RONALD L. LINDWALL
-----------------------------------
(Signature)
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
Date: November 14, 1996
------------------------
-34-
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- ------------------
<S> <C> <C>
3.1 - Certificate of Incorporation of the Registrant, as amended,
incorporated by reference to Exhibit 3.1 to the Registrant's
Registration Statement on Form S-1, File No. 33-91412, filed on April
20, 1995 (the "S-1 Registration Statement").
3.2 - By-laws of the Registrant, as amended, incorporated by reference to
Exhibit 3.2 to the S-1 Registration Statement.
3.3 - Certificate of Incorporation of Benedek License Corporation,
incorporated by reference to Exhibit 3.3 to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1996 (the "Second
Quarter 1996 10-Q)"
3.4 - By-laws of Benedek License Corporation, incorporated by reference to
Exhibit 3.4 to the Second Quarter 1996 10-Q.
4.1 - Indenture dated as of March 1, 1995 between the Registrant and The
Bank of New York, relating to the 11 7/8% Senior Secured Notes due
2005, incorporated by reference to Exhibit 4.1 to the S-1 Registration
Statement.
4.2 - Form of 11 7/8% Senior Secured Note due 2005 (included in Exhibit 4.1
hereof), incorporated by reference to Exhibit 4.2 to the S-1
Registration Statement.
4.3 - First supplemental Indenture dated as of June 6, 1996 among the
Registrant, Benedek License Corporation and the Bank of New York,
incorporated by reference to Exhibit 4.3 to the Second Quarter 1996
10-Q.
10.1 - Credit Agreement dated as of June 6, 1996 among the Registrant,
Benedek Communications Corporation, the Lenders listed therein, Pearl
Street L.P., Goldman, Sachs & Co. and Canadian Imperial Bank of
Commerce, New York Agency, incorporated by reference to Exhibit 10.1
to the Second Quarter 1996 10-Q.
10.2 - Guaranty dated as of June 6, 1996 by Benedek License Corporation in
favor of Canadian Imperial Bank of Commerce, New York Agency,
incorporated by reference to Exhibit 10.2 to the Second Quarter 1996
10-Q.
10.3 - Acquired Assets Security Agreement dated as of June 6, 1996 between
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency, incorporated by reference to Exhibit 10.3 to the Second
Quarter 1996 10-Q.
10.4 - Tangible Assets Security Agreement dated as of June 6, 1996 between
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency, incorporated by reference to Exhibit 10.4 to the Second
Quarter 1996 10-Q.
10.5 - Accounts Receivable Security Agreement dated as of June 6, 1996 among
the Registrant and Canadian Imperial Bank of Commerce, New York
Agency, incorporated by reference to Exhibit 10.5 to the Second
Quarter 1996 10-Q.
</TABLE>
-35-
<PAGE>
<PAGE>
EXHIBIT INDEX (CONTINUED)
<TABLE>
<CAPTION>
Location of Exhibit
Exhibit in Sequential
No. Description of Exhibits Numbering System
- ------- ----------------------- -------------------
<S> <C> <C>
10.6 - Merger Agreement dated as of June 6, 1996 between the Registrant and
each of Brissette Broadcasting Corporation, Brissette TV of Lansing,
Inc., Brissette TV of Madison, Inc., Brissette TV of Odessa, Inc.,
Brissette TV of Wichita Falls, Inc., Brissette TV of Springfield,
Inc., Brissette TV of Wausau, Inc., Brissette TV of Wheeling, Inc. and
Brissette TV of Peoria, Inc., incorporated by reference to Exhibit
10.6 to the Second Quarter 1996 10-Q. 10.7 - Employment Agreement
dated as of June 6, 1996 between Registrant and A. Richard Benedek,
incorporated by reference to Exhibit 10.6 to the Second Quarter 1996
10-Q.
10.7 - Employment Agreement dated as of June 6, 1996 between Registrant and
A. Richard Benedek, incorporated by reference to Exhibit 10.7 to the
Second Quarter 1996 10-Q.
10.8 - Employment Agreement dated as of June 6, 1996 between Registrant and
K. James Yager, incorporated by reference to Exhibit 10.8 to the
Second Quarter 1996 10-Q.
10.9 - Employment Agreement dated as of March 8, 1996 between Registrant and
Douglas E. Gealy, incorporated by reference to Exhibit 10.9 to the
Second Quarter 1996 10-Q.
