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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20479
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 20, 1996
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NWCG Holdings Corporation
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(Exact name of registrant as specified in its charter)
Delaware 33-82274 13-3771996
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(State or other (Commission) (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
3200 Windy Hill Road, Suite 1100-West, Atlanta, Georgia 30339
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(Address of principal executive offices) (Zip Code)
(770) 955-0045
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Registrant's telephone number, including area code
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
As previously reported, New World Television Incorporated ("NW
Television"), a Delaware corporation and a wholly owned subsidiary of New World
Communications Group Incorporated ("NWCG"), NW Communications of San Diego,
Inc., a Delaware corporation and a wholly owned subsidiary of NW Television
("KNSD Communications"), and KNSD License, Inc., a Delaware corporation and a
wholly owned subsidiary of KNSD Communications (together with KNSD
Communications, the "KNSD Sellers"), and NBC are parties to an Asset Purchase
Agreement dated May 22, 1996 (the "KNSD Asset Purchase Agreement").
On November 20, 1996, upon the terms set forth in the KNSD
Asset Purchase Agreement, Outlet Broadcasting, Inc., a wholly owned subsidiary
of NBC, completed its purchase from the KNSD Sellers of substantially all of
the assets of the KNSD Sellers related to the ownership and operation of
television station KNSD, Channel 39, San Diego, California for a purchase price
of $225 million, subject to adjustment based on Net Working Capital (as defined
in the KNSD Asset Purchase Agreement) as of such date.
On November 20, 1996, New World Communications Group
Incorporated and NBC issued a press release announcing the consummation of the
transactions contemplated by the WVTM Asset Purchase Agreement, which is filed
herewith as an exhibit and incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro Forma Financial Information
The information set forth in Exhibit 99.2 filed
herewith is incorporated herein by reference.
(c) The following items are filed with this report:
EXHIBIT NO. DESCRIPTION
99.1 Asset Purchase Agreement dated
May 22, 1996 by and among New
World Television Incorporated,
NW Communications of San
Diego, Inc., KNSD License,
Inc. and National Broadcasting
Company, Inc. (1)
99.2 Pro forma financial
information.
99.3 Press Release dated November
20, 1996 issued by National
Broadcasting Company, Inc. and
New World Communications Group
Incorporated. (2)
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(1) Incorporated herein by reference to Exhibit 99.1
filed as part of the Form 8-K dated May 22, 1996 of
New World Communications Group Incorporated.
(2) Incorporated herein by reference to the identical
exhibit filed as part of the Form 8-K dated November
20, 1996 of New World Communications Group
Incorporated.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
NWCG Holdings Corporation
(Registrant)
Date: December 5, 1996 By: \s\ Laurence Winoker
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Name: Laurence Winoker
Title: Vice President and Controller
(principal accounting officer)
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EXHIBIT INDEX
Exhibit Description
99.1 Asset Purchase Agreement dated May 22, 1996 by and among New
World Television Incorporated, NW Communications of San Diego,
Inc., KNSD License, Inc. and National Broadcasting Company,
Inc. (1)
99.2 Pro forma financial information.
99.3 Press Release dated November 20, 1996 issued by National
Broadcasting Company, Inc. and New World Communications Group
Incorporated. (2)
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(1) Incorporated herein by reference to Exhibit 99.1 filed as part
of the Form 8-K dated May 22, 1996 of New World Communications
Group Incorporated.
(2) Incorporated herein by reference to the identical exhibit
filed as part of the Form 8-K dated November 20, 1996 of New
World Communications Group Incorporated.
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Exhibit 99.2
NWCG Holdings Corporation
Pro Forma Financial Information
Basis of Presentation
In March 1995 NWCG sold its investment in WSBK-TV (the "Boston Station") for
gross proceeds of $107.5 million. NWCG repaid $19.5 million of the Bank Credit
Agreement Loans in March 1995 and $77.3 million of the Step-Up Notes in April
1995 from the net proceeds of the Boston Station sale.
NWCG purchased certain debt and equity securities of Argyle Television Holding
Inc. ("Argyle") for total consideration of approximately $750.4 million,
including the $100 million in cash paid for an option in 1994 and assumption of
debt of approximately $283.6 million. Argyle controlled four VHF television
stations, KDFW-TV (Dallas, Texas), KTBC-TV (Austin, Texas), KTVI-TV (St. Louis,
Missouri) and WVTM-TV (Birmingham, Alabama). For financial reporting purposes,
the acquisition occurred on March 31, 1995. FCC approval for change in control
of the television stations occurred on April 14, 1995. The acquisition has
been accounted for as a purchase.
In July 1995 NWCG purchased Cannell Entertainment Inc. for Series E Cumulative
Convertible Redeemable Preferred Stock ("Series E Preferred Stock") valued at
approximately $30 million and certain other consideration. The acquisition has
been accounted for as a purchase.
