<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
FOR THE QUARTER ENDED MARCH 31, 1999
COMMISSION FILE NUMBERS:
BENEDEK BROADCASTING CORPORATION 33-78792
BENEDEK COMMUNICATIONS CORPORATION 333-09529
---------------------------
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 IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
---------------------------
SUBSIDIARY GUARANTOR REGISTRANT
BENEDEK LICENSE CORPORATION DELAWARE 36-4081877
(EXACT NAME OF SUBSIDIARY GUARANTOR (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
AS SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION)
</TABLE>
---------------------------
<TABLE>
<S> <C>
100 PARK AVENUE 61101
ROCKFORD, ILLINOIS (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 815-987-5350
---------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED:
------------------- ----------------------
<S> <C>
NONE NONE
</TABLE>
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 affiliates. 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 May
5, 1999, 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 May
5, 1999, there were outstanding 7,400,000 shares of Class B common stock, $0.01
par value, and no shares of Class A common stock, $0.01 par value.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
FORM 10-Q TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM Page
NUMBER PART I - FINANCIAL STATEMENTS ----
- ------
<S> <C> <C>
Item 1. Financial Statements
Introductory Comments........................................................................ 2
Benedek Communications Corporation and Subsidiaries and Benedek Broadcasting
Corporation and Subsidiaries
Consolidated Balance Sheets as of December 31, 1998 and March 31, 1999..................... 3
Consolidated Statements of Operations for the Three Months Ended March 31, 1998
and 1999............................................................................ 4
Consolidated Statements of Stockholders' Equity (Deficit) for the Three Months Ended
March 31, 1999........................................................................ 5
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1998
and 1999.............................................................................. 6
Notes to Consolidated Financial Statements................................................. 7
Benedek License Corporation and WMTV License Co., LLC
Combined Balance Sheets as of December 31, 1998 and March 31, 1999......................... 10
Combined Statements of Operations for the Three Months Ended March 31, 1998
and 1999.............................................................................. 11
Combined Statements of Stockholder's Equity for the Three Months Ended
March 31,1999......................................................................... 12
Combined Statements of Cash Flows for the Three Months Ended March 31, 1998
and 1999.............................................................................. 13
Notes to Combined Financial Statements..................................................... 14
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........ 15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings............................................................................ 22
Item 6. Exhibits and Reports on Form 8-K............................................................. 22
Signatures............................................................................................... 23
</TABLE>
-1-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
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 ("Benedek Communications") and its wholly owned subsidiary, Benedek
Broadcasting Corporation ("Benedek Broadcasting"). Unless the context otherwise
requires, references to the "Company" refer to Benedek Communications and
Benedek Broadcasting and its wholly-owned subsidiaries, Benedek License
Corporation ("BLC"), The WMTV Trust and its subsidiary, WMTV License Co., LLC
("WMTV LLC") and Benedek Cable, Inc. ("BCI"), a non-recourse subsidiary. Benedek
Communications is a holding company with minimal separate operations from its
operating subsidiary, Benedek Broadcasting. Separate financial information has
been provided for each consolidated entity and, where appropriate, separate
disclosures. All significant intercompany accounts and transactions have been
eliminated.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions for Form 10-Q and Article 10 of
Regulation S-X. 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 Benedek
Communications and Benedek Broadcasting, for the fiscal year ended December 31,
1998.
-2-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, 1998 MARCH 31, 1999
---------------------------------------- --------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------------ -------------------- ---------------- --------------
ASSETS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
Current Assets
Cash and cash equivalents........................... $ 4,290 $ 4,291 $ 2,043 $ 2,044
Receivables
Trade, net....................................... 25,984 25,984 23,431 23,431
Other............................................ 1,389 1,389 890 890
Current portion of program broadcast rights......... 4,878 4,878 3,543 3,543
Prepaid expenses.................................... 1,623 1,623 1,898 1,898
Deferred income taxes............................... 1,191 1,191 902 902
------------------ -------------------- -------------- ----------------
TOTAL CURRENT ASSETS................. 39,355 39,356 32,707 32,708
------------------ -------------------- -------------- ----------------
Property and equipment................................. 62,627 62,627 59,794 59,794
------------------ -------------------- -------------- ----------------
Intangible assets...................................... 335,634 335,634 333,234 333,234
------------------ -------------------- -------------- ----------------
Other assets
Program broadcast rights, less current portion...... 1,198 1,198 1,279 1,279
Deferred loan costs................................. 6,116 8,475 6,385 8,242
Land held for sale.................................. 109 109 109 109
Other............................................... 63 63 63 63
------------------ -------------------- -------------- ----------------
7,486 9,845 7,836 9,693
------------------ -------------------- -------------- ----------------
$ 445,102 $ 447,462 $ 433,571 $ 435,429
================== ==================== ============== ================
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current Liabilities
Current maturities of notes payable................. $ 15,911 $ 15,911 $ 17,510 $ 17,510
Current program broadcast rights payable............ 6,994 6,994 5,103 5,103
Accounts payable and accrued expenses............... 11,977 11,977 9,162 9,162
Deferred revenue.................................... 644 644 551 551
------------------ -------------------- -------------- ----------------
TOTAL CURRENT LIABILITIES............ 35,526 35,526 32,326 32,326
------------------ -------------------- -------------- ----------------
Long-Term Obligations
Notes and leases payable............................ 233,492 358,905 230,340 359,781
Program broadcast rights payable.................... 891 891 1,250 1,250
Deferred revenue.................................... 2,994 2,994 2,826 2,826
Deferred income taxes .............................. 48,366 33,765 46,492 30,079
------------------ -------------------- -------------- ----------------
285,743 396,555 280,908 393,936
------------------ -------------------- -------------- ----------------
Exchangeable redeemable senior preferred stock......... - 107,596 - 111,063
------------------ -------------------- -------------- ----------------
Seller junior discount preferred stock ................ - 55,048 - 56,138
------------------ -------------------- -------------- ----------------
Stockholders' Equity (Deficit)
Common stock, no par, authorized 200 shares,
issued 148.85 shares............................ 870 - 870 -
Common stock, Class A $0.01 par value, 10,000,000
authorized none issued or outstanding........... - - - -
Common stock, Class B $0.01 par value, 10,000,000
authorized 7,400,000 issued and outstanding..... - 74 - 74
Additional paid-in capital.......................... 150,969 (59,549) 150,967 (59,988)
Accumulated deficit................................. (28,006) (87,200) (31,500) (97,524)
Stockholder's note receivable....................... - (588) - (596)
------------------ -------------------- -------------- ----------------
123,833 (147,263) 120,337 (158,034)
------------------ -------------------- -------------- ----------------
$ 445,102 $ 447,462 $ 433,571 $ 435,429
================== ==================== ============== ================
</TABLE>
-3-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-----------------------------------------------------------------------------------
1998 1999
------------------------------------------- -----------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------------- ------------------- ----------------- ---------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C>
Net revenues.............................. $ 30,695 $ 30,695 $ 32,281 $ 32,281
------------------- ------------------- ----------------- --------------
Operating expenses:
Selling, technical and program........ 15,400 15,400 15,187 15,187
General and administrative............. 5,233 5,233 6,660 6,660
Depreciation and amortization.......... 7,788 7,788 7,814 7,814
Corporate.............................. 1,377 1,377 1,241 1,241
------------------- ------------------- ----------------- --------------
29,798 29,798 30,902 30,902
------------------- ------------------- ----------------- --------------
Operating income.................... 897 897 1,379 1,379
------------------- ------------------- ----------------- --------------
Financial income (expense):
Interest expense:
Cash interest....................... (6,851) (6,851) (6,343) (6,343)
Other interest...................... (327) (4,021) (10) (4,540)
------------------- ------------------- ----------------- --------------
(7,178) (10,872) (6,353) (10,883)
Interest income........................ 34 34 38 38
------------------- ------------------- ----------------- --------------
(7,144) (10,838) (6,315) (10,845)
------------------- ------------------- ----------------- --------------
(Loss) before income tax benefit.... (6,247) (9,941) (4,936) (9,466)
Income tax benefit........................ 2,333 3,810 1,442 3,254
