<PAGE>
<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
FOR THE QUARTER ENDED September 30, 1997 COMMISSION FILE NUMBERS:
Benedek Broadcasting Corporation 33-78792
Benedek Communications Corporation 333-09529
</TABLE>
----------------------
BENEDEK BROADCASTING CORPORATION
and
BENEDEK COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
----------------------
<TABLE>
<S> <C> <C>
Delaware Benedek Broadcasting Corporation 13-2982954
Delaware Benedek Communications Corporation 36-4076007
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
----------------------
SUBSIDIARY GUARANTOR REGISTRANT
<TABLE>
<S> <C> <C>
Benedek License Corporation Delaware 36-4081877
(Exact Name of Subsidiary Guarantor (State of Formation) (I.R.S Employer Identification
as Specified in its Certificate of Incorporation) (Number)
</TABLE>
----------------------
100 Park Avenue 61101
Rockford, Illinois (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: 815-987-5350
----------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered:
------------------- --------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrants (1) have 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, and (2) have been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
100% of the voting common stock of Benedek Communications Corporation is
owned by Mr. A. Richard Benedek. 100% of the voting common stock of Benedek
Broadcasting Corporation is owned by Benedek Communications Corporation. None of
the voting common stock of either registrant is held by non-affiliates.
Indicate the number of shares outstanding of each of Benedek Broadcasting
Corporation's classes of common stock as of the latest practicable date: At
November 13, 1997, there were outstanding 148.85 shares of common stock, without
par value.
Indicate the number of shares outstanding of each of Benedek Communications
Corporation's classes of common stock, as of the latest practicable date: At
November 13, 1997, there were outstanding 7,030,000 shares of common stock,
$0.01 par value.
================================================================================
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION AND
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
FORM 10-Q TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item
Number Page
------ ----
PART I - FINANCIAL STATEMENTS
<S> <C> <C>
Item 1. FINANCIAL STATEMENTS
Introductory Comments........................................................ 1
Benedek Communications Corporation and Benedek Broadcasting Corporation and
Subsidiaries
Consolidated Balance Sheets as of December 31, 1996 and September 30, 1997. 2
Consolidated Statements of Operations for the Three Months Ended
September 30, 1996 and 1997.............................................. 3
Consolidated Statements of Operations for the Nine Months Ended
September 30, 1996 and 1997.............................................. 4
Consolidated Statement of Stockholder's Equity (Deficit) for the Nine
Months Ended September 30, 1997.......................................... 5
Consolidated Statements of Cash Flows for the Nine Months Ended
September 30, 1996 and 1997.............................................. 6
Notes to Consolidated Financial Statements................................. 8
Benedek License Corporation
Balance Sheets as of December 31, 1996 and September 30, 1997.............. 14
Statements of Operations for the Three Months and Nine Months Ended
September 30, 1996 and 1997.............................................. 15
Statement of Stockholder's Equity for the Nine Months Ended
September 30, 1997....................................................... 16
Statements of Cash Flows for the Nine Months ended September 30,
1996 and 1997............................................................ 17
Notes to Financial Statements.............................................. 18
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.......................................... 19
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................................ 27
Item 6. Exhibits and reports on Form 8-K............................................. 27
SIGNATURES............................................................................... 29
</TABLE>
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Important Explanatory Note:
The integrated Form 10-Q is filed, without audit, pursuant to the Securities
Exchange Act of 1934, as amended, for each of Benedek Communications
Corporation and its wholly owned subsidiary, Benedek Broadcasting
Corporation. Unless the context requires otherwise, references to the
"Company" refer to both Benedek Communications Corporation and Benedek
Broadcasting Corporation. Benedek Communications Corporation is a holding
company with minimal separate operations from its operating subsidiary,
Benedek Broadcasting Corporation. Separate financial information has been
provided for each entity and, where appropriate, separate disclosures.
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 the Annual Reports on Form 10-K of each
of Benedek Communications Corporation and Benedek Broadcasting Corporation
for the fiscal year ended December 31, 1996.
-1-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, 1996 September 30, 1997
----------------------------------- -----------------------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
--------------- --------------- --------------- ---------------
(Unaudited)
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents.............. $ 8,090,583 $ 8,091,683 $ 2,632,400 $ 2,633,500
Receivables
Trade, net........................... 23,744,311 23,744,311 21,499,888 21,499,888
Due from Seller...................... 474,011 474,011 - -
Other................................ 386,163 385,063 1,240,209 1,239,109
Current portion of program broadcast
rights............................... 4,427,832 4,427,832 6,167,770 6,167,770
Prepaid expenses....................... 1,453,007 1,453,007 2,001,753 2,001,753
Deferred income taxes.................. 1,333,000 1,333,000 990,000 990,000
--------------- --------------- --------------- ---------------
TOTAL CURRENT ASSETS....... 39,908,907 39,908,907 34,532,020 34,532,020
--------------- --------------- --------------- ---------------
Property and Equipment.................... 84,021,301 84,021,301 74,580,860 74,580,860
--------------- --------------- --------------- ---------------
Intangible Assets......................... 354,622,296 354,622,296 347,789,147 347,789,147
--------------- --------------- --------------- ---------------
Other Assets
Program broadcast rights, less current
portion.............................. 2,298,365 2,298,365 2,126,552 2,126,552
Deferred loan costs.................... 9,667,095 13,385,766 9,009,874 12,343,259
Land held for sale..................... 109,000 109,000 109,000 109,000
Other.................................. 670,605 670,605 62,115 62,115
--------------- --------------- --------------- ---------------
12,745,065 16,463,736 11,307,541 14,640,926
--------------- --------------- --------------- ---------------
$ 491,297,569 $ 495,016,240 $ 468,209,568 $ 471,542,953
=============== =============== =============== ===============
LIABILITIES AND STOCKHOLDER'S
EQUITY (DEFICIT)
Current Liabilities
Current maturities of notes and
leases payable....................... $ l14,015,273 $ 14,015,273 $ 19,562,708 $ 19,562,708
Current maturities of program
broadcast rights payable............ 6,119,953 6,119,953 8,108,934 8,108,934
Accounts payable and accrued expenses.. 15,368,581 15,368,581 9,292,725 9,292,725
Deferred revenue....................... 707,347 707,347 657,067 657,067
--------------- --------------- --------------- ---------------
TOTAL CURRENT LIABILITIES.. $ 36,211,154 36,211,154 37,621,434 37,621,434
--------------- --------------- --------------- ---------------
Long-Term Obligations
Notes and leases payable (Note D)...... 247,171,289 344,219,003 239,198,752 346,013,153
Program broadcast rights payable....... 1,592,400 1,592,400 1,615,777 1,615,777
Deferred revenue....................... 4,435,166 4,435,165 3,945,862 3,945,862
Deferred income taxes.................. 57,415,000 54,600,000 52,002,000 44,997,000
--------------- --------------- --------------- ---------------
310,613,855 404,846,568 296,762,391 396,571,792
--------------- --------------- --------------- ---------------
Exchangeable redeemable senior preferred
stock (Note C)........................ - 58,462,223 - 69,130,236
--------------- --------------- --------------- ---------------
Seller junior discount preferred
stock (Note C)....................... - 47,057,040 - 49,907,938
--------------- --------------- --------------- ---------------
Stockholder's Equity (Deficit)
Common stock, no par, authorized
200 shares, issued 179.09 shares... 1,046,500 - 1,046,500 -
Common stock, Class A $0.01 par value
25,000,000 authorized none issued or
outstanding.......................... - - - -
Common stock, Class B $0.01 par value
25,000,000 authorized, 7,030,000
issued and outstanding.............. - 70,300 - 70,300
Additional paid-in capital............. 149,592,627 (35,346,586) 149,204,600 (38,523,769)
Accumulated deficit.................... (4,685,418) (16,284,459) (14,944,208) (43,234,978)
--------------- --------------- --------------- ---------------
145,953,709 (51,560,745) 135,306,892 (81,688,447)
--------------- --------------- --------------- ---------------
Less 30.24 shares held in treasury..... (1,481,149) - (1,481,149) -
--------------- --------------- --------------- ---------------
144,472,560 (51,560,745) 133,825,743 (81,688,447)
--------------- --------------- --------------- ---------------
$ 491,297,569 $ 495,016,240 $ 468,209,568 $ 471,542,953
=============== =============== =============== ===============
</TABLE>
