Document/Exhibit Description Pages Size
1: 10-Q Paxson Communications, Inc. Form 10-Q 21 142K
13: EX-10.100 Asset Purchase Agreement 40 175K
14: EX-10.101 Asset Purchase Agreement 41 177K
15: EX-10.102 Asset Purchase Agreement 45 190K
16: EX-10.103 Construction Agreement 9 37K
17: EX-10.104 Loan Agreement 29 120K
18: EX-10.105 Asset Purchase Agreement 44 184K
19: EX-10.106 Asset Purchase Agreement 42 176K
20: EX-10.107 Agreement and Plan of Merger 34 110K
21: EX-10.107.01 First Amendment to Agreement and Plan of Merger 3 17K
22: EX-10.108 Asset Purchase Agreement 41 174K
23: EX-10.109 Option Agreement 9 35K
24: EX-10.110 Subordinated Note 13 50K
25: EX-10.111 Asset Purchase Agreement 40 142K
26: EX-10.112 Asset Purchase Agreement 40 169K
27: EX-10.113 Time Brokerage Agreement 28 96K
28: EX-10.114 Purchase Agreement 17 63K
29: EX-10.115 Asset Purchase Agreement 32 138K
30: EX-10.116 Asset Purchase Agreement 32 148K
31: EX-10.117 Asset Purchase Agreement 32 144K
32: EX-10.118 Asset Purchase Agreement 33 147K
33: EX-10.119 Time Brokerage Agreement 16 70K
34: EX-10.120 Loan Agreement 28 109K
35: EX-10.121 Second Amendment to Asset Purchase Agreement 6 22K
36: EX-10.122 Asset Purchase Agreement 41 180K
37: EX-10.123 Asset Purchase Agreement 94 303K
38: EX-10.124 Loan Agreement 52 170K
39: EX-10.125 Time Brokerage Agreement 28 98K
40: EX-10.126 Option Agreement 18 64K
2: EX-10.89 Amended as Restated Promissory Note 6 25K
3: EX-10.90 First Anemdment to Loan Agreement 2 15K
4: EX-10.91 Asset Purchase Agreement 15 73K
5: EX-10.92 Asset Purchase Agreement 41 174K
6: EX-10.93 The Brokerage Agreement 29 97K
7: EX-10.94 Asset Purchase Agreement 38 173K
8: EX-10.95 First Amendment 2 15K
9: EX-10.96 Promissory Note 4 21K
10: EX-10.97 Stock Purchase Agreement 42 199K
11: EX-10.98 Asset Purchase Agreement 42 178K
12: EX-10.99 Asset Purchase Agreement 42 177K
41: EX-27 Financial Data Schedule (For SEC Use Only) 1 12K
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- ------------
Commission File Number 1-13452
PAXSON COMMUNICATIONS CORPORATION
----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 59-3212788
---------------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
601 CLEARWATER PARK ROAD
WEST PALM BEACH, FLORIDA 33401
---------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (561) 659-4122
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934
during the proceeding 12 months (or for shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common and preferred stock, as of July 31, 1996:
CLASS OF STOCK NUMBER OF SHARES
-------------- ----------------------
COMMON STOCK-CLASS A, $0.001
PAR VALUE PER SHARE --------------------- 38,670,309
COMMON STOCK-CLASS B, $0.001
PAR VALUE PER SHARE ---------------------- 8,311,639
REDEEMABLE CUMULATIVE SENIOR
PREFERRED STOCK, $0.001 PAR VALUE --------- 2,000
REDEEMABLE CUMULATIVE SERIES B
PREFERRED STOCK, $0.001 PAR VALUE --------- 714.286
REDEEMABLE CUMULATIVE JUNIOR
PREFERRED STOCK, $0.001 PAR VALUE --------- 33,000
PAXSON COMMUNICATIONS CORPORATION
INDEX
[Download Table]
Page
----
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1996 and December 31, 1995 3
Consolidated Statements of Operations
Six Months Ended June 30, 1996
and June 30, 1995 4
Consolidated Statements of Operations
Three Months Ended June 30, 1996
and June 30, 1995 5
Consolidated Statements of Changes in
Common Stockholders' Equity 6
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1996
and June 30, 1995 7-8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-17
Part II - Other Information
Item 1. Legal Proceedings 18
Item 2. Changes in Securities 18
Item 3. Defaults upon Senior Securities 18
Item 4. Submission of Matters to a Vote of
Security Holders 18
Item 5. Other Information 18
Item 6. Exhibits and Reports on Form 8-K 18-21
Signatures 22
2
PAXSON COMMUNICATIONS CORPORATION
Consolidated Balance Sheets
[Enlarge/Download Table]
June 30, December 31,
1996 1995
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $115,577,129 $ 68,070,990
Accounts receivable, less allowance for doubtful
accounts of $1,037,349 and $909,713 respectively 19,354,203 17,726,415
Prepaid expenses and other current assets 2,487,528 971,363
Current program rights 664,830 1,412,544
------------ ------------
Total current assets 138,083,690 88,181,312
Property and equipment, net 110,429,710 79,859,080
Intangible assets, net 121,300,867 84,318,147
Other assets, net 28,480,440 19,896,694
Investments in broadcast properties 38,887,393 21,192,030
Program rights, net 266,551 384,814
------------ ------------
Total assets $437,448,651 $293,832,077
============ ============
LIABILITIES, REDEEMABLE SECURITIES AND COMMON STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 6,948,343 $ 5,030,692
Accrued interest 6,730,050 6,932,342
Current portion of program rights payable 642,229 1,449,602
Current portion of long-term debt 569,766 430,590
------------ ------------
Total current liabilities 14,890,388 13,843,226
Program rights payable 277,242 432,750
Long-term debt 3,764,578 12,484,024
Senior subordinated notes, net 227,507,455 227,374,911
Redeemable Cumulative Compounding Senior
preferred stock, $0.001 par value; 15% dividend rate
per annum, 2,000 shares authorized, issued and
outstanding 18,393,136 16,824,082
Redeemable Class A & B common stock warrants - 6,465,317
Redeemable Cumulative Compounding Series B preferred
stock, $0.001 par value; 15% dividend rate per annum,
714.286 shares authorized, issued and outstanding 2,990,200 2,352,654
Redeemable Cumulative Compounding Junior preferred
stock, $0.001 par value; 12% dividend rate per annum,
33,000 shares authorized, issued and outstanding 34,090,262 31,533,910
Class A common stock, $0.001 par value; one vote per share;
150,000,000 shares authorized, 38,665,509 shares issued
and outstanding 38,665 26,227
Class B common stock, $0.001 par value; ten votes per
share, 35,000,000 shares authorized, 8,311,639 shares
issued and outstanding 8,312 8,312
Class C common stock, $0.001 par value; non-voting;
12,500,000 shares authorized, 0 shares issued and
outstanding - -
Class A & B common stock warrants 6,862,647 -
Class C common stock warrants 4,281,852 5,338,952
Stock subscription notes receivable (17,500) (115,714)
Additional paid-in capital 197,424,842 34,342,086
Deferred option plan compensation (1,949,672) (1,384,267)
Accumulated deficit (71,113,756) (55,694,393)
Commitments and contingencies
------------ -------------
Total liabilities, redeemable securities and
common stockholders' equity $437,448,651 $293,832,077
============ ============
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
3
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Operations
[Enlarge/Download Table]
For the Six Months
Ended June 30,
1996 1995
(Unaudited)
Revenue:
Local and national advertising $ 65,004,033 $ 40,454,900
Other 2,598,240 2,497,723
Trade and barter 1,767,993 1,403,725
------------ ------------
Total revenue 69,370,266 44,356,348
Operating expenses:
Direct 15,438,517 11,554,850
Programming 7,498,374 5,940,066
Sales and promotion 5,497,070 4,473,186
Technical 3,321,787 2,147,289
General and administrative 14,083,120 9,989,674
Trade and barter 1,357,018 1,193,843
Time brokerage agreement fees 3,040,383 549,947
Sports rights fees 766,160 1,019,355
