-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q0e5rxwDuOGp9FdO4HcrK1jsr+uB+WMebQIVOx8BGfDCZ3ApKbO55drfVzF9kJTZ gUliXFee05fZ1NxvUGeFsw== 0000950130-99-006470.txt : 19991117 0000950130-99-006470.hdr.sgml : 19991117 ACCESSION NUMBER: 0000950130-99-006470 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRANITE BROADCASTING CORP CENTRAL INDEX KEY: 0000839621 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 133458782 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-19728 FILM NUMBER: 99752659 BUSINESS ADDRESS: STREET 1: 767 THIRD AVE 34TH FL CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128262530 MAIL ADDRESS: STREET 1: 767 THIRD AVE 34TH FL CITY: NEW YORK STATE: NY ZIP: 10017 10-Q 1 FORM 10-Q - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 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 0-19728 GRANITE BROADCASTING CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 13-3458782 (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 767 Third Avenue - 34th Floor New York, New York 10017 Telephone number: (212) 826-2530 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ (APPLICABLE ONLY TO CORPORATE ISSUERS:) Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class A Voting Common Stock, par value $.01 per share - 178,500 shares outstanding at November 11, 1999; Common Stock (Nonvoting), par value $.01 per share - 17,960,841 shares outstanding at November 11, 1999. PART I. FINANCIAL INFORMATION GRANITE BROADCASTING CORPORATION CONSOLIDATED BALANCE SHEET
September 30, December 31, ASSETS 1999 1998 - ------ ------------- ------------- (Unaudited) Current assets: Cash and cash equivalents $ 55,038,237 $ 762,392 Accounts receivable, net 28,492,021 32,830,227 Film contract rights 21,087,169 9,671,443 Other assets 9,327,623 9,627,807 ------------ ------------ Total current assets 113,945,050 52,891,869 Property and equipment, net 34,107,775 33,040,152 Film contract rights 13,071,802 4,497,956 Other noncurrent assets 2,596,882 2,788,083 Deferred financing fees, net 9,015,935 11,086,733 Intangible assets, net 609,677,603 677,669,324 ------------ ------------ $782,415,047 $781,974,117 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) - ---------------------------------------------- Current liabilities: Accounts payable $ 2,860,233 $ 4,031,837 Accrued interest 11,333,561 5,107,551 Income taxes payable 34,028,619 5,774,889 Other accrued liabilities 5,004,656 4,133,202 Film contract rights 22,084,095 13,648,629 Other current liabilities 4,591,321 5,763,882 ------------ ------------ Total current liabilities 79,902,485 38,459,990 Long-term debt 313,981,277 426,399,159 Film contract rights payable 22,664,834 5,920,122 Deferred tax liability 81,864,023 78,308,597 Other noncurrent liabilities 23,025,293 18,005,696 Commitments Cumulative Exchangeable Preferred Stock, net of offering costs 203,930,665 185,167,313 Cumulative Convertible Exchangeable Preferred Stock --- 31,183,400 Stockholders' equity (deficit): Common Stock: 41,000,000 shares authorized consisting of 1,000,000 shares of Class A Common Stock, $.01 par value, and 40,000,000 shares of Common Stock (Nonvoting), $.01 par value; 178,500 shares of Class A Common Stock and 17,960,841 shares of Common Stock (Nonvoting) (11,608,032 shares at December 31,1998) issued and outstanding 181,393 117,865 Additional paid-in capital 25,264,610 14,233,125 Accumulated earnings (deficit) 34,970,024 (12,006,267) Less: Unearned compensation (2,435,682) (2,881,008) Treasury stock (47,000) (47,000) Note receivable from officer (886,875) (886,875) ------------ ------------ Total stockholders' equity (deficit) 57,046,470 (1,470,160) ------------ ------------ $782,415,047 $781,974,117 ============ ============
See accompanying notes. -1- GRANITE BROADCASTING CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended September 30, Nine Months Ended September 30, ------------------------------------------ ----------------------------------- 1999 1998 1999 1998 ------------------------ ----------------- ------------------ -------------- (Unaudited) (Unaudited) Net revenues $ 35,578,729 $ 35,917,480 $ 110,378,956 $116,376,621 Station operating expenses 22,884,702 21,295,176 68,043,639 65,982,640 Time brokerage agreement fees --- 111,124 --- 427,810 Depreciation expense 1,447,013 1,318,128 4,247,228 4,063,965 Amortization expense 6,696,536 5,160,835 19,539,434 12,339,347 Corporate expense 1,817,541 1,996,203 6,524,565 5,947,835 Non-cash compensation expense 204,193 210,157 727,901 759,385 ------------------- ----------------- ------------------ -------------- Operating income 2,528,744 5,825,857 11,296,189 26,855,639 Other expenses: Equity in net loss of investee --- --- 133,603 973,439 Interest expense, net 9,232,562 10,062,300 29,231,335 28,857,559 Non-cash interest expense 663,900 462,016 2,124,366 1,370,939 Net gain on asset dispositions (101,291,854) (57,775,928) (101,291,854) (57,775,928) Gain from insurance settlement --- --- (2,655,408) --- Other 725,893 520,557 1,396,597 1,037,172 ------------------- ----------------- ------------------ -------------- Income before income taxes and extraordinary item 93,198,243 52,556,912 82,357,550 52,392,458 Provision for income taxes 37,953,269 7,369,000 34,488,279 10,540,000 ------------------- ----------------- ------------------ -------------- Income before extraordinary item 55,244,974 45,187,912 47,869,271 41,852,458 Extraordinary loss on early extinguishment of debt, net of tax (892,980) (222,772) (892,980) (2,962,510) ------------------- ----------------- ------------------ -------------- Net income $ 54,351,994 $ 44,965,140 $ 46,976,291 $ 38,889,948 =================== ================= ================== ============== Net income attributable to common shareholders $ 47,482,936 $ 38,612,518 $ 26,536,992 $ 20,000,528 =================== ================= ================== ============== Per common share: Income before extraordinary item $ 3.49 $ 3.65 $ 2.17 $ 2.29 Extraordinary loss (0.06) (0.02) (0.06) (0.30) ------------------- ----------------- ------------------ -------------- Net income $ 3.43 $ 3.63 $ 2.11 $ 1.99 =================== ================= ================== ============== Weighted average common shares outstanding 13,846,000 10,652,000 12,578,000 10,029,000 Net income attributable to common shareholders - assuming dilution $ 47,972,605 $ 39,312,915 $ 28,212,941 $ 22,264,518 =================== ================= ================== ============== Per common share-assuming dilution: Income before extraordinary item $ 2.53 $ 2.19 $ 1.55 $ 1.43 Extraordinary loss (0.05) (0.01) (0.05) (0.17) ------------------- ----------------- ------------------ -------------- Net income $ 2.48 $ 2.18 $ 1.50 $ 1.26 =================== ================= ================== ============== Adjusted weighted average common shares - assuming dilution 19,369,000 18,018,000 18,770,000 17,603,000