-2-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------------------------------------------------
1996 1997
----------------------------------- -----------------------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net revenues.............................. $ 29,786,193 $ 29,786,193 $ 30,986,072 $ 30,986,072
--------------- --------------- --------------- --------------
Operating expenses:
Selling, technical and program expenses 14,329,062 14,329,062 14,453,692 14,453,692
General and administrative............. 4,983,063 4,983,063 4,658,211 4,658,211
Depreciation and amortization.......... 7,776,513 7,776,513 7,416,159 7,416,159
Corporate.............................. 693,375 693,375 949,680 949,680
--------------- --------------- --------------- --------------
27,782,013 27,782,013 27,477,742 27,477,742
--------------- --------------- --------------- --------------
OPERATING INCOME.................. 2,004,180 2,004,180 3,508,330 3,508,330
--------------- --------------- --------------- --------------
Financial income (expense):
Interest expense:
Cash interest........................ (6,854,643) (6,854,643) (7,439,179) (7,439,179)
Other interest....................... (367,253) (3,442,437) (374,686) (3,948,305)
--------------- --------------- --------------- --------------
(7,221,896) (10,297,080) (7,813,865) (11,387,484)
Interest income........................ 34,620 34,621 29,342 29,342
--------------- --------------- --------------- --------------
(7,187,276) (10,262,459) (7,784,523) (11,358,142)
--------------- --------------- --------------- --------------
Loss on investment........................ - - (608,798) (608,798)
--------------- --------------- --------------- --------------
(LOSS) BEFORE INCOME TAX BENEFIT.. (5,183,096) (8,258,279) (4,884,991) (8,458,610)
Income tax benefit........................ 1,847,474 3,077,679 1,592,163 3,021,164
--------------- --------------- --------------- --------------
NET (LOSS)........................ $ (3,335,622) (5,180,600) $ (3,292,828) (5,437,446)
=============== ===============
Preferred stock dividends and accretion... (3,251,249) (4,637,979)
--------------- --------------
Net income (loss) applicable to common stock $ (8,431,849) $ (10,075,425)
=============== ==============
Earnings (loss) per common share....... $ (1.20) $ (1.28)
=============== ==============
Weighted-average common shares outstanding 7,030,000 7,030,000
=============== ==============
</TABLE>
-3-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------------------------------
1996 1997
----------------------------------- -----------------------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net revenues.............................. $ 59,901,221 $ 59,901,221 $ 92,179,715 $ 92,179,715
--------------- --------------- --------------- ---------------
Operating expenses:
Selling, technical and program expenses 27,870,091 27,870,091 44,084,389 44,084,389
General and administrative............. 9,676,914 9,676,914 14,079,764 14,079,764
Depreciation and amortization.......... 11,845,806 11,845,806 22,959,504 22,959,504
Corporate.............................. 1,780,809 1,780,809 2,771,428 2,771,428
--------------- --------------- --------------- ---------------
51,173,620 51,173,620 83,895,085 83,895,085
--------------- --------------- --------------- ---------------
OPERATING INCOME.................. 8,727,601 8,727,601 8,284,630 8,284,630
--------------- --------------- --------------- ---------------
Financial income (expense):
Interest expense:
Cash interest........................ (15,734,623) (15,734,623) (21,612,667) (21,612,667)
Other interest....................... (683,781) (4,540,950) (1,112,026) (11,522,686)
--------------- --------------- --------------- ---------------
(16,418,404) (20,275,573) (22,724,693) (33,135,353)
Interest income........................ 247,054 247,054 99,376 99,376
--------------- --------------- --------------- ---------------
(16,171,350) (20,028,519) (22,625,317) (33,035,977)
--------------- --------------- --------------- ---------------
Loss on investment........................ - - (608,798) (608,798)
--------------- --------------- --------------- ---------------
(LOSS) BEFORE INCOME TAX BENEFIT.. (7,443,749) (11,300,918) (14,949,485) (25,360,145)
Income tax benefit........................ 1,847,474 3,077,679 4,690,695 8,880,695
--------------- --------------- --------------- ---------------
NET (LOSS)........................ $ (5,596,275) (8,223,239) $ (10,258,790) (16,479,450)
=============== ===============
Preferred stock dividends and accretion... (4,142,943) (13,518,911)
--------------- ---------------
Net income (loss) applicable to common stock $ (12,366,182) $ (29,998,361)
=============== ===============
Earnings (loss) per common share....... $ (1.76) $ (4.29)
=============== ===============
Weighted-average common shares outstanding 7,030,000 7,030,000
=============== ===============
</TABLE>
-4-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
Nine Months Ended September 30, 1997
(Unaudited)
BENEDEK BROADCASTING CORPORATION
--------------------------------
<TABLE>
<CAPTION>
Additional
Common Paid-In Accumulated Treasury
Stock Capital Deficit Stock Total
----------- -------------- --------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996...... $ 1,046,500 $ 149,592,627 $ (4,685,418) $ (1,481,149) $ 144,472,560
Financial costs related to debt
and preferred stock of Benedek
Communications Corporation..... - (388,027) - - (388,027)
Net (loss)..................... - - (10,258,790) - (10,258,790)
----------- -------------- --------------- ------------ --------------
Balance at September 30, 1997..... $ 1,046,500 $ 149,204,600 $ (14,944,208) $ (1,481,149) $ 133,825,743
=========== ============== =============== ============ ==============
</TABLE>
BENEDEK COMMUNICATIONS CORPORATION
<TABLE>
<CAPTION>
Additional
Common Paid-In Accumulated
Stock Capital Deficit Total
----------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Balance at December 31, 1996.............. $ 70,300 $ (35,346,586) $ (16,284,459) $ (51,560,745)
Accretion to exchangeable redeemable
senior preferred stock................. - (3,047,841) - (3,047,841)
Financial costs related to the sale of
exchangeable redeemable senior
preferred stock........................ - (129,342) - (129,342)
Dividends payable on preferred stock - - (10,471,069) (10,471,069)
Net (loss).............................. - - (16,479,450) (16,479,450)
----------- -------------- --------------- --------------
Balance at September 30, 1997............. $ 70,300 $ (38,523,769) $ (43,234,978) $ (81,688,447)
=========== ============== =============== ==============
</TABLE>
-5-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------------------------------
1996 1997
----------------------------------- -----------------------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net (loss)...................................... $ (5,596,275) $(8,223,239) $ (10,258,790) $ (16,479,450)
Adjustments to reconcile net (loss) to
net cash (used in) operating activities:
Amortization of program broadcast rights 2,823,914 2,823,914 4,600,995 4,600,995
Depreciation and amortization................. 8,249,682 8,249,682 15,574,477 15,574,477
Amortization of intangibles and deferred
loan costs................................... 4,310,329 4,415,386 8,500,881 9,144,852
Amortization of note discount................. - 3,752,112 - 9,766,689
Loss on sale of property and equipment (34,862) (34,862) 23,715 23,715
Deferred income taxes......................... (1,855,778) (3,085,982) (5,070,000) (9,260,000)
Loss on investment............................ - - 608,798 608,798
Changes in operating assets and liabilities,
net of effects of acquisitions:
Receivables................................... 3,912,841 3,913,941 1,389,114 1,389,114
Due to sellers................................ 2,821,334 2,821,334 97,337 97,337
Prepaid expenses and other.................... (307,648) (307,649) (548,748) (548,748)
Payments on program broadcast rights payable.. (1,896,086) (1,896,086) (4,156,766) (4,156,766)
Accounts payable and accrued expenses......... (3,001,126) (3,001,126) (6,276,317) (6,276,317)
Deferred revenue.............................. (423,158) (423,158) (539,584) (539,584)
--------------- --------------- --------------- ---------------
NET CASH PROVIDED BY OPERATING ACTIVITIES.... 9,003,167 9,004,267 3,945,112 3,945,112
--------------- --------------- --------------- ---------------
Cash Flows From Investing Activities
Purchase of property and equipment.............. (2,644,579) (2,644,579) (3,471,503) (3,471,503)
Proceeds from sale of equipment................. 187,300 187,300 15,886 15,886
Reimbursement for equipment purchases........... 79,198 79,198 - -
Purchase of securities.......................... (663,937) (663,937) - -
Payment for acquisition of stations,
net of cash.................................. (321,848,468) (321,848,468) (210,535) (210,535)
Other .......................................... 3,616 3,616 (1,302) (1,302)
--------------- --------------- --------------- ---------------
NET CASH (USED IN) INVESTING ACTIVITIES...... (324,886,870) (324,886,870) (3,667,454) (3,667,454)
--------------- --------------- --------------- ---------------
Cash Flows From Financing Activities
Principal payments on notes and
capital leases payable........................ (249,726) (249,726) (11,892,680) (11,892,680)
Proceeds from issuance of redeemable
preferred stock.... .......................... - 105,000,000 - -
Proceeds from long-term debt.................... 128,000,000 218,178,200 - -
Contribution of paid-in capital by parent 188,377,052 - - -
Proceeds from Revolving Credit Facility - - 6,999,671 6,999,671
Payment of debt and preferred stock
acquisition costs... ........................ (4,734,542) (11,535,690) (842,832) (842,832)
