SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
[X] Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 1993
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ________________ to ________________
Commission File No. 0-2481
LIN BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 62-0673800
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5295 Carillon Point
Kirkland, Washington 98033
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code:
(206) 828-1902
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days. Yes X
No ___
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ X ]
The number of shares outstanding of the registrant's Common Stock
was 51,512,770 as of February 28, 1994, excluding 3,817,402 treasury
shares. The aggregate market value of the voting stock held by non-
affiliates of the registrant was $2,739,315,011 as of February 28, 1994.
(The term "affiliates" is deemed, for this purpose only, to refer only to
the directors of the registrant and to McCaw Cellular Communications, Inc.)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement relating to its 1994
annual meeting of stockholders are incorporated by reference into Part III
hereof. Such Proxy Statement will be filed with the Securities and
Exchange Commission no later than 120 days after the registrant's fiscal
year ended December 31, 1993.
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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
There are several legislative and regulatory initiatives at
the federal and state levels that are expected to result in the
allocation of additional spectrum for use for mobile
communications services, and may result in the modification of
rights held by providers of mobile communications services and
the modification of relationships between facilities-based
cellular carriers and resellers of cellular services. See "The
Company's Cellular Operations-Cellular Competition" and
"Governmental Regulation." The Company believes these
initiatives will continue and will result, in some cases, in
additional competition for the Company. One entity has already
been authorized to provide a cellular-like mobile service in
certain markets of the Company (in addition to the B Block
cellular competition) commencing in 1993 and 1994. The Company
also intends to pursue rights to offer additional mobile
communications services. In light of the uncertainty as to the
eventual outcome of any of these specific initiatives, including
as to the nature and timing of the additional competitive
services covered thereby, it is impossible to quantify the impact
of these legislative and regulatory initiatives or such
competition on the Company at this time.
1993 COMPARED TO 1992
LIN reported net revenues of $688.6 million for 1993, an
increase of 20% over 1992 net revenues of $572.5 million.
Consolidated cellular revenues increased 28% as strong cellular
subscriber growth continued. As of December 31, 1993, the number
of cellular subscribers in all of the Company's cellular systems
was 1,434,000, a 34% increase from the 1,073,000 subscribers as
of December 31, 1992. Media revenues were up 2% from 1992.
During the first quarter of 1993, the Company retroactively
adopted Statement of Financial Accounting Standard (SFAS) No.
109, "Accounting for Income Taxes," effective January 1, 1991.
The adoption of SFAS No. 109 as of January 1, 1991 required the
Company to record a cumulative effect of the change in accounting
for income taxes of $693.8 million with a corresponding increase
in deferred tax liability. The years ended December 31, 1992 and
1991 have been restated to reflect the retroactive adoption.
This change in accounting for income taxes has no effect on cash
flow and will reduce/increase the income tax expense/benefit the
Company will recognize in future periods as the difference in the
book and tax basis of the intangible assets is reduced. See
notes 2 and 8 to the Company's consolidated financial statements
included herein for additional information regarding the
restatement of prior periods' financial statements.
The Company recorded a consolidated net loss for 1993 of
$60.7 million or $1.18 per share, compared to a consolidated net
loss of $69.0 million or $1.34 per share for 1992.
Revenues
Net revenues for LIN's consolidated cellular operations
(principally New York and Dallas) increased 28% from 1992. This
increase was primarily the result of a 29% increase in
subscribers, offset, in part, by a decline in average revenue per
subscriber. Total monthly average revenue per subscriber for all
of LIN's cellular markets, weighted by LIN's ownership interest
in such markets, was approximately $83 for 1993, compared to
approximately $90 for 1992, a decrease of 8%. The decrease in
average revenue per subscriber is primarily the result of a lower
average rate per minute plus a slight decline in average minutes
of use per subscriber. The average rate has decreased due
principally to pricing actions such as actual rate decreases
and/or including more minutes for a fixed price. The Company
expects that the trend of decreasing revenue per subscriber will
continue as the number of casual users as a percentage of the
total users increases. However, the Company is continuing to
pursue opportunities to mitigate the revenue impact of this trend
through introducing new and expanded services.