------------------- ------------------- ----------------- --------------
Net (loss)....................... $ (3,914) (6,131) $ (3,494) (6,212)
=================== =================
Preferred stock dividends and accretion... (5,210) (4,558)
------------------- --------------
Net (loss) applicable to common stock..... $ (11,341) $ (10,770)
=================== ===============
Basic and diluted (loss) per common share. $ (1.53) $ (1.46)
=================== ===============
Weighted-average common shares
outstanding............................... 7,400,000 7,400,000
=================== ===============
</TABLE>
-4-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
THREE MONTHS ENDED MARCH 31, 1999
BENEDEK BROADCASTING CORPORATION
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED
STOCK CAPITAL DEFICIT TOTAL
------------- ----------------- ----------------- ----------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance at December 31, 1998.................... $ 870 $ 150,969 $ (28,006) $ 123,833
Contribution of paid-in capital to parent.... - (2) - (2)
Net (loss)................................... - - (3,494) (3,494)
------------- --------------------- ----------------- ---------------
Balance at March 31, 1999....................... $ 870 $ 150,967 $ (31,500) $ 120,337
============= ===================== ================== ================
</TABLE>
BENEDEK COMMUNICATIONS CORPORATION
<TABLE>
<CAPTION>
ADDITIONAL STOCKHOLDER'S
COMMON PAID-IN ACCUMULATED NOTE
STOCK CAPITAL DEFICIT RECEIVABLE TOTAL
-------------- -------------- ---------------- ---------------- -------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1998.................... $ 74 $ (59,549) $ (87,200) $ (588) $ (147,263)
Accretion to exchangeable redeemable
senior preferred stock.................... - (446) - - (446)
Dividends on preferred stock................. - - (4,112) - (4,112)
Financial costs related to the sale of
preferred stock........................... - (1) - - (1)
Accrued interest on note receivable.......... - 8 - (8) -
Net (loss)................................... - - (6,212) - (6,212)
------------ -------------- ---------------- ----------- -------------
Balance at March 31, 1999....................... $ 74 $ (59,988) $ (97,524) $ (596) $ (158,034)
============ ============== ================ ============ =============
</TABLE>
-5-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------------------------------------------------
1998 1999
-------------------------------------- ------------------------------
BENEDEK BENEDEK BENEDEK BENEDEK
BROADCASTING COMMUNICATIONS BROADCASTING COMMUNICATIONS
CORPORATION CORPORATION CORPORATION CORPORATION
------------------ ----------------- ------------------------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net (loss)................................................... $ (3,914) $ (6,131) $ (3,494) $ (6,212)
Adjustments to reconcile net (loss) to net cash
provided by (used in) operating activities:
Amortization of program broadcast rights............... 1,698 1,698 1,939 1,939
Depreciation and amortization.......................... 5,357 5,357 5,377 5,377
Amortization and write-off of intangibles and
deferred loan costs.................................. 2,773 2,924 2,411 2,913
Amortization of note discount.......................... -- 3,543 -- 4,028
Deferred income taxes.................................. (2,340) (3,817) (1,585) (3,397)
Other.................................................. (83) (83) -- --
Changes in operating assets and liabilities:
Receivables.............................................. 4,153 4,153 3,052 3,052
Prepaid expenses and other............................... (540) (540) (275) (275)
Payments on program broadcast rights payable............. (1,752) (1,752) (2,218) (2,218)
Accounts payable and accrued expenses.................... (5,081) (5,081) (2,871) (2,871)
Deferred revenue......................................... (175) (175) (262) (262)
-------- -------- -------- --------
Net cash provided by operating activities.............. 96 96 2,074 2,074
-------- -------- -------- --------
Cash flows from investing activities
Purchase of property and equipment........................... (2,015) (2,015) (1,981) (1,981)
Other........................................................ 54 54 16 16
-------- -------- -------- --------
Net cash (used in) investing activities.................. (1,961) (1,961) (1,965) (1,965)
-------- -------- -------- --------
Cash flows from financing activities
Principal payments on notes payable.......................... (2,255) (2,255) (3,074) (3,074)
Net borrowings on long-term revolver......................... 4,601 4,601 1,000 1,000
Contribution of paid-in capital to parent.................... -- -- (2) --
Payment of debt and preferred stock acquisition costs........ (34) (34) (280) (282)
-------- -------- -------- --------
Net cash provided by (used in) financing
activities............................................. 2,312 2,312 (2,356) (2,356)
-------- -------- -------- --------
Increase (decrease) in cash and cash equivalents......... 447 447 (2,247) (2,247)
Cash and cash equivalents:
Beginning.................................................... 2,647 2,648 4,290 4,291
-------- -------- -------- --------
Ending....................................................... $ 3,094 $ 3,095 $ 2,043 $ 2,044
======== ======== ======== ========
Supplemental Disclosure of Cash Flow Information:
Cash payments for interest................................... $ 10,785 $ 10,785 $ 10,384 $ 10,384
Cash payments for income taxes............................... 15 15 264 264
======== ======== ======== ========
Supplemental Schedule of Noncash Investing and
Financing Activities:
Acquisition of program broadcast rights...................... $ 155 $ 155 $ 684 $ 684
Notes payable incurred for purchase of equipment............. 722 722 394 394
Equipment acquired by barter transactions.................... 80 80 56 56
Dividends accrued on redeemable preferred stock.............. -- 3,843 4,112 4,112
Accrued interest on note receivable stockholder
added to additional paid in capital...................... -- -- -- 8
Accretion to exchangeable redeemable senior --
preferred stock.......................................... -- 1,366 -- 446
======== ======== ======== ========
</TABLE>
-6-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(NOTE A) - NATURE OF BUSINESS AND BASIS OF PRESENTATION
NATURE OF BUSINESS
Benedek Communications is a holding company with minimal operations
other than from its wholly-owned subsidiary, Benedek Broadcasting. Benedek
Broadcasting owns and operates twenty-three 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.
Segment information is not presented since all of the Company's revenue is
attributed to a single reportable segment.
BASIS OF PRESENTATION
The consolidated financial statements of the Company include the accounts
of the Company and its wholly-owned subsidiary, Benedek Broadcasting and its
wholly-owned subsidiaries, BLC, BCI and The WMTV Trust and its subsidiary. The
consolidated financial statements of Benedek Broadcasting include the accounts
of Benedek Broadcasting, BLC, BCI and The WMTV Trust and its subsidiary, WMTV
LLC. Separate financial statements have been provided for each reporting entity
and, where there are differences, separate disclosures. All significant
intercompany items and transactions have been eliminated in each of the sets of
consolidated financial statements.
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 positions as of March 31, 1999 and the results of operations for the
three months ended March 31, 1999 have been included. Operating results for the
three months ended March 31, 1999 are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1999. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Annual Report on Form 10-K of the Company for the year
ended December 31, 1998.
During 1998, BCI was formed to deliver The Warner Bros. Television Network
programming to local cable companies. BCI holds minimal assets and had
insignificant operations in 1998 and in 1999. Since BCI is wholly owned by
Benedek Broadcasting the assets, liabilities and results of operations from
this company are included in the consolidated financial statements of Benedek
Broadcasting.
During October 1998, in order to comply with certain FCC duopoly rules,
Benedek Broadcasting transferred all assets and liabilities related to WMTV-TV,
serving Madison, Wisconsin, to The WMTV Trust, a disposition trust. Since
Benedek Broadcasting is the sole beneficiary of this trust, the assets,
liabilities and results of operations from this trust are included in the
consolidated financial statements of Benedek Broadcasting.
-7-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
(NOTE B) - STOCK OPTION PLAN
In December 1998, the Company's Board of Directors (the "Board") adopted
the 1999 Stock Option Plan (the "Plan") whereby from time to time on or before
December 31, 2008, options to purchase shares of Class B Common Stock may be
granted to employees, directors or consultants and advisors of the Company and
its subsidiaries. The aggregate number of shares of common stock which may be
purchased pursuant to options granted at any time under the Plan shall not
exceed 240,000. The purchase price per share shall be the fair market value, as
defined by the Plan, or an amount determined by the Board. If options are
granted to an employee who, at the time of the grant, owns more that ten percent
of the voting stock of the Company, the purchase price per share shall be at
least one hundred and ten percent of the fair market value, as defined by the
Plan.
On January 1, 1999, the Board granted options to purchase a total of
165,000 shares of Class B Common Stock at a price of $15 per share to several
key employees. The options vest over six years at 10% for the first three years,
20% in 2002 and 25% for each of 2003 and 2004.
(NOTE C) - PENDING ADOPTION OF ACCOUNTING STANDARD
The FASB (Financial Accounting Standards Board) has issued FASB statement
No. 133 "Accounting for Derivative Instruments and Hedging Activities" which the
Company will be required to adopt for its year ending December 31, 2000. This
pronouncement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, (collectively referred to as derivatives) and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This pronouncement is not expected to have a significant impact
on the Company's financial statements since the Company currently has no
derivative instruments.