--------------- --------------- --------------- ---------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES....................... 311,392,784 311,392,784 (5,735,841) (5,735,841)
--------------- --------------- --------------- ---------------
(DECREASE) IN CASH AND CASH
EQUIVALENTS................................ (4,490,919) (4,489,819) (5,458,183) (5,458,183)
Cash and cash equivalents:
Beginning....................................... 9,668,331 9,668,331 8,090,583 8,091,683
--------------- --------------- --------------- ---------------
Ending.......................................... $ 5,177,412 $ 5,178,512 $ 2,632,400 $ 2,633,500
=============== =============== =============== ===============
</TABLE>
(Continued)
-6-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------------------------------
1996 1997
----------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
--------------- --------------- --------------- ---------------
Supplemental Disclosure of Cash Flow Information
Cash payments for interest.................... $ 19,450,026 $ 19,450,026 $ 25,291,322 $ 25,291,322
Cash payments for income taxes................ - - 431,543 431,543
=============== =============== =============== ===============
Supplemental Schedule of Noncash Investing and
Financing Activities
Acquisition of program broadcast right $ 3,679,322 $ 3,679,322 $ 6,169,121 $ 6,169,121
Notes and capital leases payable incurred for
purchase of equipment....................... 380,253 380,253 2,467,908 2,467,908
Equipment acquired by barter transactions 62,555 62,555 202,725 202,725
Dividends accrued on redeemable preferred
stock....................................... - 4,142,943 - 10,471,070
Accretion to exchangeable redeemable senior
preferred stock............................. - - - 3,047,841
=============== =============== =============== ===============
Acquisition of Stations:
Cash purchase price........................... $ 321,542,152 $ 321,542,152 $ 210,535 $ 210,535
=============== =============== =============== ===============
Net working capital acquired, net of cash
$535,810................................... $ 9,840,537 $ 9,840,537 $ - -
Property and equipment acquired at fair
market value................................. 72,533,059 72,533,059 31,500 31,500
Intangible assets acquired.................... 301,351,989 301,351,989 179,035 179,035
Deferred income taxes assumed................. (58,872,778) (58,872,778) - -
Other, net.................................... 221,020 221,020 - -
--------------- --------------- --------------- ---------------
325,073,827 325,073,827 210,535 210,535
Less: Application of deposit.................. (3,225,359) (3,225,359) - -
--------------- --------------- --------------- ---------------
$ 321,848,468 $ 321,848,468 $ 210,535 $ 210,535
=============== =============== =============== ===============
</TABLE>
-7-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Note A) - Nature of Business and Basis of Presentation
Nature of Business:
Benedek Communications Corporation ("Benedek Communications") is a holding
company that derives its operating income and cash flow from its wholly owned
subsidiary, Benedek Broadcasting Corporation ("Benedek Broadcasting") which owns
and operates 22 television stations (the "Stations") located throughout the
United States. The operating revenues of the Stations 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 barter
transactions for goods and services. 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 interim unaudited consolidated financial statements of Benedek
Communications include the accounts of Benedek Communications, Benedek
Broadcasting and Benedek License Corporation ("BLC"), a wholly owned subsidiary
of Benedek Broadcasting. The interim unaudited consolidated financial statements
of Benedek Broadcasting include the accounts of Benedek Broadcasting and BLC.
All significant intercompany items and transactions have been eliminated in the
interim unaudited consolidated financial statements. Benedek Broadcasting and
Benedek Communications had identical stock ownership, so the capitalization of
Benedek Communications by its sole stockholder with Benedek Broadcasting stock
was accounted for in a manner similar to a pooling-of-interests.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for the fair presentation of
the financial position as of September 30, 1997 and the results of operations
for the three months and the nine months ended September 30, 1997 have been
included. Operating results for the three months and nine month periods ended
September 30, 1997 are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1997. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Annual Reports on Form 10-K of each of Benedek Broadcasting and Benedek
Communications for the year ended December 31, 1996. Certain prior year amounts
have been reclassified or restated to conform with the current year's
presentation, with no material effect on net income or stockholder's equity.
(Note B) - Acquisitions, Related Party and Business Combinations
On June 6, 1996, Benedek Broadcasting completed two acquisitions. These
acquisitions included (i) the assets of the television broadcasting division of
Stauffer Communications, Inc. consisting of five television stations (the
"Stauffer Stations") for a total purchase price of $54,500,000 and (ii) all the
issued and
-8-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
outstanding 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.
The pro forma results of operations for the nine months ended September 30,
1996, assuming the acquisitions of the Stauffer Stations and Brissette
Broadcasting Corporation had taken place on January 1, 1996 as compared to the
actual results for the nine months ended September 30, 1997 are as follows:
<TABLE>
<CAPTION>
Nine Months Ended September 30,
--------------------------------------------------------------------------
1996 1997
----------------------------------- -----------------------------------
Benedek Benedek Benedek Benedek
Broadcasting Communications Broadcasting Communications
Corporation Corporation Corporation Corporation
--------------- --------------- --------------- ---------------
(Pro forma) (Actual)
<S> <C> <C> <C> <C>
Net revenue............................... $ 89,680,214 $ 89,680,214 $ 92,179,715 $ 92,179,715
Operating expenses........................ (80,638,472) (80,638,472) (84,895,085) (84,895,085)
Financial expenses........................ (21,455,804) (32,605,612) (22,625,317) (33,035,977)
Loss on investment........................ - - (608,798) (608,798)
--------------- --------------- --------------- ---------------
(Loss) before income tax benefit....... (12,414,062) (23,563,870) (14,949,485) (25,360,145)
Income tax benefit........................ 3,760,440 8,135,548 4,690,695 8,880,695
--------------- --------------- --------------- ---------------
Net (loss) ............................ $ (8,653,622) (15,428,322) $ (10,258,790) (16,479,450)
=============== ===============
Preferred stock dividends and accretion... (12,573,600) (13,518,911)
--------------- ---------------
Net (loss) applicable to common stock..... $ (28,001,922) $ (29,998,361)
=============== ===============
(Loss) per common share................ $ (3.98) $ (4.29)
=============== ===============
Weighted-average common shares outstanding 7,030,000 7,030,000
=============== ===============
</TABLE>
(Note C) - Redeemable Equity Securities and Discount Notes
Concurrent with the acquisitions described in (Note B), Benedek
Communications entered into the following financing transactions, the net
proceeds of which were contributed by Benedek Communications to Benedek
Broadcasting to finance the acquisitions.
(1) Benedek Communications sold 60,000 Units in a private placement, which
generated gross proceeds of $60,000,000. Each Unit consisted of (i) ten
shares of Exchangeable Redeemable Senior Preferred Stock, (ii) ten Initial
Warrants, and (iii) 14.8 Contingent Warrants.
(i) Senior Preferred Stock - Benedek Communications issued 600,000 shares
of 15% Exchangeable Redeemable Senior Preferred Stock due 2007 (the
"Senior Preferred Stock"), with an initial liquidation preference
equal to the gross proceeds received of $60,000,000. Of these
proceeds, $9,000,000 was allocated to the initial warrants described
in (ii) below. The Senior Preferred
-9-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Stock is being accreted to its initial liquidation preference of
$60,000,000 using the effective interest method from June 5, 1996 to
July 1, 2000. Benedek Communications has the option to pay dividends
quarterly at 15% of the liquidation preference on any dividend
payment date occurring on or before July 1, 2001 either in cash or by
adding such dividends to the then effective liquidation preference.
Benedek Communications also has the option to immediately redeem
these shares, in whole or in part, at predetermined redemption
prices. If redeemed prior to July 1, 2000, the redemption price is
115% of the then effective liquidation preference. Since it is
management's intention to redeem the Senior Preferred Stock prior to
such date, the amount of the redemption premium payable at such time
is being accreted as a constructive distribution from June 5, 1996 to
July 1, 2000. The Senior Preferred Stock is exchangeable into
debentures at Benedek Communications' option, subject to certain
conditions, in whole on any scheduled dividend payment due. At
September 30, 1997, the carrying value of the Senior Preferred Stock
was $69,130,236.
(ii) Initial Warrants - Benedek Communications issued 600,000 Initial
Warrants which expire on July 1, 2007. Each Initial Warrant entitles
the holder thereof to purchase one share of Class A Common Stock at
an exercise price of $0.01 per share. The value of the Initial
Warrants at the date of issuance was $9,000,000 which was allocated
to paid-in capital.