To meet the changing and growing needs of its cellular
customers, the Company has an ongoing program to develop new
products and services. During 1993, the Company began offering
several new services in various of its markets including enhanced
directory assistance, voice recognition, and data transmission
services. The Company also introduced digital cellular service in
Los Angeles in October 1993 and is planning to begin offering
digital cellular services in New York and Dallas during the first
half of 1994. Continued growth in demand for basic cellular
service, as well as demand for new services such as those
discussed above should contribute to continued cellular revenue
growth for the Company.
Net revenues from the media segment increased 2% from 1992.
However, excluding cyclical political and Olympics revenues from
both years, the increase was 6%. The Company is planning to
introduce a local weather channel to be carried by the local
cable licensee in certain of its markets during 1994. In
addition, the Company completed agreements for the retransmission
of the Company's programming by substantially all cable systems
in the Company's television markets.
Operating Costs and Expenses
Direct operating expenses increased 11% from 1992 and
represented 18% of net revenues versus 19% in 1992. The increase
in this line item reflects increased cellular network operating
expenses due to the subscriber growth and increased network size,
as well as increased television news and programming expenses.
Selling, general and administrative expenses increased 27% from
1992 and increased to 38% of net revenues in 1993 versus 36% in
1992. Among the factors contributing to the increase are
additional marketing expenses associated with the increase in new
cellular subscribers. The Company added 20% more new subscribers
in 1993 than in 1992. The Company also had a large increase in
costs related to cellular customer service and support. This
increase reflects the Company's continuous effort to improve
customer retention as well as investments made to provide
efficient support for future customer growth. Depreciation
increased principally due to the addition of property and
equipment to expand and improve the Company's cellular systems.
Depreciation will continue to grow in the future as additional
capital expenditures will be required to support growth in the
cellular subscriber base and to provide new cellular services
including digital cellular. The Company expects amortization of
intangible assets will decline somewhat beginning in 1994 as
certain intangibles will become fully amortized. Any new
acquisitions or dispositions of cellular interests or other
changes in ownership interests will change the future level of
amortization expense. During the second quarter of 1993, the
Company's Dallas cellular venture adopted a plan to replace its
existing analog cellular system with a new dual-mode (analog and
digital) system. The provision for loss on cellular equipment
represents the estimated loss to be realized upon sale of the
analog cellular equipment at an amount less than its carrying
value. The $4.4 million downward adjustment of this provision in
the fourth quarter reflected the signing of a contract to sell
the equipment to a third party.
Other Income and Expenses
Equity in income of unconsolidated affiliates rose 6%.
Revenues of these ventures increased 16% due primarily to an
increase in subscribers offset, in part, by a decrease in average
revenue per subscriber. This trend is consistent with that of
LIN's consolidated cellular operations. Direct operating
expenses of these ventures increased 24% and represented 11% of
revenues versus 10% in the prior year. This increase is due
primarily to increased network operations, toll and roamer
expenses at those cellular operations. Selling, general and
administrative expenses of the ventures increased 17% and
represented 39% of revenues in 1993 and in 1992. The majority of
the increase in this line item was due to increased marketing and
sales expenditures associated with a 28% increase in the number
of new customers. Depreciation expenses of these ventures
increased 33%, reflecting additional capital expenditures for
capacity expansion and increased coverage in all the ventures,
and digital service equipment in Los Angeles. Other expenses
also grew significantly due to settlement of certain lawsuits and
equity in losses of a cable affiliate absorbed by Philadelphia.
Interest expense (which includes the amortization of the
financing and commitment fees) decreased $29.8 million from the
1992 amount due to lower interest rates and debt levels. The
Company's weighted average interest rate on its borrowings was
4.94% during 1993 and 6.43% during 1992. This decrease was due
both to reductions in the base borrowing rates as well as the
applicable margin the Company pays. The reduction in borrowings
was the result of scheduled principal repayments on the Bank
Credit Facilities (as defined below). As required under its Bank
Credit Facilities, the Company has entered into interest rate cap
and swap agreements. See Note 5 to the consolidated financial
statements contained elsewhere in this Form 10-K.
Minority interests in net income of consolidated
subsidiaries decreased $14.9 million primarily due to the
equipment write-down incurred at the Dallas cellular operations
as discussed above.
The provision for preferred stock dividends is a result of
the issuance, by LIN's subsidiary, LCH Communications, Inc.
("LCH"), of $850 million of LCH Preferred Stock. The LCH
Preferred Stock accrues dividends at the rate of 15.8% annually.