(NOTE D) - SUBSEQUENT EVENT
STATION SWAP
On December 30, 1998, the Company entered into an Asset Exchange Agreement
with The Ackerley Group, Inc. ("Ackerley") pursuant to which the Company
exchanged the television broadcast assets of KCOY-TV, in Santa Maria,
California for the television broadcast assets of KKTV, Ackerley's station in
Colorado Springs, Colorado. Both KCOY-TV and KKTV are CBS affiliates. The
exchange was completed on April 30, 1999. The transaction included a $9,000,000
payment by the Company to Ackerley at the closing.
The parties entered into a time brokerage agreement for each station, in
effect from January 1, 1999 until the closing. During the time brokerage period,
the revenue and expenses of each station went to the account of the buyer, net
of applicable time brokerage fees. The net time brokerage fee expense was
$380,742 for the three months ended March 31, 1999.
-8-
<PAGE>
<PAGE>
BENEDEK COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BENEDEK BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
TENDER OFFER
On April 16, 1999, the Company announced the commencement of a tender offer
and consent solicitation (the "Offer") for any and all of the $135 million in
outstanding principal amount of its 11 7/8% Senior Secured Notes due 2005 ("the
Notes"). The total consideration for each of $1,000 principal of Notes tendered
pursuant to the Offer will be the price equal to the present value of the
redemption of such Note on March 1, 2000, the earliest stated redemption date,
and of the semi-annual interest payments that would have been payable through
the earliest redemption date, discounted to the date of payment at a yield equal
to a sum of the yield on the 5 1/2% U.S. Treasury Note due February 29, 2000
(the "Reference Treasury Security") plus 50 basis points. The Offer price will
be the total consideration minus $30.00, which is the consent payment. The
Company will pay accrued and unpaid interest on the purchased Notes up to, but
not including, the payment date, which is scheduled to be no later than three
business days after the expiration date. Based on a recent price for the
Reference Treasury Security, the amount payable, including the consent payment,
would be approximately $1,107.96 per $1,000 principal amount of Notes, plus
accrued and unpaid interest through the expected date of payment, which is
expected to be May 20, 1999.
Concurrent with the Offer, the Company is soliciting to eliminate
substantially all of the restrictive provisions, security and covenants and
certain default provisions in the indenture under which the Notes were issued,
other than the covenants to pay interest on the principal of the Notes and the
related default provisions. The removal of these covenants may be achieved by a
majority vote of the holders of the Notes ("Holders"). Holders who tender their
Notes in the Offer will be required to consent to the proposed amendments to the
indenture.
As of May 12, 1999, Holders of all of the outstanding Notes had tendered
pursuant to the Offer and consented to the elimination of the restrictive
provisions of the indenture. Withdrawal rights with respect to the Notes
tendered and consents received have expired. The closing of the Offer remains
subject to completion of the new financing described in the next paragraph.
The Company anticipates financing the Offer and refinancing its existing
Term Loans and Revolving Credit Facility with $425 million of new senior secured
credit facilities (the "Facilities"). The Facilities will be structured as: (i)
a $160 million Reducing Revolving Credit Facility; (ii) a $125 million 364-day
Revolving Credit Facility/Term Loan Facility and (iii) a $140 million Term Loan.
Proceeds from the Facilities will be used to: (i) refinance its existing term
loans Credit Facility; (ii) finance the offer for the Company's Senior Secured
Notes; (iii) to make permitted distributions to Benedek Communications to call
or repurchase its outstanding securities; (iv) to make permitted acquisitions;
and (v) for general corporate purposes.
-9-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION AND
WMTV LICENSE CO., LLC
COMBINED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS DECEMBER 31, 1998 MARCH 31, 1999
---------------------- -------------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE
AND PER SHARE DATA)
<S> <C> <C>
Federal Communication Commission (FCC)
Licenses, at cost, less accumulated amortization of $8,710
and $9,509 for 1998 and 1999, respectively........................ $ 117,330 $ 116,531
Goodwill, less accumulated amortization of $2,203 and $2,423 for
1998 and 1999, respectively......................................... 33,034 32,814
---------------------- -------------------
$ 150,364 $ 149,345
====================== ===================
LIABILITIES AND STOCKHOLDER'S EQUITY
Deferred tax liability................................................. $ 31,738 $ 31,331
---------------------- -------------------
Stockholder's equity:
Common stock, $0.01 par authorized 3,000 shares,
issued and outstanding 99 shares................................ - -
Additional paid-in capital........................................ 126,040 126,040
Accumulated deficit............................................... (7,414) (8,026)
---------------------- -------------------
118,626 118,014
---------------------- -------------------
$ 150,364 $ 149,345
====================== ===================
</TABLE>
-10-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION AND
WMTV LICENSE CO., LLC
COMBINED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------------------------
1998 1999
---------------------- ---------------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Operating expense, amortization................ $ 1,018 $ 1,019
---------------------- ---------------------
(Loss) before income tax benefit.......... (1,018) (1,019)
Income tax benefit ............................ 320 407
---------------------- ---------------------
Net (loss)............................ $ (698) $ (612)
====================== ======================
</TABLE>
-11-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION AND
WMTV LICENSE CO., LLC
COMBINED STATEMENTS OF STOCKHOLDER'S EQUITY
THREE MONTHS ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN ACCUMULATED
STOCK CAPITAL DEFICIT TOTAL
------------------- ------------------ ----------------- -----------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Balance at December 31, 1998............ $ - $ 126,040 $ (7,414) $ 118,626
Net (loss)......................... - - (612) (612)
---------------------- --------------- -------------- --------------
Balance at March 31, 1999............... $ - $ 126,040 $ (8,026) $ 118,014
====================== =============== ============== ==============
</TABLE>
-12-
<PAGE>
<PAGE>
BENEDEK LICENSE CORPORATION AND
WMTV LICENSE CO., LLC
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------------------------
1998 1999
--------------------- ---------------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities
Net (loss).................................. $ (698) $ (612)
Adjustments to reconcile net (loss) to
net cash provided by operating
activities: 1,018 1,019
Amortization...........................
Deferred income tax.................... (320) (407)
--------------------- ---------------------
Net cash provided by operating
activities.......................... - -
Cash:
Beginning................................... - -
--------------------- ---------------------
Ending...................................... $ - $ -
===================== ======================
</TABLE>
-13-
<PAGE>
<PAGE>
NOTES TO COMBINED 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"). WMTV License Co., LLC ("WMTV
LLC") is a wholly owned subsidiary of the WMTV Trust, a grantor trust for the
exclusive benefit of Benedek Broadcasting. BLC and WMTV LLC own and hold the
Federal Communications Commission ("FCC") licenses for the twenty-three
television stations owned by Benedek Broadcasting which are located throughout
the United States.
BASIS OF PRESENTATION
The combined financial statements include the accounts of BLC and WMTV LLC.
All significant intercompany items and transactions have been eliminated in the
combined financial statements. WMTV LLC was formed on October 26, 1998, in order
to comply with certain FCC duopoly rules. BLC transferred the FCC license and
associated deferred tax liability of WMTV-TV, serving Madison, Wisconsin, to
WMTV LLC. Since all of the assets, liabilities and operations of WMTV LLC have
historically been reported as a part of BLC, WMTV LLC is included in the
reporting entity with BLC.
(NOTE B) - STOCKHOLDER'S EQUITY
Benedek Broadcasting has pledged 100% of the outstanding common stock of
BLC and WMTV LLC as collateral for the Senior Secured Notes and the Term Loan
Facilities issued by Benedek Broadcasting.
BLC and WMTV LLC have guaranteed the obligations of Benedek Broadcasting
with respect to the Senior Secured Notes and the Term Loan Facilities.
-14-
<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. Wherever possible, the Company has identified
these forward looking statements by words such as "anticipates," "believes,"
"estimates," " expects" and similar expressions. 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. The Company assumes no obligation to update publicly any forward
looking statements, whether as a result of new information, future events or
otherwise.
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 KKTV, Colorado Springs, Colorado ("KKTV")
which has been operated under a time brokerage agreement (a "TBA") with Ackerley
since January 1, 1999, net of the fees associated with such TBA. The historical
financial data also includes the limited operating results and TBA fee revenue
of KCOY-TV ("KCOY-TV"), the Company's Santa Maria, California station which is
being operated by Ackerley under a TBA since January 1, 1999. Pursuant to a
definitive exchange agreement KCOY-TV was exchanged for KKTV in a transaction
that was consumated on April 30, 1999. As used herein, "Same Station" data
refers to the historical results of operations of all 23 television stations
currently operated by the Company if such stations were owned by the Company
throughout the periods indicated with pro forma adjustments only for TBA fees
and revenue, 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.