(iii) Contingent Warrants - Benedek Communications issued 888,000
Contingent Warrants, each warrant to acquire one share of Class A
Common Stock at an exercise price of $0.01 per share. The Contingent
Warrants were issued to an escrow agent and are not outstanding. The
Contingent Warrants are not separable from the Senior Preferred Stock
and will not be delivered out of escrow unless the Senior Preferred
Stock is not redeemed on or prior to July 1, 2000. Since it is
management's intention to redeem the Senior Preferred Stock prior to
any release of the Contingent Warrants from escrow, no allocation of
the proceeds was made to the Contingent Warrants.
(2) Junior Preferred Stock - Benedek Communications issued 450,000 shares of
Seller Junior Discount Preferred Stock due July 1, 2008 (the "Junior
Preferred Stock") with an aggregate liquidation preference equal to the
proceeds of $45,000,000. Dividends are payable to the holders of the
Junior Preferred Stock at 7.92% per annum, cumulative until the fifth
anniversary of the issuance thereof and thereafter at increasing rates up
to 18%. Since Benedek Communications intends to redeem the Junior
Preferred Stock prior to the fifth anniversary, dividends are being
accrued at the initial rate. The dividends on the Junior Preferred Stock
are cumulative. Prior to June 1, 2001, dividend payments on the Junior
Preferred Stock are not permitted to be made in cash and instead will be
added automatically to the liquidation preference and as a result will be
deemed paid in full and will not accumulate. At September 30, 1997, the
carrying value of the Junior Preferred Stock was $49,907,938.
-10-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(3) Discount Notes - Benedek Communications issued Senior Subordinated
Discount Notes due 2006 (the "Discount Notes") in the principal
amount of $170,000,000. The Discount Notes were issued at a
discount of $79,821,800 which generated gross proceeds of $90,178,200. The
Discount Notes mature on May 15, 2006 and yield 13.25% per annum with no
cash interest accruing prior to May 15, 2001. Thereafter, cash interest
will accrue until maturity payable semiannually, commencing November 15,
2001. At September 30, 1997, the amortized value of the Discount Notes was
$106,814,403. The Discount Notes have been registered with the Securities
and Exchange Commission pursuant to a registration statement declared
effective in October 1996.
The following table summarizes these activities from June 6, 1996 to
September 30, 1997 as follows:
<TABLE>
<CAPTION>
Senior Junior
Preferred Preferred
Stock Stock Discount Notes
----------------- -------------- --------------
<S> <C> <C> <C>
Issuance of preferred stock..... $ 51,000,000 $ 45,000,000 $ -
Issuance of Discount Notes...... - - 90,178,200
Accrued dividends............... 12,877,300 4,907,938 -
Accretion of discount........... 5,252,936 - -
Amortization of note discount... - - 16,636,203
----------------- -------------- --------------
Balance at September 30, 1997... $ 69,130,236 $ 49,907,938 $ 106,814,403
================= ============== ==============
</TABLE>
Since Benedek Communications derives all of its operating income and cash
flow from Benedek Broadcasting, Benedek Communications' ability to pay its
obligations including (i) interest on and principal of the Discount Notes, (ii)
redemption of and cash dividends on the Senior Preferred Stock, and (iii)
redemption of and cash dividends on the Junior Preferred Stock, 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
Benedek Communications or to make funds available to Benedek Communications for
debt service or any other obligation.
(Note D) - Notes Payable and Amendment to the Credit Agreement
(1) Term Loans and Revolver. Associated with the transactions described in
(Note C), Benedek Broadcasting has two outstanding Term Loan Facilities
consisting of (i) a Series A Facility of $59,431,180 as of September 30, 1997
with interest payable at the bank's base rate plus 2.75% or the Eurodollar rate
plus 3.75% per annum (currently 10.13%) and (ii) a Series B Facility of
$54,135,820 as of September 30, 1997 with interest payable at the bank's base
rate plus 3.25% or the Eurodollar rate plus 4.25% per annum (currently 10.63%).
The current rates reflect the February 1997 amendment to the underlying Credit
Agreement associated with these Term Loan Facilities, as discussed below. The
Term Loan Facilities provide for quarterly principal payments until final
maturity (except during the twelve months ended September 30, 1997, during which
principal payments were made on a semiannual basis). The Series A Facility and
the Series B Facility mature on May 1, 2001 and November 1, 2002, respectively.
Benedek
-11-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Broadcasting is required to make scheduled aggregate amortization
payments on the Series A and Series B Facilities, as follows: during the balance
of 1997, $5.5 million; during 1998, $12.75 million; during 1999, $15.25 million;
during 2002, $21.75 million; during 2001, $18.18 million; and during 2002,
$42.9 million.
The Credit Agreement also includes a Revolving Credit Facility of
$10,000,000, that bears interest at the bank's base rate plus 2.75% or the
Eurodollar rate plus 3.75% per annum (currently 9.56%). There were $6,999,671 of
outstanding borrowings on the Revolving Credit Facility as of September 30,
1997. The unused portion of the Revolving Credit Facility bears interest at 0.5%
per annum.
The various interest rates described above are subject to reductions at such
times as certain leverage ratio performance tests are met.
The Credit Agreement also requires that Benedek Broadcasting prepay the Term
Loan Facilities by an amount equal to 75% of excess cash flow, as defined in the
Credit Agreement, no later than 100 days after the end of the year. Benedek
Broadcasting made a principal payment of $5,683,000 on April 1, 1997, as a
result of this clause.
The Term Loan Facilities contain various restrictive covenants and require
compliance with certain financial ratios and covenants. On February 28, 1997,
Benedek Broadcasting amended the Credit Agreement as it relates to certain
restrictive covenants and financial ratios through September 30, 1998. As part
of such amendment, Benedek Broadcasting agreed to increase the interest rate on
the Term Loan Facilities and Revolving Credit Facility by an additional 50 basis
points. Benedek Broadcasting also agreed to reduce the available Revolving
Credit Facility from $15,000,000 to $10,000,000. Benedek Broadcasting was in
compliance with the covenants as of September 30, 1997.
(2) Senior Secured Notes. During 1995, Benedek Broadcasting issued
$135,000,000 of 11 7/8% Senior Secured Notes due 2005 (the "Senior Secured
Notes"). 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 the sales
of assets, among others. Benedek Broadcasting was in compliance with these
covenants at September 30, 1997.
-12-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Notes payable consist of the following:
September 30, 1997
------------------
Senior Secured Notes................ $ 135,000,000
Term loan series A.................. 59,431,180
Term loan series B.................. 54,135,820
Revolving Credit Facility........... 6,999,671
Discount Notes...................... 106,814,403
Other............................... 3,194,786
------------------
365,575,860
Less current maturities............. 19,562,707
------------------
$ 346,013,153
==================
(Note E) - Commitments and Contingencies
Benedek Broadcasting has entered into a financing agreement for the purchase
of digital camera equipment for news operations in the amount of $1,500,000. As
of September 30, 1997, $1,080,000 was disbursed under the agreement with the
balance expected to be used over the remainder of 1997.
Benedek Broadcasting has begun construction on a new studio and office
building at KHQA-TV, Quincy, Illinois. Estimated construction costs of
approximately $1,700,000 are to be funded in part by a mortgage loan of
$1,225,000 entered into during June 1997. As of September 30, 1997, $166,000 was
disbursed under this facility.
(Note F) - Loss on Investment
During the three months ended September 30, 1997, the Company recognized a
loss of $608,798 in its investment in a start-up enterprise formed to produce
animated television programming. Since there is significant uncertainty as to
the future realization of this 1995 investment, the Company has reflected this
amount as a non-operating loss.
(Note G) - Subsequent Event
The Company has obtained a commitment to refinance the outstanding balance of
its Term Loan Facilities and Revolving Credit Facility. The refinancing will
lower the interest rate payable by the Company, reduce principal amortization
requirements in the early years of the new facility, increase the amount of the
Revolving Credit Facility to $15,000,000 and modify financial and other
covenants to provide additional flexibility to the Company in the operation of
its business. The refinancing is expected to close during December 1997.