10.10- Employment Agreement dated as of June 6, 1996 between Registrant and
Ronald L. Lindwall, incorporated by reference to Exhibit 10.10 to the
Second Quarter 1996 10-Q.
10.11- Employment Agreement dated as of June 6, 1996 between Registrant and
Terrance F. Hurley, incorporated by reference to Exhibit 10.11 to the
Second Quarter 1996 10-Q.
*10.12- Limited Waiver and First Amendment to the Credit Agreement dated as of
October 31, 1996 among the Registrant, Benedek Communications
Corporation, Goldman Sachs Credit Partners L.P., the lenders listed
therein and Canadian Imperial Bank of Commerce, New York Agency, as
Administrative Agent.
* 27 - Financial Data Schedule Pursuant to Article 5 of Regulation S-X.
- ----------------
*Filed herewith
</TABLE>
-36-
<PAGE>
<PAGE>
EXECUTION
BENEDEK BROADCASTING CORPORATION
BENEDEK COMMUNICATIONS CORPORATION
LIMITED WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT
This LIMITED WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT (this
"WAIVER AND AMENDMENT") is dated as of October 31, 1996, and entered into by and
among Benedek Broadcasting Corporation, a Delaware corporation ("COMPANY"),
Benedek Communications Corporation, a Delaware corporation ("BCC"), Goldman
Sachs Credit Partners L.P. (as successor to Pearl Street L.P.; "GSCP") and the
other financial institutions listed on the signature pages hereof ("LENDERS"),
and Canadian Imperial Bank of Commerce, New York Agency ("CIBC-NYA"), as
Administrative Agent, and for purposes of Section 11 hereof, Benedek License
Corporation, a Delaware corporation ("LICENSE SUB"), and is made with reference
to that certain Credit Agreement dated as of June 6, 1996 (the "CREDIT
AGREEMENT"), by and among Company, BCC, Lenders, GSCP, as Arranging Agent,
Goldman, Sachs & Co., as Syndication Agent, and CIBC-NYA, as Administrative
Agent and Collateral Agent. Capitalized terms used herein without definition
shall have the same meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, BCC and Company have requested Lenders to waive compliance
with the leverage ratio covenants in the Credit Agreement and Lenders desire to
grant such waiver; and
WHEREAS, BCC, Company and Lenders desire to amend the Credit Agreement
to increase the interest rate applicable to the Loans, subject to reduction
under certain conditions;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. WAIVER
Subject to the terms and conditions set forth herein and in reliance on
the representations and warranties of BCC and Company herein contained, Lenders
hereby
1
<PAGE>
<PAGE>
waive compliance with certain provisions of subsection 6.6 of the Credit
Agreement as follows:
(A) MINIMUM FIXED CHARGE COVERAGE RATIO. Lenders hereby waive
compliance with the provisions of subsection 6.6B with respect to the
Fixed Charge Coverage Ratio for the Fiscal Quarter ended September 30,
1996; provided that the Fixed Charge Coverage Ratio for such Fiscal
Quarter is not less than 1.08:1.00.
(B) MAXIMUM LEVERAGE RATIO. Lenders hereby waive compliance
with the provisions of subsection 6.6C with respect to the Leverage
Ratio as of September 30, 1996; provided that the Leverage Ratio as of
such date is not greater than 7.65:1.00.
(C) MAXIMUM CREDIT FACILITIES LEVERAGE RATIO. Lenders hereby
waive compliance with the provisions of subsection 6.6D with respect to
the Credit Facilities Leverage Ratio as of September 30, 1996; provided
that the Credit Facilities Leverage Ratio as of such date is not
greater than 2.80:1.00.