Option plan compensation 2,291,917 9,404,129
Program rights amortization 721,802 777,057
Depreciation and amortization 11,736,929 8,054,256
------------ ------------
Total operating expenses 65,753,077 55,103,652
------------ ------------
Income (loss) from operations 3,617,189 (10,747,304)
Other income (expense):
Interest expense (15,098,141) (4,887,226)
Interest income 4,034,676 578,580
Other income, net (559,053) (13,763)
------------ ------------
Loss before income tax benefit (8,005,329) (15,069,713)
Income tax benefit - 640,000
------------ ------------
Net loss (8,005,329) (14,429,713)
Dividends and accretion on preferred stock and
common stock warrants (7,414,034) (5,864,161)
------------ ------------
Net loss attributable to common stock and
common stock equivalents $(15,419,363) $(20,293,874)
============ ============
Net loss per share $ (.20) $ (.42)
Dividends and accretion on preferred stock and
common stock warrants per share (.18) (.17)
------------ ------------
Net loss attributable to common stock and
common stock equivalents per share $ (.38) $ (.59)
============ ============
Weighted average shares outstanding primary and fully
diluted 40,566,865 34,401,282
============ ============
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
4
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Operations
[Download Table]
For the Three Months
Ended June 30,
1996 1995
(Unaudited)
Revenue:
Local and national advertising $34,890,219 $ 21,971,676
Other 1,418,749 1,006,757
Trade and barter 932,531 758,212
----------- ------------
Total revenue 37,241,499 23,736,645
Operating expenses:
Direct 8,380,789 5,920,695
Programming 3,592,045 2,813,262
Sales and promotion 2,915,404 2,293,673
Technical 1,796,175 1,168,083
General and administrative 7,469,972 5,331,824
Trade and barter 712,039 722,302
Time brokerage agreement fees 2,048,680 310,899
Sports rights fees 7,199 (22,227)
Option plan compensation 533,549 9,404,129
Program rights amortization 335,131 425,222
Depreciation and amortization 6,065,187 4,269,627
----------- ------------
Total operating expenses 33,856,170 32,637,489
----------- ------------
Income (loss) from operations 3,385,329 (8,900,844)
Other income (expense):
Interest expense (7,373,363) (2,794,867)
Interest income 3,203,604 280,380
Other income, net (602,239) (81,398)
----------- ------------
Loss before income tax benefit (1,386,669) (11,496,729)
Income tax benefit - 320,000
----------- ------------
Net loss (1,386,669) (11,176,729)
Dividends and accretion on preferred stock and
common stock warrants (2,466,085) (3,673,209)
----------- ------------
Net loss attributable to common stock and
common stock equivalents $(3,852,754) $(14,849,938)
=========== ============
Net loss per share $ (.03) $ (.32)
Dividends and accretion on preferred stock and
common stock warrants per share (.05) (.11)
=========== ============
Net loss attributable to common stock and
common stock equivalents per share $ (.08) $ (.43)
=========== ============
Weighted average shares outstanding primary and fully
diluted 46,570,794 34,448,665
=========== ============
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
5
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Changes in Common Stockholders' Equity
[Enlarge/Download Table]
Common Stock
----------------------
Class Class Class ClassA&B Class Stock
A B C Common C Subscription
Stock Common Stock Notes
Warrants Warrants Receivable
Balance at December 31, 1994 $26,042 $8,312 $0 $ 0 $ 5,338,952 $ (77,666)
Stock issued for Cookeville
acquisition 95
Deferred option plan compensation
Option plan compensation
Stock options exercised 90
Increase in stock subscription
receivable (48,029)
Note repayments 9,981
Dividends on redeemable
preferred stock
Accretion on Senior redeemable
preferred stock
Accretion on Series B preferred stock
Accretion on Junior preferred stock
Accretion on Class A & B common
stock warrants
Net loss
------- ------ ----- ----------- ----------- ---------
Balance at December 31, 1995 26,227 8,312 - - 5,338,952 (115,714)
Release of Put on Class A&B common
stock warrants (unaudited) 9,116,399
Issuance of common stock, net of
issuance costs of $10,000,000
(unaudited) 10,300
Exercise of Class A,B&C common stock
warrants (unaudited) 1,854 (2,253,752) (1,057,100)
Stock issued for Todd Communications
acquisition (unaudited) 139
Deferred option plan
compensation (unaudited)
Option plan compensation(unaudited)
Stock options exercised (unaudited) 145
Note repayments (unaudited) 98,214
Dividends on redeemable
preferred stock (unaudited)
Accretion on Senior redeemable
preferred stock (unaudited)
Accretion on Series B preferred
stock (unaudited)
Accretion on Junior preferred
stock (unaudited)
Accretion on Class A & B common
stock warrants(unaudited)
Net loss (unaudited)
------- ------ ----- ----------- ----------- ---------
Balance at June 30, 1996 (unaudited) $38,665 $8,312 $0 $ 6,862,647 $ 4,281,852 $ (17,500)
======= ====== ===== =========== =========== =========
Additional Deferred Option Accumulated
Paid-in Plan Deficit
Capital Compensation
Balance at December 31, 1994 $ 20,647,647 $ 0 $ (8,923,897)
Stock issued for Cookeville
acquisition 1,199,905
Deferred option plan compensation 12,187,508 (12,187,508)
Option plan compensation 10,803,241
Stock options exercised 307,026
Increase in stock subscription
receivable
Note repayments
Dividends on redeemable
preferred stock (7,275,516)
Accretion on Senior redeemable
preferred stock (332,156)
Accretion on Series B preferred stock (325,208)
Accretion on Junior preferred stock (634,988)
Accretion on Class A & B common
stock warrants (4,729,338)
Net loss (33,473,290)
----------- ------------ ------------
Balance at December 31, 1995 34,342,086 (1,384,267) (55,694,393)
Release of Put on Class A&B common
stock warrants (unaudited)
Issuance of common stock, net of
issuance costs of $10,000,000
(unaudited) 154,789,700
Exercise of Class A,B&C common stock
warrants (unaudited) 3,308,999
Stock issued for Todd Communications
acquisition (unaudited) 1,534,967
Deferred option plan
compensation (unaudited) 2,857,322 (2,857,322)
Option plan compensation(unaudited) 2,291,917
Stock options exercised (unaudited) 591,768
Note repayments (unaudited)
Dividends on redeemable
preferred stock (unaudited) (4,062,482)
Accretion on Senior redeemable
preferred stock (unaudited) (170,728)
Accretion on Series B preferred
stock (unaudited) (204,700)
Accretion on Junior preferred
stock (unaudited) (325,042)
Accretion on Class A & B common
stock warrants(unaudited) (2,651,082)
Net loss (unaudited) (8,005,329)
------------ ------------- ------------
Balance at June 30, 1996 (unaudited) $197,424,842 $ (1,949,672) $(71,113,756)
============ ============ ============
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
6
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows
[Download Table]
For the Six Months
Ended June 30,
1996 1995
(Unaudited)
Cash flows from operating activities:
Net loss $ (8,005,329) $(14,429,713)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 11,736,929 8,054,256
Option plan compensation 2,291,917 9,404,129
Program rights amortization 721,802 777,057
Provision for doubtful accounts 427,256 325,294
Deferred income taxes - (640,000)
Loss on sale of assets 13,651 -
(Increase) decrease in accounts receivable (2,055,044) 232,653