The dividends are not required to be paid in cash at the present
time. The terms of the LCH Preferred Stock, including redemption
provisions and covenants, are described further in Note 6 to the
consolidated financial statements.
The Omnibus Reconciliation Act of 1993 increased the
corporate tax rate to 35 percent from 34 percent, effective as of
January 1, 1993. Pursuant to SFAS No. 109, the Company recorded
an additional tax expense of $15.3 million, with a corresponding
increase in deferred tax liability. This change had no effect on
cash flow and will reduce the income tax expense the Company will
recognize in future periods as the difference in the book and tax
basis of intangible assets is reduced. However, the Company's
current and future taxable income will be subject to the higher
tax rate.
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1992 COMPARED TO 1991
Revenues
Net revenues of LIN's consolidated cellular operations (New
York and Dallas) increased 28% from 1991. The increase was
primarily the result of a 33% increase in subscribers offset, in
part, by a decrease in average revenue per subscriber. Total
monthly average revenue per subscriber in LIN's five cellular
markets, weighted by LIN's ownership interest in such markets,
was approximately $90 for 1992, compared to approximately $98 for
1991, a decrease of 8.1%. The decrease in average revenue per
subscriber is largely the result of a decline in minutes of use
per subscriber, due to an increase in the number of casual users
as a percentage of customer base.
Net revenues from the media segment, which includes the
Company's television broadcasting operations and its specialty
publishing business, increased 10% from 1991. Improved economic
conditions in many of the Company's market areas stimulated
growth in advertising spending. Political advertising revenues
also contributed 26% of the total increase in revenues.
Operating Costs and Expenses
Direct operating expenses increased 3% from 1991 and
represented 19% of net revenues in 1992. The decrease in direct
operating expenses as a percent of net revenues is the result of
economies and efficiencies of scale in the cellular operations
and control of programming and news production costs in the
broadcast operations. Selling, general and administrative
expenses increased 31% from 1991. As a percentage of net
revenues, selling, general and administrative expenses increased
to 36% for 1992 from 34% for 1991. The increase in selling,
general and administrative expenses is due in part to an increase
in cellular marketing expenses associated with subscriber growth
as well as investments in development of direct sales operations.
The Company also increased customer service and support costs as
a number of measures to improve systems to support future
customer growth were undertaken. Depreciation increased
principally due to capital expenditures to expand and improve the
Company's cellular systems.
Other Income and Expenses
Equity in income of unconsolidated affiliates rose 18%,
reflecting revenue and income gains in the Los Angeles, Houston
and Philadelphia cellular ventures. Revenues of these ventures
increased 22% due primarily to an increase in subscribers offset
in part by a decrease in average minutes of use per subscriber.
Selling, general and administrative expenses of these ventures
were up 28%, largely from higher marketing and customer service
costs associated with the increased subscriber levels.
Interest expense (which includes the amortization of the
financing and commitment fees) decreased $42.9 million from 1991
levels due to lower interest rates and debt levels. This
interest rate decrease was due primarily to reductions in the
base borrowing rates the Company pays. The reduction in
borrowing was the result of scheduled principal payments on the
Bank Credit Facilities. As required under its Bank Credit
Facilities, the Company has entered into interest rate cap and
swap agreements. See Note 5 to the consolidated financial
statements contained elsewhere in this Form 10-K.
Minority interests in net income of consolidated
subsidiaries increased $4.7 million primarily due to the increase
in income generated at the New York and Dallas ventures.
