|
ACME TELEVISION LLC - 10-K/A - 19991014 - VOTING_MATTERS
Item 4. Submission of Matters to a vote of Security Holders
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Not applicable.
ITEM 6. SELECTED FINANCIAL DATA
Following is ACME Intermediate's and ACME Television's inception-to-date
selected consolidated financial data. This data is derived from their respective
audited Consolidated Financial Statements of the Company and should be read in
conjunction with the Consolidated Financial Statements located at Item 8 of this
filing and with "Management's Discussion and Analysis of Financial Condition and
Results of Operations".
ACME INTERMEDIATE ACME TELEVISION
(IN THOUSANDS) YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
------------------------ ------------------------
1997 1998 1997 1998
---------- --------- --------- ----------
STATEMENT OF OPERATIONS DATA:
Net revenues $ 11,347 $ 43,928 $ 11,347 $ 43,928
Operating expenses:
Station operating expenses 10,158 32,973 10,158 32,973
Depreciation and amortization 1,215 11,355 1,215 11,355
Corporate 1,415 2,627 1,415 2,627
--------- -------- --------- ---------
Operating (loss) (1,441) (3,027) (1,441) (3,027)
Other income (expenses):
Interest income 273 224 273 224
Interest expense (5,466) (21,378) (4,250) (16,172)
Gain on sale of assets -- 1,112 -- 1,112
Other -- (380) -- (380)
--------- -------- --------- ---------
Loss before taxes (6,634) (23,449) (5,418) (18,243)
Income tax benefit -- 2,393 -- 2,393
--------- -------- --------- ---------
Net loss $ (6,634) $(21,056) $ (5,418) $ (15,850)
========= ======== ========= =========
AT DECEMBER 31, AT DECEMBER 31,
------------------------ ------------------------
1997 1998 1997 1998
---------- --------- --------- ----------
BALANCE SHEET DATA:
Total assets $ 219,172 $286,845 $ 217,682 $ 285,377
Long-term debt(1) 167,698 187,499 130,833 145,448
Total members' capital 44,721 30,712 80,098 71,295
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
------------------------ ------------------------
1997 1998 1997 1998
---------- --------- --------- ----------
OTHER OPERATING DATA:
Broadcast cash flow and adjusted EBITDA(2):
Operating loss (1,441) (3,027) (1,441) (3,027)
Add back:
Depreciation and amortization 1,215 11,355 1,215 11,355
Time brokerage fees -- 228 -- 228
Amortization of program rights 1,433 5,321 1,433 5,321
Corporate expenses 1,415 2,627 1,415 2,627
Adjusted program payments(2) (1,598) (5,124) (1,598) (5,124)
--------- -------- --------- ---------
Broadcast cash flow 1,024 11,380 1,024 11,380
Less: corporate expenses 1,415 2,628 1,415 2,628
--------- -------- --------- ---------
Adjusted EBITDA (391) 8,752 (391) 8,752
Broadcast cash flow margin(2) 9.0% 25.9% 9.0% 25.9%
Adjusted EBITDA margin(2) NM 19.9% NM 19.9%
Cash flows provided by (used in):
Operating activities (398) 275 (501) 275
Investing activities (173,001) (15,504) (173,001) (15,504)
Financing activities 182,219 7,362 182,322 7,362
|
(1) Includes amounts outstanding under our 10 7/8% senior discount notes and 12%
senior secured notes.
(2) We define:
- broadcast cash flow as operating income, plus equity-based compensation,
depreciation and amortization, time brokerage fees, amortization of
program rights, and corporate expenses, less program payments -- the
latter as adjusted to reflect reductions for liabilities relating to
expired rights or rights which have been written-off in connection with
acquisitions;
- adjusted EBITDA as broadcast cash flow less corporate expenses;
- broadcast cash flow margin as broadcast cash flow as a percentage of net
revenues; and
- adjusted EBITDA margin as adjusted EBITDA as a percentage of net
revenues.
We have included broadcast cash flow, broadcast cash flow margin, adjusted
EBITDA and adjusted EBITDA margin data because management believes that
these measures are useful to an investor to evaluate our ability to service
debt and to assess the earning ability of our stations' operations.
However, you should not consider these items in isolation or as substitutes
for net income, cash flows from operating activities or other statement of
operations or cash flows data prepared in accordance with generally
accepted accounting principles. These measures are not necessarily
comparable to similarly titled measures employed by other companies.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and related notes included at Item 8 of this
filing.
OVERVIEW
We derive our revenues primarily from the sale of advertising time to
local, regional and national advertisers. Our revenues depend on our ability to
provide popular programming that attracts audiences in the demographic groups
targeted by advertisers, thereby allowing us to sell advertising time at
satisfactory rates. Our revenues also depend significantly on factors such as
the national and local economy and the level of local competition.
Our revenues are generally highest during the fourth quarter of each year,
primarily due to increased expenditures by advertisers in anticipation of
holiday season consumer spending and an increase in viewership during this
period. We generally pay commissions to advertising agencies on local, regional
and national advertising and to national sales representatives on national
advertising. Our revenues reflect deductions from gross revenues for commissions
payable to advertising agencies and national sales representatives.
Our primary operating expenses are programming costs, employee
compensation, advertising and promotion expenditures and depreciation and
amortization. Programming expense consists primarily of amortization of
broadcast rights relating to syndicated programs as well as news production and
sports rights fees. Changes in employee compensation expense result primarily
from increases in total staffing levels, from adjustments to fixed salaries
based on individual performance and inflation and from changes in sales
commissions paid to our sales staff based on levels of advertising revenues.
Advertising and promotion expenses consist primarily of media and related
production costs resulting from the promotion of our stations and programs. This
amount is net of any reimbursement received or due for such advertisement and
promotion from any network, including The WB Network, or other program provider.
The carrying value of long-lived assets, consisting of tangible,
identifiable intangible, and goodwill, is reviewed if the facts and
circumstances suggest that they might be impaired. For purposes of this review,
assets are grouped at the operating company level, which is the lowest level for
which there are identifiable cash flows. If this review indicates that an
asset's carrying value will not be recoverable, as determined based on future
expected, undiscounted cash flows, the carrying value is reduced to fair market
value. There are neither facts nor circumstances that would lead management to
believe that any of our long-lived assets are impaired.
Results of Operations
Net revenues for the year ended December 31,1998 increased $32.6 million (287%)
to $43.9 million as compared to $11.3 million for the year ended December 31,
1997. This increase is due primarily to the significant expansion in the number
of operating stations owned and/or operated by the Company during the last
quarter of 1997 and during 1998, particularly the acquisition of KPLR. The
Company's 1998 results include a full 12 months of operations for KPLR and WBXX,
whereas the 1997 operating results contain only the fourth quarter for each of
these operations. The addition of KUWB, Salt Lake City,UT and WTVK, Ft.
Myers/Naples, FL during 1998 also increased revenues.
Operating expenses increased to $47.0 million compared to the prior year's
operating expenses of $12.8 million. This increase was also due to the
additional stations added or launched since the third quarter of 1997.
Depreciation and amortization expense for the year includes $9.4 million in the
amortization of intangible assets. As of December 31, 1997, only Station KWBP
and Station WBXX stations had been acquired and, accordingly, there was only
$1.1 million in amortization expense for that period.
Interest expense for the current year was $16.2 million for the ACME Television
and $21.4 million for ACME Intermediate, primarily representing the amortization
of original issuance discount of ACME Television's 10-7/8% Senior Discount Notes
due 2004 (the "Television Notes") and ACME Intermediate's 12% Senior Secured
Discount Notes due 2005 (the "Intermediate Notes", and together with the
Television Notes, the "Senior Notes") along with related amortization of prepaid
financing costs. The interest expense of $4.2 million for ACME Television and
$5.5 million for ACME Intermediate during the 1997 year represents primarily the
interest expense on the Senior Notes, which were outstanding only during the
fourth quarter of the year.
Apart from the Company's Missouri operations (which pertain solely to the
Company's investment in KPLR), which are organized as traditional "C"
corporations, the Company and its operating subsidiaries are organized as
limited liability companies. Accordingly, although the Company is subject to
various minimum state taxes, all federal tax attributes are passed through to
the members of the Company. The Company's Missouri operations, after deduction
of allocable interest charges, generated a net taxable loss, and a corresponding
deferred tax benefit of $2.4 million.
The net loss for ACME Television and for ACME Intermediate for the year ended
December 31, 1998 was $15.9 million and $21.1 million, respectively, compared to
a net loss of $5.4 million and $6.6 million, respectively, for the prior year.
These increased net losses are due primarily to the increased amortization of
intangible assets relating to the Companies' newly acquired and operating
stations and the substantially increased interest expense incurred in connection
with the September 1997 issuance of long-term debt to finance these
acquisitions, offset by improved operating performance attributable to the
inclusion of full year results related to Station KPLR.
The Company's Broadcast cash flow for the year ended December 31, 1998 was $11.4
million, compared to a $1.0 million broadcast cash flow in 1997. This increase
is primarily attributable to the profitable operations of Station KPLR, which
was operated under an LMA from October 1, 1997 and acquired on March 13, 1998,
and, to a lesser extent, significantly reduced losses at Station KWBP.
Liquidity And Capital Resources
Cash flows provided by operating activities for ACME Television and ACME
Intermediate were $275,000 for the year-ended December 31, 1998 compared to cash
flows used by operating activities of $501,000 and $398,000 for year-end 1997,
respectively, an increase of $776,000 and $673,000, respectively. The increase
was primarily due to higher broadcast cash flows offset by increases in working
capital needs and the payment of certain liabilities assumed in connection with
the Station KPLR and Station KWBP acquisitions.
Cash flows used in investing activities were $15,500,000 for the year-ended
December 31, 1998. The major cash flows used in investing activities during 1998
related to the Company's acquisition of WTVK in June 1998, and to capital
expenditures which principally related to the build-out of Station KUWB. These
outflows were partially offset by the purchase and subsequent sale at a gain of
$1.1 million of the construction permit for Channel 31 serving Springfield,
Missouri. Cash flows used in investing activities in 1997 were $173.0 million
and principally related to the Company's deposit in connection with the
acquisition of Station KPLR, the acquisition of Station WBXX and the build-out
of Station WBXX. The Company anticipates that future requirements for capital
expenditures will include those incurred in the continued build-out of its
station in Albuquerque, New Mexico (completed in March 1999) and the routine
maintenance and upgrade of its other stations which will be financed primarily
through its $20 million capital equipment facility.
Cash flows provided by financing activities for ACME Television and ACME
Intermediate of $7,362,000 related primarily to net bank borrowings in 1998
(related to the acquisition of Station WTVK) as compared to cash flows provided
by financing activities in 1997 of $182,322,000 and, $182,219,000, respectively,
relating primarily to the issuance of the Senior Notes and secondarily to
contributions from ACME Parent.
ACME Television's existing credit agreement allows for revolving credit
borrowings of up to a maximum of $40,000,000, dependent upon its meeting certain
financial ratio tests as set forth in the credit agreement. The revolving credit
facility can be used to fund future acquisitions of broadcast stations and for
general corporate purposes. At December 31, 1998, $8,000,000 was outstanding and
$32,000,000 was available under the facility. The interest rate at December 31,
1998 on this outstanding principal amount was 8.25% per annum.
The Company believes that internally generated funds from operations and
borrowings under its credit agreement, if necessary, will be sufficient to
satisfy the Company's cash requirements for its existing operations for at least
the next twelve months. The Company expects that any future acquisitions of
television stations would be financed through funds generated from operations,
through borrowings under the existing credit agreement and through additional
debt and equity financings. However there is no guarantee that such additional
debt and/or equity financing and/or equity contributions by ACME Parent will be
available or available at rates acceptable to the Company.
Year 2000
The Year 2000 ("Y2K") issue is a result of computer software applications using
a two-digit format, as opposed to a four-digit format, to indicate the year.