SECTION 2. LIMITATION OF WAIVER
Without limiting the generality of the provisions of subsection 9.6 of
the Credit Agreement, the waiver set forth above shall be limited precisely as
written and relates solely to the noncompliance by BCC and Company with the
provisions of subsections 6.6B, 6.6C and 6.6D of the Credit Agreement in the
manner and to the extent described above, and nothing in this Waiver and
Amendment shall be deemed to:
(A) constitute a waiver of compliance by BCC or Company with
respect to (i) subsection 6.6 of the Credit Agreement in any other
instance or (ii) any other term, provision or condition of the Credit
Agreement or any other instrument or agreement referred to therein; or
(B) prejudice any right or remedy that Agents or any Lender may
now have (except to the extent such right or remedy was based upon
existing defaults that will not exist after giving effect to this
Waiver and Amendment) or may have in the future under or in connection
with the Credit Agreement or any other instrument or agreement referred
to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
SECTION 3. AMENDMENTS TO CREDIT AGREEMENT
2
<PAGE>
<PAGE>
Subsection 1.1 of the Credit Agreement is hereby amended by deleting
the definitions of "Applicable Margin" and "Pricing Reduction" in their entirety
and substituting the following therefor:
"APPLICABLE MARGIN" means, for each AXEL Series A, AXEL Series
B and Revolving Loan, as of any date of determination, a percentage per
annum as set forth below less the Pricing Reduction, if any:
<TABLE>
<CAPTION>
==============================================================================================================
AXELS SERIES A AXELS SERIES B REVOLVING LOANS
- --------------------------------------------------------------------------------------------------------------
BASE RATE EURODOLLAR BASE RATE EURODOLLAR BASE RATE EURODOLLAR
LOANS RATE LOANS LOANS RATE LOANS LOANS RATE LOANS
==============================================================================================================
<S> <C> <C> <C> <C> <C>
2.25% 3.25% 2.75% 3.75% 2.25% 3.25%
==============================================================================================================
</TABLE>
After October 1, 1996, any change in the Applicable Margin resulting
from a Pricing Reduction shall become effective on the day following
delivery of the relevant Compliance Certificate to Administrative Agent
and Lenders and shall remain in effect through the next scheduled date
for delivery of a Compliance Certificate.
"PRICING REDUCTION" means (i) from the Closing Date to (but not
including) October 1, 1996, a pricing reduction equal to 0.25%; (ii) if
at any time after October 1, 1996 the Leverage Ratio as of the end of
any Fiscal Quarter is less than 7.00:1.00, a pricing reduction equal to
0.25%; and (iii) if at any time after the first anniversary of the
Closing Date the Leverage Ratio as of the end of any Fiscal Quarter is
equal to or less than 5.75:1.00, a pricing reduction equal to 0.50%.
After October 1, 1996, the Pricing Reduction shall be determined by
reference to the Leverage Ratio set forth in the most recent financial
statements delivered by Company to Administrative Agent and Lenders
pursuant to clause (ii) or (iii) of subsection 5.1 (accompanied by a
Compliance Certificate delivered by Company pursuant to clause (iv) of
subsection 5.1). It is understood and agreed that the Pricing Reduction
set forth in clause (ii) and the Pricing Reduction set forth in clause
(iii) of this definition are not cumulative. Notwithstanding anything
herein to the contrary, at any time an Event of Default shall have
occurred and be continuing, the Pricing Reduction shall be zero.
SECTION 4. CONDITIONS TO EFFECTIVENESS
Notwithstanding anything to the contrary herein, this Waiver and
Amendment shall become effective only upon the satisfaction of the following
conditions precedent (the date of satisfaction of such conditions being referred
to herein as the "FIRST AMENDMENT EFFECTIVE DATE"):
3
<PAGE>
<PAGE>
(A) BCC, Company and License Sub shall have delivered to
Administrative Agent sufficient originally executed copies for each
Lender and its counsel of this Waiver and Amendment; Administrative
Agent and Lenders constituting Requisite Lenders shall each have
executed a counterpart of this Waiver and Amendment; and Company and
Administrative Agent shall have received written or telephonic
notification of such execution by Requisite Lenders and authorization
of delivery thereof; and
(B) Administrative Agent shall have received from Company, for
distribution to each Lender that has executed and delivered a
counterpart of this Waiver and Amendment on or prior to 5:00 p.m. (New
York City time) on November 7, 1996, an amendment fee in an amount
equal to 0.05% of the combined AXEL Exposure and Revolving Loan
Exposure of such Lender.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Waiver and Amendment and
to amend the Credit Agreement in the manner provided herein, each of BCC and
Company hereby represents and warrants that after giving effect to this Waiver
and Amendment:
(A) CORPORATE POWER AND AUTHORITY. Each of BCC, Company and
License Sub has all requisite corporate power and authority to enter
into this Waiver and Amendment, and each of BCC and Company has all
requisite corporate power and authority to carry out the transactions
contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Waiver and Amendment.