Decrease (increase) in prepaid expenses and other
current assets (1,516,165) 187,121
Increase in other assets (1,863,879) (2,454,459)
Increase (decrease) in accounts payable and
accrued liabilities 1,806,130 (2,247,724)
(Decrease) increase in accrued interest (202,292) 582,194
------------- ------------
Net cash provided by (used in) operating
activities 3,354,976 (209,192)
------------- ------------
Cash flows from investing activities:
Acquisitions of broadcast properties (61,965,301) (45,110,012)
Increase in deposits on broadcast properties (6,907,000) (2,392,000)
Proceeds from sale of fixed assets 228,279 -
Increase in investments in broadcast properties (17,695,363) (500,000)
Purchase of property and equipment (13,936,104) (9,589,477)
------------- ------------
Net cash used in investing activities (100,275,489) (57,591,489)
------------- ------------
Cash flows from financing activities:
Proceeds from issuance of common stock 164,800,000 -
Issuance expenses of common stock sale (9,888,479) -
Proceeds from long-term debt 17,700,000 49,980,000
Payments of long-term debt (27,930,270) (109,129)
Payments of loan origination costs - (5,002,634)
Proceeds from exercise of common stock options 465,893 -
Repayments of stock subscription notes receivable 98,214 -
Payments for program rights (818,706) (230,027)
------------- ------------
Net cash provided by financing activities 144,426,652 44,638,210
------------- ------------
Increase (decrease) in cash and cash equivalents 47,506,139 (13,162,471)
------------- ------------
Cash and cash equivalents at beginning of period 68,070,990 21,571,658
------------- ------------
Cash and cash equivalents at end of period $ 115,577,129 $ 8,409,187
============= ============
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
7
PAXSON COMMUNICATIONS CORPORATION
Consolidated Statements of Cash Flows (continued)
[Enlarge/Download Table]
For the Six Months
Ended June 30,
1996 1995
(Unaudited)
Supplemental disclosures of cash flow
information:
Cash paid for interest $14,478,551 $4,249,482
=========== ==========
Cash paid for income taxes $ - $ -
=========== ==========
Non-cash operating and financing activities:
Accretion of discount on senior subordinated notes $ 132,544 $ -
=========== ==========
Issuance of common stock for Cookeville partner buyout $ - $1,200,000
=========== ==========
Issuance of common stock for Todd Communications
acquisition $1,535,106 $ -
=========== ==========
Note payable incurred for WOCD acquisition $1,650,000 $ -
=========== ==========
Dividends accreted on redeemable preferred stock $ 4,062,482 $3,465,829
=========== ==========
Accretion on redeemable securities $ 3,351,552 $2,398,332
=========== ==========
Trade and barter revenue $ 1,767,993 $1,403,725
=========== ==========
Trade and barter expense $ 1,357,018 $1,193,843
=========== ==========
The accompanying Notes to Consolidated Financial Statements
are an integral part of the consolidated financial statements.
8
PAXSON COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
Paxson Communications Corporation's (the "Company") financial information
contained in the financial statements and notes thereto as of June 30, 1996 and
for the six and three month periods ended June 30, 1996 and 1995, are
unaudited. In the opinion of management, all adjustments necessary for the fair
presentation of such financial information have been included. These
adjustments are of a normal recurring nature. There have been no changes in
accounting policies since the period ended December 31, 1995. The composition
of accounts has changed to reflect the sale of Class A common stock and the
operations of acquisitions discussed below.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These financial statements, footnotes, and
discussions should be read in conjunction with the December 31, 1995 financial
statements and related footnotes and discussions contained in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1995,
Quarterly Report on Form 10-Q for the quarter ended March 31, 1996, and the
definitive proxy statement for the annual meeting of stockholders held May 16,
1996, all of which were filed with the United States Securities and Exchange
Commission. Also, in connection with the April 3, 1996 sale of 13.5 million
shares of Class A common stock by the Company and others, the Company filed a
Registration Statement on Form S-1 with the Securities and Exchange Commission
on January 26, 1996 which, as amended, was declared effective March 28, 1996.
The Company has engaged the services of an investment banking firm to advise it
on strategic alternatives with regard to its network-affiliated television
operations in the West Palm Beach, Florida market. Such alternatives may
include the possible sale or exchange of these assets.
9
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Since its inception in 1991, the Company has grown primarily through the
acquisition or management of radio and television broadcast stations and radio
networks, as well as the subsequent improvement of these properties' operations.
Certain of the Company's radio and television stations were and continue to be
operated under time brokerage agreements for various periods. Under time
brokerage agreements, the stations' operating revenues and expenses are
controlled by the Company and are included in the consolidated statement of
operations in the financial statements. The Company operates three business
segments: (1) the Infomall TV Network ("inTV"), a nationwide network of owned,
operated or affiliated television stations dedicated to the airing of long form
paid programming, consisting primarily of infomercials; (2) Paxson Radio,
consisting of radio broadcasting stations, radio news and sports networks and
billboard operations; and (3) Paxson Network-Affiliated Television, consisting
of network-affiliated television broadcasting stations in West Palm Beach,
Florida. The broadcast properties owned, to be owned, operated or affiliated
with the Company as of June 30, 1996, are listed below:
[Enlarge/Download Table]
INFOMALL TV NETWORK COMMENCEMENT
TV MARKET SERVED (1) STATION OF OPERATIONS OWNERSHIP
--------------------------------------------------------------------------------------
New York, NY WHAI-TV 1996 Owned
Los Angeles, CA KZKI-TV 1995 Owned
Philadelphia, PA WTGI-TV 1995 Owned
San Francisco, CA KLXV-TV 1995 Owned
Boston, MA WGOT-TV 1995 Owned
Washington, D.C. (2) WYVN-TV 1996 Owned
Dallas,TX (2)(3) Channel 68 1996 Owned
Atlanta, GA WTLK-TV 1994 Owned
Atlanta, GA WNGM-TV 1996 Time Brokerage
Houston, TX KTFH-TV 1995 Owned
Cleveland, OH WOAC-TV 1995 Time Brokerage
Cleveland, OH WAKC-TV 1996 Owned
Tampa, FL WFCT-TV 1994 Time Brokerage
Miami, FL WCTD-TV 1994 Time Brokerage
Denver, CO (4) KUBD-TV 1995 Owned
Phoenix,AZ (4) KWBF-TV 1996 Owned
St. Louis, MO (4) WCEE-TV 1996 Owned
Orlando, FL WIRB-TV 1994 Time Brokerage
Hartford, CT (5) WTWS-TV 1995 Owned
Raleigh, NC (6) WRMY-TV 1996 Time Brokerage
Grand Rapids, MI (2)(7) WJUE-TV 1996 Owned
Albany, NY WOCD-TV 1996 Owned
Dayton, OH (4) WTJC-TV 1995 Owned
Puerto Rico WSJN-TV 1996 Time Brokerage
Puerto Rico WKPV-TV 1996 Time Brokerage
Puerto Rico WJWN-TV 1996 Time Brokerage
Sacramento, CA KCMY-TV 1995 Affiliate
Indianapolis, IN WIIB-TV 1996 Affiliate