These computer software applications will then be unable to uniquely distinguish
dates beyond the year 1999, which could cause a system failure or other computer
errors.
The Company is in the process of evaluating potential Year 2000 (Y2K) issues for
both its information technology (IT) and non-IT systems (non-IT systems include
but are not limited to, those systems that are not commonly thought of as IT
systems, such as telephone/PBX systems, fax machines, editing equipment,
cameras, microphones, etc). All internal software and hardware is purchased,
leased or licensed from third party vendors. Most of the Company's station
facilities are new or have been recently upgraded and the Company has polled all
of its significant software vendors and has been advised by them that their
software is Y2K compliant.
The Company has completed its assessment and planning phase of its Y2K readiness
project and has begun the testing phase, which consists of independently
verifying that the systems are, in fact, Y2K compliant. In addition to testing
internal systems for compliance, this phase also includes polling key suppliers,
such as program suppliers, utilities, etc., to determine their Y2K readiness.
At the conclusion of the testing phase, the Company will commence its final
phase of its Y2K project, implementation. During this phase, the Company will
fix, test and implement critical applications that were discovered to be Y2K
deficient during the preceding phases.
At this point in time, the Company is not aware of aware of any additional
significant upgrades or changes that will need to be made to its internal
software and hardware to become Y2K ready, nor is it aware of any material
supplier with Y2K readiness problem, but this is subject to change as the
evaluation and compliance testing process continues. The Company expects to be
able to implement the systems and programming changes necessary to address Y2K
IT and non-IT readiness issues and, based on preliminary estimates, does not
believe that the costs associated with such actions will have a material effect
on the Company's results of operations or financial condition. There can be no
assurance, however, that there will not be a delay in, or increased costs
associated with the implementation of such changes.
Pending Adoption of Accounting Standard
The FASB (Financial Accounting Standards Board) has issued FASB statement No.
133 "Accounting for Derivative Instruments and Hedging Activities" which the
Company will be required to adopt for its year ending December 31, 2000. This
pronouncement establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, (collectively referred to as derivatives) and for hedging activities.
It requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. This pronouncement is not expected to have a significant impact
on the Company's financial statements since the Company currently has no
derivative instruments.
Recent Developments
On February 15, 1999, ACME Parent acquired a 25% membership interest in Sylvan
Tower, LLC. This interest permits ACME Parent to offer to ACME Television of
Oregon, LLC, a subsidiary of ACME Television which operates station KWBP, a
long-term lease at the Sylvan Tower facility for installation and operation of a
digital television antenna and transmitter.
On February 19, 1999, the Company entered into an Asset Purchase Agreement with
Ramar Communications, Inc. ("Ramar") pursuant to which it will acquire the
television broadcast assets of KASY-TV, in Albuquerque, California. The Company
will pay to Ramar at closing $25 million. In a related transaction, the Company
is selling to Ramar its station serving the Albuquerque market, KWBQ, for
$100,000. The closings of both the KASY and the KWBQ transactions are subject to
FCC approvals and various other conditions and are expected to occur
simultaneously. At the closing, the Company will begin operating KWBQ in
connection with an LMA with Ramar. The Company contemplates that this
transaction will be completed during the second quarter 1999.
On March 23, 1999, the Company entered into an agreement in principle to acquire
from Paxson Communications Corporation ("PCC") the television broadcast assets
of WDPX-TV, serving the Dayton, Ohio, market, WPXG-TV, serving the Green Bay
market and WPXU-TV, serving the Champaign-Decatur market in a $40 million cash
transaction. The transaction is subject to the execution of definitive
agreements, the Company's completion of due-diligence with respect to the assets
being acquired and the obtaining by the Company of financing on terms
satisfactory to the Company. The Company contemplates that this transaction will
be completed during the second quarter 1999. The Company and PCC also announced
that they have entered into an agreement in principle for Station WBXX to manage
the local advertising sales operations for PCC's Knoxville, TN station WPXK.
In February 16, 1999, the Company acquired the remaining 51% interest in Station
KUPX and in March 1999, the FCC approved the swap of station KUPX for station
KUWB, which is expected to close in May 1999. The Company intends to account for
the swap as a non-monetary transaction using its historical cost. The Company
believes that the fair value of station KUWB approximates the historical cost of
station KUPX.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ACME Television's revolving credit facility has a variable interest rate.
Accordingly, the Company's interest expense can be materially affected by
future fluctuations in the applicable interest rate.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
INDEPENDENT AUDITORS' REPORT
The Members
ACME Intermediate Holdings, LLC
ACME Television, LLC
We have audited the accompanying consolidated balance sheets of ACME
Intermediate Holdings, LLC and Subsidiaries and ACME Television, LLC (a
wholly-owned subsidiary of ACME Intermediate Holdings, LLC) and Subsidiaries as
of December 31, 1998 and 1997, and the related consolidated statements of
operations, members' capital and cash flows for the years ended December 31,
1998 and 1997. In connection with our audit of the consolidated financial
statements, we have also audited the financial statement schedules listed in the
index at Item 14. These consolidated financial statements and financial
statement schedules are the responsibility of the Companies' management. Our
responsibility is to express an opinion on these consolidated financial
statements and financial schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of ACME Intermediate
Holdings, LLC and Subsidiaries and ACME Television, LLC and Subsidiaries as of
December 31, 1998 and 1997 and the results of their operations and their cash
flows for each of the years then ended, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedules, when considered in relation to the financial statements taken as a
whole, present fairly in all material respects, the information set forth
therein.
KPMG LLP
Los Angeles, California
February 24, 1999
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31,
---------------------------------------------------------------------------
1997 1998
----------------------------------- -----------------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS, LLC TELEVISION, LLC HOLDINGS, LLC TELEVISION, LLC
------------- --------------- ------------- ---------------
(IN THOUSANDS)
ASSETS
Current assets:
Cash and cash equivalents $8,820 $8,820 $953 $953
Accounts receivable, net 677 699 10,609 10,609
Due from affiliates 54 162 4 131
Current portion of programming rights 614 614 6,357 6,357
Prepaid expenses and other current
assets 3,060 3,032 414 414
--------------- -------------- -------------- --------------
Total current assets 13,225 13,327 18,337 18,464
Property and equipment, net 7,346 7,346 16,441 16,441
Programing rights, net of current portion 587 587 8,046 8,046
Deposits 143,000 143,000 36 36
Deferred income taxes -- -- 3,811 3,811
Intangible assets, net 36,004 36,004 222,987 222,987
Other assets 19,010 17,418 17,187 15,592
--------------- -------------- -------------- --------------
Total assets $219,172 $217,682 $286,845 $285,377
=============== ============== ============== ==============
LIABILITIES AND MEMBERS' CAPITAL
Current liabilities:
Accounts payable $ 3,363 $ 3,361 $ 4,425 $ 4,425
Accrued liabilities 651 651 4,210 4,210
Current portion of programming
rights payable 653 653 7,649 7,649
Current portion of obligations under
lease 292 292 1,273 1,273
--------------- -------------- -------------- --------------
Total current liabilities 4,959 4,957 17,557 17,557
Bank borrowings -- -- 8,000 8,000
Programming rights payable, net of current
portion 1,351 1,351 6,512 6,512
Obligations under lease, net of current
portion 443 443 4,199 4,199
Other liabilities -- -- 1,125 1,125
Deferred income taxes -- -- 31,241 31,241
Senior discount notes 130,833 130,833 145,448 145,448
Senior secured notes 36,865 -- 42,051 --
--------------- -------------- -------------- --------------
Total liabilities 174,451 137,584 256,133 214,082
--------------- -------------- -------------- --------------
Members' capital 51,355 85,516 58,402 92,563
Accumulated deficit (6,634) (5,418) (27,690) (21,268)
--------------- -------------- -------------- --------------
Total members' capital 44,721 80,098 30,712 71,295
=============== ============== ============== ==============
Total liabilities and members'
capital $219,172 $217,682 $286,845 $285,377
=============== ============== ============== ==============
|
See accompanying notes to conolidated financial statements.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------
1997 1998
---------------------------------- -----------------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS, LLC TELEVISION, LLC HOLDINGS, LLC TELEVISION, LLC
------------- --------------- ------------- ---------------
(IN THOUSANDS)
NET REVENUES $ 11,347 $ 11,347 $ 43,928 $ 43,928
-------- -------- -------- --------
OPERATING EXPENSES:
Station operating expenses 10,158 10,158 32,973 32,973
Depreciation and amortization 1,215 1,215 11,355 11,355
Corporate 1,415 1,415 2,627 2,627
-------- -------- -------- --------
Total operating expenses 12,788 12,788 46,955 46,955
-------- -------- -------- --------
Operating loss (1,441) (1,441) (3,027) (3,027)
OTHER INCOME (EXPENSES)
Interest income 273 273 224 224
Interest expense (5,466) (4,250) (21,378) (16,172)
Gain on sale of assets -- -- 1,112 1,112
Other expense -- -- (380) (380)
-------- -------- -------- --------
Net loss before income taxes (6,634) (5,418) (23,449) (18,243)
Income tax benefit -- -- 2,393 2,393
-------- -------- -------- --------
Net loss $ (6,634) $ (5,418) $(21,056) $(15,850)
======== ======== ======== ========
|
See accompanying notes to consolidated financial statements.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF MEMBERS' CAPITAL
For the Years Ended December 31, 1998 and 1997
(In thousands)
ACME INTERMEDIATE HOLDINGS, LLC
TOTAL
MEMBERS' ACCUMULATED MEMBERS'
CAPITAL DEFICIT CAPITAL
-------- ----------- --------
Balance at December 31, 1996 $ -- $ -- $ --
Contribution of Parent 47,201 -- 47,201
Unit offering 4,154 -- 4,154
Net loss -- (6,634) (6,634)
-------- -------- --------
Balance at December 31, 1997 51,355 (6,634) 44,721
Contribution of Parent 7,047 -- 7,047
Net loss -- (21,056) (21,056)
-------- -------- --------
Balance at December 31, 1998 $ 58,402 $(27,690) $ 30,712
======== ======== ========
|
ACME TELEVISION, LLC
TOTAL
MEMBERS' ACCUMULATED MEMBERS'
CAPITAL DEFICIT CAPITAL
-------- ----------- ---------
Balance at December 31, 1996 $ -- $ -- $ --
Contribution of Parent 85,516 -- 85,516
Net loss -- (5,418) (5,418)
-------- -------- --------
Balance at December 31, 1997 85,516 (5,418) 80,098
Contribution of Parent 7,047 -- 7,047
Net loss -- (15,850) (15,850)
-------- -------- --------
Balance at December 31, 1998 $ 92,563 $(21,268) $ 71,295
======== ======== ========
|
See accompanying notes to consolidated financial statements.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1998
------------------------------- --------------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS, LLC TELEVISION, LLC HOLDINGS, LLC TELEVISION, LLC
------------- --------------- ------------- ---------------
(IN THOUSANDS)
Cash flows from operating activities:
Net loss $ (6,634) $ (5,418) $(21,056) $(15,850)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 1,215 1,215 11,355 11,355
Amortization of discount on senior notes 5,121 3,908 20,226 15,037
Deferred taxes -- -- (2,393) (2,393)
Gain on sale of assets -- -- (1,112) (1,112)
Changes in assets and liabilities, net of
purchase transactions:
Increase in accounts receivables, net (699) (699) (5,459) (5,459)
Increase in Program contracts (706) (706) (5,166) (5,166)
(Increase) decrease in prepaid expenses (3,090) (3,194) 334 317
Increase in other assets -- -- (576) (576)
Increase in accounts payable 3,363 3,361 59 59
Increase in accrued expenses 651 651 2,639 2,639
Increase in programming rights payable 381 381 3,899 3,899
Decrease in other liabilities -- -- (2,475) (2,475)
-------- -------- -------- --------
Net cash provided by (used in) operating activities (398) (501) 275 275
-------- -------- -------- --------
Cash flows from investing activities:
Purchase of property and equipment (6,077) (6,077) (2,945) (2,945)
Cash acquired in acquisition - St. Louis -- -- 779 779
Purchase of Ft. Myers station, net of cash acquired -- -- (14,450) (14,450)
Purchase of Springfield, MO station -- -- (2,225) (2,225)
Proceeds from sale of Springfield, MO station -- -- 3,337 3,337
Deposit relating to acquisition agreement (143,000) (143,000) -- --
Purchase of Knoxville station (13,454) (13,454) -- --
Other (10,470) (10,470) -- --
-------- -------- -------- --------
--
Net cash used in investing activities (173,001) (173,001) (15,504) (15,504)
-------- -------- -------- --------
Cash flows from financing activities:
Increase in notes payable to bank -- -- 11,000 11,000
Payments of notes payable to banks -- -- (3,000) (3,000)
Payments on capital leases (97) (97) (638) (638)
Contribution from Parent 24,126 62,441 -- --
Issuance of units 4,154 -- -- --
Issuance of senior discount notes 127,370 127,370 -- --
Issuance of senior secured notes 35,650 -- -- --
Debt issuance costs (8,984) (7,392) -- --
-------- -------- -------- --------
Net cash provided by financing activities 182,219 182,322 7,362 7,362
-------- -------- -------- --------
Net increase (decrease) in cash 8,820 8,820 (7,867) (7,867)
Cash at beginning of period -- -- 8,820 8,820
-------- -------- -------- --------
Cash at end of period 8,820 8,820 953 953
======== ======== ======== ========
Cash Payments for:
Interest 514 514 864 864
Taxes -- -- 70 70
Non-Cash Transactions:
Contributions by Parent 23,075 23,075 7,047 7,047
Property and equipment acquired with
capital lease obligations -- -- 5,375 5,375
|
See accompanying notes to consolidated financial statements.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the years ended December 31, 1998 and December 31, 1997
(1) DESCRIPTION OF THE BUSINESS AND FORMATION
Presentation
Financial statements are presented for each of ACME Intermediate Holdings, LLC
and its subsidiary, ACME Television, LLC. Unless the context requires otherwise,
references to the "Company" refers to both ACME Intermediate Holdings, LLC and
ACME Television, LLC. Segment information is not presented since all of the
Company's revenue is attributed to a single reportable segment.