(B) AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Waiver and Amendment and the performance of the Credit Agreement
as amended by this Waiver and Amendment (as so amended, the "AMENDED
AGREEMENT") have been duly authorized by all necessary corporate action
on the part of BCC, Company and License Sub.
(C) NO CONFLICT. The execution and delivery by each of BCC and
Company of this Waiver and Amendment and the performance by Company of
the Amended Agreement do not and will not (i) violate any provision of
any law or any governmental rule or regulation applicable to BCC,
Company or any of their respective Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of BCC or Company or any of their
respective Subsidiaries or any order, judgment or decree of any court
or other agency or government binding on BCC, Company or any of their
respective Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under
any Contractual Obligation of BCC, Company or any of their
respective Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the
4
<PAGE>
<PAGE>
properties or assets of BCC, Company or any of their respective
Subsidiaries (other than Liens created under any of the Loan Documents
in favor of Collateral Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under
any Contractual Obligation of BCC, Company or any of their respective
Subsidiaries.
(D) GOVERNMENTAL CONSENTS. The execution and delivery by each
of BCC and Company of this Waiver and Amendment and the performance by
BCC and Company of the Amended Agreement do not and will not require
any registration with, consent or approval of or notice to, or other
action to, with or by, any federal, state or other governmental
authority or regulatory body.
(E) BINDING OBLIGATION. This Waiver and Amendment and the
Amended Agreement have been duly executed and delivered by each of BCC
and Company and are the legally valid and binding obligations of BCC
and Company, enforceable against BCC and Company in accordance with
their respective terms, except as may be limited by bankruptcy,
insolvency reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles
relating to enforceability.
(F) INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of
the Credit Agreement are and will be true, correct and complete in all
material respects on and as of the First Amendment Effective Date to
the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date.
(G) ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated
by this Waiver and Amendment that would constitute an Event of Default
or a Potential Event of Default.
(H) NO CHANGE TO ORGANIZATIONAL DOCUMENTS. Neither the
Certificate of Incorporation nor the Bylaws of BCC or of Company has
been amended, supplemented or otherwise modified since the Closing
Date.
SECTION 6. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
(A) On and after the First Amendment Effective Date, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to the "Credit Agreement", "thereunder", "thereof" or
words or like
5
<PAGE>
<PAGE>
import referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(B) Except as specifically amended by this Waiver and Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(C) The execution, delivery and performance of this Waiver and
Amendment shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy of Agent
or any Lender under, the Credit Agreement or any of the other Loan Documents.
SECTION 7. FEES AND EXPENSES.
Each of BCC and Company acknowledges that all costs, fees and expenses
as described in subsection 9.2 of the Credit Agreement incurred by Agents and
their respective counsel with respect to this Waiver and Amendment and the
documents and transactions contemplated hereby shall be for the account of BCC
and Company.
SECTION 8. HEADINGS.
Section and subsection headings in this Waiver and Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Waiver and Amendment for any other purpose or be given any
substantive effect.
SECTION 9. COUNTERPARTS
This Waiver and Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
6
<PAGE>
<PAGE>
SECTION 10. GOVERNING LAW
THIS WAIVER AND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
SECTION 11. ACKNOWLEDGEMENT AND CONSENT BY CREDIT SUPPORT PARTIES
BCC is a party to the BCC Pledge Agreement and the BCC Security
Agreement (collectively, the "BCC COLLATERAL DOCUMENTS") and the BCC Guaranty,
in each case as amended through the First Amendment Effective Date, pursuant to
which BCC has (a) guarantied the Obligations and (b) created Liens in favor of
Collateral Agent on certain Collateral and pledged certain Collateral to
Collateral Agent to secure the obligations of BCC under the BCC Guaranty.
License Sub is a party to the License Sub Guaranty, as amended through the First
Amendment Effective Date, pursuant to which License Sub has guarantied the
Obligations. BCC and License Sub are collectively referred to herein as the
"CREDIT SUPPORT PARTIES", and the BCC Guaranty, the BCC Collateral Documents and
the License Sub Guaranty are collectively referred to herein as the "CREDIT
SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Waiver and Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Waiver and Amendment. Each Credit Support Party hereby confirms that each Credit
Support Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guaranty or secure, as the case may be, to
the fullest extent possible the payment and performance of all "Guarantied
Obligations" and "Secured Obligations", as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Guarantied Obligations" or
"Secured Obligations", as the case may be, in respect of the Obligations of
Company now or hereafter existing under or in respect of the Amended Agreement
and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Waiver and Amendment. Each Credit Support
Party represents and warrants that all representations and warranties contained
in the Amended Agreement and the Credit Support Documents to which it is
7
<PAGE>
<PAGE>
a party or otherwise bound are true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Waiver and
Amendment, such Credit Support Party is not required by the terms of the Credit
Agreement or any other Loan Document to consent to the amendments to the Credit
Agreement effected pursuant to this Waiver and Amendment and (ii) nothing in the
Credit Agreement, this Waiver and Amendment or any other Loan Document shall be
deemed to require the consent of such Credit Support Party to any future
amendments to the Credit Agreement.