LIQUIDITY AND CAPITAL RESOURCES
The Company utilizes capital primarily to expand and improve
its cellular systems, to make acquisitions of cellular interests,
to improve broadcasting operations and to make interest and
principal payments on its indebtedness. The Company's cellular
operations continue to require substantial capital to increase
system capacity and coverage areas, to enable provision of new
services, and to expand and improve administrative support
systems. In 1993, the Company began the replacement of the
existing cellular system in Dallas with a new system provided by
L.M. Ericsson, the system vendor in all of the Company's other
markets. This project is expected to cost approximately $100
million, of which approximately $55 million was expended during
1993. Additionally, the Company continues to invest in digital
cellular equipment and in October 1993 announced the introduction
of digital cellular service in the Los Angeles market. Customer
trials of digital service are continuing in New York with the
introduction of digital service for both New York and Dallas
planned for the first half of 1994. Although the conversion to
digital services requires significant initial expenditures, there
are several advantages such as initially, a three-fold capacity
expansion and the establishment of a platform for future service
enhancement such as short message, caller ID, improved data
transmission and longer phone battery life. The Company expects
its additional capital expenditures in 1994 in connection with
the planned expansion of digital service to be approximately $20
million and otherwise expects that it will continue to invest
cash to grow its businesses at levels similar to or in excess of
its 1993 investing activities. During October of 1993, the
Company completed the acquisition of the Texas-17 RSA for
approximately $36 million. This market is adjacent to the
Houston market, which will increase the Company's coverage area
in that region. The Company also has entered into an agreement
to purchase the Connecticut-1 RSA adjacent to the New York market
for approximately $30 million. That transaction is expected to
be completed during 1994.
The Company's principal sources of funds are provided by
operations and two bank credit facilities, a Cellular Facility
and a Broadcast Facility (together, the "Bank Credit
Facilities"). Under the Company's Cellular Facility, LIN
Cellular Network ("LCNI"), a wholly-owned subsidiary of the
Company, had $1.48 billion outstanding and $240 million available
as of December 31, 1993. Under the Company's Broadcast Facility,
LIN Television Corporation ("LTC"), a wholly-owned subsidiary of
the Company, had $222 million outstanding and no additional funds
available as of December 31, 1993.
Under its Bank Credit Facilities, the Company must remain in
compliance with a series of financial covenants which compare the
levels of the Company's cellular and broadcast indebtedness to
its cellular and broadcast cash flows as of the end of each
quarter. During the second quarter of 1993, the Company
renegotiated certain terms of its Cellular Facility (see Note 5
to the consolidated financial statements contained elsewhere in
this Form 10-K). Although the Company is currently in compliance
with all covenants under the Bank Credit Facilities, the ratios
of indebtedness to cash flow required to be maintained by the
Bank Credit Facilities decrease through 1994. It is necessary
over that time period for the Company either to reduce debt or to
increase cash flow to remain in compliance.
Any failure to comply with these or other covenants and
restrictions contained in the Company's indebtedness could result
in a default thereunder. The ability of the Company to comply
with these provisions may be affected by events beyond its
control. If the Company fails to service its indebtedness or
satisfy the covenants contained in the Bank Credit Facilities or
the agreements relating to its other indebtedness, the Company
will be in default. In such an event, holders of the Company's
indebtedness will be able to exercise their rights including the
right to declare all the borrowed funds and interest thereon
immediately due and payable. If the Company were unable to repay
such indebtedness, the holders of such indebtedness could proceed
against their collateral, if any. Substantially all of the
Company's assets, including its stock in subsidiaries and its
ownership interests in entities holding cellular licenses, are
pledged or encumbered as security for indebtedness. Further
details with respect to the Company's Bank Credit Facilities are
contained in Note 5 to the consolidated financial statements
contained elsewhere in this Form 10-K.
The Company's assets are essentially divided into four
pools, three of which are subject to the restrictions of the Bank
Credit Facilities and the Preferred Stock. All of the Company's
cellular operations other than Philadelphia are owned by LCNI and
are subject to the restrictions of the Cellular Facility. All of
the Company's broadcast operations other than WOOD-TV are owned
by LTC and are subject to the restrictions of the Broadcast
Facility. The Company's Philadelphia cellular interest,
television station WOOD-TV and its GuestInformant business, all
held by subsidiaries, are subject to the restrictions of the
Preferred Stock (see Note 6 to the consolidated financial
statements). With limited exceptions, none of the cash flows,
proceeds of borrowings or proceeds from sales of assets from any
of these pools are available to meet the cash needs of the other
pools or of the Company in general. The Company's other assets
not described above (principally its interest in a mobile
satellite corporation and some of its cash) are held free of any
restriction.