Formation:
ACME Intermediate Holdings, LLC (ACME Intermediate) was formed on August 8,
1997. Upon formation, ACME Intermediate received a contribution from ACME
Television Holdings, LLC (ACME Parent), of ACME Parent's wholly owned
subsidiaries - ACME Television of Oregon, LLC (ACME Oregon) and ACME Television
of Tennessee, LLC (ACME Tennessee) and certain other net assets. This
Contribution of $25,455,000 (including cash of $2,380,000) was made in exchange
for membership units in ACME Intermediate and was treated as a transaction
between entities under common control, similar to a pooling of interests.
Accordingly, the transaction was recorded at historical cost and ACME
Intermediate has reflected the results of operations of the entities contributed
for the year ended December 31, 1997. In addition, on September 30, 1997, ACME
Parent made an additional contribution of $21,746,000 in exchange for membership
units in the Company.
ACME Television, LLC (ACME Television) was formed on August 8, 1997. Upon
formation, ACME Television received a contribution from ACME Television
Holdings, LLC (ACME Parent), through ACME Intermediate of ACME Parent's wholly
owned subsidiaries - ACME Oregon and ACME Tennessee and certain other net
assets. This Contribution of $25,455,000 (including cash of $2,380,000) was made
in exchange for membership units in the Company and was treated as a transaction
between entities under common control, similar to a pooling of interests.
Accordingly, the transaction was recorded at historical cost and ACME Television
has reflected the results of operations of the entities contributed for the year
ended December 31, 1997. In addition, on September 30, 1997, ACME Intermediate
made an additional contribution of $60,061,000 in exchange for membership units
in ACME Television.
ACME Parent owns, directly and indirectly, approximately 92% of the outstanding
members units of ACME Intermediate. ACME Intermediate owns, directly or
indirectly, 100% of the outstanding members units of the Company.
Nature of Business
ACME Intermediate Holdings, LLC is a holding company with no assets or
independent operations other than its investment in it's wholly-owned
subsidiary, ACME Television, LLC. The Company, through is subsidiaries, owns
and/or operates six commercially licensed broadcast television stations (the
"Stations" or "Subsidiaries") located throughout the United States.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION
The Consolidated Financial Statements include the accounts of the Company and
its subsidiaries. All Significant intercompany transactions have been
eliminated.
REVENUE RECOGNITION
Revenue from the sale of airtime related to advertising and contracted time is
recognized at the time of broadcast. The Company receives such revenues net of
commissions deducted by the advertising agencies and national sales
representatives.
CASH AND CASH EQUIVALENTS
For purposes of reporting the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.
ACCOUNTS RECEIVABLE
Accounts receivable are presented net of the related allowance for doubtful
accounts which totaled $555,000 and $51,000 at December 31, 1998 and 1997,
respectively.
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to concentration of
credit risk consist primarily of accounts receivable and cash. Due to the
short-term nature of these instruments, the carrying value approximates the fair
market value. The Company believes that concentrations of credit risk with
respect to accounts receivable, which are unsecured, are limited due to the
Company's ongoing relationship with its clients. The Company provides its
estimate of uncollectible accounts. The Company has not experienced significant
losses relating to accounts receivable.
PROGRAM BROADCAST RIGHTS
Program broadcast rights represent costs incurred for the right to broadcast
certain features and syndicated television programs. Program broadcast rights
are stated, on a gross basis, at the lower of amortized cost or estimated
realizable value. The cost of such program broadcast rights and the
corresponding liability are recorded when the initial program becomes available
for broadcast under the contract. Generally, program broadcast rights are
amortized over the life of the contract on a straight-line basis related to the
usage of the program. The portion of the cost estimated to be amortized within
one year and after one year rare reflected in the balance sheets as current and
noncurrent assets, respectively. The gross payments under these contracts that
are due within one year and after one year are similarly classified as current
and noncurrent liabilities.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. The cost of maintenance is expensed
when incurred. Depreciation and amortization are computed using the
straight-line method over the estimated useful lives of the respective assets.
When property is retired or otherwise disposed of, the cost and accumulated
depreciation are removed from the appropriate accounts and any gain or loss is
included in the results of current operations. The principal lives used in
determining depreciation rates of various assets are as follows:
Buildings and Improvements 20 - 30 years
Broadcast and other equipment 3 - 20 years
Furniture and fixtures 5 - 7 years
Vehicles 5 years
|
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
INTANGIBLE ASSETS
Intangible assets consist of broadcast licenses and goodwill, both of which are
amortized on a straight-line basis over a 20-year life.
As of
December 31,
----------------------
1997 1998
-------- --------
Broadcast licenses ................. $24,338 $154,351
Goodwill ........................... 12,427 78,808
-------- --------
Total intangible assets ............ 36,765 233,159
Less: accumulated amortization ..... (761) (10,172)
-------- --------
Net intangible assets .......... $36,004 $222,987
======== ========
|
BARTER AND TRADE TRANSACTIONS
Revenue and expenses associated with barter agreements in which broadcast time
is exchanged for programming rights are recorded at the estimated average rate
of the airtime exchanged. Trade transactions, which represent the exchange of
advertising time for goods or services, are recorded at the estimated fair value
of the products or services received. Barter and trade revenue is recognized
when advertisements are broadcast. Merchandise or services received from airtime
trade sales are charged to expense or capitalized when used or received.
LOCAL MARKETING AGREEMENTS
In connection with station acquisitions, and pending FCC approval of the
transfer of license assets, we generally enter into local marketing agreements
with the sellers. Under the terms of these agreements, we obtain the right to
program and sell advertising time on 100% of the station's inventory of
broadcast time, incur certain operating expenses and may make payments to the
sellers. As the holder of the FCC license, the seller/licensee retains ultimate
control and responsibility for all programming broadcast on the station. We, in
turn, record revenues from the sale of advertising time and operating expenses
for costs incurred. Included in the accompanying consolidated statements of
operations for the years ended December 31, 1997 and 1998, are net revenues of
$9.5 million and $6.8 million, respectively, that relate to local marketing
agreements. Payments to the sellers for the years ended December 31, 1997 and
1998 were $0 and $228,000, respectively. At December 31, 1998, the Company was
not obligated for any future payments to sellers.
CARRYING VALUE OF LONG-LIVED ASSETS
The Company has adopted the provisions of Statement of Financial Accounting
Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." The carrying value of long-lived assets
(tangible, identifiable intangible and goodwill) is reviewed if the facts and
circumstances suggest that they may be impaired. For purposes of this review,
assets are grouped at the operating company level, which is the lowest level for
which there are identifiable cash flows. If this review indicates that an
asset's carrying value will not be recoverable, as determined based on future
expected, undiscounted cash flows, the carrying value is reduced to fair market
value.
INCOME TAXES
The Company is a limited liability company, therefore, no income taxes have been
provided for its operations other than at its subsidiary ACME Television of
Missouri, Inc. which is a "C" corporation subject to federal and state taxation.
Any liability or benefit from the Company's non-taxable entities' consolidated
income or loss is the responsibility of, or benefit to, the individual members.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. These
estimates include the allowance for doubtful accounts net of the realizable
value of programming rights and the evaluation of the recoverability of
intangible assets. Actual results could differ from those estimates.
RECLASSIFICATIONS
Certain amounts previously reported for 1997 have been reclassified to conform
to the 1998 financial statement presentation.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
(3) PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
December 31,
----------------------
1997 1998
-------- --------
Land $ -- $ 553
Buildings & Improvements 365 2,529
Broadcast and Other Equipment 7,201 13,163
Furniture and Fixtures 60 287
Vehicles 61 320
Construction in process -- 1,935
-------- --------
Total $ 7,687 $ 18,652
Less Accumulated Depreciation (341) (2,211)
-------- --------
Net Property and equipment $ 7,346 $ 16,441
======== ========
|
Included in property and equipment are assets acquired under capital leases with
a total cost of $6,207,000 and the associated accumulated depreciation of
$767,000.
(4) ACQUISITIONS
On June 17, 1997, ACME Parent acquired substantially all of the assets and
assumed certain liabilities of Channel 32, Incorporated, relating to the
operations of Station KWBP, in exchange for $18,675,000 in cash and $4,400,000
of membership units in ACME Parent. The acquisition was accounted for using the
purchase method. The excess of the purchase price plus the fair value of net
liabilities assumed of approximately $23,478,000, has been recorded as an
intangible asset and is being amortized over a period of 20 years. In addition,
the results of operations (excluding depreciation and amortization) of station
KWBP were recorded by the Company beginning January 1, 1997 pursuant to a Local
Marketing Agreement whereby ACME Oregon effectively operated the station and
funded the station's losses during the period from January 1, 1997 to June 17
1997 (the acquisition date).
On July 29, 1997, ACME Parent entered into and subsequently contributed to ACME
Missouri a stock purchase agreement to acquire Koplar Communications, Inc.
(KCI). On September 30, 1997, ACME Missouri placed $143 million in to an escrow
account (classified as a deposit on the December 31, 1997 consolidated balance
sheet). In connection with this acquisition, the Company entered into a
long-term LMA with Station KPLR and filed the requisite applications with the
FCC for the transfer of the Station's license to ACME Missouri.
Pursuant to the LMA relating to Station KPLR, The Company retained all revenues
generated by the station, bore substantially all operating expenses (excluding
depreciation and amortization) of the station and was obligated to pay an LMA
fee. These revenues and expenses for the period October 1 through December 31,
1997 are included in the Company's operating results for the year ended December
31, 1997.