See Accompanying Notes -2- GRANITE BROADCASTING CORPORATION CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) Nine Months Ended September 30, 1999 (Unaudited)
Class A Common Additional Common Stock Paid-in Accumulated Unearned Note Receivable Stock (Nonvoting) Capital Deficit Compensation from Officer --------- ------------- ------------- --------------- -------------- --------------- Balance at December 31, 1998 $1,785 $116,080 $14,233,125 $(12,006,267) $(2,881,008) $(886,875) Dividends on redeemable preferred stock (20,064,188) Accretion of offering costs related to Cumulative Exchangeable Preferred Stock (375,111) Exercise of stock options 228 108,672 Conversion of Convertible Preferred Stock into Common Stock (Nonvoting) 62,367 31,121,033 Issuance of Common Stock (Nonvoting) 933 (933) Grant of stock award under stock plans 282,575 (282,575) Stock expense related to stock plans (40,563) 727,901 Net income 46,976,291 --------- ------------- ------------- -------------- -------------- ------------- Balance at September 30, 1999 $1,785 $179,608 $25,264,610 $34,970,024 $(2,435,682) $(886,875) ========= ============= ============= ============== ============== ============= Total Stockholders' Treasury Equity Stock (Deficit) --------- ------------- Balance at December 31, 1998 $(47,000) $(1,470,160) Dividends on redeemable preferred stock (20,064,188) Accretion of offering costs related to Cumulative Exchangeable Preferred Stock (375,111) Exercise of stock options 108,900 Conversion of Convertible Preferred Stock into Common Stock (Nonvoting) 31,183,400 Issuance of Common Stock (Nonvoting) - Grant of stock award under stock plans - Stock expense related to stock plans 687,338 Net income 46,976,291 --------- ------------- Balance at September 30, 1999 $(47,000) $57,046,470 ========= =============
-3- GRANITE BROADCASTING CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months Ended September 30, ------------------------------- 1999 1998 -------------- --------------- Cash flows from operating activities: (Unaudited) Net income $ 46,976,291 $ 38,889,948 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of intangible assets 19,539,434 12,339,347 Depreciation 4,247,228 4,063,965 Non-cash compensation expense 727,901 759,385 Non-cash interest expense 2,124,366 1,370,939 Equity in net loss of investee 133,603 973,439 Deferred taxes 8,455,521 4,749,000 Net gain on disposition of assets (101,291,854) (57,775,928) Gain from insurance proceeds (2,655,408) --- Extraordinary loss 1,373,815 4,557,510 Change in assets and liabilities: Decrease in accounts receivable, net 4,338,206 6,370,696 Increase in accounts payable and accrued liabilities 5,925,860 3,040,029 Increase in income taxes payable 23,353,730 4,077,596 (Increase) decrease in film contract rights and other noncurrent assets (29,912,752) 1,421,224 Increase in film contract rights payable and other current liabilities 24,007,617 5,622,273 (Decrease) in deferred tax and other noncurrent liabilities 1,529,915 (9,400,236) (Increase) decrease in other assets (123,786) 2,576,729 ------------- ------------- Net cash provided by operating activities 5,689,857 23,635,916 Cash flows from investing activities: Payment for acquisition of station --- (170,869,424) Proceeds from disposition of assets, net 171,308,975 149,990,381 Insurance proceeds received 6,747,789 --- WB affiliation payment (4,243,921) (14,500,000) Investment in Datacast (133,603) (500,000) Capital expenditures (10,315,767) (5,264,108) ------------- ------------- Net cash provided by (used in) investing activities 163,363,473 (41,143,151) Cash flows from financing activities: Proceeds from bank loan 54,500,000 38,000,000 Repayment of bank debt (135,000,000) (151,500,000) Retirement of senior subordinated notes (32,065,000) (33,922,700) Proceeds from senior subordinated notes, net --- 174,482,000 Dividends paid (1,776,629) (2,296,531) Payment of deferred financing fees (503,965) (7,113,347) Other financing activities 68,109 198,967 ------------- ------------- Net cash (used in) provided by financing activities (114,777,485) 17,848,389 ------------- ------------- Net increase in cash and cash equivalents 54,275,845 341,154 Cash and cash equivalents, beginning of period 762,392 2,170,927 ------------- ------------- Cash and cash equivalents, end of period $ 55,038,237 $ 2,512,081 ============== ============= Supplemental information: Cash paid for interest $ 23,400,000 $ 19,547,000 Income taxes paid 1,691,000 154,000 Non-cash capital expenditures 88,000 478,000 Non-cash dividend 18,388,500 10,392,000
See accompanying notes. -4- GRANITE BROADCASTING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1 - Basis of presentation - -------------------------------- The accompanying unaudited consolidated financial statements include the accounts of Granite Broadcasting Corporation and its subsidiaries (the "Company"), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the three and nine month periods ended September 30, 1999 are not necessarily indicative of the results that may be expected for the year ended December 31, 1999. For further information, refer to the Company's consolidated financial statements and notes thereto for the year ended December 31, 1998 which were included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. All significant intercompany accounts and transactions have been eliminated. Certain amounts in the prior year have been reclassified to conform to 1998 presentation. Data as of and for the year ended December 31, 1998 are derived from the Company's audited consolidated financial statements. In the opinion of management, all adjustments of a normal recurring nature which are necessary for a fair presentation of the results for the interim periods have been made. Note 2 -Dispositions - -------------------- On July 30, 1999, the Company completed the disposition of WEEK-FM to the Cromwell Group, Inc. of Illinois for $1,150,000 in cash. On August 31, 1999, the Company completed the disposition of KEYE-TV, the CBS affiliate serving Austin, Texas, to CBS Corporation for $160,000,000 in cash. A portion of the proceeds from the sale of these stations was used to repay outstanding indebtedness under the Company's bank credit agreement (the "Credit Agreement"). The Company recognized