In August 1996 NWCG sold substantially all of the assets of WVTM-TV and its
subsidiaries (collectively, the "Birmingham Station") to National Broadcasting
Company, Inc. ("NBC") for gross proceeds of $200 million, subject to certain
adjustments. NWCG repaid $80.0 million of NWC Acquisition's debt in August
1996 from the net proceeds of the Birmingham Station sale and an additional
$15.0 million on September 30, 1996.
In November 1996 NWCG sold substantially all of the assets of KNSD-TV and its
subsidiaries (collectively, the "San Diego Station") to NBC for gross proceeds
of $225 million, subject to certain adjustments. NWCG repaid in full the
outstanding balance of $27.6 million of the Bank Credit Agreement Loans and
offered to purchase up to $109.6 million of the Step Up Notes and up to $194.3
million of the 11% Notes, less the principal amount purchased, if any, under
the Step Up Note offer.
The following condensed consolidated pro forma balance sheet gives effect to,
as of September 30, 1996, the sale of the San Diego Station, repayment of a
portion of NW Television's debt and the repayment of a portion of NWC
Acquisition's debt.
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The following condensed consolidated pro forma statement of operations for the
nine months ended September 30, 1996 gives effect to, as of January 1, 1996,
the sale of the San Diego Station, repayment of a portion of NW Television's
debt, the sale of the Birmingham Station and the repayment of a portion of NWC
Acquisition's debt. The following condensed consolidated pro forma statement
of operations for the year ended December 31, 1995 gives effect to, as of
January 1, 1995, the sale of the Boston Station, the sale of the San Diego
Station, repayment of a portion of NW Television's debt, the purchase of
Argyle, borrowings necessary to fund the Argyle acquisition, the issuance of
preferred stock, the sale of the Birmingham Station, and the repayment of a
portion of NWC Acquisition's debt. The pro forma financial information does not
necessarily reflect the future results or the results that would have occurred
had these transactions actually occurred on January 1, 1996 or January 1, 1995
(in thousands, except per share).
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NWCG Holdings Corporation
Pro Forma Balance Sheet
(dollars in thousands)
September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Historical Pro Forma
Historical KNSD Adjustments Pro Forma
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<S> <C> <C> <C> <C> <C>
ASSETS
Cash $ 141,798 $ (1) $ 232,355 (a) $ 133,700
(240,452) (b)
Receivables 168,953 (10,411) - 158,542
Television program contract rights 31,992 (4,054) - 27,938
Film Costs 70,837 - - 70,837
Prepaid expenses 4,783 (41) - 4,742
Deferred income taxes 4,410 - - 4,410
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Total current assets 422,773 (14,507) (8,097) 400,169
Property, plant and equipment 201,450 (11,694) - 189,756
Long-term receivables 11,890 - - 11,890
Television program contracts rights 6,546 (218) - 6,328
Film costs 49,572 - - 49,572
Intangible assets and excess reorganization value 1,360,677 (86,098) (69,250) (c) 1,205,329
Equity investments 39,624 - - 39,624
Other assets 36,478 - - 36,478
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$2,129,010 $(112,517) $ (77,347) $1,939,146
========== ======================= ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued expenses $ 79,455 $ (1,195) $ 1,950 (d) $ 88,816
8,606 (c)
Television program contracts payable 33,404 (5,571) - 27,833
Deferred income 25,097 (444) - 24,653
Participations and residuals payable 47,753 - - 47,753
Current portion of long-term debt and notes payable 36,467 - (16,289) (b) 20,178
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Total current liabilities 222,176 (7,210) (5,733) 209,233
Noncurrent television program contract 9,678 (532) - 9,146
rights
Long-term debt 1,143,705 - (224,163) (b) 919,542
Other noncurrent liabilities 22,575 (973) - 21,602
Participations and residuals payable 7,859 - - 7,859
Deferred tax credits 89,424 - (19,251) (c) 70,173
Minority interest 386,322 (25,758) (e) 360,564
Subsidiary's redeemable preferred stock 311,551 - - 311,551
Stockholder's equity
Preferred stock - - - -
Common stock - -
Additional paid-in capital 519,782 - - 519,782
Accumulated deficit (584,062) (103,802) (58,605) (c) (490,306)
25,758 (e)
230,405 (f)
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Total stockholder's equity (64,280) (103,802) 197,558 29,476
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$2,129,010 $(112,517) $ (77,347) $1,939,146
========== ======================= ==========
</TABLE>
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NWCG Holdings Corporation
Pro Forma Statement of Operations
(dollars in thousands)
Nine months ended September 30, 1996
(unaudited)
<TABLE>
<CAPTION>
Historical
NBC
Historical Stations Adjustments Pro Forma
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<S> <C> <C> <C> <C>
Net revenues $478,405 $(46,005) $ - $432,400
Operating Expenses
Technical and programming 277,849 (15,397) - 262,452
Selling, general and administrative 97,294 (8,245) - 89,049
Depreciation and amortization of intangible assets 57,323 (5,841) (3,700) (g) 47,782
Corporate expenses 17,138 - - 17,138
-------- -------- -------- --------