On March 13, 1998, ACME Missouri completed its acquisition of Koplar
Communications, Inc. ("KCI") and acquired all of the outstanding stock of KCI
for a total consideration of approximately $146.3 million. The acquisition was
accounted for using the purchase method. Pursuant to the LMA referred to above,
all revenues and operating expenses of the station (excluding depreciation and
amortization) for the period from September 30, 1997 to March 31, 1998 (the
effective date of the purchase transaction) are included in the Company's
operating results. The purchase transaction was recorded on the consolidated
balance sheet of the Company effective March 31, 1998 and the Company's results
of operations includes revenues and expenses (including amortization of
intangible assets) beginning April 1, 1998.
The fair value of the assets acquired and liabilities assumed relating to the
acquisition of Station KPLR (in thousands):
Assets acquired:
Cash and cash equivalents 779
Accounts receivables, net 1,703
Program broadcast rights 8,490
Property and equipment 2,233
Prepaid expenses and other current
assets 416
FCC License 93,775
Goodwill 82,563
Other assets 395
--------
Total assets acquired 190,354
Liabilities assumed:
Accounts payable (1,005)
Accrued liabilities (1,332)
Program broadcast rights payable (8,258)
Deferred income taxes (29,889)
Other liabilities (3,531)
--------
Total liabilities assumed (44,015)
--------
Total purchase price 146,339
========
|
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
On October 7, 1997, the Company acquired Crossville Limited Partnership, the
owner of Station WINT, in exchange for $13,200,000 in cash. Subsequent to the
acquisition, the Company changed the call letters of the station to WBXX. The
acquisition was accounted for using the purchase method. The excess of the
purchase price over the fair value of net assets acquired of approximately
$13,287,000, has been recorded as an intangible asset and is being amortized
over a period of 20 years.
During 1997, ACME Parent entered into and contributed to the Company the right
to: (i) acquire 49% of the licensee of Station KUPX (formerly KZAR) in exchange
for member units in ACME Parent valued at $6 million, (ii) pay $3 million for an
option to acquire the remaining 51% interest in the licensee of Station KUPX for
$5 million, exercisable immediately after the station commences on-air
operations. On December 15, 1997, the Company acquired the 49% interest in the
licensee of Station KUPX, paid $3 million to acquire the option and loaned the
sellers $4 million (to be applied to the subsequent majority interest purchase
price). On January 22, 1998, ACME Parent issued $6 million of its member units
to the sellers for the 49% interest in the license of Station KUPX in connection
with the above transaction. The amount of the issuance was based upon a fixed
dollar amount of consideration. ACME Parent contributed this investment to the
Company in exchange for membership units in the Company. The Company recorded
the $6 million investment and increase in capital in January 1998 when the
consideration was issued. The Company accounted for the 49% investment with the
equity method of accounting. The $4 million loan is to be applied against the
remaining purchase price when the Company exercises its option to acquire the
remaining 51% of the Station.
In May 1998 ACME Television and the majority owners of KUPX entered into an
agreement with another broadcaster in Salt Lake City to (i) swap station KUPX
for station KUWB, subject to FCC approval (ii) enable the Company to operate
station KUWB under an LMA and enable the owner of KUWB to operate KUPX under an
LMA agreement.
On August 22, 1997, ACME New Mexico entered into an agreement with affiliates of
the sellers of station KZAR to acquire 100% of the interests in the construction
permit for Station KAUO for a consideration of $10,000. This agreement was
consummated on January 22, 1998. Subsequently, the call letters of KAUO were
changed to KWBQ. Construction of station KWBQ was completed and the station
commenced broadcasting in March 1999.
On June 30, 1998, ACME Parent acquired substantially all the assets and assumed
certain liabilities of WTVK-Channel 46 serving the Fort Myers/Naples, Florida
marketplace for approximately $14.5 million in cash and 1,047 membership units
in ACME Parent (valued at approximately $1.0 million). The acquisition was
accounted for using the purchase method. The excess of the purchase price over
the fair value of the net assets assumed of approximately $15.5 million has been
recorded as an intangible asset and is being amortized over a period of 20
years. The Company had entered into an LMA agreement with WTVK wherein the
Company, effective March 3, 1998, retained all revenues generated by the
station, bore all operating expenses (excluding depreciation and amortization)
of the station and had the right to program the station (subject to WTVK's
ultimate authority for programming) and the station's existing programming
commitments. The LMA terminated upon the consummation of the acquisition.
Consequently, under the LMA the revenues and operating expenses of the station
are included in the Company's results of operations from March 3, 1998 to June
30, 1998. The purchase transaction was recorded on the consolidated balance
sheet of the Company on June 30, 1998 and the Company's results of operations
includes revenues and expenses (including amortization of intangible assets)
beginning July 1, 1998.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
The unaudited pro forma financial information for the year ended December 31,
1998 and 1997, set forth below reflects the net revenue and net loss assuming
the KWBP, WBXX, KPLR, WTVK and KWBQ transactions had taken place at the
beginning of each respective year. This unaudited pro forma financial
information does not necessarily reflect the results of operations that would
have occurred had the acquisitions occurred on January 1, 1998 and 1997.
ACME Intermediate ACME Television
--------------------- --------------------
Year Ended Dec 31, Year Ended Dec 31,
--------------------- --------------------
1997 1998 1997 1998
-------- -------- -------- --------
Net Revenues $ 35,410 $ 44,275 $ 35,410 $ 44,275
Net loss (24,948) (23,483) (21,332) (18,277)
======== ======== ======== ========
|
(5) UNIT OFFERING
On September 30, 1997, ACME Intermediate Holdings, LLC issued 71,634 Units (the
Unit Offering) consisting of 71,634 membership units (representing 8% of the
ACME Intermediate's outstanding membership equity) and $71,635,000 (par value at
maturity) in 12% Senior Secured Discount Notes Due 2005 (Intermediate Notes).
Cash interest on the Intermediate Notes is payable semi-annually in arrears,
commencing with the six-month period ending March 31, 2003. The net proceeds
from the Unit Offering, after the deduction of underwriter fees and other
related offering costs, were $38.3 million and were received by the Company on
September 30, 1997. The Company has allocated approximately $4.2 million of such
net proceeds to the membership units, $35.6 million to the discounted note
payable and $1.5 million to prepaid financing costs - the latter which is being
amortized over the eight year term of the notes. The Intermediate Notes contain
certain covenants and restrictions including restrictions on future indebtedness
and restricted payments, as defined, and limitations on liens, investments,
transactions with affiliates and certain asset sales. The Company was in
compliance with all such covenants and restrictions at December 31, 1998 and
1997.
The Intermediate Notes are secured by a first priority lien on the limited
liability company interests in ACME Television and ACME Subsidiary Holdings II,
LLC, both of which are direct wholly-owned subsidiaries of ACME Intermediate.
The consolidated financial statements of Acme Television are included herein.
ACME Subsidiary Holdings II, LLC was formed solely to own a 0.5% interest in
Acme Television, has no other assets or operations and does not constitute a
substantial portion of the collateral for the Intermediate Notes.
(6) SENIOR DISCOUNT NOTES
On September 30, 1997, ACME Television, LLC issued 10.875% Senior Discount Notes
Due 2004 (Notes) with a face value of $175,000,000 and received $127,370,000 in
gross proceeds from such issuance. These Notes provide for semi-annual cash
interest payments beginning in the fourth year with the first interest payment
due on March 31, 2001. The Notes are subordinated to ACME Television's bank
revolver (see Note 7) and to the ACME Television's capital equipment finance
facilities (see Note 8). The Notes mature on September 30, 2004 and may not be
prepaid without penalty.
The Notes contain certain covenants and restrictions including restrictions on
future indebtedness and limitations on investments, and transactions with
affiliates. ACME Television was in compliance with all such covenants and
restrictions at December 31, 1998 and December 31, 1997.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
Costs associated with the issuance of these notes, including the underwriters
fees and related professional fees are included in long-term other assets and
will be amortized over the seven year term of the notes.
ACME Television's subsidiaries (hereinafter referred to in this section
collectively as Subsidiary Guarantors) are fully, unconditionally, and jointly
and severally liable for ACME Television's notes. The Subsidiary Guarantors are
wholly owned and constitute all of ACME Television's direct and indirect
subsidiaries except for ACME Finance Corporation, a wholly owned finance
subsidiary of ACME Television with essentially no independent operations that is
jointly and severally liable with the Company on the Notes (as defined). ACME
Television has not included separate financial statements of the aforementioned
subsidiaries because (i) ACME Television is a holding company with no assets or
independent operations other than its investments in its subsidiaries and (ii)
the separate financial statements and other disclosures concerning such
subsidiaries are not deemed material to investors.
Various agreements to which ACME Television and/or the subsidiary Guarantors are
parities restrict the activity of the Subsidiary Guarantors to make
distributions to the Company. The Investment and Loan Agreement (the Investment
Agreement), dated June 17, 1997, as amended, among ACME Parent and the parties
thereto and the Limited Liability Company Agreement (the LLC Agreement), dated
June 17, 1997, as amended, among ACME Parent and the parties thereto each
contain certain restrictions on the ability of the Subsidiary Guarantors to
declare or pay dividends to ACME Television in the absence of the consent of
certain parties thereto. The Indenture governing the Notes prevents the
Subsidiary Guarantors from declaring or paying any dividend or distribution to
ACME Television unless certain financial covenants are satisfied and there has
been no default thereof. The revolving credit facility with Canadian Imperial
Bank Corporation (see Note 7) also prohibits distributions from the Subsidiary
Guarantors to ACME Television except in certain circumstances during which
default has not occurred thereunder.
(7) BANK REVOLVER
On August 15, 1997, ACME Television entered into a $22.5 million revolving
credit facility (the Loan Agreement) with Canadian Imperial Bank Corporation
(CIBC), as agent and lead lender. Under the terms of the Loan Agreement,
advances bear interest at either the alternative base rate or the adjusted LIBOR
rate, as defined in the Loan Agreement. Commitment fees are charged at a rate of
.5% per annum, paid quarterly, of the unused portion of the facility. On
December 2, 1997, the Loan Agreement was amended to provide ACME Television with
an increased credit line to $40 million, more favorable interest rates and a
lengthened term. As of December 31, 1998 there was an outstanding balance of $8
million and $32.0 million available under the Loan Agreement. There was no
outstanding balance due at December 31, 1997.
The Loan Agreement contains certain covenants and restrictions including
restrictions on future indebtedness and limitations on investments and
transactions with affiliates. ACME Television was in compliance with all such
covenants and restrictions at December 31, 1998 and 1997.
Costs associated with the procuring of bank credit facilities, including loan
fees and related professional fees, are included in long-term other assets and
are amortized over the term of the Loan Agreement.
(8) COMMITMENTS AND CONTINGENCIES
OBLIGATIONS UNDER OPERATING LEASES
The Company is obligated under noncancelable operating leases for office space
and its transmission sites. Future minimum lease payments as of the year ended
December 31, 1998, under noncancelable operating leases with initial or
remaining terms of one year or more are:
1999 $ 1,125,000
2000 1,118,000
2001 1,068,000
2002 970,000
2003 916,000
Thereafter 4,806,000
-----------
Total $10,003,000
===========
|
Total future minimum lease payments under non-cancelable operating leases were
$10,003,000 and $6,615,000 at December 31, 1998 and 1997, respectively.
Total rental expense under operating leases for the twelve months ended
December 31, 1998 and 1997 was approximately $967,463 and $166,000,
respectively.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
OBLIGATIONS UNDER CAPITAL LEASES
As of December 31, 1998, approximately $5.5 million of equipment was leased
under capital equipment facilities. These obligations are reflected as current
obligations under capital leases of $1,273,000 and $292,000, and as non-current
liabilities under capital lease of $4,199,000 and $443,000 at December 31, 1998
and 1997 respectively. These capital lease obligations expire over the next five
years. Future minimum lease payments as of December 31, 1998 under capital
leases are:
1999 $ 1,638,000
2000 1,431,000
2001 1,371,000
2002 1,351,000
2003 931,000
-----------
Total $ 6,722,000
Less interest (1,250,000)
-----------
Present value of
minimum lease payments $ 5,472,000
===========
|
PROGRAM BROADCAST RIGHTS PAYABLE
Commitments for program broadcast rights that have been executed, but which have
not been recorded in the accompanying financial statements, as the underlying
programming is not yet available for broadcast, were approximately $28,265,000
and $7,010,000 as of December 31, 1998 and December 31, 1997, respectively.