Broadcast cash flow is defined as operating income, excluding net income of
non-recourse subsidiaries, before financial income as derived from the
consolidated statements of operations plus depreciation and amortization,
amortization of program broadcast rights, corporate expenses and non-cash
compensation less payments for program broadcast rights. The Company has
included broadcast cash flow data because (i) the information is a measurement
utilized by lenders to measure the Company's ability to service its debt and pay
for capital expenditures, (ii) the information is a measurement utilized by
industry analysts to determine a market value of the Company's television
stations and (iii) the information is a measurement industry analysts utilize
when evaluating and comparing the operating performance of the Company.
Broadcast cash flow does 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. Broadcast cash flow is also not reflected in the
Company's consolidated statements of cash flows; but it is a common and
meaningful measure for comparison to other companies in the broadcast industry.
The amounts excluded from broadcast cash flow are significant components in
understanding and assessing the Company's results of operations and cash flows.
The term "broadcast cash flow" may not be the same terminology utilized by other
companies in the presentation of similar information."
Adjusted EBITDA is defined as operating income, excluding net income of
non-recourse subsidiaries, 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. The Company has included Adjusted EBITDA data
because (i) the information is a measurement utilized by lenders to measure the
Company's ability to service its debt and pay for capital
-15-
<PAGE>
<PAGE>
expenditures, (ii) the information is a measurement utilized by industry
analysts to determine a private market value of the Company's television
stations and (iii) the information is a measurement industry analysts utilize
when evaluating and comparing the operating performance of the Company. Adjusted
EBITDA does 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. Adjusted EBITDA is also not reflected in the Company's consolidated
statements of cash flows; but it is a common and meaningful measure for
comparison to other companies in the broadcast industry. The amounts excluded
from Adjusted EBITDA are significant components in understanding and assessing
the Company's results of operations and cash flows. The term "Adjusted EBITDA"
may not be the same terminology utilized by other companies in the presentation
of similar information.
The Company believes that Adjusted EBITDA and broadcast cash flow
information discussed below provide meaningful information as to the performance
of the television stations owned by the Company, particularly information that
is presented on a Same Station basis. Changes from year to year indicate how the
Company has performed in its efforts to increase net sales and manage expenses
on an operating basis.
The Company owns 23 network-affiliated television stations (the "Stations)
in the United States. The Stations are diverse in geographic and network
affiliation, serve small to medium-sized markets and, in the aggregate, reach
communities in 24 states. The Company's broadcast signals reach approximately
2.9 million households, representing more than 20% of all television households
in the markets above 100. Twelve of the Stations are affiliated with CBS, six
are affiliated with ABC, four are affiliated with NBC, and one is affiliated
with Fox. Additionally, the Company has entered into agreements with Warner
Bros. Television Network to develop a local cable affiliate called the "WB 100+
Station Group" (the "WeB") in each of the Company's 20 markets which are outside
of the 100 largest in the U.S., as measured by A.C. Nielsen Company.
During September 1998, the Company began delivering The Warner Bros.
Television Network programming to local cable companies in 15 of the Company's
20 markets which rank above market 100 as measured by Nielsen surveys. These
local affiliates are called the "WeB" and are operated by a newly-formed
wholly-owned subsidiary of Benedek Broadcasting called Benedek Cable, Inc.
("BCI"). The WeB is a 24 hour, seven day a week television channel which
broadcasts The Warner Bros. Television Network prime time programming, WB Kids
children's programming and syndicated programming of Warner Bros. and others.
The Company is continuing its negotiations with cable systems in its markets for
the carriage of WeB programming to all households within its WeB markets. The
WeB's impact on the Company's operations for 1999 was insignificant and is
expected to be insignificant in the balance of 1999. For purposes of the
Company's Adjusted EBITDA, the results of operations of BCI is excluded due to
its status as a nonrecourse subsidiary.
On December 30, 1998, the Company entered into an Asset Exchange Agreement
with Ackerley pursuant to which it agreed to exchange the television broadcast
assets of KCOY-TV for the television broadcast assets of KKTV, Ackerley's
station in Colorado Springs, Colorado. Both KCOY-TV and KKTV are CBS affiliates.
The exchange was completed on April 30, 1999. The transaction included a
$9,000,000 payment by the Company to Ackerley at the closing. The transaction
was structured, to the extent feasible, as a tax-free exchange pursuant to
Section 1031 of the Internal Revenue Code.
The parties also entered into a time brokerage agreement for each station,
in effect from January 1, 1999 until the closing. During the time brokerage
period, the revenues and expenses of each station went to the account of the
buyer, net of applicable time brokerage fees. The net time brokerage fee expense
was $380,742 for the three months ended March 31, 1999.
-16-
<PAGE>
<PAGE>
During October 1998, the Company transferred WMTV-TV, the Company's station
in Madison, Wisconsin to a trust (the "WMTV Trust") due to the Grade A broadcast
signal overlap between WMTV-TV and WIFR- TV, the Company's station in Rockford,
Illinois. The Company is seeking to comply with the FCC requirements by either
exchanging one of the stations for another broadcast station in a transaction
qualifying for deferred capital gains treatment under Section 1031 of the
Internal Revenue Code of 1986 or by selling either WMTV-TV or WIFR-TV. Under the
trust arrangement, the Company relinquished control of WMTV-TV to a trustee
while retaining the economic risks and benefits of ownership. The Company has
filed an application seeking an extension to continue the trust arrangement
pending the outcome of the FCC's current duopoly rule making proceedings.
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 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.
The Company's primary operating expenses are employee compensation,
programming, 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. 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.
For the three months ended March 31, 1999, the Company reported net
revenues of $32.3 million compared to net revenues of $30.7 million for the
three months ended March 31, 1998. The Company had a net loss of $6.2 million
for the three months ended March 31, 1999, compared to a net loss of $6.1
million for the three months ended March 31, 1998. Benedek Broadcasting had a
net loss of $3.5 million for the three months ended March 31, 1999 compared to a
net loss of $3.9 million for the three months ended March 31,1998. Adjusted
EBITDA for the three months ended March 31, 1999 was $9.0 million as compared to
$8.6 million for the three months ended March 31, 1998.
The following table sets forth certain historical results of the operations
and operating data for the periods indicated. The table reflects the operating
effects of the TBA's associated with the exchange of KCOY-TV for KKTV (the
"Station Swap") only since January 1, 1999.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
--------------------------------------
1998 1999
---- ----
(IN THOUSANDS)
<S> <C> <C>
Operating income............................... $ 897 $ 1,379
Add:
Amortization of program
broadcast rights........................ 1,698 1,939
Depreciation and amortization............ 7,788 7,814
Corporate expenses....................... 1,377 1,241
Operating loss of nonrecourse subsidiary.. - 60
Less:
Payment for program
broadcast liabilities................. (1,752) (2,218)
--------------- ----------------
Broadcast cash flow............................ $ 10,008 $ 10,215
=============== ================
</TABLE>
-17-
<PAGE>
<PAGE>
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998
The following table provides both historical information and Same Station
information for the three months ended March 31, 1998 and 1999. The Same Station
information gives effect to the Station Swap as if the exchange was consummated
on January 1, 1998.