While the Company has generated sufficient cash to meet its
expenditure requirements, the Company continues to have
substantial debt service, and other operating and capital
requirements. If cash generated from operations is not
sufficient to fund those requirements, the Company will have to
borrow additional amounts under its Cellular Facility. There are
conditions which must be satisfied before the banks will be
required to lend those additional amounts. If these conditions
are not satisfied, the banks may conclude it is not in their best
interest to lend additional amounts to the Company. If the
Company were unable to borrow the required amounts from the
banks, it may seek to issue additional debt through a private or
public offering, sell equity or sell certain cellular interests,
broadcast properties or other assets. There can be no assurance
that the Company will be able to obtain such additional financing
or sell assets when needed, or if it is able to obtain such
financing or sell assets, that the terms will be favorable to the
Company. Finally, the Company will be required by the terms of
its Bank Credit Facilities to apply the proceeds of asset sales
under certain circumstances not reinvested in similar assets to
the repayment of loans thereunder. While the Company expects to
have sufficient internally generated funds to repay its
indebtedness at maturity, there can be no assurance that this
will occur.
The Company's indebtedness is due and payable over several
years, with the amortization of the Broadcast Facility and
Cellular Facility having commenced in 1991 and 1993,
respectively. See Note 5 to the consolidated financial
statements contained elsewhere in this Form 10-K. While the
Company expects to have sufficient internally generated funds to
repay its indebtedness when due, there can be no assurance that
this will occur. If the Company does not have sufficient
internally generated funds, it may issue additional indebtedness,
sell equity or sell assets to refinance such maturing
indebtedness. There can be no assurance that such issuances or
sales will be possible or, if carried out, that the terms thereof
will be favorable to the Company or its stockholders. To date
the Company has obtained funds to meet its obligations primarily
through the issuance of indebtedness.
Cash provided by operating activities totalled $219.6
million in 1993, compared to $143.3 million in 1992. The
increase was primarily due to improved operating margins and
decreases in amounts paid for interest, partially offset by an
increase in tax payments for the year. The Company's Los Angeles
cellular affiliate continues to provide a substantial
contribution to the Company's operating cash flow. In the event
the California economy remains weak or the business of the Los
Angeles affiliate is otherwise adversely affected, the Company's
cash flow could similarly be adversely affected. The Company's
accounts receivable increased at a rate somewhat higher than the
increase in revenues due to a combination of an increase in
subscriber receivables as a result of accelerating subscriber
growth near the end of the year, an increase in receivables from
dealers for cellular equipment purchases and various increases in
other miscellaneous receivables.
The Company used $168.5 million of cash and cash equivalents
for investing activities during 1993, primarily as a result of
capital expenditures and cellular acquisitions offset by net
advances from certain affiliates. As mentioned earlier, the
Dallas cellular system change-out is expected to cost
approximately $100 million, with approximately $55 million having
been expended during 1993. During 1992, the Company expended a
net of $85.7 million for investing activities. This amount
included $71.5 million of capital expenditures and $26.7 million
of additional advances to unconsolidated cellular affiliates.
During 1993, the Company made scheduled principal repayments
of $37.6 million and $33.8 million on its Broadcast Facility and
Cellular Facility, respectively. During 1992, the Company made
scheduled principal repayments of $31.8 million on its Broadcast
Facility. Scheduled principal payments on the Bank Credit
Facilities increase to $146.9 million during 1994.
It is the Company's policy to carefully monitor the state of
its business, cash requirements and capital structure. From time
to time, the Company may enter into transactions pursuant to
which debt is extinguished, including sales of assets or equity,
joint ventures, reorganizations or recapitalizations. There can
be no assurance that any further such transactions will be
undertaken or, if undertaken, will be favorable to stockholders.
Inflation
The Company believes that its businesses are affected by
inflation to an extent no greater than other businesses are
generally affected.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements and
supplementary data, together with the report of Ernst & Young LLP,
independent auditors, are included elsewhere herein. Reference
is made to the "Index to Financial Statements" immediately
preceding page F-1.