Income from operations 28,801 (16,522) 3,700 15,979
Other income (expense):
Interest expense (97,298) - 19,784 (i) (77,514)
Gain on sale of broadcast station 103,227 (103,227) (j) -
Interest income and other (536) - - (536)
-------- -------- -------- --------
5,393 - (83,443) (78,050)
-------- -------- -------- --------
Income (loss) before income taxes 34,194 (16,522) (79,743) (62,071)
Benefit (provision) for income taxes (51,708) - 62,283 (l) 10,575
Minority interest in consolidated subsidiary (6,764) - 21,301 (e) 14,537
Equity in earnings of affiliates 2,815 - - 2,815
-------- -------- -------- --------
Net income (loss) $(21,463) $(16,522) $ 3,841 $(34,144)
======== ======== ======== ========
</TABLE>
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NWCG Holdings Corporation
Pro Forma Statement of Operations
(dollars in thousands)
Year Ended December 31, 1995
(unaudited)
<TABLE>
<CAPTION>
Historical
Historical Historical NBC
Historical WSBK Argyle Stations Adjustment Pro Forma
---------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net revenues $605,010 $(5,741) $29,628 $(56,199) $ - $572,698
Operating Expenses
Technical and programming 362,088 (5,189) 10,130 (21,778) - 345,251
Selling, general and administrative 113,123 (1,058) 6,474 (10,012) - 108,527
Depreciation and amortization of
intangible assets 66,608 (798) 6,951 (7,404) (1,997) (g) 63,360
Corporate expenses 20,506 0 9,761 0 (9,761) (h) 20,506
-------- ------- ------- -------- ------- --------
Income from operations 42,685 1,304 (3,688) (17,005) 11,758 35,054
Other income (expense):
Interest expense (120,297) - - - 23,092 (i) (97,205)
Gain on sale of WSBK 41,671 - - - (41,671) (j) -
Interest and investment income and other (4,181) - 2 - 6,824 (k) 2,645
-------- ------- ------- -------- ------- --------
(82,807) - 2 - (11,755) (94,560)
-------- ------- ------- -------- ------- --------
Income (loss) before income taxes (40,122) 1,304 (3,686) (17,005) 3 (59,506)
Benefit (provision) for income taxes (34,500) - (145) - 31,254 (l) (3,391)
Minority interest in consolidated
subsidiary 20,839 - - - (2,627) (e) 18,212
Equity in earnings of affiliates (607) - - - - (607)
-------- ------- ------- -------- ------- --------
Net income (loss) $(54,390) $ 1,304 $(3,831) $(17,005) $28,630 $(45,292)
======== ======= ======= ======== ======= ========
</TABLE>
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Notes to Pro Forma Condensed Consolidated Financial Information
(amounts in thousands)
(a) Reflects cash estimated to be received on the sale of the San Diego
Station.
(b) Reflects the reduction of a portion of NW Television's and NWC
Acquisition's debt with the net proceeds from the sale of the NBC
Stations. Although NW Television will make an offer to repurchase an
aggregate of approximately $85,000 principal amount of 11% Notes at
100% of the principal amount thereof plus accrued and unpaid interest,
New World has not assumed any holders will tender 11% Notes pursuant
to such offer because the current market price of the 11% Notes
exceeds their par value.
(c) Reflects the income tax effect of the sale of the San Diego Station.
The adjustment to intangible assets reflects a reduction of the
valuation allowance recorded for restricted net operating losses
("NOLs") whose realization did not previously meet the "more likely
than not" test of probability contained in Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes" ("SFAS
109") due to restrictions on their use. The sale of the San Diego
Station will allow NWCG to utilize a portion of these previously
restricted NOLs to reduce the tax liability associated with the gain
on the sale of the San Diego Station.
(d) Reflects the estimated costs associated with the sale of the San Diego
Station.
(e) Reflects the adjustment to minority interest as a result of the gain
on the sale of the San Diego Station.
(f) Reflects adjustment to the gain on the sale of the San Diego Station.
The pre-tax gain on the sale of the San Diego Station is estimated to
be approximately $126,603.
(g) Reflects the adjustment of amortization of intangible assets and
depreciation of property, plant and equipment associated with the sale
of the Boston Station and the purchase of the Argyle stations in 1995
and the sale of the NBC Stations in 1996.
(h) Reflects the elimination of Argyle-related corporate expenses as a
result of the consolidation of operations.
(i) Reflects adjustments to interest expense for the repayment of a
portion of NW Television's debt with the net proceeds from the sale of
the Boston Station in 1995, additional borrowings under NWC
Acquisition's debt agreement to finance the purchase of Argyle and
repay Argyle's debt assumed in 1995, and
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for the repayment of a portion of NW Television's and NWC
Acquisition's debt with the net proceeds from the sale of the NBC
Stations in 1996.
(j) Reflects adjustment to eliminate the gain recorded on the sale of the
Boston Station in 1995 and to eliminate the gain recorded on the sale
of the Birmingham Station in 1996.
(k) Reflects adjustment to eliminate the loss on sale of NWCG and to
record adjustment of dividends related to subsidiary's redeemable
preferred stock.
(l) Reflects adjustment of the provision for income taxes in accordance
with SFAS No. 109.