<TABLE>
<CAPTION>
HISTORICAL SAME STATION
THREE MONTHS ENDED MARCH 31, THREE MONTHS ENDED MARCH 31,
--------------------------------------------- ---------------------------------------
1998 1999 % 1998 1999 %
---- ---- ---- ----
CHANGE CHANGE
------ ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Local/regional..................... $ 19,759 $ 20,728 4.9% $ 20,421 $ 20,707 1.4%
National........................... 10,177 11,030 8.3 10,918 11,029 1.0
Political.......................... 763 173 (77.3) 413 173 (58.1)
Other.............................. 4,570 5,154 12.7 4,583 4,465 (2.5)
------------ ------------ ------------ ------------ ----------- ----------
35,269 37,085 5.1 36,335 36,374 0.1
Direct costs....................... 4,574 4,804 5.0 4,746 4,798 1.0
------------ ------------ ------------ ------------ ----------- ----------
Net revenues....................... 30,695 32,281 5.1 31,589 31,576 0.0
Operating expenses:
Selling, technical and
program expenses............... 15,400 15,187 (1.3) 16,236 15,988 (1.5)
General and administrative....... 5,233 6,660 27.2 5,142 5,126 (0.3)
Depreciation and amortization.... 7,788 7,814 0.3 7,779 7,783 0.0
Corporate........................ 1,377 1,241 (9.8) 1,377 1,241 (9.8)
------------ ------------ ------------ ------------ ----------- ----------
29,798 30,902 3.7 30,534 30,138 (1.2)
------------ ------------ ------------ ------------ ----------- ----------
Operating income.......... $ 897 $ 1,379 53.7% $ 1,055 $ 1,438 36.3%
============ ============ ============ ============ =========== ==========
Broadcast cash flow................ $ 10,008 $ 10,215 2.0% $ 10,247 $ 10,690 4.3%
Broadcast cash flow margin......... 32.6% 31.6% 32.4% 33.8%
Adjusted EBITDA.................... $ 8,633 $ 8,974 3.9% $ 8,870 $ 9,449 6.5%
Adjusted EBITDA margin............. 28.1% 27.7% 28.0% 29.9%
</TABLE>
Net revenues for the three months ended March 31, 1999 increased $1.6
million or 5.1% to $32.3 million from $30.7 million for the three months ended
March 31, 1998. Gross revenues excluding political advertising revenue increased
$2.4 million or 7.0% to $36.9 million from $34.5 million for the three months
ended March 31, 1999. The increase was primarily caused by the effect of the
TBA's associated with the Station Swap. On a Same Station basis, net revenues
for the three months ended March 31, 1999 were $31.6 million as compared to
$31.6 million for the three months ended March 31, 1998. Net revenues for the
three months ended March 31, 1999 reflected gains in advertising demand which
offset the absence of Winter Olympics on the Company's 12 CBS stations and a
decline in political advertising both of which positively affected the three
months ended March 31, 1998.
Operating expenses for the three months ended March 31, 1999 increased $1.1
million or 3.7% to $30.9 million from $29.8 million for the three months ended
March 31, 1998. The increase in operating expenses was attributable to the
effect of the TBA's associated with the Station Swap. On a Same Station basis,
operating expenses for the three months ended March 31, 1999 decreased $0.4
million or 1.2% to $30.1 million from $30.5 million for the three months ended
March 31, 1998 resulting primarily from decreased payroll-related costs.
Operating income for the three months ended March 31, 1999 increased $0.5
million or 53.7% to $1.4 million from $0.9 million for the three months ended
March 31, 1998. On a Same Station basis, operating income for the three months
ended March 31, 1999 increased $0.4 million or 36.3% to $1.4 million from $1.0
million for the three months ended March 31, 1998.
-18-
<PAGE>
<PAGE>
Financial (expenses), net for Benedek Broadcasting decreased $0.8 million
or 11.3% to $6.3 million from $7.1 million for the year three months ended March
31, 1998 due to the lower interest rates on its Term Loan Facilities. Benedek
Communications' financial expenses (net) for the three months ended March 31,
1999 remained at $10.8 million. Benedek Communications has higher financial
expenses than Benedek Broadcasting as a result of the interest on its Senior
Subordinated Discount Notes (the "Discount Notes").
Income tax benefit for Benedek Broadcasting for the three months ended
March 31, 1999 was $1.4 million compared to $2.3 million for the three months
ended March 31, 1998. For the three months ended March 31, 1999, Benedek
Communications had a $3.3 million income tax benefit compared to $3.8 million
for the three months ended March 31, 1998. Benedek Communications had a $3.3
million income tax benefit compared to $3.8 million for the three months ended
March 31, 1998. Benedek Communications has a greater income tax benefit than
Benedek Broadcasting due to the net tax affect on the difference in financial
expenses.
Net loss for Benedek Broadcasting for the three months ended March 31, 1999
was $3.5 million as compared to $3.9 million net loss for the three months ended
March 31, 1998. Benedek Communications had a net loss of $6.2 million for the
three months ended March 31, 1999 as compared to a net loss of $6.1 million for
the three months ended March 31, 1998.
Broadcast cash flow for the three months ended March 31, 1999 increased
$0.2 million or 2.0% to $10.2 million from $10.0 million for the three months
ended March 31, 1998. As a percentage of net revenues, broadcast cash flow
margin decreased to 31.6% for the three months ended March 31, 1999 from 32.6%
for the three months ended March 31, 1998.
On a Same Station basis, broadcast cash flow for the three months ended
March 31, 1999 increased $0.5 million or 4.3% to $10.7 million from $10.2
million for the three months ended March 31, 1998. As a percentage of net
revenues, broadcast cash flow margin on a Same Station basis increased to 33.8%
for the three months ended March 31, 1999 from 32.4% for the three months ended
March 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows from Operating Activities is the primary source of liquidity for
the Company and were $2.1 million for the three months ended March 31, 1999
compared to $0.1 million for the three months ended March 31, 1998. The change
in cash flows from operating activities was the result primarily of a $1.0
million increase in accounts payable at March 31, 1999 as compared to March 31,
1998, and a $0.4 million reduction in cash payments of interest expense. Cash
payments of interest expense totaled $10.4 million for the three months ended
March 31, 1999 as compared to $10.8 million for the three months ended March 31,
1998.
Cash Flows from Investing Activities were $(2.0) million for the three
months ended March 31, 1999, as compared to $(2.0) million for the three months
ended March 31, 1998. The purchase of property and equipment was the primary
component of cash flows from investing activities for both years.
Cash Flows from Financing Activities were $(2.4) million for the Company
for the three months ended March 31, 1999 compared to $2.3 million for the three
months ended March 31, 1998. During the three months ended March 31, 1998, the
Company had net borrowings of $4.6 million under the Revolving Credit Facility
(as defined) as compared to $1.0 million for the three months ended March 31,
1999.
At March 31, 1999, Benedek Broadcasting had available to it a maximum of
$15.0 million under the revolving credit facility of the Credit Agreement (the
"Revolving Credit Facility") of which $14.0 million was unused at such time.
From time to time throughout 1999, Benedek Broadcasting's cash needs required
the use of the Revolving Credit Facility for general working capital purposes
and to fund capital expenditures. During
-19-
<PAGE>
<PAGE>
the three months ended March 31, 1999, the highest outstanding balance under the
Revolving Credit Facility was $1.0 million.
On April 16, 1999, the Company announced the commencement of a tender offer
and consent solicitation (the "Offer") for any and all of the $135 million in
outstanding principal amount of its 11 7/8% Senior Secured Notes due 2005 ("the
Notes"). The total consideration for each of $1,000 principal of Notes tendered
pursuant to the Offer will be the price equal to the present value of the
redemption of such Note on March 1, 2000, the earliest stated redemption date,
and of the semi-annual interest payments that would have been payable through
the earliest redemption date, discounted to the date of payment at a yield equal
to a sum of the yield on the 5 1/2% U.S. Treasury note due February 29, 2000
("Reference Treasury Security") plus 50 basis points. The offer price will be
the total consideration minus $30.00, which is the consent payment. The Company
will pay accrued and unpaid interest on the purchased Notes up to, but not
including, the payment date, which is scheduled to be no later than three
business days after the expiration date. Based on a recent price for the
Reference Treasury Security, the amount payable, including the consent payment,
would be approximately $1,107.86 per $1,000 principal amount of Notes, plus
accrued and unpaid interest through the expected date of payment, which is
expected to be May 20, 1999.
Concurrent with the Offer, the Company is soliciting to eliminate
substantially all of the restrictive provisions, security and covenants and
certain default provisions in the indenture under which the Notes were issued,
other than the covenants to pay interest on the principal of the Notes and the
related default provisions. The removal of these covenants may be achieved by a
majority vote of the holders of the Note ("Holders"). Holders who tender their
Notes in the Offer are required to consent to the proposed amendments to the
indenture.
As of May 12, 1999, Holders of all of the outstanding Notes had tendered
pursuant to the Offer and consented to the elimination of the restrictive
provisions of the indenture. Withdrawal rights with respect to the Notes
tendered and consents received have expired. The closing of the Offer remains
subject to completion of the new financing described in the next paragraph.
The Company anticipates financing the offer and refinancing its existing
Term Loans and Revolving Credit Facility pursuant to $425 million of new senior
secured credit facilities (the "Facilities"). The Facilities will be structured
as: (i) a $160 million Reducing Revolving Credit Facility; (ii) a $125 million
364-day Revolving Credit Facility/Term Loan Facility and (iii) a $140 million
Term Loan. Proceeds from the Facilities will be used to: (i) refinance its
existing term loans Credit Facility; (ii) finance the offer for the Company's
Senior Secured Notes; (iii) to make permitted distributions to Benedek
Communications to call or repurchase its outstanding securities; (iv) to make
permitted acquisitions and (v) for general corporate purposes.