-13-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, September 30,
ASSETS 1996 1997
---- -----
(Unaudited)
<S> <C> <C>
Federal Communication Commission (FCC) Licenses, at cost,
less accumulated amortization of $2,322,404
and $4,981,445 for 1996 and 1997, respectively.......... $ 123,538,650 $ 121,324,547
Goodwill, less accumulated amortization of $432,060 and
$1,174,560 for 1996 and 1997, respectively................ 34,804,740 34,135,650
--------------- ----------------
$ 158,343,390 $ 155,460,197
=============== ================
LIABILITIES AND STOCKHOLDER'S EQUITY
Deferred tax liability....................................... $ 34,506,000 $ 33,336,000
--------------- ----------------
Stockholder's Equity:
Common stock, $0.01 par authorized 3,000 shares,
issued and outstanding 99 shares........................ 1 1
Additional paid-in capital................................ 125,861,055 126,040,090
Accumulated deficit....................................... (2,023,666) (3,915,894)
--------------- ----------------
123,837,390 122,124,197
--------------- ----------------
$ 158,343,390 $ 155,460,197
=============== ================
</TABLE>
-14-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
----------------------------------- -----------------------------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating expense, amortization........... $ 1,013,482 $ 1,017,943 $ 1,414,673 $ 3,062,228
--------------- --------------- --------------- ---------------
(Loss) before income tax benefit....... (1,013,482) (1,017,943) (1,414,673) (3,062,228)
Income tax benefit ....................... 565,800 319,000 565,800 1,170,000
--------------- --------------- --------------- ---------------
Net (loss)............................ $ (447,682) $ (698,943) $ (848,873) $ (1,892,228)
=============== =============== =============== ===============
</TABLE>
-15-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENT OF STOCKHOLDER'S EQUITY
Nine Months Ended September 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Additional
Common Paid-In Accumulated
Stock Capital Deficit Total
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Balance at December 31, 1996 $ 1 $ 125,861,055 $ (2,023,666) $ 123,837,390
Capital contribution of FCC
licenses from parent........ - 179,035 - 179,035
Net (loss).................... - - (1,892,228) (1,892,228)
--------------- --------------- -------------- --------------
Balance at September 30, 1997.... $ 1 $ 126,040,090 $ (3,915,894) $ 122,124,197
=============== =============== ============== ==============
</TABLE>
-16-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
---------------------------------
1996 1997
---- ----
<S> <C> <C>
Cash Flows From Operating Activities
Net (loss)......................................................... $ (848,873) $ (1,892,228)
Adjustments to reconcile net (loss) to net cash provided by
operating activities:
Amortization ...................................................... 1,414,673 3,062,228
Deferred income tax................................................ (565,800) (1,170,000)
--------------- --------------
Net cash provided by operating activities.................... $ 0 $ 0
Cash:
Beginning.......................................................... - -
--------------- --------------
Ending............................................................. $ 0 $ 0
=============== ==============
Supplemental Schedule of Noncash Investing and Financing Activities
FCC licenses acquired by contribution of capital................... $ 110,188,879 $ 179,035
=============== ==============
</TABLE>
-17-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(Note A) - Nature of 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 Communications Commission ("FCC") licenses for
the 22 television stations owned by Benedek Broadcasting which are located
throughout the United States.
Basis of Presentation:
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for the fair presentation of the
financial position as of September 30, 1997 and the results of operations for
the three months and the nine months ended September 30, 1997 have been
included. Operating results for the three month and nine month periods ended
September 30, 1997 are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1997. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Annual Report on Form 10-K of Benedek Broadcasting for the year ended
December 31, 1996.
(Note B) - 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 liability 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.
On August 7, 1997, Benedek Broadcasting purchased two low-power television
stations including their respective FCC licenses. The licenses were transferred
to BLC as contributed capital as of the acquisition date.
(Note C) - 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.
BLC has guaranteed the obligations of Benedek Broadcasting with respect to
the Senior Secured Notes and the Term Loan Facilities.
-18-
<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, 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 the Company 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 the Company as if such stations were
owned by the Company throughout the periods indicated with pro forma adjustments
only for corporate expenses, depreciation and amortization and interest. Same
Station information does not purport to represent what the Company's results of
operations would have been if such transactions had been effected at the
beginning of such periods and does not purport to project results of operations
of the Company in any future period.
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 Company 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 and
broadcast cash flow do not purport to represent cash provided by operating
activities as reflected in the Company'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.
Unless the context otherwise requires, references to the "Company" refer to
both Benedek Communications and its wholly-owned operating subsidiary, Benedek
Broadcasting, and financial information with respect to the Company refers to
the consolidated financial information of Benedek Communications, which includes
Benedek Broadcasting and its wholly-owned subsidiary, Benedek License
Corporation.
The operating revenues of the Company 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 barter transactions for goods and
services. Revenue depends on the ability of the Company to provide popular
programming which attracts audiences in the demographic groups targeted by
advertisers, thereby allowing
-19-
<PAGE>
<PAGE>
the Company 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.
For the nine months ended September 30, 1997, the Company reported net
revenues of $92.2 million compared to net revenues of $59.9 million for the nine
months ended September 30, 1996. The increase in 1997 net revenues was due to
the acquisitions of the Acquired Stations which increased net revenues by $29.9
million. Benedek Communications had a net loss of $16.5 million for the nine
months ended September 30, 1997 compared to a net loss of $8.2 million for the
nine months ended September 30, 1996. Benedek Broadcasting had a net loss of
$10.3 million for the nine months ended September 30, 1997 compared to a net
loss of $5.6 million for the nine months ended September 30, 1996. The
additional net loss of Benedek Communications was due to interest expense on its
debt, net of income taxes. The Company's Adjusted EBITDA for the nine months
ended September 30, 1997 was $31.7 million as compared to $21.5 million for the
nine months ended September 30, 1996. On a Same Station basis, Adjusted EBITDA
for the nine months ended September 30, 1997 was $31.7 million as compared to
$31.6 million for the nine months ended September 30, 1996.
Time sales to local/regional advertisers and national advertisers constitute
the largest concentration of the Company's operating revenues and represent
approximately 85.1% of gross revenues for the nine months ended September 30,
1997 as compared to 82.2% for the nine months ended September 30, 1996.
Approximately 55.3% of the gross revenues of the Company in the nine months
ended September 30, 1997 was generated from local and regional advertising,
which is sold primarily by the Stations' sales staff, and the remainder of the
advertising revenues is comprised primarily of national advertising, which is
sold by national sales representatives retained by the Company. The Company
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.
The Company'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. The Company 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. Under its contract with the network, a network-affiliated station
receives approximately two-thirds of its daily programming from its network and
in turn is compensated, in most cases, by its network for carrying such
programming with the network's commercial content intact. Depreciation and
amortization expense has increased as assets purchased at fair market value in
connection with the acquisitions of the Acquired Stations began to depreciate.
For the nine months ended September 30, 1997, depreciation and amortization
increased $11.1 million from $11.9 million to $23.0 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. The
Company's operating expenses (excluding depreciation and amortization) represent
approximately 66.1% of net revenues for the nine months ended September 30, 1997
as compared to approximately 65.7% of net revenues for the nine months ended
September 30, 1996.
-20-
<PAGE>
<PAGE>
The following table sets forth the computation of broadcast cash flow and
Adjusted EBITDA for the periods indicated. 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 September 30, Nine Months Ended September 30,
----------------------------------- -----------------------------------
1996 1997 1996 1997
---- ---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Operating income................................ $ 2,004 $ 3,508 $ 8,727 $ 8,285
Add:
Amortization of program broadcast rights.... 1,530 1,559 2,824 4,601
Depreciation and amortization............... 7,777 7,416 11,846 22,959
Corporate expenses.......................... 693 950 1,781 2,771
Less:
Payment for program broadcast liabilities... (710) (1,336) (1,896) (4,157)
--------------- --------------- --------------- ---------------
Broadcast cash flow......................... 11,294 12,097 23,282 34,459
Corporate.................................. 693 950 1,781 2,771
--------------- --------------- --------------- ---------------
Adjusted EBITDA............................... $ 10,601 $ 11,147 $ 21,501 $ 31,688
=============== =============== =============== ===============
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1996
The following table provides historical information for the three month
periods ended September 30, 1996 and 1997.
<TABLE>
<CAPTION>
Three Months Ended September 30,
------------------------------------------------------
(Dollars in Thousands)
%
1996 1997 Change
---- ---- ------
<S> <C> <C> <C>
Net revenues................................. $ 29,786 $ 30,986 4.0%
---------------- --------------- --------------
Operating expenses:
Selling, technical and
program expenses......................... 14,329 14,454 0.9 %
General and administrative................. 4,983 4,658 (6.5)%
Depreciation and amortization.............. 7,777 7,416 (4.6)%
Corporate.................................. 693 950 37.1 %
---------------- --------------- --------------
27,782 27,478 (1.1)%
---------------- --------------- --------------
Operating income............... $ 2,004 $ 3,508 75.1 %
================ =============== ==============
Broadcast cash flow.......................... $ 11,294 $ 12,097 5.8 %
Broadcast cash flow margin................... 37.9% 39.0%
Adjusted EBITDA.............................. $ 10,601 $ 11,147 3.7 %
Adjusted EBITDA margin....................... 35.5% 36.0%
</TABLE>
Net revenues for the three months ended September 30, 1997 increased $1.2
million or 4.0% to $31.0 million from $29.8 million for the three months ended
September 30, 1996. Political advertising revenue decreased $2.2 million to $0.1
million for the three months ended September 30, 1997 from $2.3 million for the
three months ended September 30, 1996. Gross revenues excluding political
advertising revenue increased $3.2 million or 10.0% from the three months ended
September 30, 1996 primarily caused by the improved performance of the
television stations acquired in 1996.