Maturities on the Company's program broadcast rights payables (including
commitments not recognized in the accompanying financial statements due to the
lack of current availability for broadcast) for each of the next five years are:
1999 $ 9,316,000
2000 9,903,000
2001 8,897,000
2002 6,322,000
2003 3,838,000
Thereafter 4,150,000
-----------
Total $42,426,000
===========
|
CERTAIN COMPENSATION ARRANGEMENTS
ACME Parent has issued Management Carry Units to certain members of management.
These units entitle holders to certain distribution rights upon achievement of
certain returns by non-management investors and are subject to forfeiture or
repurchase by ACME Parent in the event of termination of each individual's
employment by ACME Parent under certain specified circumstances. The Company has
determined the value of these at the issuance date to be immaterial. These
Management Carry Units will be accounted for as a variable plan resulting in an
expense when it is probable that any such distributions will be made. The
Company will record any such expense relating to the Management Carry Units
issued by ACME Parent. As of December 31, 1998 and 1997 there were 100
Management Carry Units outstanding and no expense has been recorded.
LEGAL PROCEEDINGS
The Company is a party to routine claims and suits brought against it in the
ordinary course of business. In the opinion of management, the outcome of such
routine claims will not have a material adverse effect on the Company's
business, financial condition, results of operations or liquidity.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
(9) INCOME TAXES
The income tax expense (benefit) consists of the following:
(in
thousands)
1998
----------
Current
Federal income taxes --
State income taxes --
------
Total current tax expense (benefit) --
Deferred tax benefit (2,393)
------
Total income tax expense (benefit) (2,393)
======
|
The differences between the income tax benefit and income taxes computed using
the U.S. Federal statutory income tax rates (35%) consist of the following:
(in
thousands)
1998
----------
Tax expense (benefit) at U.S. Federal
rate (3,471)
State income taxes, net
of Federal tax expense (benefit) (261)
Nondeductible expenses 1,430
Other (91)
------
Income tax benefit (2,393)
======
|
DEFERRED INCOME TAXES
The Company's subsidiary, ACME Television Holdings of Missouri, Inc. is a "C"
corporation and is subject to state and federal income taxes (see Note 2 "Income
Taxes"). The deferred tax asset of $3,811,000 and liability of $31,241,000 for
the year ended December 31, 1998, were related to the following:
1998
-------
LONG
TERM
-------
ASSETS
Allowances and reserves 2,211
Net operating loss carryforwards 1,255
Other 345
-------
Deferred tax asset 3,811
LIABILITIES
Program Amortization (944)
Intangibles (30,297)
-------
Deferred tax liability (31,241)
-------
Net deferred tax liability (27,430)
=======
|
The primary difference in the book basis and tax basis of the Company's
non-taxable entities relates to intangible assets. Intangible assets of the
non-taxable entities had a book and tax basis of approximately $59 million and
$58 million at December 31, 1998, respectively.
ACME INTERMEDIATE HOLDINGS, LCC AND SUBSIDIARIES
ACME TELEVISION,LLC AND SUBSIDIARIES
Notes to Consolidated Financial Statements -- Continued
(10) Related Party Transactions
The Company's stations have entered into affiliation agreements and, from
time to time, related marketing arrangements with The WB Network and related
marketing arrangements. Jamie Kellner is an owner and the chief executive
officer of The WB Network.
Pursuant to an agreement among Koplar Communications, Roberts Broadcasting,
Michael Roberts and Steven C. Roberts, Roberts Broadcasting cannot (i)
transfer its license for Station WHSL, East St. Louis, Illinois, (ii) commit
any programming time of the station for commercial programming or
advertising or (iii) enter into an LMA with respect to such station until
June 1, 2000. In the event that the current affiliation agreement for WHSL
is terminated, the substitute format must be substantially similar to the
current home shopping network format or, in the alternative, an infomercial
format. The annual payment from the Company for these agreements was
$200,000 during the first three years (paid by the prior owner of Station
KPLR). The Company paid $300,000 in 1998 and will pay $300,000 in 1999 under
this agreement.
In connection with ACME Utah and ACME New Mexico, the Company has entered
into long-term agreements to lease studio facilities and/or transmission
tower space for Stations KUWB and KWBQ from an affiliate of Michael and
Steven Roberts. Both Michael and Steven C. Roberts are members of ACME
Parent and Michael Roberts is a proposed Member of ACME Parent's Board of
Advisors. These leases have terms of approximately fifteen years and provide
for monthly payments aggregating approximately $25,000, subject to
adjustment based on the Consumer Price Index.
On October 1, 1997, in connection with our acquisition of KWBP, we paid CEA,
Inc., an affiliate of one of ACME Parents' unit holders, CEA Capital
Partners, a broker's fee of approximately $176,000. On the same day, we paid
CEA, Inc., $132,000 in connection with the purchase of WBXX, $25,000 in
connection with the purchase of the construction permit for KWBQ (formerly
KAUO), $45,000 in connection with the purchase of the construction permit
for KUPX (formerly KZAR) and $889,000 in connection with the purchase of
KPLR, as broker's fees in each of the transactions. Additionally, in
connection with the recent acquisition of WBUI, WIWB and WBDT, we paid CEA,
Inc. a broker's fee of $125,000. CEA, Inc. also received compensation from
the seller in connection with the purchase of WBUI, WIWB and WBDT. One of
our directors, Mr. Collis, is an officer of an affiliate of CEA Capital
Partners.
The Company believes that the terms of each of the foregoing transactions
are or were at least as favorable to the Company or its affiliates as those
that could be obtained from an unaffiliated party.
(11) DEFINED CONTRIBUTION PLAN
In 1998, the Company established a 401(k) defined contribution plan (the
Plan) which covers all eligible employees (as defined in the Plan).
Participants are allowed to make nonforfeitable contributions up to 15% of
their annual salary, but may not exceed the annual maximum contribution
limitations established by the Internal Revenue Service. The Company
currently matches 50% of the amounts contributed by each participant but
does not match participants' contributions in excess of 6% of their
contribution per pay period. The Company contributed and expensed $200,000
to the Plan for the year ended December 31, 1998.
(12) SUBSEQUENT EVENTS (UNAUDITED)
On February 15, 1999, ACME Parent acquired a 25% membership interest in
Sylvan Tower, LLC. This interest permits ACME Parent to offer to ACME
Television of Oregon, LLC, a subsidiary of ACME Television which operates
station KWBP, a long-term lease at the Sylvan Tower facility for
installation and operation of a digital television antenna and transmitter.
In February 16, 1999, the Company acquired the remaining 51% interest in
Station KUPX and in March 1999, the FCC approved the swap of station KUPX
for station KUWB, which is expected to close in May 1999. The Company
intends to account for the swap as a non-monetary transaction using its
historical cost. The Company believes that the fair value of station KUWB
approximates the historical cost of station KUPX.
On February 19, 1999, the Company entered into an agreement in principle
with Ramar Communications ("Ramar") to acquire Ramar's station, KASY TV-50,
serving the Albuquerque market for approximately $27 million. In a related
transaction, the Company will concurrently sell to Ramar its station KWBQ,
also serving the Albuquerque market. The Company will also enter into a
10-year LMA agreement with Ramar to operate KWBQ. This transaction is
subject to FCC approval.
On March 23, 1999, the Company entered into an agreement in principle with
Paxson Communications Corporation ("PCC") to acquire three PCC stations
serving the Dayton, OH, Green Bay, WI and Champaign-Decatur, IL markets for
$40 million. The transaction, which is subject to the completion of a
definitive agreement, due-diligence, and satisfactory financing
arrangements, contemplates that the Company would commence operating the
stations as WB Network affiliates upon the payment to PCC of $32 million.
This payment would be credited at the final closing, which would take place
following FCC approval.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS
Set forth below is certain information with respect to the members of ACME
Parent's Board of Advisors, which ultimately controls both ACME Intermediate and
ACME Television and the senior management of the ACME Intermediate and ACME
Television. All ages are set forth as of March 15, 1999.
NAME AGE POSITION
---- --- --------
Jamie Kellner ................ 51 Chairman of the Board, Chief Executive Officer
and Member of ACME Parent's Board of Advisors
Douglas Gealy ................ 38 President, Chief Operating Officer and Member of
ACME Parent's Board of Advisors
Thomas Allen ................. 46 Executive Vice President, Chief Financial Officer
and Member of ACME Parent's Board of Advisors
Thomas Embrescia .............. 57 Member of ACME Parent's Board of
Advisors
Michael Roberts ............... 50 Proposed Member of ACME Parent's Board of
Advisors(1)
Edward Danduran .............. 46 Vice President, Controller
Gerald Donadio................. 39 Vice President of Sales (2)
Michael Mingroni ............. 42 Vice President of Graphics (2)
Robert Shaw .................. 51 Vice President of Programming (2)
|
(1) Mr. Roberts is expected to hold this office subsequent to the
consummation of the acquisition of the remaining 51% interest in Station
KUWB, which acquisition occurred on February 16, 1999.
(2) Messrs. Donadio, Mingroni and Shaw are officers of ACME Television only,
and not of ACME Intermediate.
Jamie Kellner - Mr. Kellner is a founder of ACME Parent and serves as its
Chairman, Chief Executive Officer and is a member of its Board of Advisors,
which has exclusive authority to manage its business and affairs. Mr. Kellner is
also a founder, chief executive officer and partner of The WB Television Network
since 1993. Previously, Mr. Kellner was President of Fox Broadcasting Company
for over seven years. He currently serves on the board of directors of
Montecito Broadcasting Corporation, NELVANA LTD. and SMART TV, LLC.
Douglas Gealy - Mr. Gealy is also a founder of ACME Parent and serves as its
President and Chief Operating Officer and a member of its Board of Advisors.
Since December of 1996, Mr. Gealy has been involved in development activities
with respect to ACME Parent. Prior to founding ACME Parent, Mr. Gealy served for
one year as Executive Vice President of Benedek Broadcasting Corporation.
Previously, Mr. Gealy was a Vice President and General Manager of Station WCMH
and its LMA, WWHO, both in Columbus, Ohio, and following the acquisition of
these stations by NBC, served as President and General Manager of these
stations.
Thomas Allen - Mr. Allen is a founder, member of the Board of Advisors,
Executive Vice President and the Chief Financial Officer of ACME Parent. Since
June of 1996, Mr. Allen has been involved in development activities with respect
to the Company. Previously, Mr. Allen was the Chief Operating Officer and Chief
Financial Officer for Virgin Interactive Entertainment from August 1993 to May
1996. Prior to that Mr. Allen served as the Chief Financial Officer of the Fox
Broadcasting Company for approximately seven years.
Thomas Embrescia - Mr. Embrescia is the Chairman and principle investor of
Second Generation Television, LLC, a company he formed in 1993. In addition, he
also serves as chairman or chief executive officer of and is a principle
investor in several other media and marketing related businesses. He has over 31
years of experience in the broadcasting and media industry. Mr. Embrescia has
been a member of ACME Parent's Board of Advisors since the Company acquired
station WTVK from Second Generation Television in June 1998.
Michael V. Roberts - Mr. Roberts is a co-founder of Roberts Broadcasting which
owns several television stations in medium-sized markets in the U.S. and has
served as its Chairman and Chief Executive Officer since 1989. Mr. Roberts is
also the founder of companies active in commercial real estate development,
construction program management and corporate management consulting.