YEAR 2000
The Year 2000 ("Y2K") issue is a result of computer programs using a two
digit format, as opposed to four digits, to indicate the year. These computer
systems will then be unable to read dates beyond the year 1999, which could
cause a system failure or other computer errors. The worst case scenario for the
Company is that its Stations would be unable to broadcast their daily
programming in which advertising revenue is generated.
The Company is currently in the process of evaluating potential Y2K issues
for its internal information technology ("IT") and non-IT ("non-IT") systems
which include but are not limited to systems such as broadcast equipment,
editing equipment, cameras, microphones, telephone/PBX systems, fax machines and
certain other equipment. It is also in the process of evaluating potential Y2K
issues that would involve third parties with which the Company has material
relationships (suppliers and customers).
All internal software and hardware is purchased or leased from third party
vendors. The Company does not employ or contract for computer programmers to
write Company-specific applications. The Company believes
-20-
<PAGE>
<PAGE>
that the sales systems are Y2K compliant due to their recent implementation. The
Company's core financial system is not Y2K compliant and is in the process of
being upgraded to a Y2K compliant version to be completed during the third
quarter of 1999. Non-IT systems that are not critical to operations are being
replaced or upgraded in the normal course of business so that they will be Y2K
compliant systems. At this time, the Company is not aware of any additional
significant upgrades or changes that will need to be made to its internal
software and hardware to become Y2K ready, but this is subject to change as the
evaluation and compliance testing process continues. The Company expects to be
able to successfully implement any software or hardware changes that may be
necessary to address Y2K IT and non-IT readiness issues. Based upon preliminary
estimates, the Company does not believe that the costs associated with such
actions will have a material effect on the Company's results of operations or
financial condition. There can be no assurance however that there will not be
increased costs associated with the implementation of any such changes.
The Company has begun the process of polling key suppliers and customers to
gain an understanding of their Y2K readiness. The Company cannot guarantee that
Y2K compliance problems of third parties with which it has a material
relationship will not have a material adverse effect on the Company's business,
results of operations and financial condition. The Company has not yet
formulated a contingency plan to address difficulties that may arise from Y2K
noncompliance of its IT and non-IT systems or those of key third parties,
however, a contingency plan will be developed during third quarter 1999.
PENDING ADOPTION OF ACCOUNTING STANDARD
The FASB (Financial Accounting Standards Board) has issued FASB statement
No. 133 "Accounting for Derivative Instruments and Hedging Activities" which the
Company will be required to adopt for its year ending December 31, 2000. This
pronouncement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, (collectively referred to as derivatives) and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This pronouncement is not expected to have a significant impact
on the Company's financial statements since the Company currently has no
derivative instruments.
-21-
<PAGE>
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company currently and from time to time is involved in litigation
incidental to the conduct of its business. The Company (including in its
capacity as successor of Brissette) is not currently a party to any lawsuit or
proceeding which, in the opinion of management, is likely to have a material
adverse effect on the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<S> <C>
(a)(3) Exhibits.
* 4.1 -- Second Supplemental Indenture dated as of October 31, 1998 among
Benedek Broadcasting Corporation, Benedek License Corporation, Phil
A. Jones, as trustee, WMTV License Co., LLC, and The Bank of New
York.
* 4.2 -- Third Supplemental Indenture dated as of May 3, 1999 among Benedek
Broadcasting Corporation, Benedek License Corporation, Phil A.
Jones, as trustee, WMTV License Co., LLC, and The Bank of New York.
* 27.1 -- Financial Data Schedule pursuant to Article 5 of Regulation S-X
with respect to Benedek Communications Corporation.
*27.2 -- Financial Data Schedule pursuant to Article 5 of Regulation S-X
with respect to Benedek Broadcasting Corporation.
</TABLE>
*Filed herewith
(b) Reports on Form 8-K
None.
-22-
<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: May 13, 1999
-23-
<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: May 13, 1999
-24-
<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
(REGISTRANT)
By: /s/ RONALD L. LINDWALL
-----------------------
RONALD L. LINDWALL
SENIOR VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
(Authorized Officer and Principal
Accounting Officer)
DATE: May 13, 1999
-25-
<PAGE>
<PAGE>
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE, dated as of October 31,
1998, among Benedek Broadcasting Corporation, a Delaware corporation (the
"Company"), Benedek License Corporation, a Delaware corporation ("BLC"), as
successor by merger to Benedek Broadcasting Company, L.L.C., a Delaware limited
liability company ("LLC"), Philip A. Jones, solely in his capacity as Trustee
("Trustee") under The WMTV Trust, a Wisconsin trust (the "Trust"), WMTV License
Co., LLC, a Delaware limited liability company ("License Co.") and The Bank of
New York, as trustee ("BONY"), amends and supplements the Indenture (as defined
below).
R E C I T A L S
Section 1. The Company, LLC and BONY entered into the
Indenture, dated as of March 1, 1995 (the "Indenture"), relating to the
Company's Series A and Series B 11-7/8% Senior Secured Notes due 2005 (the
"Notes").
Section 2. The Company's obligations in respect of the Notes
and under the Indenture were guaranteed by LLC.
Section 3. The LLC merged with and into BLC and, pursuant to
the First Supplemental Indenture dated as of June 6, 1996, among the Company,
BLC, and BONY (the "First Supplemental Indenture"), BLC assumed LLC's
obligations under the Indenture.
Section 4. The Company owns and operates television station
WMTV(TV) Madison, Wisconsin ("WMTV") and the licenses and authorizations issued
by the Federal Communications Commission ("FCC") for WMTV are owned by BLC.
Pursuant to certain FCC rules and regulations, the Company is transferring the
assets of WMTV to the Trustee, and BLC is transferring the licenses and
authorizations issued by the FCC in respect of WMTV to License Co., of which the
Trustee is the sole member.
Section 5. The parties hereto wish to reflect the express
assumption by the Trustee and License Co. of the obligations of BLC set forth in
the First Supplemental Indenture.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained and intending to be legally binding, the parties
hereto hereby agree as follows:
<PAGE>
<PAGE>
Section 1. Capitalized terms used herein and not otherwise
defined herein are used as defined in the Indenture as supplemented by the First
Supplemental Indenture.
Section 2. Each of the Company, BLC, the Trustee and License
Co. hereby acknowledges and agrees that, by virtue of the transfer of assets to
the Trustee and License Co., the Trustee and License Co. have become parties to
the Indenture in accordance with Article X of the Indenture and are jointly and
severally responsible for all the liabilities and obligations of BLC under the
First Supplemental Indenture. Accordingly, each of the Trustee and License Co.
hereby expressly assume all the liabilities and obligations of BLC under the
First Supplemental Indenture as set forth in Article X of the Indenture. Nothing
contained herein shall limit or otherwise affect the obligations of BLC under
the First Supplemental Indenture.
Section 3. Each of the Trust and License Co. is a Wholly Owned
Subsidiary and a Restricted Subsidiary as those terms are defined in the
Indenture.
Section 4. This Second Supplemental Indenture shall be
governed by and construed in accordance with the law of the State of New York.
Section 5. The Second Supplemental Indenture may be executed
in any number of counterparts, each of which, when so executed, shall be deemed
to be an original, but all of which shall together constitute but one and the
same instrument.
Section 6. This Second Supplemental Indenture is an amendment
supplemental to the Indenture and the First Supplemental Indenture and said
Indenture, First Supplemental Indenture and this Second Supplemental Indenture
shall henceforth be read together.
2
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be executed as of the day and year first above
written.