a pre-tax gain for financial statement reporting purposes on the sale of these stations of $103,470,000. In July 1999 the Company and the American Broadcasting Companies, Inc. ("ABC") agreed to terminate the ABC affiliation of KNTV, the ABC affiliate serving San Jose-Salinas-Monterey, California, effective July 2000. The Company received $14,000,000 in cash on September 1, 1999 in accordance with the agreement. The Company recognized a loss for financial statement reporting purposes on the sale of the affiliation of $2,178,000. The Company anticipates paying 1999 federal and state income taxes of approximately $30,452,000 during the fourth quarter of 1999. Such taxes relate primarily to the gain on the sale of the Austin station and to the gain, for tax purposes, on the sale of the ABC affiliation at KNTV. During the third quarter of 1999, the Company reclassified certain of its intangible assets between FCC license and network affiliation based on appraised values. As both of these intangible assets are being -5- amortized over a 40-year life, other than the impact on the loss on the sale of the affiliation, the reclassification had no impact to the results of operations for the nine months ended September 30, 1999. Note 3 - Long Term Debt - ----------------------- On July 7, 1999, the Company repurchased $2,000,000 principal amount of its 10 3/8% Senior Subordinated Notes, due May 15, 2005 (the "10 3/8% Notes") and $9,635,000 principal amount of its 8 7/8% Senior Subordinated Notes, due May 15, 2008 (the "8 7/8% Notes"). On September 24, 1999, the Company repurchased $20,430,000 principal amount of its 9 3/8% Senior Subordinated Notes, due December 1, 2005 (the "9 3/8% Notes"). As a result of these transactions, the Company incurred an extraordinary loss including the write-off of a portion of related deferred financing fees, net of tax benefit, of $893,000 during the third quarter of 1999. On August 31, 1999, the Company used $95,000,000 of the proceeds from the sale of the Austin station to repay all of its outstanding indebtedness under its Credit Agreement. The Company had no outstanding borrowings under the Credit Agreement at September 30, 1999. Note 4 - Conversion of Preferred Stock - -------------------------------------- On August 16, 1999 the Company announced it would redeem all outstanding shares of its Cumulative Convertible Exchangeable Preferred Stock on September 15, 1999 at a redemption price of $25.97 per share, plus accrued but unpaid dividends (the "Redemption Price"). Holders of the Cumulative Convertible Exchangeable Preferred Stock had the option to accept the Redemption Price or convert each preferred share into five shares of the Company's Common Stock (Nonvoting) at any time on or before September 10, 1999. As a result, 1,247,336 shares of the Cumulative Convertible Exchangeable Preferred Stock were converted into 6,236,680 shares of Common Stock (Nonvoting) prior to September 10, 1999. Note 5 - Recent Developments - ---------------------------- On August 5, 1999 the Federal Communications Commission announced the relaxation of certain television ownership rules, thus enabling the Company to continue to own and operate KNTV, the ABC affiliate serving San Jose-Salinas-Monterey, California, in addition to operating KBWB-TV, the WB affiliate serving San Francisco-Oakland-San Jose, California. Note 6 - Per-share calculations - ------------------------------- The per-share calculations shown on the face of the income statement for the three and nine month periods ended September 30, 1999 and 1998 are computed in accordance with the Statement of Financial Accounting Standards ("SFAS") No. 128 "Earnings per Share." The following table sets forth the computation of basic and diluted earnings per share: -6-
Three months ended Three months ended Nine months ended Nine months ended September 30, 1999 September 30, 1998 September 30, 1999 September 30, 1998 ------------------- ------------------- ------------------- ------------------- Income before extraordinary item $55,244,974 $45,187,912 $47,869,271 $41,852,458 Extraordinary loss on early extinguishment of debt (892,980) (222,772) (892,980) (2,962,510) ------------------- ------------------- ------------------- ------------------- Net income 54,351,994 44,965,140 46,976,291 38,889,948 LESS: - -Preferred stock dividends Convertible preferred 489,669 700,397 1,675,949 2,263,990 Exchangeable preferred 6,254,352 5,527,188 18,388,239 16,250,319 - -Accretion on exchangeable Preferred 125,037 125,037 375,111 375,111 ------------------- ------------------- ------------------- ------------------- Income attributable to common shareholders $47,482,936 $38,612,518 $26,536,992 $20,000,528 =================== =================== =================== ================== Effect of dilutive securities: PLUS: Convertible preferred Stock dividends 489,669 700,397 1,675,949 2,263,990 ------------------- ------------------- ------------------- ------------------- Income attributable to common shareholders - Assuming dilution $47,972,605 $39,312,915 $28,212,941 $22,264,518 =================== =================== =================== ================== - --------------------------------------------------------------------------------------------------------------------------- Weighted average common Shares outstanding for basic Income per share 13,846,000 10,652,000 12,578,000 10,029,000 =================== =================== =================== ================== ADD: Effect of dilutive securities: Preferred stock conversions 4,289,000 7,107,000 5,542,000 7,107,000 Stock award plans 17,000 - - 30,000 Stock options 1,217,000 259,000 650,000 437,000 ------------------- ------------------- ------------------- ------------------- Total potentially dilutive common shares 5,523,000 7,366,000 6,192,000 7,574,000 Adjusted weighted average Common shares outstanding- assuming dilution 19,369,000 18,018,000 18,770,000 17,603,000 =================== =================== =================== ================== Per common share: Basic income before extraordinary item $ 3.49 $ 3.65 $ 2.17 $ 2.29 Basic extraordinary loss (0.06) (0.02) (0.06) (0.30) ------------------- ------------------- ------------------- ------------------- Basic income per share $ 3.43 $ 3.63 $ 2.11 $ 1.99 =================== =================== =================== ================== Diluted income before extraordinary item $ 2.53 $ 2.19 $ 1.55 $ 1.43 Diluted extraordinary loss (0.05) (0.01) (0.05) (0.17) ------------------- ------------------- ------------------- ------------------- Diluted income per share $ 2.48 $ 2.18 $ 1.50 $ 1.26 =================== =================== =================== ==================