Edward Danduran - Mr. Danduran has been Vice President and Controller of the
Company since July 1997. Prior to joining the Company, Mr. Danduran was a
Financial Consultant for Virgin Interactive Entertainment, Inc., from November
1995 until April 1997. From 1989 to 1995, Mr. Danduran was the Chief Financial
Officer of Phoneby, a business communications company,
Gerald Donadio - Mr. Donadio has served as ACME Television's Vice President of
Sales since June 1998. From 1996 until 1998, Mr. Donadio was a senior account
executive for a division of Time Warner Cable and from 1992 until 1996 served in
a similar capacity for a division Cox Communications.
Robert Shaw - Mr. Shaw has been Vice President of Programming of the ACME
Television since September 1997. Prior to joining the Company, Mr. Shaw spent
nearly 17 years at WCMH-TV, the NBC affiliate in Columbus, OH, in various
management capacities, most recently as Director of Programming and Station
Manager.
Michael Mingroni - Mr. Mingroni has served as ACME Television's Vice President
of Graphics since September 1997. From 1990 until 1997, Mr. Mingroni was the Art
Director for WCMH-TV, the NBC affiliate in Columbus, OH.
Edward J. Koplar has resigned all director and officer positions held with the
Company, its Parent and its subsidiaries. The Company is in the process of
negotiating a severance arrangement with Mr. Koplar.
ITEM 11. EXECUTIVE COMPENSATION & EMPLOYMENT AGREEMENTS
The following table discloses compensation earned for the years ended December
31, 1998 and 1997 (year of formation) by the Company's Chief Executive Officer,
and the Company's next four most highly paid executive officers.
SUMMARY COMPENSATION TABLE (1)
OTHER ALL
ANNUAL OTHER
SALARY BONUS COMPENSATION COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (2) ($) (3) ($) (4)
--------------------------- ---- --- ------- ------- -------
Jamie Kellner(5)...................... 1998 $175,000 $100,000 $ -- $ --
Chairman of the Board, Chief 1997 -- -- -- --
Executive Officer and Member of
the Board of Advisors
Douglas Gealy(5)...................... 1998 300,000 25,000 5,351 93,870
President, Chief Operating 1997 227,083 50,000 -- 2,406
Officer and Member of the Board of
Advisors
Thomas Allen(5)....................... 1998 300,000 25,000 -- 6,334
Executive Vice President, Chief 1997 145,833 50,000 105,000 2,171
Financial Officer and Member of
the Board of Advisors
|
Edward Danduran....................... 1998 106,016 20,000 -- 3,000
Controller and Chief Accounting 1997 67,017 -- -- --
Officer
Robert Shaw........................... 1998 89,344 16,000 -- 2,731
Vice President of Programming.... 1997 50,119 5,000 -- 859
|
(1) The Company does not have Restricted stock, Stock appreciation rights
nor did it have payouts on LTIP's
(2) The amounts shown in the column reflect payments under the Company's
Annual Incentive Plan which is described below under the caption "Annual
and Long-Term Incentive Plans."
(3) Amounts disclosed in this column include:
(a) For Mr. Gealy, a company leased automobile.
(b) For Mr. Allen, a signing bonus that was contingent upon the closing
of the purchases of Stations KPLR, KWPB, WBXX and KWBQ.
(4) Amounts in this column include:
(a) The Company's contributions under its 401K Savings Plan, a defined
contribution plan.
(b) Reimbursements of COBRA expenses.
(c) Payments on behalf of the named executives for life insurance.
(d) For Mr. Gealy, this amount includes reimbursement of moving expenses
in the amount of $86,251.
(5) Messrs. Kellner, Gealy and Allen hold 40, 30 and 30, respectively,
Management Carry Units of ACME Parent. Ownership of these units entitles
them to certain distribution rights upon achievement of certain returns
by non-management investors and are subject to forfeiture or repurchase
by ACME Parent in the event of the termination of each individual's
employment by ACME Parent under certain specified circumstances. The
Management Carry Units vest over a five-year period, subject to
acceleration upon the occurrence of certain events, such as an initial
public offering, a change in control or a sale of ACME Parent. The
dollar value of payouts as a result of ownership of these units cannot
presently be determined.
Employment Agreements
ACME Parent has entered into a six-year non-exclusive consulting agreement (the
"Consulting Agreement") with Jamie Kellner which expires June 30, 2003, and
six-year full-time exclusive employment agreements (the "Employment Agreement")
with each of Messrs. Gealy and Allen which expire June 30, 2003, in each case
subject to reduction to five-year terms upon the consummation of an initial
public offering of common stock of a successor to ACME Parent (an "ACME IPO").
The Employment Agreements provide for annual compensation reviews by the
Company's Compensation Committee, which consists of Mr. Kellner, Mr. Embrescia
and certain of ACME Parent's investors, with stipulated minimum annual
adjustments equal to increases in the Consumer Price Index. Mr. Kellner's
consulting compensation is set annually on a discretionary basis by the
Compensation Committee.
Mr. Danduran is employed by the Company pursuant to employment agreement that
expires December 31, 2001. The employment agreement requires Mr. Danduran to
devote substantially all of his business time to the business of the Company and
precludes Mr. Danduran from engaging in activities competitive with the business
of the Company throughout the term of the employment agreement.
Mr. Shaw is employed by ACME Television pursuant to employment agreement that
expires December 31, 2001. The employment agreement requires Mr. Shaw to devote
substantially all of his business time to the business of the ACME Television
and precludes Mr. Shaw from engaging in activities competitive with the business
of ACME Television throughout the term of the employment agreement.
Annual and Long-term Incentive Plans
Messers Kellner, Gealy and Allen's agreements provide for annual incentive plans
calling for cash bonuses to be paid to each of them on a formula basis dependent
upon achieving certain pre-determined profitability targets, although the
Compensation Committee can elect to increase such bonus awards. All other
managers of ACME Television, including Messers Danduran, Mingroni and Shaw,
participate in an annual cash bonus plan targeted at 10-20% of base pay and
dependent upon the Company's achieving certain annual profitability targets.
The Company has also adopted a long-term incentive compensation plan ("LTIP") in
which all general managers of the Company's stations and non-founder corporate
office executives participate. The participants' awards are determined by the
Company's Compensation Committee and are increased or decreased dependent upon
the Company achieving pre-determined long-term operating profit levels. The
awards generally vest in equal thirds on the third, fourth and fifth
anniversaries of the effective date of the awards. For 1998, the Company
recorded an expense of $399,000 representing the estimated awards earned during
1998 related to this plan.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ACME Intermediate holds all of the outstanding membership units of ACME
Television and has full and exclusive authority for the management of its
business and affairs. ACME Parent holds 92.14% of the outstanding membership
units of ACME Intermediate and has exclusive authority for the management of the
business and affairs of ACME Intermediate. Full authority for the management of
ACME Parent resides in its executive officers and the Board of Advisors of ACME
Parent. Messrs. Kellner, Gealy and Allen collectively own all of the outstanding
voting securities of ACME Parent and each holds the same executive offices of
ACME Intermediate, ACME Television and ACME Parent. Accordingly, the following
table sets forth certain information regarding the beneficial ownership of ACME
Intermediate's membership units by (i) certain holders or groups of related
holders who, individually or as a group, are the beneficial owners of 5% or more
of the fully diluted equity interests of ACME Intermediate, (ii) the executive
officers and the Majority Member of ACME Intermediate and (iii) the executive
officers and the Majority Member of ACME Intermediate as a group. The LLC
Agreement of ACME Intermediate authorizes the issuance of 1,000,000 Common Units
of which 910,986 are issued and outstanding. 71,634 of the Common Units were
issued to ACME Intermediate noteholders, in connection with the offering of the
Intermediate Notes in September 1997. The Percentage of Beneficial Ownership
column set forth below reflects ownership percentages based upon capital
contributions. Pursuant to the LLC Agreement of ACME Intermediate, distributions
are made on a pro rata basis as determined by the ratio of a member's membership
units to the aggregate membership units of all members.
PERCENTAGE
TYPE OF NUMBER BENEFICIAL
NAME(1) INTEREST OF UNITS OWNERSHIP
------- -------- -------- -----------
ACME Television Holdings, LLC(2) Common Units 839,352 92.14%
Executive Officers and Majority Member Common Units 839,352 92.14%
ACME Television Holdings, LLC Common Units 839,352 92.14%
Jamie Kellner(3) Common Units 839,352 92.14%
1545 East Valley Road
Montecito, CA 93108
Douglas Gealy(3) Common Units 839,352 92.14%
10829 Olive Boulevard, Suite 202
St. Louis, MO 63141
Thomas Allen(3) Common Units 839,352 92.14%
2101 East Fourth Street, Suite 200
Santa Ana, CA 92705
Thomas Embrescia(4) Common Units 839,352 92.14%
One Radio Lane
Cleveland, OH 44114
Majority Member and executive Common Units 839,352 92.14%
officers as a group (4 persons)
|
(1) Except as otherwise noted below, the persons named in the table have sole
voting power and investment power with respect to all units set forth in
the table.
(2) Pursuant to the LLC Agreement of ACME Parent, distributions are made in
respect of the various classes of such membership units in accordance with
certain priority distributions and ownership percentages as set forth
therein, and vary among the respective classes of membership units based
upon the extent to which holders of designated classes of such membership
units have achieved specified cumulative distributions. Currently Messrs.
Kellner, Gealy and Allen are the beneficial owners of 40%, 30% and 30%,
respectively, the only outstanding voting membership units of ACME Parent.
Upon June 30, 2002 or the occurrence of certain specified events of
default, the holders of certain non-voting membership units of ACME Parent
will be granted voting rights and therefore be able to add new members
and/or replace current members of ACME Parent's Board of Advisers;
provided, however that ACME Parent has not consummated an initial public
offering. In the event of a reorganization of ACME Parent for purposes of
an initial public offering, all of the outstanding memberships units of
ACME Parent will be converted into one class of equity stock.
(3) Messrs. Kellner, Gealy and Allen are each executive officers of the
Company, ACME Television and ACME Parent and members of the Board of
Advisors of ACME Parent. Currently, Messrs. Kellner, Gealy and Allen are
the beneficial owners of the only outstanding voting membership units of
ACME Parent and, therefore, may be deemed to be beneficial owners of the
membership units of ACME Intermediate held by ACME Parent.
(4) Mr. Embrescia is a member of the Board of Advisors of ACME Parent and
therefore may be deemed to be a beneficial owner of the membership units
of ACME Intermediate held by ACME Parent. Mr. Embrescia holds non-voting
membership units equal to 5.31% and 2.3%, respectively, of beneficial
ownership of ACME Parent on a fully diluted basis based on capital
contributions.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's stations have entered into affiliation agreements and, from
time to time, related marketing arrangements with The WB Network and
related marketing arrangements. Jamie Kellner is an owner and the chief
executive officer of The WB Network.
Pursuant to an agreement among Koplar Communications, Roberts Broadcasting,
Michael Roberts and Steven C. Roberts, Roberts Broadcasting cannot (i)
transfer its license for Station WHSL, East St. Louis, Illinois, (ii)
commit any programming time of the station for commercial programming or
advertising or (iii) enter into an LMA with respect to such station until
June 1, 2000. In the event that the current affiliation agreement for WHSL
is terminated, the substitute format must be substantially similar to the
current home shopping network format or, in the alternative, an infomercial
format. The annual payment from the Company for these agreements was
$200,000 during the first three years (paid by the prior owner of Station
KPLR). The Company paid $300,000 in 1998 and will pay $300,000 in 1999
under this agreement.
In connection with ACME Utah and ACME New Mexico, the Company has entered
into long-term agreements to lease studio facilities and/or transmission
tower space for Stations KUWB and KWBQ from an affiliate of Michael and
Steven Roberts. Both Michael and Steven C. Roberts are members of ACME
Parent and Michael Roberts is a proposed Member of ACME Parent's Board of
Advisors. These leases have terms of approximately fifteen years and
provide for monthly payments aggregating approximately $25,000, subject to
adjustment based on the Consumer Price Index.