PHILIP A. JONES, SOLELY IN
HIS CAPACITY AS TRUSTEE
under The WMTV Trust, a Wisconsin trust
/s/ Philip A. Jones
------------------------------------
Philip A. Jones
Attest: /s/
--------------------
WMTV LICENSE CO., LLC
By: PHILIP A. JONES, SOLELY IN
------------------------------------
HIS CAPACITY AS TRUSTEE
under The WMTV Trust, a Wisconsin
trust
/s/ Philip A. Jones
------------------------------------
Philip A. Jones
Attest: /s/
--------------------
THE BANK OF NEW YORK,
as trustee,
By: /s/ Michael Culhane
------------------------------------
Name: Michael Culhane
Title: Vice President
Attest: /s/
--------------------
3
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION
By: /s/ Mary L. Flodin
------------------------------------
Name: Mary L. Flodin
Title: Vice President/Controller
Attest: /s/
--------------------
BENEDEK LICENSE CORPORATION
By: /s/ Mary L. Flodin
------------------------------------
Name: Mary L. Flodin
Title: Vice President/Controller
Attest: /s/
--------------------
4
<PAGE>
<PAGE>
BENEDEK BROADCASTING CORPORATION,
AS ISSUER
AND
CERTAIN SUBSIDIARIES OF BENEDEK BROADCASTING CORPORATION,
AS GUARANTORS
AND
THE BANK OF NEW YORK,
AS TRUSTEE
---------------------------------------------
THIRD SUPPLEMENTAL INDENTURE
DATED AS OF MAY 3, 1999
---------------------------------------------
$135,000,000
117/8% SENIOR SECURED NOTES DUE 2005
<PAGE>
<PAGE>
THIS THIRD SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
dated as of May 3, 1999, is among BENEDEK BROADCASTING CORPORATION, a Delaware
corporation (the "Company"), certain of its subsidiaries (as more specifically
identified on the signature pages hereof, the "Guarantors"), and THE BANK OF NEW
YORK, a New York banking corporation, as trustee (the "Trustee"). All terms not
otherwise defined herein shall have the meaning ascribed thereto in the
Indenture (as hereinafter defined).
RECITALS
The Company, such of the Guarantors as were then subsidiaries of the
Company and the Trustee entered into an indenture dated as of March 1, 1995 (the
"Indenture") providing for the issuance by the Company of $135 million in an
aggregate principal amount of its 117/8% Senior Secured Notes (the "Securities")
as provided in the Indenture, the payment of which Securities was guaranteed by
such Guarantors in the manner provided in the Guarantee Agreements referred to
in the Indenture.
The Indenture was supplemented by that certain First Supplemental
Indenture dated as of June 6, 1996, to reflect that Benedek Broadcasting
Company, L.L.C. ("LLC"), which had guaranteed the Company's obligations in
respect of the Securities under the Indenture, was merged with and into Benedek
License Corporation ("BLC") and that BLC assumed all of the obligations of LLC
set forth in the Indenture.
Also, the Indenture was supplemented by that certain Second
Supplemental Indenture dated as of October 31, 1998, to reflect the transfer of
assets of Television Station WMTV by the Company to Philip A. Jones, solely in
his capacity as trustee under The WMTV Trust (the "WMTV Trust") and the transfer
of the licenses and authorizations issued by the Federal Communications
Commission relating to Television Station WMTV from BLC to WMTV License Co., LLC
("License Co.") and each of WMTV Trust and License Co. became Guarantors
pursuant to the Second Supplemental Indenture.
The Company has offered, upon the terms and subject to the conditions
set forth in the Offer to Purchase and Consent Solicitation Statement dated
April 16, 1999 and the related Consent and Letter of Transmittal dated April 16,
1999 (collectively, the "Tender Offer Documents"), to purchase for cash any and
all of the outstanding Securities.
The Company, with the consent of the Holders of at least fifty-one
percent (51%) in aggregate principal amount of the outstanding Securities,
desires to further supplement the Indenture for the purpose of eliminating
substantially all the restrictive covenants contained therein.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the mutual covenants
contained herein and in the Indenture, as the same has been supplemented from
time to time, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby mutually
<PAGE>
<PAGE>
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Securities, as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. General. Capitalized terms that are used but not defined
herein shall have the meanings ascribed to them in the Indenture.
Section 1.02 Elimination. Pursuant to Section 9.02 of the Indenture,
Section 1.01 (captioned "Definitions") is hereby amended to delete the following
terms and the corresponding definitions thereof in their entirety:
"Bank Credit Agreement"
"Cash Flow Leverage Ratio"
"Change of Control"
"Consolidated Net Worth"
"Exchangeable Stock"
"Interest Rate Protection Agreement"
"Net Available Cash"
"Net Cash Proceeds"
"Non-Convertible Capital Stock"
"Permitted Holders"
"Restricted Holder"
"Senior Debt"
"Tax Amount"
"Voting Stock"
In addition the following definitions are hereby amended as follows:
a. "Affiliate" is amended to delete the second full sentence
in its entirety.
b. "Asset Disposition" is amended to delete the text of (iv)
and (v) in their entirety and the text of each is replaced with "Intentionally
omitted".
c. "Consolidated Net Income" is amended to delete the second
full paragraph in its entirety.
d. "Issue" is amended by deleting the second full sentence in
its entirety.
2
<PAGE>
<PAGE>
Section 1.03 Elimination. Pursuant to Section 9.02 of the Indenture,
Section 1.02 (captioned "Other Definitions") is hereby amended to delete the
following terms and the corresponding definitions thereof in their entirety:
"Excluded Stock"
"Offer"
"Offer Amount"
"Offer Period"
"Purchase Date"
"Restricted Payment"
ARTICLE TWO
AMENDMENT TO TRANSFER AND EXCHANGE
Section 2.01 Elimination. Pursuant to Section 9.02 of the Indenture,
Article 2 of the Indenture (captioned "The Securities"), is hereby amended as
follows:
a. Section 2.06(i)(ii) is amended to delete the reference to
Section 4.08.
ARTICLE THREE
AMENDMENT TO NOTICE OF REDEMPTION
Section 3.01. Elimination. Pursuant to Section 9.02 of the Indenture,
Article 3 of the Indenture (captioned "Redemption"), is hereby amended as
follows:
a. Section 3.03 is amended by deleting the first sentence and
replacing it with the following:
"At least 30 days (or in the case of a redemption required
pursuant to paragraph 6 of the Securities, at least 10
Business Days but not more than 11 Business Days) before a
date of redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of
Securities to be redeemed."
ARTICLE FOUR
ELIMINATION OF CERTAIN COVENANTS
Section 4.01. Elimination. Pursuant to Section 9.02 of the Indenture,
Article 4 of the Indenture (captioned "Covenants"), is hereby amended as
follows:
3
<PAGE>
<PAGE>
a. The text of each of the following Sections is deleted in
its entirety and replaced with "Intentionally omitted":
Section 4.02
Section 4.03
Section 4.04
Section 4.05
Section 4.06
Section 4.07
Section 4.08
Section 4.09
Section 4.12
Section 4.13
b. The text of Section 4.14 (i), (iii), (iv), (v), and (vi) is
deleted in its entirety and replaced with "Intentionally omitted".
ARTICLE FIVE
ELIMINATION OF SUCCESSOR COMPANY
Section 5.01. Elimination. Pursuant to Section 9.02 of the Indenture,
Article 5 of the Indenture (captioned "Successor Company"), is hereby amended as
follows:
a. The text of Section 5.01 is deleted in its entirety and
replaced with "Intentionally omitted".
ARTICLE SIX
ELIMINATION OF CERTAIN EVENTS OF DEFAULT
Section 6.01. Elimination. Pursuant to Section 9.02 of the Indenture,
Article 6 of the Indenture (captioned "Defaults and Remedies"), is hereby
amended as follows:
a. The text of Section 6.01(3)(i) is deleted in its entirety and
replaced with "Intentionally omitted".
b. The text of Section 6.01(4) is deleted in its entirety and
replaced with the following:
"the Company fails to comply with Section 4.11 or 4.15 or
any Pledgor fails to comply with any of its obligations
under the Security
4
<PAGE>
<PAGE>
Documents and such failure continues for 30 days after the
notice specified below;"
c. The text of Section 6.01(5) text is deleted in its entirety
and replaced with the following:
"any representations and warranties of a Pledgor set forth
in the Security Documents proves to have been materially
false at the time it was made and is not cured within 60
days after the notice specified below;"
d. The text of each of Section 6.01(6) and 6.01(9) is deleted in
its entirety and replaced with "Intentionally omitted".
e. The last two paragraphs of Section 6.01 are deleted in
their entirety and replaced with the following:
"A Default under clause (4) or (5) is not an Event of
Default until the Trustee or the Holders of at least 25% in
principal amount of the Securities notify the Company of the
Default and the Company does not cure such Default within
the time specified after receipt of such Notice. Such Notice
must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30
days after the occurrence thereof, written notice in the
form of an Officers' Certificate of any event which with the
giving of notice and the lapse of time would become an Event
of Default under clause (4) or (5), its status and what
action the Company is taking or proposes to take with
respect thereto."