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PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
ON FORM 8-K
(a)(1) Financial Statements Filed
Report of Ernst & Young LLP, Independent Auditors
Consolidated Financial Statements of the Company
- Consolidated Balance Sheets at December 31, 1993 and 1992
- Consolidated Statements of Operations for the Years Ended
December 31, 1993, 1992 and 1991
- Consolidated Statements of Stockholders' Deficit for the
Years Ended December 31, 1993, 1992 and 1991
- Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1992 and 1991
- Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
Independent Auditors' Report
Report of Independent Public Accountants
Combined Financial Statements of the Company's
Unconsolidated Affiliates
- Combined Balance Sheets at December 31, 1993 and 1992
- Combined Statements of Income for the Years Ended
December 31, 1993, 1992 and 1991
- Combined Statements of Ventures' Equity for the Years
Ended December 31, 1993, 1992 and 1991
- Combined Statements of Cash Flows for the Years Ended
December 31, 1993, 1992 and 1991
- Notes to the Combined Financial Statements
(a)(2) Financial Statement Schedules Filed
Financial Statement Schedules of the Company
VIII- Valuation and Qualifying Accounts and
Reserves for the Years Ended December 31,
1993, 1992 and 1991
Financial Statement Schedules of the Company's
Unconsolidated Affiliates
II - Amounts Receivable from Related Parties for the
Years Ended December 31, 1993, 1992 and 1991
IV - Indebtedness to Related Parties for the Years
Ended December 31, 1993, 1992 and 1991
V - Property and Equipment for the Years Ended
December 31, 1993, 1992 and 1991
VI- Accumulated Depreciation and Amortization of
Property and Equipment for the Years Ended
December 31, 1993, 1992 and 1991
VIII- Valuation and Qualifying Accounts and Reserves
for the Years Ended December 31, 1993, 1992 and
1991
X - Supplementary Income Statement Information for
the Years Ended December 31, 1993, 1992 and
1991
All other schedules have been omitted because the
information is not required or is not applicable, or because the
information required is included in the financial statements or
the notes thereto.
(a)(3) Exhibits
3.1 Restated Certificate of Incorporation of LIN
Broadcasting Corporation (incorporated by reference
to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1992)
3.2 By Laws, as amended (incorporated by reference to
Exhibit 3(b) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1989)
10.1* 1969 Stock Option Plan, as amended
10.2* Profit Sharing Plan, as amended and restated
effective January 1, 1989 (incorporated by reference
to Exhibit 10.2 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1992)
10.3* Deferred Compensation Plan, as amended (incorporated
by reference to Exhibit 10(d) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1989)
10.4 Television affiliation contract for WAND-TV with
American Companies, Inc., dated February 8, 1990
(incorporated by reference to Exhibit 10.4 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.5 Television affiliation contract for WAVY-TV with
National Broadcasting Company, Inc., dated December
17, 1988 (incorporated by reference to Exhibit 10(f)
to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989)
10.6 Television affiliation contract for KXAS-TV with
National Broadcasting Company, Inc., dated October
5, 1989, as amended (incorporated by reference to
Exhibit 10.6 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.7 Television affiliation contract for KXAN-TV with
National Broadcasting Company, Inc., dated July 1,
1989, as amended (incorporated by reference to
Exhibit 10(h) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1989)
10.8 Television affiliation contract for WOTV-TV with
National Broadcasting Company, Inc., dated January
1, 1981, as amended (incorporated by reference to
Exhibit 10.8 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.9 Television affiliation contract for WISH-TV with
CBS, Inc., dated November 1, 1992 (incorporated by
reference to Exhibit 10.9 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.10 Television affiliation contract for WANE-TV with
CBS, Inc., dated November 1, 1992 (incorporated by
reference to Exhibit 10.10 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.11 Partnership Agreement, dated as of March 18, 1983,
among LIN Cellular Communications Corporation,
Metromedia, Inc., and Cellular Systems, Inc.
(incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.12 Partnership Agreement, dated as of June 22, 1983,
between Los Angeles Cellular Corporation and LIN
Cellular Communications Corporation (incorporated by
reference to Exhibit 10.12 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.13 Stock Agreement, dated June 5, 1982, by and among
Radio Broadcasting Company, LIN Broadcasting
Corporation, LIN Cellular Communications
Corporation, Metromedia, Inc., and AWACS, Inc.
(incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.14 Amended and Restated Partnership Agreement, dated as
of November 9, 1984, among LIN Cellular
Communications Corporation, D/FW Signal, Inc., MCI
Cellular Telephone Company, Cellular Mobile Systems,
Inc., and Mid-America Cellular Systems, Inc.