Operating expenses for the three months ended September 30, 1997 decreased
$0.3 million or 1.1% to $27.5 million from $27.8 million for the three months
ended September 30, 1996. General and administrative expenses declined by $0.3
million to $4.7 million for the three months ended September 30,
-21-
<PAGE>
<PAGE>
1997 as compared to $5.0 million for the three months ended September 30, 1996.
Depreciation and amortization decreased $.4 million to $7.4 million for the
three months ended September 30, 1997 as compared to $7.8 million for the three
months ended September 30, 1996 due to assets becoming fully depreciated.
Operating expenses as a percentage of net revenues decreased to 88.7% for the
three months ended September 30, 1997 as compared to 93.3% for the three months
ended September 30, 1996.
Operating income for the three months ended September 30, 1997 increased
$1.5 million or 75.1% to $3.5 million from $2.0 million for the three months
ended September 30, 1996.
Financial (expenses), net for Benedek Broadcasting for the three months
ended September 30, 1997 increased $0.6 million or 8.3% to $7.8 million from
$7.2 million in the three months ended September 30, 1996. For the three months
ended September 30, 1997, Benedek Communications' financial expenses (net)
increased $1.1 million or 10.7% to $11.4 million from $10.3 million for the
three months ended September 30, 1996. The increases are primarily due to the
higher 1997 interest rates on the Company's Term Loan Facilities. Benedek
Communications has higher financial expenses than Benedek Broadcasting due to
the debt structure.
Loss on investment of $0.6 million was the result of uncertainty as to the
future realization of a 1995 investment in a start-up operation in a television
production business. The Company acquired a minority interest in the business
which has experienced losses since that date. The Company has reflected this
investment as a non-operating loss.
Income tax benefit for Benedek Broadcasting for the three months ended
September 30, 1997 was $1.6 million compared to $1.8 million for the three
months ended September 30, 1996. For the three months ended September 30, 1997,
Benedek Communications had a $3.0 million income tax benefit compared to $3.1
million for the three months ended September 30, 1996. Benedek Communications
has a greater income tax benefit than Benedek Broadcasting due to the net income
tax effect on its higher financial expenses.
Net loss for Benedek Broadcasting for the three months ended September 30,
1997 was $3.3 million and a $3.3 million net loss for the three months ended
September 30, 1996. Benedek Communications had a net loss of $5.4 million for
the three months ended September 30, 1997 as compared to a net loss of $5.2
million for the three months ended September 30, 1996.
Broadcast cash flow for the three months ended September 30, 1997 increased
$0.8 million or 7.1% to $12.1 million from $11.3 million for the three months
ended September 30, 1996 primarily as a result of the improvement in the
Acquired Stations. As a percentage of net revenues, broadcast cash flow margin
increased to 39.0% for the three months ended September 30, 1997 from 37.9% for
the three months ended September 30, 1996.
-22-
<PAGE>
<PAGE>
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1996
The following table provides both historical and Same Station information
for the nine month periods ended September 30, 1996 and 1997. The Same Station
information gives effect to the acquisition of the Acquired Stations as if such
transactions were consummated on January 1, 1996.
<TABLE>
<CAPTION>
Historical Same Station
Nine Months Ended September 30, Nine Months Ended September 30,
-------------------------------------- -------------------------------------
% %
1996 1997 Change 1996 1997 Change
---- ---- ------ ---- ---- ------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Net revenues.................. $ 59,901 $ 92,180 53.9% $ 89,680 $ 92,180 2.8%
--------- ---------- ---------- ---------- ---------- --------
Operating expenses:
Selling, technical and
program expenses.......... 27,870 44,084 58.1% 41,779 44,084 3.5%
General and administrative.. 9,677 14,080 45.4% 14,741 14,080 0.8%
Depreciation and
amortization.............. 11,846 22,960 93.8% 21,605 22,960 6.2%
Corporate................... 1,781 2,771 55.6% 2,514 2,771 10.2%
--------- ---------- ---------- ---------- ---------- --------
51,174 83,895 63.9% 80,639 83,895 4.0%
--------- ---------- ---------- ---------- ---------- --------
Operating income........ $ 8,727 $ 8,285 (5.1%) $ 9,041 $ 8,285 8.4%
========= ========== ========== ========== ========== ========
Broadcast cash flow........... $ 23,282 $ 34,459 48.0% $ 34,158 $ 34,459 0.8%
Broadcast cash flow margin.... 38.9% 37.4% 38.0% 37.4%
Adjusted EBITDA............... $ 21,501 $ 31,688 47.4% $ 31,644 $ 31,688 0.1%
Adjusted EBITDA margin........ 35.9% 34.4% 35.2% 34.4%
</TABLE>
Net revenues for the nine months ended September 30, 1997 increased $32.3
million or 53.9% to $92.2 million from $59.9 million for the nine months ended
September 30, 1996 primarily as a result of the June 6, 1996 addition of the
Acquired Stations which increased net revenue by $29.9 million. On a Same
Station basis, net revenues for the nine months ended September 30, 1997
increased $2.5 million or 2.8% to $92.2 million from $89.7 million for the nine
months ended September 30, 1996, despite a $3.3 million decline in political
advertising revenue. Gross revenues on a Same Station basis excluding political
advertising revenue increased $5.8 million or 5.8% to $105.0 million for the
nine months ended September 30, 1997 from $99.2 million for the nine months
ended September 30, 1996.
Operating expenses for the nine months ended September 30, 1997 increased
$32.7 million or 63.9% to $83.9 million from $51.2 million for the nine months
ended September 30, 1996. The increase in operating expenses was attributable to
the addition of the Acquired Stations. On a Same Station basis, operating
expenses for the nine months ended September 30, 1997 increased $3.3 million or
4.0% to $83.9 million from $80.6 million for the nine months ended September 30,
1996. The increase in operating expenses was caused primarily by increased
depreciation and amortization expense and a 3.2% increase in payroll-related
costs.
Operating income for the nine months ended September 30, 1997 decreased $0.4
million or 5.1% to $8.3 million from $8.7 million for the nine months ended
September 30, 1996.
Financial (expenses), net for Benedek Broadcasting for the nine months ended
September 30, 1997 increased $6.4 million or 40.0% to $22.6 million from $16.2
million in the nine months ended September 30, 1996. For the nine months ended
September 30, 1997, Benedek Communication's financial expenses (net) increased
$13.0 million or 65.0% to $33.0 million from $20.0 million for the nine months
ended
-23-
<PAGE>
<PAGE>
September 30, 1996. The increases are due to the Company's higher debt level
following the completion of the financing of the purchase price for the Acquired
Stations. Benedek Communications has higher financial expenses than Benedek
Broadcasting due to the debt structure.
Loss on investment of $0.6 million was the result of uncertainty as to the
future realization of a 1995 investment in a start-up operation in a television
production business. The Company acquired a minority interest in the business
which has experienced losses since that date. The Company has reflected this
investment as a non-operating loss.
Income tax benefit for Benedek Broadcasting for the nine months ended
September 30, 1997 was $4.7 million compared to $1.8 million for the nine months
ended September 30, 1996. For the nine months ended September 30, 1997, Benedek
Communications had a $8.9 million income tax benefit compared to $3.1 million
for the nine months ended September 30, 1996. Benedek Communications has a
greater income tax benefit than Benedek Broadcasting due to the net income tax
affect on the difference in financial expenses. The tax effect of the excess of
book depreciation over tax depreciation and a current period net operating loss
for tax purposes were the primary factors resulting in the income tax benefit
for the nine months ended September 30, 1997.
Net loss for Benedek Broadcasting for the nine months ended September 30,
1997 was $10.3 million as compared to a $5.6 million net loss for the nine
months ended September 30, 1996. Benedek Communications had a net loss of $16.5
million for the nine months ended September 30, 1997 as compared to a net loss
of $8.2 million for the nine months ended September 30, 1996.
Broadcast cash flow for the nine months ended September 30, 1997 increased
$11.2 million or 48.0% to $34.5 million from $23.3 million for the nine months
ended September 30, 1996 primarily as a result of the addition of the Acquired
Stations. As a percentage of net revenues, broadcast cash flow margin decreased
to 37.4% for the nine months ended September 30, 1997 from 38.9% for the nine
months ended September 30, 1996. On a Same Station basis, broadcast cash flow
for the nine months ended September 30, 1997 increased $0.3 million or 0.8% to
$34.5 million from $34.2 million for the nine months ended September 30, 1996.
As a percentage of net revenues, broadcast cash flow margin on a Same Station
basis decreased to 37.4% for the nine months ended September 30, 1997 from 38.0%
for the nine months ended September 30, 1996.