-7- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain sections of this Form 10-Q contain various forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which represent the Company's expectations or beliefs concerning future events. The forward-looking statements include, without limitation, the Company's ability to meet its future liquidity needs and its disclosure concerning Year 2000 issues. The Company cautions that these forward-looking statements are further qualified by important factors that could cause actual results to differ materially from those in the forward looking statements. Such factors include, without limitation, general economic conditions, competition in the markets in which the Company's stations are located, technological change and innovation in the broadcasting industry and proposed legislation. Introduction - ------------ The Company is a group broadcaster that operates nine network-affiliated television stations. The Company's revenues are derived principally from local and national advertising and, to a lesser extent, from network compensation for the broadcast of programming and revenues from studio rental and commercial production activities. The primary operating expenses involved in owning and operating television stations are employee salaries, depreciation and amortization, programming and advertising and promotion expenses. Comparisons of the Company's consolidated financial statements for the three and nine months ended September 30, 1999 against prior periods have been affected by the acquisition of KBWB-TV, the WB affiliate serving San Francisco-Oakland-San Jose California, which occurred on July 20, 1998, the sale of WWMT-TV, the CBS affiliate serving Grand Rapids-Kalamazoo-Battle Creek, Michigan, which occurred on July 15, 1998, the sale of WLAJ-TV, the ABC affiliate serving Lansing, Michigan, which occurred on August 17, 1998, and the sale of KEYE-TV, the CBS affiliate serving Austin, Texas, which occurred on August 31, 1999. It is anticipated that comparisons of the Company's consolidated financial statements for the year ended December 31, 1999 against prior periods will also be affected by the aforementioned transactions. Numbers referred to in the following discussion have been rounded to the nearest thousand. -8- The following table sets forth certain operating data for the three and nine months ended September 30, 1999 and 1998:
Three Months Ended September 30, Nine Months Ended September 30, -------------------------------- ------------------------------- 1999 1998 1999 1998 --------------- --------------- --------------- -------------- Operating income $ 2,529,000 $ 5,826,000 $11,296,000 $26,856,000 Add: Time brokerage agreement fees --- 111,000 --- 428,000 Depreciation and amortization 8,143,000 6,479,000 23,786,000 16,403,000 Corporate expense 1,818,000 1,996,000 6,525,000 5,948,000 Non-cash compensation 204,000 210,000 728,000 759,000 ----------- ----------- ----------- ----------- Broadcast cash flow $12,694,000 $14,622,000 $42,335,000 $50,394,000 =========== =========== =========== ===========
"Broadcast cash flow" means operating income plus time brokerage agreement fees, depreciation, amortization, corporate expense and non-cash compensation. The Company has included broadcast cash flow data because such data are commonly used as a measure of performance for broadcast companies and are also used by investors to measure a company's ability to service debt. Broadcast 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, 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. Three months ended September 30, 1999 and 1998 - ---------------------------------------------- Net revenue totaled $35,579,000; a decrease of $338,000 or 1 percent compared to $35,917,000 for the three months ended September 30, 1998. The slight decrease was primarily due to the loss of political advertising revenue in a non-election year and the loss of revenue from the disposition of the Austin station in August 1999 and the disposition of the Kalamazoo and Lansing stations in 1998. The decrease was offset, in part, by strong growth in advertising revenue at the Company's WB affiliates. Station operating expenses totaled $22,885,000; an increase of $1,590,000 or 7.5 percent compared to $21,295,000 for the three months ended September 30, 1998. The increase was primarily due to increases in programming, promotion and news expense. Amortization expense increased $1,536,000 or 30 percent due to additional intangible amortization expense associated with the acquisition of the San Francisco station. The net gain on asset dispositions of $101,292,000 resulted primarily from the sale of the Company's Austin station in August 1999, offset, in part, by the loss on the sale of the ABC affiliation at KNTV. -9- Net interest expense decreased $829,000 during the three months ended September 30, 1999 as compared to the same period a year earlier primarily due to lower levels of outstanding indebtedness. The Company used the proceeds from the sale of its Austin station to repay $115,000,000 of debt. The Company reported income before taxes and extraordinary item of $93,198,000 during the third quarter and will partially offset this income with its remaining available net operating loss carryforwards. The provision for income taxes for the third quarter consists of $25,401,000 of current federal and state taxes and $12,071,000 of deferred taxes. During the third quarter, the Company repurchased $32,065,000 principal amount of its subordinated notes at various prices. In connection with the repurchases, the Company incurred an extraordinary loss after the write-off of related deferred financing fees, net of tax benefit, of $893,000. Nine months ended September 30, 1999 and 1998 - --------------------------------------------- Net revenue totaled $110,379,000 a decrease of $5,998,000 or 5 percent compared to $116,377,000 for the nine months ended September 30, 1998. The decrease was primarily due to the loss of Olympic-related advertising revenue at the Company's CBS affiliated stations and the loss of political advertising in a non-election year. The decrease was also due to the loss of revenue from the disposition of the Kalamazoo, Lansing and Austin stations, offset, in part, by the added revenues from the acquisition of the San Francisco station. Station operating expenses totaled $68,044,000; an increase of $2,061,000 or 3 percent compared to $65,983,000 for the nine