Norfolk, VA WJCB-TV 1995 Affiliate
Fresno, CA KGMC-TV 1996 Affiliate
10
[Enlarge/Download Table]
PAXSON RADIO COMMENCEMENT
RADIO MARKET SERVED (1) STATION FORMAT OF OPERATIONS OWNERSHIP
-------------------------- ---------- ----------------------------------------------
Miami, FL WLVE-FM Smooth Jazz 1993 Owned
WZTA-FM Active Rock 1992 Owned
WINZ-AM News 1992 Owned
WSHE-FM Modern AC 1996 Time Brokerage
WFTL-AM Hot Talk 1995 Owned
WSRF-AM Block/Long Form 1996 Time Brokerage
Tampa, FL WHPT-FM Rock AC 1991 Owned
WSJT-FM Smooth Jazz 1995 Owned
WHNZ-AM News 1991 Owned
WZTM-AM Sports 1994 Owned
Orlando, FL WMGF-FM Soft AC 1992 Owned
WJRR-FM Active Rock 1992 Owned
WDIZ-FM Modern AC 1996 Time Brokerage
WTKS-FM Hot Talk 1996 Time Brokerage
WWNZ-AM News 1992 Owned
WQTM-AM Sports 1994 Owned
Jacksonville, FL WROO-FM Country 1991 Owned
WPLA-FM Rock Alternative 1992 Owned
WFSJ-FM Smooth Jazz 1996 Owned
WNZS-AM Sports 1993 Owned
WZNZ-AM News 1992 Owned
Cookeville, TN WGSQ-FM Country 1994 Owned
WPTN-AM Talk 1994 Owned
RADIO NETWORK
-------------
Alabama Radio Network News 1995 Owned
Florida Radio Network News 1993 Owned
Tennessee Radio Network News 1994 Owned
University of Florida Sports Network Sports 1994 Owned
Universtiy of Miami Sports Network Sports 1995 Owned
Penn State Sports Network Sports 1994 Owned
[Enlarge/Download Table]
PAXSON NETWORK-AFFILIATED TELEVISION COMMENCEMENT
TV MARKET SERVED (1) STATION AFFILIATION OF OPERATIONS OWNERSHIP
--------------------------------------------------------------------------------------------------
West Palm Beach, FL WPBF-TV (8) ABC 1994 Owned
WTVX-TV (8) Warner/UPN 1995 Time Brokerage
(1) Each station is licensed by the Federal Communications Commission
("FCC") to serve a specific community, which is included in the listed
market.
(2) Station is currently under construction or presently not
operational.
(3) The Company owns 49% of Channel 68 and has an option to acquire the
remaining 51% upon completion of construction.
(4) On July 1, 1996, the Company exercised its options to purchase
these stations from The Christian Network, Inc. ("CNI") for $100,000
and forgiveness of outstanding loans aggregating $15 million.
(5) To be operated pursuant to a time brokerage agreement upon
completion of an FCC-required restructuring of the Company's
investment in such station in connection with the Company's
acquisition of WHAI-TV.
(6) The Company has an option to acquire a 40% ownership interest in
WRMY-TV.
(7) The Company owns 49% of WJUE-TV and has an option to acquire up to
70%.
(8) The Company has engaged the services of an investment banking firm
to advise it on strategic alternatives with regard to its
network-affiliated television operations. Such alternatives may include
the possible sale or exchange of these assets.
11
In April 1996, the Company began operating WNGM-TV pursuant to 10 a year time
brokerage agreement with Whitehead Media, Inc.
In May and June 1996, the Company purchased the assets of WNYA-LP and W23BA-LP
for approximately $1.5 million and $2 million, respectively. These "low power"
stations will be utilized to simulcast the signal of the Company's WHAI-TV
station.
In May 1996, the Company purchased the assets of WOCD-TV for approximately $2.5
million which included the issuance by the Company of a $1.65 million
promissory note to the seller bearing interest at 8.25% and payable in equal
monthly amounts over seven years.
In May 1996, the Company purchased the assets of CASHI billboards, primarily
169 billboard faces, for approximatley $12 million.
In May 1996, the Company began operating WSHE-FM and WSRF-AM both in the Miami
market pursuant to a time brokerage agreement pending completion of the
acquisition of these stations scheduled for January 1997. Purchase price
consists of a cash payment of $47.5 million and $10 million of Company common
stock.
In June 1996, the Company purchased the stock of Todd Communications, Inc.,
owner of WFSJ-FM and which was beneficially owned by a member of Mr. Paxson's
family, for aggregate consideration of $5 million, consisting of Class A common
stock valued at approximately $1.5 million, the cancellation of a $1.85 million
note receivable from Todd Communications and the satisfaction of a Todd
Communications note payable to Mr. Paxson of approximately $1.65 million.
In June 1996, the Company began operating WDIZ-FM and WTKS-FM pursuant to time
brokerage agreements pending completion of the acquisition of these stations
for $22 million and $25 million, respectively.
The Company's operating data throughout the periods discussed have been
impacted significantly by the timing and mix of radio, television and inTV
acquisitions throughout such periods. Operating revenues are derived from the
sale of advertising to local and national advertisers. The Company's primary
operating expenses involved in owning and operating Paxson Radio and Paxson
Network-Affiliated Television are syndicated program rights fees, commissions
on revenues, employee salaries, news gathering, promotion and administrative
expenses. Comparatively, operation of an inTV station involves low operating
expenses relative to traditional network or independent television station
operation. As a result, the Company's inTV stations usually contribute to
operating profit within a short time frame. The costs of operating an inTV
station do not vary significantly with revenue, with the exception of costs
associated with sales commissions and agency fees. As such, upon obtaining a
certain level of revenue sufficient to cover fixed costs, additional revenue
levels have a significant impact on the operating results of an individual inTV
station.
The Company currently expects to continue acquiring additional stations which
may have similar effects on the comparability of revenues, operating expenses,
interest expense and operating cash flow as those described above.
The Company's past results are not necessarily indicative of future performance
due to various risks and uncertainties which may significantly reduce revenues
and increase operating expenses. For example, a reduction in expenditures by
radio and television advertisers in the Company's markets may result in lower
revenues. The Company may be unable to reduce expenses, including certain
variable expenses, in an amount sufficient in the short term to offset lost
revenues caused by poor market conditions. The Company's television stations
are dependent upon "must carry" regulations for carriage on cable systems in
each market. The constitutionality of "must carry" regulations is currently
being litigated in the U.S. Supreme Court and if such regulations were
invalidated, the Company could suffer decreased revenues or increased carriage
expenses if the Company's stations lose cable carriage or are forced to pay
cable systems for carriage. The broadcasting industry continues to undergo
rapid technological change which may increase competition within the Company's
markets as new delivery systems, such as direct broadcast satellite and
computer networks, attract customers. The changing nature of audience tastes
and viewing and listening habits may affect the continued attractiveness of the
Company's broadcasting stations to advertisers, upon whom the Company is
dependent for its revenue.
Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amount (contingent or otherwise) of assets and
liabilities at the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. The fair value of the
Company's investments in broadcast properties and programming rights payable
were based upon the net present value of applicable estimated future cash flows
using a discounted rate approximating market rates. The fair values of the
Company's long-term debt and the senior subordinated notes were estimated based
on market rates and instruments with similar risks and maturities. The fair
value estimates presented are based
12
on pertinent information available to management as of June 30, 1996.
As a result of the foregoing, the estimates presented in the Company's financial
statements are not necessarily indicative of the amounts that the Company could
realize in a current market exchange. Although management is not aware of any
factors that would significantly affect the estimated fair value amounts, such
amounts have not been comprehensively revalued for purposes of the Company's
financial statements.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected financial
information as a percentage of revenues.
STATEMENTS OF OPERATIONS
[Download Table]
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1996 1995 1996 1995
----- ---- ---- ----
Revenues 100.0% 100.0% 100.0% 100.0%
Operating Expenses:
Direct 22.3% 26.1% 22.5% 24.9%
Programming 10.8 13.4 9.6 11.9
Sales and promotion 7.9 10.1 7.8 9.7
Technical 4.8 4.8 4.8 4.9
General and administrative 20.3 22.5 20.1 22.5
Trade and barter 2.0 2.7 1.9 3.0
Time brokerage agreement fees 4.4 1.2 5.5 1.3
Sport rights fees 1.1 2.3 - -0.1
Option plan compensation 3.3 21.2 1.5 39.6
Program rights amortization 1.0 1.7 0.9 1.8
Depreciation and amortization 16.9 18.2 16.3 18.0
----- ----- ---- -----
Total operating expenses 94.8 124.2 90.9 137.5
----- ----- ---- -----
Income (loss) from operations 5.2 -24.2 9.1 -37.5
----- ----- ---- -----
Other income (expense):
Interest expense -21.8 -11.0 -19.8 -11.8
Interest income 5.8 1.3 8.6 1.2
Other income, net -0.7 - -1.6 -0.3
----- ----- ---- -----
Loss before income tax benefit -11.5 -33.9 -3.7 -48.4
----- ----- ---- -----
Income tax benefit - 1.4 - 1.3
----- ----- ---- -----
Net loss -11.5% -32.5% -3.7% -47.1%
===== ===== ==== =====
13
The following sets forth, for the periods indicated, selected information for
the Company's business segments:
[Enlarge/Download Table]
As of and for the six As of and for the three
months ended June 30, months ended June 30,
1996 1995 1996 1995
---- ---- ---- ----
INFOMALL TV NETWORK
Total revenue $ 27,327,040 $ 10,725,692 $ 14,611,120 $ 6,822,598
Operating expenses, less
depreciation, amortization
and option plan compensation 14,482,609 6,216,319 7,848,987 3,765,974
Depreciation and amortization 4,438,053 2,074,228 2,367,123 1,236,922
Option plan compensation 7,238 - 3,675 -
------------ ------------ ------------ ------------
Income (loss) from operations $ 8,399,140 $ 2,435,145 $ 4,391,335 $ 1,819,702
============ ============ ============ ============
Operating cash flow $ 13,988,000 $ 5,018,000 $ 7,463,000 $ 3,367,000
============ ============ ============ ============
Total identifiable assets $173,354,366 $ 74,506,976 $173,354,366 $ 74,506,976
============ ============ ============ ============
Capital expenditures $ 6,537,552 $ 885,369 $ 5,016,886 $ 536,704
============ ============ ============ ============
PAXSON RADIO
Total revenue $ 31,626,945 $ 25,121,812 $ 17,091,255 $ 12,816,094
Operating expenses, less
depreciation, amortization
and option plan compensation 25,084,027 21,425,930 12,968,931 10,248,871
Depreciation and amortization 5,299,811 4,135,204 2,710,785 2,095,254
Option plan compensation 254,251 1,561,000 220,847 1,561,000
------------ ------------ ------------ ------------
Income (loss) from operations $ 988,856 $ (2,000,322) $ 1,190,692 $ (1,089,031)
============ ============ ============ ============
Operating cash flow $ 7,012,000 $ 4,208,000 $ 4,666,000 $ 2,753,000
============ ============ ============ ============
Total identifiable assets $ 84,284,513 $ 66,742,444 $ 84,284,513 $ 66,742,444
============ ============ ============ ============
Capital expenditures $ 1,445,034 $ 4,091,180 $ 701,677 $ 2,375,462
============ ============ ============ ============
PAXSON NETWORK-AFFILIATED TELEVISION
Total revenue $ 9,696,270 $ 7,306,968 $ 5,155,602 $ 3,721,971
Operating expenses, less
depreciation, amortization
and option plan compensation 8,092,005 5,258,481 4,226,926 2,706,693
Depreciation and amortization 1,465,120 1,572,113 718,129 785,451
Option plan compensation - - - -
------------ ------------ ------------ -------------
Income (loss) from operations $ 139,145 $ 476,374 $ 210,547 $ 229,827
============ ============ ============ ============
Operating cash flow $ 2,722,000 $ 2,340,000 $ 1,494,000 $ 1,180,000
============ ============ ============ ============
Total identifiable assets $ 37,930,692 $ 38,062,872 $ 37,930,692 $ 38,062,872
============ ============ ============ ============
Capital expenditures $ 881,759 $ 1,523,408 $ 761,818 $ 1,039,109
============ ============ ============ ============
CORPORATE AND OTHER
Total revenue $ 720,011 $ 1,201,876 $ 383,522 $ 375,982
Operating expenses, less
depreciation,amortization
and option plan compensation 4,065,590 4,744,537 2,212,590 2,242,195
Depreciation and amortization 533,945 272,711 269,150 152,000
Option plan compensation 2,030,428 7,843,129 309,027 7,843,129
------------ ------------ ------------ ------------
Income (loss) from operations $ (5,909,952) $(11,658,501) $ (2,407,245) $ (9,861,342)
============ ============ ============ ============
Operating cash flow $ (3,346,000) $ (2,602,000) $ (1,829,000) $ (1,175,000)
============ ============ ============ ============
Total identifiable assets $141,879,080 $ 15,651,339 $141,879,080 $ 15,651,339
============ ============ ============ ============
Capital expenditures $ 5,071,759 $ 3,089,520 $ 4,816,340 $ 558,710
============ ============ ============ ============
CONSOLIDATED
Total revenue $ 69,370,266 $ 44,356,348 $ 37,241,499 $ 23,736,645
Operating expenses, less
depreciation,amortization
and option plan compensation 51,724,231 37,645,267 27,257,434 18,963,733
Depreciation and amortization 11,736,929 8,054,256 6,065,187 4,269,627
Option plan compensation 2,291,917 9,404,129 533,549 9,404,129
------------ ------------ ------------ -------------
Income (loss) from operations $ 3,617,189 $(10,747,304) $ 3,385,329 $ (8,900,844)
============ ============ ============ ============
Operating cash flow $ 20,376,000 $ 8,964,000 $ 11,794,000 $ 6,125,000
============ ============ ============ ============
Total identifiable assets $437,448,651 $194,963,631 $437,448,651 $194,963,631
============ ============ ============ ============
Capital expenditures $ 13,936,104 $ 9,589,477 $ 11,296,721 $ 4,509,985
============ ============ ============ ============
"Operating cash flow" is defined as net income excluding non-cash items,
non-recurring items including terminated operations, interest, other income,
income taxes and time brokerage fees, less scheduled program rights payments.