Liquidity and Capital Resources
Cash Flows from Operating Activities is the primary source liquidity for the
Company. Cash provided by operating activities was $3.9 million for the nine
months ended September 30, 1997 as compared to $9.0 million for the nine months
ended September 30, 1996. Cash flows from operating activities included cash
payments of interest expense which totaled $25.3 million for the nine months
ended September 30, 1997 as compared to $19.5 million for the nine months ended
September 30, 1996. The increase in payments of interest expense of $5.8 million
was due to the Company's higher debt level following the acquisition of the
Acquired Stations. Cash flows from operating activities for the nine months
ended September 30, 1996 included a $2.5 million signing bonus from CBS in
consideration of the 1995 contract with the Company.
Cash Flows from Investing Activities were $(3.7) million for the nine months
ended September 30, 1997 compared to $(324.9) million for the nine months ended
September 30, 1996. For the nine months ended September 30, 1996, cash flows
from investing activities included the purchase cost of $321.8 million
associated with the acquisitions of the Acquired Stations.
-24-
<PAGE>
<PAGE>
Cash Flows from Financing Activities were $(5.7) million for the nine months
ended September 30, 1997 compared to $311.4 million for the nine months ended
September 30, 1996. For the nine months ended September 30, 1997, cash flows
from financing activities included principal payments on notes and capital
leases payable of $11.9 million funded in part by aggregate draw downs on the
Revolving Credit Facility of $7.0 million.
At September 30, 1997, Benedek Broadcasting had available to it a maximum of
$10.0 million under the revolving credit facility of the Credit Agreement (the
"Revolving Credit Facility") of which $3.0 million was unused at September 30,
1997. From time to time throughout 1997, Benedek Broadcasting's cash needs has
required the use of the Revolving Credit Facility for general working capital
purposes and to fund capital expenditures. During the nine months ended
September 30, 1997, the highest outstanding balance under the Revolving Credit
Facility was $8.5 million.
Benedek Broadcasting did not meet certain financial ratios contained in the
Credit Agreement at September 30, 1996 and December 31, 1996, due to lower than
expected Adjusted EBITDA (as defined in the Credit Agreement). The lenders under
the Credit Agreement agreed to waive such noncompliance and have amended certain
financial ratio tests applicable to 1997 and the first half of 1998. The
amendment provides that for so long as the ratio of debt to Adjusted EBITDA (as
defined in the Credit Agreement) exceeds certain levels, the Term Loan
Facilities will bear interest at varying additional spreads from that originally
provided for in the Credit Agreement. The amendment further reduced the
Revolving Credit Facility from $15.0 million to $10.0 million and increased the
percentage of excess cash flow to be applied as prepayments of the Term Loan
Facilities from 50% to 75% until the Company's ratio of debt to Adjusted EBITDA
is at 6.75 or lower. The Company was in compliance with the revised financial
covenants at September 30, 1997.
Recent Developments
In the third quarter of 1997, the Company entered into definitive agreements
with The Warner Bros. Television Network to develop a local cable affiliate
called the "WeB" in each of the Company's 20 markets which rank above 100. The
WeB is intended to be a 24 hour, seven day a week television channel which will
broadcast Warner Bros. Network prime time programming, WB children's programming
and syndicated programming of Warner Bros. and others. The Company is currently
in negotiations with cable systems in its markets for the carriage of WeB
programming. The WeB is scheduled to begin service in by the fall of 1998 in
most 100-plus markets. The Company will be responsible for all local sales
efforts for the new channels in its markets. The Company does not anticipate a
significant effect on operations during 1997 nor does it anticipate that
significant capital expenditures will be required in connection with the
development of its WeB affiliates.
During August 1997, Benedek Broadcasting completed the purchase of the
television broadcasting licenses and certain equipment of two low-power
television stations located in Columbia and Jefferson City, Missouri for a
purchase price of $0.2 million. One-half of the purchase price was paid at
closing with the remainder due in two installments during 1998 and 1999.
Concurrently with such purchase, the Company entered into network affiliation
agreements for such stations with the Fox Television Network. The television
stations began operating in September of 1997 without material expenditures for
equipment needs.
In connection with the acquisition of the Brissette Station, the Company
obtained a temporary waiver of the FCC's duopoly rules which would
otherwise have precluded the Company from acquiring the Brissette Station in
Madison, Wisconsin due to the overlap between that market and the Company's
-25-
<PAGE>
<PAGE>
station in Rockford, Illinois. Under proposed revisions to the duopoly rules,
the Company will be required to dispose of one of such stations. In addition,
the FCC has announced it will not extend the Company's temporary waiver and as a
result, pending such disposition, the Company will be required to put one of the
stations in a trust with an independent trustee. The Company will seek to comply
with the FCC requirements by exchanging one of the stations for another
broadcast station.
Income Taxes
For the nine months ended September 30, 1997, Benedek Broadcasting had a tax
benefit of $4.7 million recognized consisting of a $3.2 million benefit related
to the net reduction of deferred income tax liabilities and $0.1 million of
taxes currently due. Benedek Communications had a tax benefit of $8.9 million
for the nine months ended September 30, 1997 consisting of a $6.0 million
benefit related to the net reduction of deferred income tax liabilities and $0.1
million of taxes currently due.
Under the provisions of the Internal Revenue Code, Benedek Broadcasting has
approximately $11.5 million of actual net operating loss carryforwards available
to offset future tax liabilities whereas Benedek Communications has
approximately $12.2 million available to it. These net operating loss
carryforwards expire between 2007 through 2011.
Emerging Accounting Standards
In February 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
("FASB 128"), which establishes standards for computing and presenting earnings
per share. FASB 128 replaces the presentation of primary and fully diluted
earnings per share with basic and diluted earnings per share, respectively.
Basic earnings per share are computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for the
period. Diluted earnings per share are computed similarly to fully diluted
earnings per share. The standard is effective for financial statements for
periods ending after December 15, 1997, with earlier application not permitted.
No material effect is expected on earnings per share as a result of the adoption
of FASB 128.
Also in February 1997, the FASB issued Statement of Financial Accounting
Standards No. 129, "Disclosure of Information About Capital Structure" ("FASB
129"), which codifies certain disclosure requirements with respect to capital
structure, most of which have been previously required for public entities under
other accounting pronouncements. The standard is effective for financial
statements for periods ending after December 15, 1997.
In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("FASB 130"), which establishes
standards for reporting and display of comprehensive income and its components.
The disclosure requirements of FASB 129 and FASB 130 will be effective for the
Company's financial statements beginning with the annual report for 1997.
Management does not believe that the implementation of FASB 129 or FASB 130 will
have a material affect on its financial statements.
-26-
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
In June 1997, an action was commenced in United States District Court in the
Southern District of New York against Benedek Broadcasting, along with NBC, ABC,
CBS, FOX, the National Association of Broadcasters and several other broadcast
companies, alleging violations of federal antitrust laws. The plaintiff,
PrimeTime 24 joint venture, is a provider of network programming to satellite
home viewers. The plaintiff alleges that Benedek Broadcasting and other
defendants illegally misused their market power to insulate themselves from new
competition. Benedek Broadcasting believes that the plaintiff's claim against it
are without merit. No material effect on the financial statements is anticipated
from this lawsuit.
Item 6. Exhibits and Reports on Form 8-K.
(a)(3) Exhibits.
3.1 -- Certificate of Incorporation of Benedek Broadcasting Corporation, as
amended, incorporated by reference to Exhibit 3.1 to Benedek
Broadcasting Corporation'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 Benedek Broadcasting Corporation, 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 Benedek Broadcasting
Corporation'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.
3.5 -- Certificate of Incorporation of Benedek Communications Corporation, as
amended, incorporated by reference to Exhibit 3.1 to Benedek
Communications Corporation's Registration Statement on Form S-4, File
No. 333-09529, filed on August 2, 1996 (the "S-4 Registration
Statement").
3.6 -- By-Laws of Benedek Communications Corporation, incorporated by
reference to Exhibit 3.2 to the S-4 Registration Statement.
3.7 -- Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 15.0% Exchangeable
Redeemable Senior Preferred Stock Due 2007 of Benedek Communications
Corporation and Qualifications, Limitations and Restrictions thereof,
incorporated by reference to Exhibit 3.3 to the S-4 Registration
Statement.
3.8 -- Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Series C Junior Discount Preferred
Stock of Benedek Communications Corporation and Qualifications,
Limitations and Restrictions thereof, incorporated by reference to
Exhibit 3.4 to the S-4 Registration Statement.