months ended September 30, 1998. The increase was primarily due to increases in programming and promotion expenses, offset, in part, by an overall reduction in expenses resulting from the acquisition and dispositions. Amortization expense increased $7,200,000 or 58 percent due to additional intangible amortization expense at San Francisco. Corporate expense increased $577,000 or 10 percent primarily due to the earlier incurrence of certain expenses. It is anticipated that corporate expense will decrease during the fourth quarter of 1999 as compared to the same period a year earlier, resulting in a slight increase for the full year. The net gain on asset dispositions of $101,292,000 resulted primarily from the sale of the Company's Austin station in August 1999, offset, in part, by the loss on the sale of the ABC affiliation at KNTV. Non-cash interest expense increased $753,000 or 55 percent during the nine months ended September 30, 1999 as compared to the same period a year earlier, reflecting the imputing of interest on a non-interest bearing obligation issued in connection with the San Francisco acquisition. The gain on insurance proceeds of $2,655,000 in 1998 resulted from insurance proceeds that the Company received in excess of the net book value of assets that were destroyed in a fire at the Company's Duluth station. -10- The Company reported income before taxes and extraordinary item of $82,357,000 for the nine months ended September 30, 1999 and will partially offset this income with its remaining available net operating loss carryforwards. The provision for income taxes for the nine months ended September 30, 1999 consist of $25,552,000 of current federal and state taxes and $8,456,000 of deferred taxes. Liquidity and Capital Resources - ------------------------------- In July 1999 the Company and the American Broadcasting Companies, Inc. ("ABC") agreed to terminate the ABC affiliation of KNTV, the ABC affiliate serving San Jose-Salinas-Monterey, California, effective July 2000. The Company received $14,000,000 in cash on September 1, 1999 in accordance with the agreement. KNTV will more than double its local news programming to replace the programming provided by ABC. In addition, KNTV plans to significantly expand cable carriage to reach cable subscribers throughout the San Francisco-Oakland-San Jose television market. The impact of this transaction on Company's operations cannot be determined at this time; however, it is anticipated that with expanded cable carriage, KNTV will gain access to greater advertising resources. On July 30, 1999 the Company completed the disposition of WEEK-FM to the Cromwell Group, Inc. of Illinois for $1,150,000 in cash. On August 31, 1999 the Company completed the disposition of KEYE-TV, the CBS affiliate serving Austin, Texas, to CBS Corporation for $160,000,000 in cash. The Company's bank credit agreement (the "Credit Agreement") provides for revolving credit borrowings of up to $260,000,000. The Credit Agreement can be used to fund future acquisitions of broadcast stations and for general working capital purposes, subject to certain limitations of the financial covenants thereunder. In connection with the sale of the Austin station, the Company repaid all of its outstanding indebtedness under the Credit Agreement. The Company anticipates amending its existing Credit Agreement or entering into a new credit agreement. As of November 11, 1999, the Company had no outstanding borrowings under the Credit Agreement and had $57,121,000 of cash and cash equivalents. The Company anticipates paying 1999 federal and state income taxes of approximately $30,452,000 during the fourth quarter of 1999 relating primarily to the gain on the sale of the Austin station and the gain, for tax purposes, on the sale of the ABC affiliation at KNTV. Net cash provided by operating activities was $5,690,000 during the nine months ended September 30, 1999 compared to $23,636,000 during the nine months ended September 30, 1998, a decrease of $17,946,000 or 76 percent. The decrease was primarily due to lower operating cash flow, higher cash paid for interest and an increase in net operating assets. Net cash provided by investing activities was $163,363,000 during the nine months ended September 30, 1999 compared to net cash used in investing activities of $41,143,000 during the nine months ended September 30, 1998. The increase was primarily due to the increase in proceeds from asset dispositions over the prior year and the acquisition of the San Francisco station in 1998. The Company anticipates that future requirements for capital expenditures will include those incurred during the ordinary course of business, -11- which include costs associated with the implementation of digital television technology and Year 2000 issues. Net cash used in financing activities was $114,777,000 during the nine months ended September 30, 1999 compared to net cash provided by financing activities of $17,848,000 during the nine months ended September 30, 1998. The decrease resulted primarily from the issuance of subordinated notes during the nine months ended September 30, 1998, offset in part, by a reduction in net debt repayments and a reduction in payments for deferred financing fees. The Company believes that internally generated funds from operations and credit agreement borrowings will be sufficient to satisfy the Company's cash requirements for its existing operations for the next twelve months and for the foreseeable future thereafter. The Company expects that any future acquisitions of television stations would be financed through funds generated from operations and additional debt and equity financings. Year 2000 - --------- The Company is preparing for the impact of the Year 2000 on its business, as well as on the businesses of its customers, suppliers and business partners. The "Year 2000 Issue" is the result of computer programs that were written using two digits rather than four to define the applicable year. Any of the computer programs and/or hardware used by the Company that have date-sensitive software or embedded chips may recognize a date using "00" as the year 1900 rather than the year 2000. The Year 2000 Issue could result in system failure or miscalculations in the operations at the Company's broadcast and corporate locations. The disruption of operations could include, among other things, a temporary inability to originate and transmit broadcast programming and commercials, process financial information or engage in other normal business activity. The Company may also be exposed to risks