The Company has included operating cash flow data because the financial
performance of broadcast companies is frequently evaluated based
14
on some measure of cash flow from operations and such data may assist
investors in measuring the Company's ability to service debt. Operating cash
flow is not, and should not be used as an indicator or alternative to operating
income, net income or cash flow as reflected in the Consolidated Financial
Statements as it is not a measure of financial performance under generally
accepted accounting principles.
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Consolidated revenues for the six months ended June 30, 1996 increased 56% (or
$25 million) to $69.4 million from $44.4 million for the six months ended June
30, 1995. This increase was primarily due to new television station
acquisitions and time brokerage operations ($14.0 million), new radio stations
($3.5 million) and increased revenues from existing television stations ($5.0
million) and radio stations ($3.6 million).
Operating expenses for the six months ended June 30, 1996 increased 19% (or
$10.7 million) to $65.8 million from $55.1 million for the six months ended
June 30, 1995. The increase was due to higher direct expenses such as
commissions which rise in proportion to revenues ($3.9 million), other
non-direct costs of operating new television stations ($3.4 million) and radio
stations ($1.8 million), increased non-direct costs of network-affiliated
television operations ($1.3 million) which is primarily due to the addition of
WTVX, higher depreciation and amortization related to assets acquired ($3.7
million), and increased time brokerage agreement fees ($2.5 million), all of
which were partially offset by lower option plan compensation costs ($7.1
million).
Operating cash flow for the six months ended June 30, 1996 increased 127% (or
$11.4 million) to $20.4 million, from $9.0 million for the six months ended
June 30, 1995. The increase in operating cash flow was a direct result of
television station acquisitions and improved performance of existing
television and radio properties.
Interest expense for the six months ended June 30, 1996 increased to $15.1
million from $4.9 million for the six months ended June 30, 1995, an increase
of 208% primarily due to a greater level of debt throughout the period and
higher borrowing rates. As a result of acquisitions, at June 30, 1996, total
long-term debt and senior subordinated notes were $231.8 million, or 75% higher
than the balance of $132.3 million outstanding a year prior.
Interest income for the six months ended June 30, 1996 increased to $4 million
from $.6 million, primarily due to greater levels of cash and cash equivalents
invested throughout the period primarily as a result of the receipt of the
proceeds of the April 1996 common stock sale.
THREE MONTHS ENDED JUNE 30, 1996 AND 1995
Consolidated revenues for the three months ended June 30, 1996 increased 57%
(or $13.5 million) to $37.2 million from $23.7 million for the three months
ended June 30, 1995. This increase was primarily due to new television station
acquisitions and time brokerage operations ($7.1 million), new radio stations
($2.4 million) and increased revenues from existing television stations ($2.1
million) and radio stations ($2.1 million).
Operating expenses for the three months ended June 30, 1996 increased 4% (or
$1.2 million) to $33.8 million from $32.6 million for the three months ended
June 30, 1995. The increase was due to higher direct expenses such as
commissions which rise in proportion to revenues ($2.5 million), other
non-direct costs of operating new television stations ($1.5 million) and radio
stations ($1.1 million), increased non-direct costs of network-affiliated
television operations ($.9 million) which is primarily due to the addition of
WTVX, higher depreciation and amortization related to assets acquired ($1.8
million), and increased time brokerage agreement fees ($1.7 million) all of
which were partially offset by lower option plan compensation costs ($8.9
million).
Operating cash flow for the three months ended June 30, 1996 increased
93% (or $5.7 million) to $11.8 million, from $6.1 million for the three months
ended June 30, 1995. The increase in operating cash flow was a direct result
of television station acquisitions and improved performance of the radio
properties.
Interest expense for the three months ended June 30, 1996 increased to $7.4
million from $2.8 million for the three months ended June 30, 1995, an increase
of 164% primarily due to a greater level of debt throughout the period and
higher borrowing rates. As a result of acquisitions, at June 30, 1996, total
long-term debt and senior subordinated notes were $231.8 million, or 75% higher
than the $132.3 million outstanding a year prior.
Interest income for the three months ended June 30, 1996 increased to $3.2
million from $.3 million, primarily due to greater levels of cash and cash
equivalents invested throughout the period primarily as a result of the receipt
of the proceeds of the April 1996 common stock sale.
15
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at June 30, 1996 and December 31, 1995 was $123.2
million and $74.3 million, respectively, and the ratio of current assets to
current liabilities was 9.27:1 and 6.37:1 on such dates, respectively. Working
capital increased primarily due to the April 1996 sale of 10,300,000 shares of
Class A Common Stock (the "Offering") which netted proceeds of approximately
$154.8 million less the effect on working capital of the acquisitions
previously discussed. The remaining proceeds from the Offering will be
utilized to fund the acquisitions discussed below along with related capital
requirements. The completion of each of the acquisitions discussed below is
subject to a variety of factors and to the satisfaction of various conditions,
and there can be no assurance that any of such acquisitions will be completed.
Cash provided by (used in) operations of $3.4 million and ($.2) million for the
six months ended June 30, 1996 and 1995, respectively, reflects the improvement
in operating results of existing properties, acquisitions and time brokerage
properties net of increased interest expense and increases in other assets.
Cash used for investing activities primarily reflects the acquisitions and
investments discussed above, and purchases of equipment for these and existing
properties. Cash provided by financing activities primarily reflects the
proceeds from the Offering and long term debt borrowings net of debt
repayments. In addition, the Company has advanced $900,000 to CNI during the
six months ended June 30 1996 under a demand note bearing interest at the prime
rate (currently 8.25%). At June 30, 1996 the Company had total advances to CNI
outstanding of approximately $2.1 million, which has been included in
investments in broadcast properties. Non-cash activity relates to option plan
compensation, stock issued for the WFSJ-FM acquisition, a note payable incurred
with the WOCD-TV accquisition, reciprocal trade and barter advertising revenue
and expense and accretion of discount on senior subordinated notes, as well as
dividends and accretion on the redeemable preferred stock and common stock
warrants.
The Company has engaged the services of an investment banking firm to advise it
on strategic alternatives with regard to its network-affiliated television
operations in the West Palm Beach, Florida market. Such alternatives may
include the possible sale or exchange of these assets.
The Company's primary capital requirements are for the acquisition of
broadcasting properties and related capital expenditures and interest and
principal payments on indebtedness. The Company's outstanding senior
subordinated notes require semi-annual interest payments at a fixed rate. The
Company presently has no outstanding borrowings under its $100 million senior
secured revolving credit facility ("Senior Facility"). Borrowings under the
Senior Facility bear interest at floating rates and require interest payments
on varying dates depending on the interest rate option selected by the Company.