4.1 -- Indenture dated as of March 1, 1995 between Benedek Broadcasting
Corporation and The Bank of New York, relating to the 11-7/8% Senior
Secured Notes due 2005 of Benedek Broadcasting Corporation,
incorporated by reference to Exhibit 4.3 to the S-4 Registration
Statement and Exhibit 4.1 to the S-1 Registration Statement.
4.2 -- Form of 11-7/8% Senior Secured Note due 2005 of Benedek Broadcasting
(included in Exhibit 4.3 hereof), incorporated by reference to Exhibit
4.4 to the S-4 Registration Statement and Exhibit 4.2 to the S-1
Registration Statement.
-27-
<PAGE>
<PAGE>
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.
4.4 -- Indenture dated as of May 15, 1996 between Benedek Communications
Corporation and United States Trust Company of New York, relating to
the 13-1/4% Senior Subordinated Discount Notes due 2006, incorporated
by reference to Exhibit 4.1 to the S-4 Registration Statement.
4.5 -- Form of 13-1/4% Senior Subordinated Discount Note due 2006 (included
in Exhibit 4.1 hereof), incorporated by reference to Exhibit 4.2 to the
S-4 Registration Statement and Exhibit 4.1 to the S-1 Registration
Statement.
4.6 -- Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 15.0% Exchangeable
Redeemable Senior Preferred Stock due 2007 of Benedek Communications
Corporation and Qualifications, Limitations and Restrictions thereof
(filed as Exhibit 3.7 hereof).
4.7 -- Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Series C Junior Discount Preferred
Stock of Benedek Communications Corporation and Qualifications,
Limitations and Restrictions thereof (filed as Exhibit 3.8 hereof).
4.8 -- Warrant Agreement dated as of June 5, 1996 between Benedek
Communications Corporation and IBJ Schroder Bank & Trust Company with
respect to Class A Common Stock of Benedek Communications Corporation,
incorporated by reference to Exhibit 4.7 to the S-4 Registration
Statement.
*27 -- Financial Data Schedule of Benedek Broadcasting Corporation pursuant
to Article 5 of Regulation S-X.
*27.1-- Financial Data Schedule of Benedek Communications Corporation pursuant
to Article 5 of Regulation S-X.
- ---------------
*Filed herewith
(b) Reports on Form 8-K
None.
-28-
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, 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
..................................................
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
DATE: November 14, 1997
-29-
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
BENEDEK COMMUNICATIONS CORPORATION
(REGISTRANT)
By: /s/ RONALD L. LINDWALL
..................................................
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
DATE: November 14, 1997
-30-
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, 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
..................................................
Ronald L. Lindwall
Senior Vice President and Chief Financial Officer
(Authorized Officer and Principal Accounting Officer)
DATE: November 14, 1997
-31-
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Location of Exhibits
Exhibit in Sequential
No. Description of Exhibits Numbering System
--- ----------------------- ----------------
<S> <C> <C>
3.1 Certificate of Incorporation of Benedek Broadcasting Corporation, as
amended, incorporated by reference to Exhibit 3.1 to Benedek
Broadcasting Corporation'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 Benedek Broadcasting Corporation, 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 Benedek Broadcasting
Corporation'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.
3.5 Certificate of Incorporation of Benedek Communications Corporation, as
amended, incorporated by reference to Exhibit 3.1 to Benedek
Communications Corporation's Registration Statement on Form S-4, File
No. 333-09529, filed on August 2, 1996 (the "S-4 Registration
Statement").
3.6 By-Laws of Benedek Communications Corporation, incorporated by
reference to Exhibit 3.2 to the S-4 Registration Statement.
3.7 Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 15.0% Exchangeable
Redeemable Senior Preferred Stock Due 2007 of Benedek Communications
Corporation and Qualifications, Limitations and Restrictions thereof,
incorporated by reference to Exhibit 3.3 to the S-4 Registration
Statement.
3.8 Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Series C Junior Discount
Preferred Stock of Benedek Communications Corporation and
Qualifications, Limitations and Restrictions thereof, incorporated by
reference to Exhibit 3.4 to the S-4 Registration Statement.
</TABLE>
-32-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Location of Exhibits
Exhibit in Sequential
No. Description of Exhibits Numbering System
--- ----------------------- ----------------
<S> <C> <C>
4.1 Indenture dated as of March 1, 1995 between Benedek Broadcasting
Corporation and The Bank of New York, relating to the 11-7/8% Senior
Secured Notes due 2005 of Benedek Broadcasting Corporation,
incorporated by reference to Exhibit 4.3 to the S-4 Registration
Statement and Exhibit 4.1 to the S-1 Registration Statement.
4.2 Form of 11-7/8% Senior Secured Note due 2005 of Benedek Broadcasting
(included in Exhibit 4.3 hereof), incorporated by reference to Exhibit
4.4 to the S-4 Registration Statement and 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.
4.4 Indenture dated as of May 15, 1996 between Benedek Communications
Corporation and United States Trust Company of New York, relating to
the 13-1/4% Senior Subordinated Discount Notes due 2006, incorporated
by reference to Exhibit 4.1 to the S-4 Registration Statement.
4.5 Form of 13-1/4% Senior Subordinated Discount Note due 2006 (included
in Exhibit 4.1 hereof), incorporated by reference to Exhibit 4.2 to
the S-4 Registration Statement and Exhibit 4.1 to the S-1 Registration
Statement.
4.6 Certificate of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights of 15.0% Exchangeable
Redeemable Senior Preferred Stock due 2007 of Benedek Communications
Corporation and Qualifications, Limitations and Restrictions thereof
(filed as Exhibit 3.7 hereof).
4.7 Certificate of Designation, Preferences and Relative, Participating,
Optional and Other Special Rights of Series C Junior Discount
Preferred Stock of Benedek Communications Corporation and
Qualifications, Limitations and Restrictions thereof (filed as Exhibit
3.8 hereof).
4.8 Warrant Agreement dated as of June 5, 1996 between Benedek
Communications Corporation and IBJ Schroder Bank & Trust Company with
respect to Class A Common Stock of Benedek Communications Corporation,
incorporated by reference to Exhibit 4.7 to the S-4 Registration
Statement.
</TABLE>
-33-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Location of Exhibits
Exhibit in Sequential
No. Description of Exhibits Numbering System
--- ----------------------- ----------------
<S> <C> <C>
*27 Financial Data Schedule of Benedek Broadcasting Corporation pursuant
to Article 5 of Regulation S-X.
*27.1 Financial Data Schedule of Benedek Communications Corporation pursuant
to Article 5 of Regulation S-X.
</TABLE>
*Filed herewith
-34-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 923027
<NAME> BENEDEK BROADCASTING CORP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,632,400
<SECURITIES> 0
<RECEIVABLES> 21,952,383
<ALLOWANCES> 452,495
<INVENTORY> 0
<CURRENT-ASSETS> 34,532,020
<PP&E> 129,574,867
<DEPRECIATION> 54,994,007
<TOTAL-ASSETS> 468,209,568
<CURRENT-LIABILITIES> 37,621,434
<BONDS> 239,198,752
<COMMON> 1,046,500
0
0
<OTHER-SE> 132,779,243
<TOTAL-LIABILITY-AND-EQUITY> 468,209,568
<SALES> 102,747,231
<TOTAL-REVENUES> 105,623,384
<CGS> 13,443,669
<TOTAL-COSTS> 13,443,669
<OTHER-EXPENSES> 83,765,334
<LOSS-PROVISION> 129,751
<INTEREST-EXPENSE> 22,625,317
<INCOME-PRETAX> (14,949,485)
<INCOME-TAX> (4,690,695)
<INCOME-CONTINUING> (10,258,790)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (10,258,790)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 1017522
<NAME> BENEDEK COMMUNICATIONS CORP
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,633,500
<SECURITIES> 0
<RECEIVABLES> 21,952,384
<ALLOWANCES> 452,495
<INVENTORY> 0
<CURRENT-ASSETS> 34,532,020
<PP&E> 129,574,867
<DEPRECIATION> 54,994,007
<TOTAL-ASSETS> 471,542,953
<CURRENT-LIABILITIES> 37,621,434
<BONDS> 346,013,153
<COMMON> 70,300
119,038,174
0
<OTHER-SE> 81,758,747
<TOTAL-LIABILITY-AND-EQUITY> 471,542,953
<SALES> 102,747,231
<TOTAL-REVENUES> 105,623,384
<CGS> 13,443,669
<TOTAL-COSTS> 13,443,669
<OTHER-EXPENSES> 83,765,334
<LOSS-PROVISION> 129,751
<INTEREST-EXPENSE> 33,035,977
<INCOME-PRETAX> (25,360,145)
<INCOME-TAX> (8,880,695)
<INCOME-CONTINUING> (16,479,450)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,479,450)
<EPS-PRIMARY> (4.29)
<EPS-DILUTED> (4.29)
</TABLE>