from third parties with which the Company interacts who fail to adequately address their own Year 2000 Issues. State of Readiness - ------------------ The Company has developed a multiple phase approach to identify and evaluate its state of Year 2000 readiness for both its information technology (IT) and non-IT systems. The first phase was to develop a Company-wide, uniform strategy for addressing the Year 2000 Issue and to assess the Company's current state of Year 2000 readiness. This included an internal review at each location of all IT and non-IT systems for potential Year 2000 Issues. The Company has completed this review and has identified the systems that need to be updated or replaced to ensure Year 2000 compliance. Based on these system evaluations, the Company has determined that it will be required to modify or replace portions of its software and certain hardware so that its systems will properly utilize dates beyond December 31, 1999. The primary systems that are being addressed are the master control automation systems, IBM AS/400, the computer used to process sales, traffic, accounts receivable, accounts payable and the general ledger, and systems with embedded chips, including telephone and security systems. -12- The next phase was to develop uniform test plans and test methodologies. The Company has completed upgrading and testing its critical systems. Costs to Address the Company's Year 2000 Issues - ----------------------------------------------- The Company will incur capital expenditures and incremental expenses to bring current systems into compliance. Total incremental expenses have not had a material impact on the Company's financial condition to date and are not at present, based on known facts, expected to have a material impact on the Company's financial condition. The Company estimates the total cost of upgrading equipment will be approximately $1,500,000, of which approximately $1,100,000 has been incurred through September 30, 1999. All Year 2000 expenditures are made out of each location's operating budget. There are no IT projects that have been delayed due to Year 2000 efforts. Risks of the Company's Year 2000 Issues - --------------------------------------- While the Company believes its efforts will provide reasonable assurance that material disruptions will not occur due to internal Year 2000 failures, the possibility of disruption, especially from third parties, still exists. The Company's operations are vulnerable to system failures experienced by the network program providers, certain satellite services, software and hardware providers, local and long distance telephone providers, power companies, financial services providers and others upon whom the Company relies for supporting services. In an effort to determine its vulnerabilities to third- party Year 2000 failures, the Company has requested Year 2000 compliance data from all of its suppliers and vendors. The Company will use this information in an attempt to identify whether any of these parties has a Year 2000 Issue that may materially impact the Company's operations, liquidity, capital resources or certain other functions. The Company does not, however, control the systems of other companies, and cannot assure that these systems will be timely converted and, if not converted, would not have an adverse effect on the Company's business operations. In the event that the Company and/or its significant vendors or suppliers do not complete their Year 2000 compliance efforts, the Company could experience disruptions in its operations, including a temporary inability to engage in normal broadcast or business activities. Disruptions in the economy generally resulting from Year 2000 Issues also could affect the Company. Contingency Plan - ---------------- The Company has developed a contingency plan to address system failures that are critical to conduct its business. This plan includes, but is not limited to, increases in overtime salaries and/or increases in personnel to operate systems that would ordinarily be operated by a computer. -13- Year 2000 Forward-Looking Statements - ------------------------------------ The foregoing Year 2000 discussion contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. Such statements, including without limitation, anticipated costs and the dates by which the Company expects to complete certain actions, are based on management's best current estimates, which were derived utilizing numerous assumptions about future events, including the continued availability of certain resources, representations received from third parties and other factors. However, there can be no guarantee that these estimates will be achieved, and actual results could differ materially from those anticipated. Specific factors that might cause such material differences include, but are not limited to, the ability to identify and remediate all relevant IT and non-IT systems, results of Year 2000 testing, adequate resolution of Year 2000 Issues by businesses and other third parties who are service providers, suppliers or customers of the Company, unanticipated system costs, the adequacy of and ability to develop and implement contingency plans and similar uncertainties. The "forward-looking statements" made in the foregoing Year 2000 discussion speak only as of the date on which such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. -14- PART II ------- OTHER INFORMATION ----------------- Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- On October 26, 1999, the holders of all of the Company's Voting Common Stock adopted resolutions by written consent in lieu of a special meeting amending the Company's Bylaws to increase the number of directors to 11 and electing Veronica Pollard as a director of the Company. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits 10.40 Limited Waiver, dated August 31, 1999, to the Fourth Amended and Restated Credit Agreement, dated as of June 10, 1998, as amended, by and among Granite Broadcasting Corporation, the Lenders listed therein, and Bankers Trust Company, as Administrative Agent, The Bank of New York, as Documentation Agent, and Goldman Sachs Credit Partners L.P., Union Bank of California, N.A., and ABN Amro Bank N.V., as Co-Agents. 10.41 Amendment, dated July 26, 1999, to the Network Affiliation Agreement (KNTV(TV)). 