The Company believes that it will require additional financing to consummate
the acquisitions discussed below (including the expected capital expenditures
associated therewith), and to meet its anticipated short term and long term
working capital requirements for its existing properties. The Company presently
has available to it the full $100 million in borrowing capacity under the
Senior Facility. The Company is currently pursuing alternatives to obtain such
additional financing, but there can be no assurance that the Company will be
able to obtain such financing on terms acceptable to it. The failure to raise
funds necessary to finance the Company's future cash requirements could
adversely affect the Company's ability to pursue its business strategy. In
addition, should the Company suffer a significant impairment to its cash flow
from operations due to the occurrence of one or more adverse events, its
liquidity could become insufficient on a short term basis due to diminished
borrowing capacity under the Senior Facility and, on a long term basis, the
Company could have insufficient resources to repay indebtedness under the
Senior Facility or the senior subordinated notes when due.
16
ACQUISITION COMMITMENTS
The Company has agreements to purchase significant assets of, or to enter into
time brokerage arrangements with respect to, the following properties, which
are subject to various conditions, including the receipt of regulatory
approvals:
[Download Table]
Property Market Served (1) Purchase Price
-----------------------------------------------------------------------------
Infomall TV Network:
KXLI-TV Minneapolis, MN $12,000,000
KAJW-TV Phoenix, AZ $12,000,000
WNAL-TV Birmingham, AL $10,000,000
KMNZ-TV Oklahoma City, OK $ 6,500,000
WAAP-TV Greensboro-Winston Salem, NC (2) $ 5,000,000
WSJN-TV,WKPV-TV,WJWN-TV Puerto Rico (3) $ 4,000,000
WHKE-TV Milwaukee, WI(4) $ 3,500,000
W42AJ-LPTV Washington, D.C. $ 1,550,000
WRAP-LPTV Boston, MA $ 1,300,000
WOST-TV Providence, RI (5) $ 1,000,000
KGLB-TV Tulsa, OK $ 825,000
KZAR-TV Salt Lake City, UT (6) $ 325,000
Paxson Radio:
WSHE-FM,WSRF-AM Ft. Lauderdale, FL (7) $57,500,000
WTKS-FM Orlando, FL (8) $25,000,000
WDIZ-FM Orlando, FL (8) $22,000,000
WSNI-FM,WTNT-FM,WTPS-FM Tallahassee, FL
WXSR-FM and WNLS-AM Tallahassee, FL
WOWW-FM,WTKX-FM Pensacola, FL
WPAP-FM,WPBH-FM Panama City, FL $21,300,000
WIOD-AM Miami, FL $13,000,000
WHUB-FM,WHUB-AM Cookeville, TN $ 3,800,000
WGNE-AM,WFSY-FM,WEBZ-FM Panama City, FL $ 2,850,000
Billboards Orlando, FL (9) $ 7,300,000
(1) Each station is licensed by the FCC to serve a specific community,
which is included in the listed market.
(2) The Company completed the purchase on July 25, 1996.
(3) The Company intends to purchase a 50% ownership interest in these
stations which are currently operated under a time brokerage agreement.
(4) Station license was acquired by CNI on July 9, 1996, with the Company
financing the acquisition price through a loan to CNI. The Company has
entered into a ten year time brokerage agreement to operate the station,
and has an option to purchase the station for $100,000.
(5) The Company will acquire 50% ownership interest and has committed to
loan up to $3 million for capital improvements and relocation of the
station's tower.
(6) The Company has an option to acquire a 50% ownership interest and has
committed to loan up to $3.7 million for construction of the station.
(7) Purchase price includes a cash payment of $47.5 million and $10
million of Company common stock. The Company began operating the stations
pursuant to a time brokerage agreement on May 1, 1996 and anticipates
completing the purchase in January 1997.
(8) The Company began operating WDIZ-FM pursuant to a time brokerage
agreement on June 1, 1996. The Company began operating WTKS-FM pursuant
to a time brokerage agreement on June 17, 1996.
(9) Purchase includes billboards with 68 faces. The Company completed the
purchase on July 24, 1996.
On August 1, 1996, the Company entered into a three year time brokerage
agreement with W53AA-LPTV in New York, NY with an option to purchase the
station for $3.5 million.
17
PAXSON COMMUNICATIONS CORPORATION
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
No material legal proceedings are pending to which the Company or any of its
property is subject. To the knowledge of the Company, no such legal
proceedings are contemplated by any governmental authority.
Items 2-3. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
The Company's Annual Meeting of Stockholders was held on May 16, 1996. At the
meeting, all nine of the Company's existing directors were re-elected for one
year terms. The proposal for the adoption of the Paxson Communications
Corporation 1996 Stock Incentive Plan was approved. The appointment of Price
Waterhouse LLP as the Company's independent certified public accountants was
also ratified.
The number of votes cast for, cast against and withheld, as well as the number
of broker nonvotes with respect to the election of directors is set forth below:
[Download Table]
Director For Withheld Broker Nonvotes Abstain
Lowell W. Paxson 32,198,760 6,281,583 41,510
James B. Bocock 32,199,760 6,281,583 40,510
Arthur D. Tek 32,199,579 6,281,583 40,691
J. Patrick Michaels, Jr. 32,198,779 6,281,583 41,491
S. William Scott 32,198,760 6,281,583 41,510
Bruce L. Burham 32,198,779 6,281,583 41,491
James L. Greenwald 32,199,560 6,281,583 40,710
There were no votes cast against the election of the above 7 directors.
Pursuant to the Company's certificate of incorporation, the election of two
directors, Michael J. Marocco and John A. Kornreich, was voted on only by the
holders of the Company's 2000 outstanding shares of 15% Cumulative Compounding
Redeemable Preferred Stock, all of which were cast in favor of such two
directors.
The number of votes cast for, cast against and abstaining as well as the number
of broker nonvotes with respect to the remaining two matters voted upon at the
meeting is set forth below:
[Enlarge/Download Table]
For Against Withheld Broker Nonvotes Abstain
Adoption of the Paxson
Communications Corporation
1996 Stock Incentive Plan 30,042,510 2,136,478 6,312
Accountant Appointment 32,227,772 9,859 2,669
Item 5. Other Matters. Not Applicable
Item 6. Exhibits and Reports on Form 8-K.
(a) List of Exhibits:
Exhibit No. Description
----------- -----------
3.1.1 Certificate of Incorporation of the Company**
3.1.2 The Company's Certificate of Designations of the Company's 15%
Cumulative Compounding Redeemable Preferred Stock*
3.1.3 The Company's Certificate of Designations of the Company's Series
B 15% Cumulative Compounding Redeemable Preferred Stock**
3.1.4 The Company's Certificate of Designations of the Company's Junior
Cumulative Compounding Redeemable Preferred Stock**
3.1.5 Bylaws of the Company +
18
[Enlarge/Download Table]
4.1 Form of Stock Certificate of Class A Common Stock*
10.89 Amended and restated promissory note dated August 5, 1996 between
Roberts Broadcasting of Salt Lake City, L.L.C. and Paxson Communications of
Salt Lake City-16, Inc.
10.90 First Amendment to Loan agreement dated August 5, 1996, between Roberts
Broadcasting of Salt Lake City, L.L.C. and Paxson Communications of Salt Lake City-16, Inc.
10.91 Asset purchase agreement, dated March 15, 1996, between Ralph E. Kaschai,
d/b/a Cashi Signs, Cashi Corp., Cashi Outdoor Advertising, Inc., and Cashi
Services, Inc., and Paxson Outdoor, Inc.