ARTICLE SEVEN
DISCHARGE OF INDENTURE; DEFEASANCE
Section 7.01. Elimination. Pursuant to Section 9.02 of the Indenture,
Article 8 of the Indenture (captioned "Discharge of Indenture; Defeasance"), is
hereby amended as follows:
a. The text of Section 8.01(b)(ii) is deleted in its entirety and
replaced with the following:
"their obligations under Sections 4.11, 4.14 or 4.15 and the
operation of Sections 6.01(3)(ii), 6.01(4), 6.01(7) (only
with respect to
5
<PAGE>
<PAGE>
Significant Subsidiaries), 6.01(8) (only with respect to
Significant Subsidiaries), and 6.01(10) ("covenant
defeasance option")."
b. In the second full paragraph of Section 8.01(b), the
references to each of Section 6.01(6) and 6.01(9) in the second sentence are
deleted, and the phrase "or because of the failure of the Company to comply with
5.01(iii) or 5.01(iv)" is also deleted.
ARTICLE EIGHT
AMENDMENTS
Section 8.01. Elimination. Pursuant to Section 9.02 of the Indenture,
Article 9 of the Indenture (captioned "Amendments") is hereby amended as
follows:
a. The text of Section 9.01(2) is deleted in its entirety and
replaced with "Intentionally omitted".
ARTICLE NINE
MISCELLANEOUS
Section 9.01. Effect of Supplemental Indenture. This Supplemental
Indenture supplements the Indenture and shall be subject to all the terms
thereof. Except as supplemented hereby, the Indenture shall continue in full
force and effect.
Section 9.02. Confirmation and Preservation of Indenture. The Indenture
as supplemented by this Supplemental Indenture is in all respects confirmed and
preserved.
Section 9.03. Conflict With Trust Indenture Act. If any provision of
this Supplemental Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Supplemental Indenture by the
TIA, the required provision shall control.
Section 9.04. Notices. Any notice or communication to be delivered to
the Company shall be delivered to the following address:
Benedek Broadcasting Corporation
100 Park Avenue
Rockford, Illinois 61101
Attention: Chief Financial Officer
Section 9.05. Severability. If any provision in this Supplemental
Indenture shall be invalid, illegal or otherwise unenforceable, then the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
6
<PAGE>
<PAGE>
Section 9.06. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts, each of which, when so executed and delivered,
shall be an original; such counterparts shall together constitute but one and
the same instrument.
Section 9.07. Effectiveness. This Supplemental Indenture shall be
effective as of the opening of business on the Payment Date (as defined in the
Tender Offer Documents).
Section 9.08. Recitals. The recitals contained herein shall be taken as
the statements of the Company. The Trustee assumes no responsibility for their
correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Supplemental Indenture.
Section 9.09. Governing Law. This Supplemental Indenture shall be
governed by and construed in accordance with the laws of the jurisdiction that
governs the Indenture and its construction.
[THE REST OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
7
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the day and year first above written.
BENEDEK BROADCASTING CORPORATION, as
Issuer
By: /s/ Ronald L. Lindwall
----------------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President-Finance
and Chief Financial Officer
BENEDEK LICENSE CORPORATION, as
Guarantor
By: /s/ Ronald L. Lindwall
----------------------------------
Name: Ronald L. Lindwall
Title: Senior Vice President-Finance
and Chief Financial Officer
PHILIP A. JONES, solely in his capacity
as Trustee under The WMTV Trust,
as Guarantor
By: /s/ Ronald L. Lindwall
----------------------------------
Philip A. Jones
WMTV LICENSE CO., LLC, as Guarantor
By: PHILIP A. JONES, solely in his
capacity as Trustee under
The WMTV Trust, as Member
By: /s/ Philip A. Jones
----------------------------------
Philip A. Jones
8
<PAGE>
<PAGE>
THE BANK OF NEW YORK, as Trustee
By: /s/ Michael Culhane
----------------------------------
Name: Michael Culhane
Title: Vice President
9
<PAGE>
<PAGE>
STATE OF ILLINOIS )
) ss.
COUNTY OF WINNEBAGO )
This instrument was acknowledged before me on May 4, 1999 by Ronald L.
Lindwall, Senior Vice President-Finance and Chief Financial Officer on behalf of
Benedek Broadcasting Corporation, a Delaware corporation. Given under my hand
and official seal this 4th day of May, 1999.
/s/
-----------------------------------------
Signature
Notary in and for the State of Illinois
[NOTARY SEAL APPEARS HERE]
10
<PAGE>
<PAGE>
STATE OF ILLINOIS )
) ss.
COUNTY OF WINNEBAGO )
This instrument was acknowledged before me on May 4, 1999 by Ronald L.
Lindwall, Senior Vice President-Finance and Chief Financial Officer on behalf of
Benedek License Corporation, a Delaware corporation. Given under my hand and
official seal this 4th day of May, 1999.
/s/
----------------------------------------
Signature
Notary in and for the State of Illinois
[NOTARY SEAL APPEARS HERE]
11
<PAGE>
<PAGE>
STATE OF KANSAS )
) ss.
COUNTY OF JOHNSON )
This instrument was acknowledged before me on May 4, 1999 by Philip A.
Jones, solely in his capacity as Trustee under The WMTV Trust, a Wisconsin
trust. Given under my hand and official seal this 4th day of May, 1999.
/s/
--------------------------------------
Signature
Notary in and for the State of Kansas
[NOTARY SEAL APPEARS HERE]
12
<PAGE>
<PAGE>
STATE OF KANSAS )
) ss.
COUNTY OF JOHNSON )
This instrument was acknowledged before me on May 4, 1999 by Philip A.
Jones, solely in his capacity as Trustee under The WMTV Trust, on behalf of WMTV
License Co., LLC, as Member. Given under my hand and official seal this 4th day
of May, 1999.
/s/
--------------------------------------
Signature
Notary in and for the State of Kansas
[NOTARY SEAL APPEARS HERE]
13
<PAGE>
<PAGE>
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
This instrument was acknowledged before me on May 5, 1999 by Michael
Culhane, Vice President, on behalf of The Bank of New York, a New York banking
corporation. Given under my hand and official seal this 5th day of May, 1999.
/s/
--------------------------------
Signature
Notary in and for the State of New York
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 1017522
<NAME> BENEDEK COMMUNICATIONS CORPORATION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,044,189
<SECURITIES> 0
<RECEIVABLES> 24,867,805
<ALLOWANCES> 547,004
<INVENTORY> 0
<CURRENT-ASSETS> 32,707,824
<PP&E> 141,819,219
<DEPRECIATION> 82,025,666
<TOTAL-ASSETS> 435,428,838
<CURRENT-LIABILITIES> 32,325,705
<BONDS> 359,780,900
<COMMON> 74,000
167,201,687
0
<OTHER-SE> (158,108,085)
<TOTAL-LIABILITY-AND-EQUITY> 435,428,838
<SALES> 35,628,900
<TOTAL-REVENUES> 37,085,038
<CGS> 4,803,713
<TOTAL-COSTS> 4,803,713
<OTHER-EXPENSES> 30,776,208
<LOSS-PROVISION> 126,002
<INTEREST-EXPENSE> 10,883,790
<INCOME-PRETAX> (9,466,429)
<INCOME-TAX> (3,254,311)
<INCOME-CONTINUING> (6,212,118)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,212,118)
<EPS-PRIMARY> (1.46)
<EPS-DILUTED> (1.46)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 923027
<NAME> BENEDEK BROADCASTING CORPORATION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,043,089
<SECURITIES> 0
<RECEIVABLES> 24,867,805
<ALLOWANCES> 547,004
<INVENTORY> 0
<CURRENT-ASSETS> 32,706,724
<PP&E> 141,819,219
<DEPRECIATION> 82,025,666
<TOTAL-ASSETS> 433,570,930
<CURRENT-LIABILITIES> 32,325,705
<BONDS> 230,340,286
<COMMON> 869,795
0
0
<OTHER-SE> 119,467,511
<TOTAL-LIABILITY-AND-EQUITY> 433,570,930
<SALES> 35,628,900
<TOTAL-REVENUES> 37,085,038
<CGS> 4,803,713
<TOTAL-COSTS> 4,803,713
<OTHER-EXPENSES> 30,776,208
<LOSS-PROVISION> 126,002
<INTEREST-EXPENSE> 6,353,382
<INCOME-PRETAX> (4,936,020)
<INCOME-TAX> (1,442,311)
<INCOME-CONTINUING> (3,493,709)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,493,709)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