27. Financial Data Schedule. (b) Reports on Form 8-K Current Report on Form 8-K, filed September 13, 1999, reporting the sale of the assets of KEYE-TV, the CBS affiliated station serving the Austin, Texas television market, to CBS Corporation for a purchase price of $160 million, subject to certain adjustments. No financial statements were filed at such time. -15- SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed by an officer and the principal accounting officer on its behalf by the undersigned thereunto duly authorized. GRANITE BROADCASTING CORPORATION Registrant Date November 15, 1999 /s/ W. DON CORNWELL --------------------------------------------- (W. Don Cornwell) Chief Executive Officer Date November 15, 1999 /s/ LAWRENCE I. WILLS --------------------------------------------- (Lawrence I. Wills) Vice President, Finance and Controller (Principal Accounting Officer) -16- EX-10.40 2 LIMITED WAIVER, DATED AUGUST 31, 1999 EXHIBIT 10.40 LIMITED WAIVER TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT August 31, 1999 Granite Broadcasting Corporation 767 Third Avenue, 34th Floor New York, New York 10017 Ladies and Gentlemen: This Limited Waiver (this "Limited Waiver") is dated as of August 31, 1999 and is made with reference to that certain Fourth Amended and Restated Credit Agreement dated as of June 10, 1998, by and among Granite Broadcasting Corporation (the "Company"), the lenders party thereto ("Lenders"), Bankers Trust Company, as Administrative Agent ("Administrative Agent"), The Bank of New York, as Documentation Agent, and Goldman Sachs Credit Partners L.P., Union Bank of California, N.A., and ABN Amro Bank N.V., as Co-Agents, as amended by that certain First Amendment to Fourth Amended and Restated Credit Agreement dated as of March 23, 1999 (as so amended, the "Credit Agreement"). Capitalized terms used herein without definition shall have the meanings assigned to such terms in the Credit Agreement. Pursuant to that certain Purchase and Sale Agreement dated as of April 28, 1999, by and among CBS Corporation, a Pennsylvania corporation, Company, KBVO, Inc. ("KBVO") and KBVO License, Inc. ("KBVO License"), Company, KBVO and KBVO License have agreed to sell television station KEYE-TV (formerly KBVO-TV) serving Austin, Texas and the assets relating thereto (the "KEYE Sale") and the closing of such transaction is expected to occur on or about August 31, 1999. Company has informed Lenders that it intends to prepay all outstanding Loans with the Net Cash Proceeds of the KEYE Sale and to use the Net Cash Proceeds remaining after such prepayment (the "Excess Proceeds") to redeem or repurchase a portion of its Subordinated Indebtedness in compliance with the terms of the Credit Agreement and the indentures pursuant to which such Subordinated Indebtedness was issued. Company has also informed the Lenders that it does not expect to be able to comply with the provisions of Subsection 7.6A (Maximum Total Debt Ratio) until it has been able to effect such redemptions and has requested the waiver of Subsections 7.6A, 7.5(iv) and 7.7 of the Credit Agreement on the terms and conditions set forth below. By their execution of a counterpart of this Limited Waiver, Requisite Lenders agree to waive the provisions of Subsection 7.6A of the Credit Agreement and the provisions of Subsections 7.7 and 7.5(iv) of the Credit Agreement requiring compliance with the provisions of Subsection 7.6 and Subsections 7.5(iv)(b) and 7.5(iv)(f)(y), respectively, on a Pro Forma Basis on the closing of the KEYE Sale and on any redemption or repurchase of Convertible Preferred Stock; provided, that (i) Company prepays -------- all Loans outstanding on the date of the closing of the KEYE Sale with the Net Cash Proceeds thereof, (ii) Company would be in compliance with the provisions of Subsection 7.6A if pro forma effect were given to the redemption of Subordinated Indebtedness in an amount equal to the Excess Proceeds after giving effect to any redemptions and repurchases thereof after the date of the KEYE Sale, and (iii) the Excess Proceeds are, to the extent required by Subsection 2.4B(iii)(a) of the Credit Agreement, deposited in a collateral account maintained with the Administrative Agent; provided, further, that the waiver of -------- ------- Subsection 7.6A set forth herein shall remain in effect until the earlier of (x) the date when the proposed redemption of Subordinated Indebtedness is effected in accordance with the terms of the Credit Agreement or (y) the date which is 170 days after the date of the closing of the KEYE Sale. Without limiting the generality of the provisions of subsection 10.6 of the Credit Agreement, the waiver set forth herein shall be limited precisely as written and relate solely to compliance the provisions of Subsection 7.6A of the Credit Agreement and the provisions of Subsections 7.7 and 7.5(iv) of the Credit Agreement requiring compliance with the provisions of Subsection 7.6 and Subsections 7.5(iv)(b) and 7.5(iv)(f)(y), respectively, on a Pro Forma Basis on the closing of the KEYE Sale and on any redemption or repurchase of Convertible Preferred Stock for the time period set forth above. Nothing in this Limited Waiver shall be deemed to (a) constitute a waiver of any other term, provision or condition of the Credit Agreement or any other instrument or agreement referred to therein, (b) prejudice any right or remedy that Administrative Agent may now have or may have in the future under or in connection with the Credit Agreement or any other instrument or agreement referred to therein or (c) create any obligation on the part of Administrative Agent to renew or extend the waiver contained herein. Except as expressly set forth herein, the terms, provisions and conditions of the Credit Agreement and the other Loan Documents shall remain in full force and effect and in all other respects are hereby ratified and confirmed. Each Subsidiary of Company hereby acknowledges that it has read this Limited Waiver and consents to the terms thereof and further hereby confirms and agrees that, notwithstanding the effectiveness of this Limited Waiver, the obligations of such Subsidiary under the Subsidiary Guaranty shall not be impaired or affected and the Subsidiary Guaranty is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects. In order to induce the Administrative Agent and Requisite Lenders to enter into this Limited Waiver, the Company by its execution of a counterpart of this Limited Waiver, represents and warrants that (a) no Event of Default or Potential Event of Default exists under the Credit Agreement or the other Loan Documents after giving effect to the waiver contemplated in this Limited Waiver, (b) all representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true and correct in all material respects on and as of such earlier date, and (c) the Company and its Subsidiaries have performed all agreements to be performed on their part as set forth in the Credit Agreement. 