10.92 Asset purchase agreement, dated May 31, 1996 by and between Paxson
Broadcasting of Orlando, Limited Partnership and Press Broadcasting Company for
Radio Station WTKS(FM) Cocoa Beach, Florida
10.93 Time brokerage agreement, dated May 31, 1996, by and between Press
Broadcasting Company, Inc. and Paxson Broadcasting of Orlando, Limited
Partnership for Radio Station WTKS(FM) Cocoa Beach, Florida
10.94 Asset purchase agreement, dated December 11, 1995, by and between Channel
55 of Albany, Inc. and Cornerstone Television, Inc. for Television Station
WOCD(TV) Amsterdam, New York
10.95 First amendment to asset purchase agreement, dated February 29, 1996, by
and between Channel 55 of Albany, Inc and Cornerstone Television, Inc.
10.96 Promissory note, dated May 31, 1996, between Channel 55 of Albany, Inc.
and Cornerstone Television, Inc. principal sum of $1,650,000
10.97 Stock purchase agreement, dated May 23, 1996 by and among Channel 44 of
Tulsa, Inc, Paxson Communications of Tulsa-44, Inc and Broadcasting Systems,
Inc.
10.98 Asset purchase agreement, dated April 18, 1996, by and between Paxson
Communications of Phoenix-13, Inc. and Channel 13 of Flagstaff, Inc.
10.99 Asset purchase agreement, dated April 18, 1996 by and among Paxson
Communications of Denver-59, Inc., UHF Channel 59 Corp. and Channel 59 of
Denver, Inc.
10.100 Asset purchase agreement, dated April 18, 1996, by and between Paxson
Communications of Dayton-26, Inc. and Channel 26 of Dayton, Inc.
10.101 Asset purchase agreement, dated April 18, 1996 by and between Paxson
Communications of St. Louis-13, Inc and Channel 13 of St. Louis, Inc.
10.102 Asset purchase agreement, dated April 12, 1996, by and between Paxson
Broadcasting of Miami, Limited Partnership and TK Communications, L.C.
10.103 Construction agreement, dated April 16, 1996, by and among Offshore
Broadcasting Corporation, Ocean State Television, L.L.C. and Paxson
Communications of Providence-69, Inc.
10.104 Loan agreement, dated April 16, 1996, by and among Paxson Communications
of Providence-69, Inc., Offshore Broadcasting Corporation and Ocean State
Television, L.L.C.
10.105 Asset purchase agreement, dated April 19, 1996 by and between Paxson
Communications of Greensboro-16, Inc. and Television Communications, Inc. for
Television Station WAAP(TV), Burlington, North Carolina
10.106 Asset purchase agreement, dated April 26, 1996, by and between Paxson
Broadcasting of Miami, Limited Partership and WIOD, Inc.
10.107 Agreement and Plan of Merger, dated April 12, 1996 by and among Devon W.
Paxson, Todd L. Paxson, Pax Jax, Inc., Paxson Communications Corporation and
Todd Communications, Inc.
10.107.1 First amendment to agreement and Plan of Merger, dated June 27, 1996
by and among Devon W. Paxson, Todd L. Paxson, Pax Jax, Inc., Paxson
Communications Corporation and Todd Communications, Inc.
10.108 Asset purchase agreement , dated May 13, 1996, by and among Paxson
Communications of Tallahassee, Inc., B.Radio, Inc., and Boss Radio Group, Inc,
for WGNE, WFSY, WEBZ.
19
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10.109 Option agreement by and between Paxson Communications of Minneapolis 41,
Inc. and KX Acquisition, L.P. for Television Station KXLI(TV), St.Cloud
Minnesota dated May 30, 1996.
10.110 Subordinated Note between MacDonald Communications Corporation and
Paxson Communications Corporation for $3,000,000 dated June 7, 1996.
10.111 Asset purchase agreement, dated April 29, 1996, by and among Paxson
Communications of Tallahassee, Inc., Southern Broadcasting Companies, Inc.,
Great South Broadcasting, Inc, Charles E. Giddens, Inc., and Southern
Broadcasting of Pensacola, Inc.
10.112 Asset purchase agreement, dated April 26, 1996, by and between Paxson
Broadcasting of Orlando, Limited Partnership and Shamrock Communications, Inc
10.113 Time Brokerage agreement, dated April 26, 1996, by and between Shamrock
Communications, Inc. and Paxson Broadcasting of Orlando, Limited Partnership
for Radio Station WDIZ(FM) Orlando, Florida
10.114 Purchase agreement, dated July 17, 1996, by and between Impact
Communications of Central Florida, Inc. and Paxson Outdoor, Inc.
10.115 Asset purchase agreement, dated February 23, 1996, by and among Paxson
Communications LPTV, Inc., and Michael A. Bogner d/b/a Amity Broadcasting
Company
10.116 Asset purchase agreement, dated July 1, 1996, by and among Paxson
Communications of New London-26, Inc., Paxson New London License, Inc. and
Roberts Broadcasting of Hartford, L.L.C.
10.117 Asset purchase agreement, dated March 5, 1996, by and between Paxson
Communications LPTV, Inc., and Craig L. Fox
10.118 Asset purchase agreement, dated June 18, 1996, by and between Paxson
Communications LPTV, Inc and Communications Corporation
10.119 Time brokerage agreement, dated July 9, 1996, by and between Channel 55
of Milwaukee, Inc. and Paxson Communications of Milwaukee-55, Inc. for
Television Station WHKE-TV Milwaukee, Wisconsin
10.120 Loan agreement, dated July 9, 1996, by and between Paxson Communications
of Milwaukee-55, Inc. and Channel 55 of Milwaukee, Inc. for Television Station
WHKE-TV Kenosha, Wisconsin
10.121 Second amendment to asset purchase agreement, dated July 9, 1996, by and
between LeSea Broadcasting Corporation and Channel 55 of Milwaukee, Inc.
10.122 Asset purchase agreement, dated July 1, 1996, by and between Paxson
Communications LPTV, Inc. and Electron Communications Corporation
10.123 Asset exchange agreement, dated August 7, 1996, by and between Paxson
Communications of Birmingham-44, Inc. and WNAL-TV Inc.
10.124 Loan agreement, dated August 7, 1996, by and between Paxson Communications
of Birmingham-44, Inc. and WNAL-TV Inc.
10.125 Time Brokerage Agreement, dated August 7, 1996, by and between Paxson
Communications of Birmingham-44, Inc. and WNAL-TV Inc.
10.126 Option agreement by and among Paxson Communications of Salt Lake City-16, Inc.
and Roberts Broadcasting of Salt Lake City, L.L.C., dated August 5, 1996
27 Financial Data Schedule (for SEC use only)
-----------------
* Filed with the Company's Registration Statement on Form S-4, filed September
26, 1994, Registration No. 33-84416 and incorporated herein by reference.
** Filed with the Company's Annual Report on Form 10-K, dated March 31, 1995
and incorporated herein by reference.
+ Filed with the Company's Registration Statement on Form S-1, as amended,
filed January 26, 1996, Registration No. 333-473 and incorporated herein by
reference.
(b) Reports on Form 8-K. None.
20
PAXSON COMMUNICATIONS CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PAXSON COMMUNICATIONS CORPORATION
Date: August 12, 1996 By: /s/ James B. Bocock
---------------------------
James B. Bocock
President, Chief Operating
Officer, Director
Date: August 12, 1996 By: /s/ Arthur D. Tek
---------------------------
Arthur D. Tek
Vice President, Chief
Financial Officer, Director
21
Dates Referenced Herein and Documents Incorporated by Reference
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