The Company believes that the terms of each of the foregoing transactions
are or were at least as favorable to the Company or its affiliates as those
that could be obtained from an unaffiliated party.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The following financial statements are included in Item 8:
ACME Intermediate Holdings, LLC and Subsidiaries and
ACME Television, LLC and Subsidiaries:
-- Consolidated Balance Sheets as of December 31, 1998 and December 31,
1997.
-- Consolidated Statements of Operations for the years ended December 31,
1998 and December 31, 1997.
-- Consolidated Statements of Members' Capital for the years ended December
31, 1998 and 1997.
-- Consolidated Statements of Cash Flows for the years ended December 31,
1998 and December 31, 1997.
-- Notes to the Consolidated Financial Statements.
(a) 2. FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statement schedules are included in
Item 14 (d):
- Schedule I - Condensed Financial Information of ACME Intermediate
Holdings, LLC and ACME Television, LLC (Parent Companies)
-- Consolidated Balance Sheets as of December 31, 1998 and
December 31, 1997.
-- Consolidated Statements of Operations for the years ended
December 31, 1998 and December 31, 1997.
-- Consolidated Statements of Cash Flows for the years ended
December 31, 1998 and December 31, 1997.
-- Notes to the Consolidated Financial Statements.
- Schedule II - Valuation and Qualifying Accounts
All other schedules have been omitted since the required information is not
present or not present in amounts sufficient to require submission of the
schedule, or because the information required is included in the
consolidated financial statements or the notes thereto, included in Item 8
herewith.
(a) 3. EXHIBITS
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------ -------------------
3.1 Certificate of Formation of ACME Intermediate Holdings, LLC,
incorporated by reference to Exhibit 3.1 of ACME Intermediate
Holdings, LLC's Registration Statement on Form S-4, File No.
333-40277 filed on November 14, 1997 (the "Intermediate Registration
Statement")
3.2 Limited Liability Company Agreement of ACME Intermediate Holdings,
LLC, incorporated by reference to Exhibit 3.2 of Intermediate
Registration Statement.
3.3 Certificate of Formation of ACME Television, LLC, incorporated by
reference to Exhibit 3.1 of ACME Television, LLC's Registration
Statement on Form S-4, File No. 333-40281, filed on November 14,
1997 (the "Television Registration Statement").
3.4 Limited Liability Company Agreement of ACME Television, LLC,
incorporated by reference to Exhibit 3.2 of the Television
Registration Statement.
4.1 Indenture, dated September 30, 1997, by and among ACME Intermediate
Holdings, LLC and ACME Intermediate Finance, Inc., as Issuers, and
Wilmington Trust Company, incorporated by reference to Exhibit 4.2
of the Intermediate Registration Statement.
4.2 Form of Securities of ACME Intermediate Holdings, LLC, incorporated
by reference to Exhibit 4.3 of the Intermediate Registration
Statement.
4.3 Indenture, dated September 30, 1997, by and among ACME Television,
LLC and ACME Finance Corporation, as Issuers, the Guarantors named
therein, and Wilmington Trust Company, incorporated by reference to
Exhibit 4.1 of the Television Registration Statement.
4.5 First Supplemental Indenture, dated February 11, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, the Guarantors
named therein, and Wilmington Trust Company, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
4.6 Second Supplemental Indenture, dated March 13, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, the Guarantors
named therein, and Wilmington Trust Company, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
4.7 Third Supplemental Indenture, dated August 21, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, as issuers, the
Guarantors named therein, and Wilmington Trust Company, incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending September 30, 1998.
|
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------ -------------------
10.1 Agreement, dated January 30, 1998, by and between ACME Television
Licenses of Tennessee, LLC, Ruth Payne Carman (dba E&R
Communications) and the Carman-Holly Partnership, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
10.2 Asset Purchase Agreement, dated March 2, 1998, by and between ACME
Television, LLC and Second Generation of Florida, Ltd., incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
10.3 Time Brokerage Agreement, dated March 2, 1998, by and between ACME
Television, LLC and Second Generation of Florida, Ltd., incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
10.4 Assignment Agreement, dated June 16, 1998, by and between ACME
Television Licenses of Tennessee, LLC, Ruth Payne Carman (dba E&R
Communications), Carman-Harrison, LLC and Donald E. Holley,
incorporated by reference to Registrant's Quarterly Report on Form
10-Q for the period ending June 30, 1998.
10.5 Time Brokerage Agreement, dated April 20, 1998, for KUPX-TV, by and
amoung Paxson Salt Lake City License, Inc., Paxson Communications of
Salt Lake City-30, Inc. and ACME Television of Utah, LLC,
incorporated by reference to Registrant's Quarterly Report on Form
10-Q for the period ending June 30, 1998.
10.6 Master Lease Agreement, dated June 30, 1998, by and between General
Electric Capital Corporation and ACME Television, LLC, incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending June 30, 1998.
10.7 Purchase Agreement, dated October 30, 1998, by and between Roberts
Broadcasting of New Mexico, LLC and Acme Television of New Mexico,
LLC.
10.8 Option Agreement, dated November 5, 1998, by and between Roberts
Broadcasting of New Mexico, LLC and Acme Television of New Mexico,
LLC.
10.9 Tower Lease Agreement, dated December 30, 1998, by and between
Roberts Broadcasting of New Mexico, LLC and Acme Television of New
Mexico, LLC.
21.0 Subsidiaries
27.1* Financial Data Schedule for ACME Television, LLC, available in
electronic format as filed by the Registrant.
27.2* Financial Data Schedule for ACME Intermediate Holdings, LLC,
available in electronic format as filed by the Registrant.
|
* Filed herewith
(b) REPORTS ON FORM 8-K.
The Company filed no reports on Form 8-K during the three months ended
December 31, 1998.
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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.
ACME Intermediate Holdings, LLC
Date: October 14, 1999 /s/ Thomas D. Allen
----------------------------------
Thomas D. Allen
Executive Vice President and Chief
Financial Officer and Director
(Principal Financial Officer)
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report on Form 10-K has been signed by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Jamie Kellner Chairman of the Board October 14, 1999
------------------------- Chief Executive Officer and Member
Jamie Kellner of ACME Parent's Board of Advisors
(Principal Executive Officer)
/s/ Douglas Gealy President and Member of ACME October 14, 1999
------------------------- Parent's Board of Advisors
Douglas Gealy
/s/ Thomas D. Allen Executive Vice President and Chief October 14, 1999
------------------------- Financial Officer and Member of
Thomas D. Allen the Board of Advisors
(Principal Financial Officer)
/s/ Edward Danduran Vice President and Controller October 14, 1999
------------------------- (Principal Accounting Officer)
Edward Danduran
/s/ Thomas D. Allen Majority Member October 14, 1999
-------------------------
ACME Television Holdings, LLC
By: Thomas Allen
Title: Executive Vice President and
Chief Financial Officer
|
SIGNATURES
Pursuant to the requirements of Sections 13 or 15(d) 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.
ACME Television, LLC
Date: October 14, 1999 /s/ Thomas D. Allen
----------------------------------
Thomas D. Allen
Executive Vice President and Chief
Financial Officer and Director
(Principal Financial Officer)
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual
Report on Form 10-K has been signed by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
/s/ Jamie Kellner Chairman of the Board October 14, 1999
------------------------ Chief Executive Officer and
Jamie Kellner Member of ACME Parent's Board
of Advisors
(Principal Executive Officer)
/s/ Douglas Gealy President and Member of ACME October 14, 1999
------------------------ Parent's Board of Advisors
Douglas Gealy
/s/ Thomas D. Allen Executive Vice President and October 14, 1999
------------------------ Chief Financial Officer and
Thomas D. Allen Member of the Board of Advisors
(Principal Financial Officer)
/s/ Edward Danduran Vice President and Controller October 14, 1999
------------------------ (Principal Accounting Officer)
Edward Danduran
/s/ Thomas Allen Majority Member October 14, 1999
------------------------
ACME Intermediate Holdings, LLC
By: Thomas Allen
Title: Executive Vice President and
Chief Financial Officer
|
ACME INTERMEDIATE HOLDINGS, LLC AND ACME TELEVISION, LLC
(Parent Companies)
CONDENSED FINANCIAL INFORMATION
BALANCE SHEETS
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1998 1997
-------------------------------- --------------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS, LLC TELEVISION, LLC HOLDINGS, LLC TELEVISION, LLC
------------- --------------- -------------- ---------------
(IN THOUSANDS)
ASSETS
Cash and cash equivalents $ -- $ 872 $ -- $ 8,693
Accounts receivable -- 12 -- --
Due from affiliates 4 131 54 162
Prepaid expenses and other current
assets -- 127 -- 177
--------- --------- --------- ---------
Total current assets 4 1,142 54 9,032
Property and equipment, net -- 200 -- 139
Investment in and advances to subsidiaries 71,295 220,542 80,098 197,888
Acquisition related deposits -- 36 -- --
Prepaid financing costs, less current
portion 1,596 6,657 1,594 7,079
--------- --------- --------- ---------
Total assets 72,895 228,577 81,746 214,138
========= ========= ========= =========
LIABILITIES
Accounts payable -- 1,793 -- 2,774
Accrued liabilities -- 1,831 -- 433
Capital leases payable -- 40 --
--------- --------- --------- ---------
Total current liabilities -- 3,664 -- 3,207
Capital leases payable, less current
portion -- 170 --
Bank borrowings -- 8,000 -- --
Due to affiliates 131 -- 162
Senior Secured Discount Notes -- 145,448 -- 130,833
Senior discount notes 42,052 -- 36,863 --
--------- --------- --------- ---------
Total liabilities 42,183 157,282 37,025 134,040
--------- --------- --------- ---------
Members' Capital
Members' Capital 58,402 92,563 51,355 85,516
Accumulated deficit (27,690) (21,268) (6,634) (5,418)
--------- --------- --------- ---------
Total members' capital 30,712 71,295 44,721 80,098
========= ========= ========= =========
Total liabilities and members'
capital 72,895 228,577 81,746 214,138
========= ========= ========= =========
|
See accompanying notes to condensed financial information.
ACME INTERMEDIATE HOLDINGS, LLC AND ACME TELEVISION, LLC
(Parent Companies)
CONDENSED FINANCIAL INFORMATION
STATEMENT OF OPERATIONS
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------
1998 1997
------------------------------- ----------------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS, LLC TELEVISION, LLC HOLDINGS, LLC TELEVISION, LLC
------------- --------------- --------------- ---------------
(IN THOUSANDS)
Revenues $ -- $ 181 $ -- $ --
-------- -------- -------- --------
Selling, general and administrative -- 2,923 -- 1,415
Depreciation and amortization -- 67 -- 9
-------- -------- -------- --------
Operating loss -- (2,809) -- (1,424)
Interest income from subsidiaries -- 24,978 -- 5,631
Other income 1 1,112 -- 273
Interest expense (5,207) (16,091) (1,216) (3,712)
-------- -------- -------- --------
Net income before equity in net loss of
subsidiaries (5,206) 7,190 (1,216) 768
Equity in net loss of subsidiaries (15,850) (23,040) (5,418) (6,186)
-------- -------- -------- --------
Net loss (21,056) (15,850) (6,634) (5,418)
======== ======== ======== ========
|
See accompanying notes to condensed financial information.