2 This Limited Waiver may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument. This Limited Waiver shall become effective as of the date hereof upon the execution of counterparts hereof duly executed by Company, its Subsidiaries and Requisite Lenders or, in the case of any Lender, telecopy or telephone confirmation from such Lender of its execution hereof. Company acknowledges that all costs, fees and expenses as described in subsection 10.2 of the Credit Agreement incurred by Administrative Agent and its counsel with respect to this Limited Waiver and the documents and transactions contemplated hereby shall be for the account of Company. THIS LIMITED WAIVER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. [Remainder of page intentionally left blank] 3 ADMINISTRATIVE AGENT: BANKERS TRUST COMPANY, individually and as Administrative Agent and Collateral Agent By: /s/ Patricia Hogan ------------------------------------ Patricia Hogan Principal ACKNOWLEDGED AND APPROVED BY: BORROWER: GRANITE BROADCASTING CORPORATION By: /s/ Lawrence I. Wills --------------------------- Lawrence I. Wills Vice President 4 SUBSIDIARIES: GRANITE RESPONSE TELEVISION, INC. KBVO, INC. KBVO LICENSE, INC. KNTV, INC. KNTV LICENSE, INC. RJR COMMUNICATIONS, INC. KBJR LICENSE, INC. SAN JOAQUIN COMMUNICATIONS CORPORATION KSEE LICENSE, INC., WPTA-TV, INC. WPTA-TV LICENSE, INC. WTVH, INC. WTVH LICENSE, INC. WWMT-TV, INC. WWMT-TV LICENSE, INC. WKBW-TV, INC. WKBW-TV LICENSE, INC. QUEEN CITY BROADCASTING, INC. QUEEN CITY BROADCASTING OF NEW YORK, INC. WEEK, INC. WEEK LICENSE, INC. WXON, INC. WXON LICENSE, INC. WLAJ, INC. WLAJ LICENSE, INC. WEEK-TV LICENSE, INC. PACIFIC FM INCORPORATED KOFY-TV LICENSE, INC. By: /s/ Lawrence I. Wills ----------------------------- Lawrence I. Wills Vice President LENDERS: THE BANK OF NEW YORK, as Documentation Agent and a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ 5 GOLDMAN SACHS CREDIT PARTNERS L.P., as a Co-Agent and a Lender By: _________________________________________ Name:______________________________ Title:______________________________ UNION BANK OF CALIFORNIA, N.A., as a Co-Agent and a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ ABN AMRO BANK N.V., NEW YORK BRANCH, as a Co-Agent and a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ NATEXIS BANQUE BFCE, as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ COMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE, as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ By: _________________________________________ Name:_______________________________ Title:_______________________________ 6 HELLER FINANCIAL, INC., as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ PARIBAS, as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ By: _________________________________________ Name:_______________________________ Title:_______________________________ THE BANK OF NOVA SCOTIA, as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ BANQUE NATIONALE DE PARIS, as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ By: _________________________________________ Name:_______________________________ Title:_______________________________ 7 MELLON BANK, N.A., as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ BANK OF TOKYO-MITSUBISHI TRUST, as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ FREMONT FINANCIAL CORPORATION, as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ SOUTHERN PACIFIC BANK, as a Lender By: _________________________________________ Name:_______________________________ Title:_______________________________ 8 EX-10.41 3 AMENDMENT, DATED JULY 26, 1999 EXHIBIT 10.41 American Broadcasting Companies, Inc. [LOGO] July 26, 1999 Granite Broadcasting Attn: W. Don Cornwell 767 Third Avenue, 28th Floor New York, NY 10017 Dear Mr. Cornwell: This will constitute an Amendment to the Primary Television Affiliation Agreement between American Broadcasting Companies, Inc. ("ABC" or "we") and KNTV License, Inc. ("KNTV") or "you") dated January 3, 1996 (the "Agreement"). You and we agree that the Agreement shall terminate effective midnight at the end of the day July 2, 2000 on the following terms: 1. We agree to pay you, in addition to all other compensation due to you pursuant to the Agreement, the total sum of $14 million within ten (10) days of execution of the Amendment. It is agreed that the Amendment will be executed no later than September 1, 1999. 2. Each party shall continue to enjoy its respective rights under the Agreement and to be subject to its respective obligations under the Agreement until the time of termination herein provided. 3. Neither party shall have any continuing obligation under the Agreement subsequent to the time of termination, provided that ABC shall be obligated to pay you any compensation owing to you pursuant to Schedule A for broadcasting network sponsored programs prior to termination, and further provided that the reciprocal indemnification obligations set forth in paragraph VI.S. of the Agreement shall continue with respect to materials broadcast prior to termination. 4. You and we agree to keep confidential the existence and terms of this Amendment until a mutually agreeable date which shall be on or about September 1, 1999. It is contemplated that the termination of KNTV's ABC network affiliation will be announced at that time by means of a joint press release or announcement or separate press releases or announcements approved by both parties. Granite Broadcasting -2- July 26, 1999 5. You and we agree to cooperate to insure an orderly transition in the shift of ABC network service from KNTV to ABC's new affiliate in the market. If the foregoing is in accordance with your understanding, please indicate your consent by signing the space provided below. Sincerely yours, American Broadcasting Companies, Inc. By:____________________________ Title:___________________________ Accepted and Agreed to by: KNTV License, Inc. By:__________________________ Title:_________________________ EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GRANITE BROADCASTING CORPORATION'S 3RD QUARTER FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 55,038,237 0 28,492,021 0 0 113,945,050 34,107,775 0 782,415,047 79,902,485 313,981,277 203,930,665 0 181,393 56,865,077 782,415,047 0 110,378,956 0 99,082,767 (100,856,644) 0 29,785,283 82,357,550 34,488,279 47,869,271 0 892,980 0 46,976,291 2.11 1.50
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