[Remainder of page intentionally left blank]
8
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
LENDERS:
GOLDMAN SACHS CREDIT PARTNERS
L.P.,
as a Lender
By: ________________________________________
Authorized Signatory
CANADIAN IMPERIAL BANK OF
COMMERCE, NEW YORK AGENCY,
as a Lender and as Administrative Agent
By: CIBC Wood Gundy Securities Corp.,
as agent
By: ____________________________________
Managing Director
CIBC INC.,
as a Lender
By: CIBC Wood Gundy Securities Corp.,
as agent
By: ____________________________________
Managing Director
S-1
<PAGE>
<PAGE>
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR,
as a Lender
By: ________________________________________
Name:
Title:
CHL HIGH YIELD LOAN PORTFOLIO, A
UNIT OF THE CHASE MANHATTAN
BANK,
as a Lender
By: ________________________________________
Name:
Title:
ING CAPITAL ADVISORS, INC.,
AS AGENT FOR BANK SYNDICATION
ACCOUNT,
as a Lender
By: ________________________________________
Name:
Title:
S-2
<PAGE>
<PAGE>
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY,
as a Lender
By: ________________________________________
Name:
Title:
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.,
as a Lender
By: Merrill Lynch Asset Management, L.P.,
as Investment Advisor
By: ____________________________________
Name:
Title:
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY,
as a Lender
By: ________________________________________
Name:
Title:
S-3
<PAGE>
<PAGE>
PILGRIM AMERICA PRIME RATE
TRUST,
as a Lender
By: ________________________________________
Name:
Title:
PRIME INCOME TRUST,
as a Lender
By: ________________________________________
Name:
Title:
PROTECTIVE LIFE INSURANCE
COMPANY,
as a Lender
By: ________________________________________
Name:
Title:
SENIOR DEBT PORTFOLIO,
as a Lender
By: ________________________________________
Name:
Title:
S-4
<PAGE>
<PAGE>
RESTRUCTURED OBLIGATIONS
BACKED BY SENIOR ASSETS B.V.,
as a Lender
By: ________________________________________
Name:
Title:
STRATA FUNDING LTD.,
as a Lender
By: ________________________________________
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST,
as a Lender
By: ________________________________________
Name:
Title:
S-5
<PAGE>
<PAGE>
BCC AND COMPANY:
BENEDEK BROADCASTING
CORPORATION
By: ________________________________________
Name:
Title:
BENEDEK COMMUNICATIONS
CORPORATION
By: ________________________________________
Name:
Title:
BENEDEK LICENSE CORPORATION
By: ________________________________________
Name:
Title:
S-6
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 923027
<NAME> BENEDEK BROADCASTING CORPORATION
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 5,177,412
<SECURITIES> 0
<RECEIVABLES> 19,952,565
<ALLOWANCES> 422,178
<INVENTORY> 0
<CURRENT-ASSETS> 31,398,719
<PP&E> 121,790,941
<DEPRECIATION> 34,536,903
<TOTAL-ASSETS> 489,648,853
<CURRENT-LIABILITIES> 25,286,918
<BONDS> 254,823,502
<COMMON> 1,046,500
0
0
<OTHER-SE> 145,162,915
<TOTAL-LIABILITY-AND-EQUITY> 489,648,853
<SALES> 67,327,612
<TOTAL-REVENUES> 68,638,196
<CGS> 8,736,975
<TOTAL-COSTS> 8,736,975
<OTHER-EXPENSES> 50,986,493
<LOSS-PROVISION> 218,861
<INTEREST-EXPENSE> 16,394,945
<INCOME-PRETAX> (7,452,024)
<INCOME-TAX> (1,847,474)
<INCOME-CONTINUING> (5,604,550)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,604,550)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<PAGE>