ACME INTERMEDIATE HOLDINGS, LLC AND ACME TELEVISION, LLC
(Parent Companies)
CONDENSED FINANCIAL INFORMATION
STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1998 1997
------------------------------- --------------------------------
ACME ACME
INTERMEDIATE ACME INTERMEDIATE ACME
HOLDINGS, LLC TELEVISION, LLC HOLDINGS, LLC TELEVISION, LLC
------------- --------------- -------------- ---------------
(IN THOUSANDS)
Cash flows from operating activities:
Net loss $ (21,056) $ (15,850) $ (6,634) $ (5,418)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization -- 67 -- 9
Accretion on Senior Secured Discount Notes -- 14,615 -- 3,463
Accretion on Senior Discount Notes 5,207 -- 1,213 --
Equity in net loss of subsidiaries 15,850 23,040 5,418 6,186
Changes in assets and liabilities:
Increase in accounts receivable -- (12) -- --
Decrease (Increase) in due from affiliates 50 31 -- (162)
Increase in other assets -- 386
(Increase) decrease in prepaid expenses -- 50 -- (177)
(Increase) decrease in accounts payable -- (981) -- 2,774
Increase in accrued expenses -- 1,398 -- 433
Decrease is due to affiliates (31) -- -- --
--------- --------- --------- ---------
Net cash provided by (used in)
operating activities 20 22,744 (3) 7,108
--------- --------- --------- ---------
Cash flows from investing activities:
Purchase of property and equipment -- -- -- (148)
Investments in and advances to affiliates -- (38,544) (62,335) (180,999)
--------- --------- --------- ---------
Net cash used in investing activities -- (38,544) (62,335) (181,147)
--------- --------- --------- ---------
Cash flows from financing activities:
Increase in notes payable to bank -- 11,000 -- --
Payments of notes payable to banks -- (3,000) -- --
Payments on capital leases -- (21) -- --
Contribution from Parent -- -- 24,126 62,441
Issuance of units -- -- 4,154 --
Issuance of Senior Discount Notes -- -- -- 127,370
Issuance of Senior Secured Notes -- -- 35,650 --
Payment of prepaid financing costs (20) -- (1,592) (7,079)
--------- --------- --------- ---------
Net cash provided by (used in) financing
activities (20) 7,979 62,338 182,732
--------- --------- --------- ---------
Net increase (decrease) in cash -- (7,821) -- 8,693
Cash at beginning of period -- 8,693 -- --
--------- --------- --------- ---------
Cash at end of period -- 872 -- 8,693
========= ========= ========= =========
Cash Payments for:
Interest -- -- -- 71
Taxes -- -- -- --
Non-Cash Transactions:
Contributions by Parent 7,047 7,047 23,075 23,075
Property and equipment contributed
to consolidated subsidiaries -- 103 -- --
Property and equipment acquired
for capital lease obligations -- 231 -- --
|
See accompanying notes to condensed financial information
ACME INTERMEDIATE HOLDINGS, LLC (PARENT COMPANY)
ACME TELEVISION, LLC (PARENT COMPANY)
Notes to Condensed Financial Information
(1) BASIS OF PRESENTATION
Pursuant to the rules and regulations of the Securities and Exchange
Commission, the Condensed Financial Statements of ACME Intermediate
Holdings, LLC and ACME Television, LLC do not include all of the information
and notes normally included with financial statements prepared in accordance
with generally accepted accounting principles. It is therefore suggested
that these Condensed Financial Statements be read in conjunction with the
Consolidated Financial Statements and Notes thereto included at Item 8 of
this filing.
(2) CASH DIVIDENDS
There have been no cash dividends declared by either ACME Intermediate
Holdings, LLC or ACME Television, LLC.
(3) LONG-TERM DEBT
There are no cash interest payments due on ACME Intermediate Holdings, LLC's
Senior Secured Discount Notes until March 31, 2003. There are no cash
interest payments due on ACME Television, LLC's Senior Discount Notes until
March 31, 2001.
ACME INTERMEDIATE HOLDINGS, LLC AND SUBSIDIARIES
ACME TELEVISION, LLC AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND DECEMBER 31, 1997
(IN THOUSANDS)
ADDITIONS
BALANCE AT ADDITIONS ACQUIRED IN BALANCE AT
BEGINNING CHARGED TO PURCHASE END OF
ALLOWANCE FOR DOUBTFUL ACCOUNTS OF PERIOD EXPENSE TRANSACTIONS DEDUCTIONS PERIOD
------------------------------- --------- ---------- ------------ ---------- ----------
Year ended December 31, 1997 0 51,000 0 51,000
Year ended December 31, 1998 51,000 223,776 280,224 0 555,000
|
(1) Additions relating to purchase transactions.
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------ -------------------
3.1 Certificate of Formation of ACME Intermediate Holdings, LLC,
incorporated by reference to Exhibit 3.1 of ACME Intermediate
Holdings, LLC's Registration Statement on Form S-4, File No.
333-40277 filed on November 14, 1997 (the "Intermediate Registration
Statement")
3.2 Limited Liability Company Agreement of ACME Intermediate Holdings,
LLC, incorporated by reference to Exhibit 3.2 of Intermediate
Registration Statement.
3.3 Certificate of Formation of ACME Television, LLC, incorporated by
reference to Exhibit 3.1 of ACME Television, LLC's Registration
Statement on Form S-4, File No. 333-40281, filed on November 14,
1997 (the "Television Registration Statement").
3.4 Limited Liability Company Agreement of ACME Television, LLC,
incorporated by reference to Exhibit 3.2 of the Television
Registration Statement.
4.1 Indenture, dated September 30, 1997, by and among ACME Intermediate
Holdings, LLC and ACME Intermediate Finance, Inc., as Issuers, and
Wilmington Trust Company, incorporated by reference to Exhibit 4.2
of the Intermediate Registration Statement.
4.2 Form of Securities of ACME Intermediate Holdings, LLC, incorporated
by reference to Exhibit 4.3 of the Intermediate Registration
Statement.
4.3 Indenture, dated September 30, 1997, by and among ACME Television,
LLC and ACME Finance Corporation, as Issuers, the Guarantors named
therein, and Wilmington Trust Company, incorporated by reference to
Exhibit 4.1 of the Television Registration Statement.
4.5 First Supplemental Indenture, dated February 11, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, the Guarantors
named therein, and Wilmington Trust Company, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
4.6 Second Supplemental Indenture, dated March 13, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, the Guarantors
named therein, and Wilmington Trust Company, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
4.7 Third Supplemental Indenture, dated August 21, 1998, by and among
ACME Television, LLC and ACME Finance Corporation, as issuers, the
Guarantors named therein, and Wilmington Trust Company, incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending September 30, 1998.
10.1 Agreement, dated January 30, 1998, by and between ACME Television
Licenses of Tennessee, LLC, Ruth Payne Carman (dba E&R
Communications) and the Carman-Holly Partnership, incorporated by
reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
10.2 Asset Purchase Agreement, dated March 2, 1998, by and between ACME
Television, LLC and Second Generation of Florida, Ltd., incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
|
10.3 Time Brokerage Agreement, dated March 2, 1998, by and between ACME
Television, LLC and Second Generation of Florida, Ltd., incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending March 31, 1998.
10.4 Assignment Agreement, dated June 16, 1998, by and between ACME
Television Licenses of Tennessee, LLC, Ruth Payne Carman (dba E&R
Communications), Carman-Harrison, LLC and Donald E. Holley,
incorporated by reference to Registrant's Quarterly Report on Form
10-Q for the period ending June 30, 1998.
10.5 Time Brokerage Agreement, dated April 20, 1998, for KUPX-TV, by and
amoung Paxson Salt Lake City License, Inc., Paxson Communications of
Salt Lake City-30, Inc. and ACME Television of Utah, LLC,
incorporated by reference to Registrant's Quarterly Report on Form
10-Q for the period ending June 30, 1998.
10.6 Master Lease Agreement, dated June 30, 1998, by and between General
Electric Capital Corporation and ACME Television, LLC, incorporated
by reference to Registrant's Quarterly Report on Form 10-Q for the
period ending June 30, 1998.
10.7 Purchase Agreement, dated October 30, 1998, by and between Roberts
Broadcasting of New Mexico, LLC and Acme Television of New Mexico,
LLC.
10.8 Option Agreement, dated November 5, 1998, by and between Roberts
Broadcasting of New Mexico, LLC and Acme Television of New Mexico,
LLC.
10.9 Tower Lease Agreement, dated December 30, 1998, by and between
Roberts Broadcasting of New Mexico, LLC and Acme Television of New
Mexico, LLC.
21.0 Subsidiaries
27.1* Financial Data Schedule for ACME Television, LLC, available in
electronic format as filed by the Registrant.
27.2* Financial Data Schedule for ACME Intermediate Holdings, LLC,
available in electronic format as filed by the Registrant.
|
* Filed herewith
|
ARTICLE 5
|
|
|
|
CIK: 0001049510
|
|
NAME: ACME Television, LLC
|
|
MULTIPLIER: 1,000
|
|
|
|
PERIOD TYPE
|
YEAR
|
|
FISCAL YEAR END
|
DEC 31 1998
|
|
PERIOD START
|
JAN 01 1998
|
|
PERIOD END
|
DEC 31 1998
|
|
CASH
|
953
|
|
SECURITIES
|
0
|
|
RECEIVABLES
|
11,295
|
|
ALLOWANCES
|
555
|
|
INVENTORY
|
0
|
|
CURRENT ASSETS
|
18,464
|
|
PP&E
|
18,652
|
|
DEPRECIATION
|
(2,211)
|
|
TOTAL ASSETS
|
285,377
|
|
CURRENT LIABILITIES
|
17,557
|
|
BONDS
|
145,448
|
|
PREFERRED MANDATORY
|
0
|
|
PREFERRED
|
0
|
|
COMMON
|
0
|
|
OTHER SE
|
92,563
|
|
TOTAL LIABILITY AND EQUITY
|
285,377
|
|
SALES
|
43,928
|
|
TOTAL REVENUES
|
43,928
|
|
CGS
|
46,955
|
|
TOTAL COSTS
|
46,955
|
|
OTHER EXPENSES
|
15,216
|
|
LOSS PROVISION
|
0
|
|
INTEREST EXPENSE
|
16,172
|
|
INCOME PRETAX
|
(18,243)
|
|
INCOME TAX
|
2,393
|
|
INCOME CONTINUING
|
(15,850)
|
|
DISCONTINUED
|
0
|
|
EXTRAORDINARY
|
0
|
|
CHANGES
|
0
|
|
NET INCOME
|
(15,850)
|
|
EPS BASIC
|
0
|
|
EPS DILUTED
|
0
|
|
ARTICLE 5
|
|
|
|
CIK: 0001049530
|
|
NAME: ACME Intermediate Holding, LLC
|
|
MULTIPLIER: 1,000
|
|
|
|
PERIOD TYPE
|
YEAR
|
|
FISCAL YEAR END
|
DEC 31 1998
|
|
PERIOD START
|
JAN 01 1998
|
|
PERIOD END
|
DEC 31 1998
|
|
CASH
|
953
|
|
SECURITIES
|
0
|
|
RECEIVABLES
|
11,168
|
|
ALLOWANCES
|
555
|
|
INVENTORY
|
0
|
|
CURRENT ASSETS
|
18,337
|
|
PP&E
|
18,652
|
|
DEPRECIATION
|
(2,211)
|
|
TOTAL ASSETS
|
286,845
|
|
CURRENT LIABILITIES
|
17,557
|
|
BONDS
|
187,499
|
|
PREFERRED MANDATORY
|
0
|
|
PREFERRED
|
0
|
|
COMMON
|
0
|
|
OTHER SE
|
58,402
|
|
TOTAL LIABILITY AND EQUITY
|
286,845
|
|
SALES
|
43,928
|
|
TOTAL REVENUES
|
43,928
|
|
CGS
|
46,955
|
|
TOTAL COSTS
|
46,955
|
|
OTHER EXPENSES
|
20,422
|
|
LOSS PROVISION
|
0
|
|
INTEREST EXPENSE
|
21,378
|
|
INCOME PRETAX
|
(23,449)
|
|
INCOME TAX
|
2,393
|
|
INCOME CONTINUING
|
(21,056)
|
|
DISCONTINUED
|
0
|
|
EXTRAORDINARY
|
0
|
|
CHANGES
|
0
|
|
NET INCOME
|
(21,056)
|
|
EPS BASIC
|
0
|
|
EPS DILUTED
|
0
|
|
|
Next Section
Previous Section