(incorporated by reference to Exhibit 10.14 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.15 Amended and Restated Partnership Agreement, dated as
of December 12, 1984, among Metro Mobile CTS,
Cellular Systems, Inc., and Houston Mobile Cellular
Communications Company (incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.16 Partnership Agreement, dated as of December 12,
1984, among American Mobile Communications of
Houston and the Gulf, Houston Cellular Corporation,
LIN Cellular Communications Corporation, MCI
Cellular Telephone Company, Charisma Communications
Corp. of the Southwest, and Cellular Mobile Systems
of Texas, Inc. (incorporated by reference to Exhibit
10.16 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992)
10.17 Partnership Agreement, dated as of September 1991,
by and between Galveston Mobile Corporation and LIN
Cellular Communications Corporation (incorporated by
reference to Exhibit 10.17 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.18 Agreement, dated December 11, 1989, between the
Company, MMM Holdings, Inc. and McCaw Cellular
Communications, Inc. (incorporated by reference to
Exhibit (c)(6) to Amendment No. 24 to Schedule 14D-1
and Amendment No. 30 to Schedule 13D relating to the
Offer filed by MMM Holdings, Inc. and McCaw with the
Securities and Exchange Commission on December 12,
1989)
10.19 Private Market Value Guarantee, dated December 11,
1989, between the Company and McCaw Cellular
Communications, Inc. (incorporated by reference to
Exhibit (c)(7) to Amendment No. 24 to Schedule 14D-1
and Amendment No. 30 to Schedule 13D relating to the
Offer filed by MMM Holdings, Inc. and McCaw with the
Securities and Exchange Commission on December 12,
1989)
10.20 Exercise, dated October 27, 1989, of the Company's
Rights of First Refusal to Acquire the Interests of
Metromedia Company in Metro One Cellular Telephone
Company, and Agreement of Purchase and Sale, dated
October 3, 1989, by and between McCaw Cellular
Communications, Inc. and Metromedia Company
(incorporated by reference to Exhibit 10(u) to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989)
<PAGE>
10.21* Form of Severance Agreement between the Company and
Certain Officers of the Company (incorporated by
reference to Exhibit 10(u) to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1989)
10.22 Credit Agreement, dated as of August 1, 1990, among
LIN Cellular Network, Inc., Morgan Guaranty Trust
Company of New York and the Lenders Named therein
(incorporated by reference to Exhibit 10.21 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990)
10.23 Credit Agreement, dated as of August 1, 1990, among
LIN Television Corporation, The Toronto-Dominion
Bank Trust Company, and the Lenders Named therein
(incorporated by reference to Exhibit 10.22 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990)
10.24 Agreement for Change-Out System, dated as of October
2, 1990, among Ericsson Radio Systems Inc., Ericsson
GE Mobile Communications Holding Inc. and Cellular
Telephone Company (incorporated by reference to
Exhibit 10.23 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990)
10.25 Stock Acquisition Agreement, dated as of May 7,
1990, between LCH Cellular, Inc. and Metromedia
Company (incorporated by reference to Exhibit (b)(i)
to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1990)
10.26 Restated Certificate of Incorporation of LCH
Communications, Inc. (formerly LCH Cellular, Inc.)
(incorporated by reference to Exhibit (b)(ii) to the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990)
10.27 Stockholders Agreement, dated as of August 10, 1990,
among Metromedia Company, LCH Holdings, Inc. and LCH
Communications, Inc. (incorporated by reference to
Exhibit (b)(iii) to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1990)
10.28* Employee Stock Purchase Plan (incorporated by
reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-8 dated March 13,
1991 (Registration No. 33-39282))
10.29* Employment Agreement, dated as of October 17, 1990
of Gary Chapman (incorporated by reference to
Exhibit 10.28 to the Company's Annual Report on Form
10-K for the year ended December 31, 1991)
10.30* Employment Agreement, dated as of April 16, 1991, of
Donald Guthrie (incorporated by reference to Exhibit
10.30 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1991)
10.31* LIN Broadcasting Corporation Retirement Plan, as
amended and restated as of January 1, 1989
(incorporated by reference to Exhibit 10.31 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1991). Amendment thereto dated
January 1, 1993 (incorporated by reference to
Exhibit 10.32 to the Company's Annual Report on Form
10-K for the year ended December 31, 1992)
10.32* LIN Broadcasting Corporation Supplemental Benefit
Retirement Plan dated January 1, 1990 (incorporated
by reference to Exhibit 10.33 to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.33* LIN Broadcasting Corporation 401(K) Plan & Trust,
dated as of July 1, 1991 (incorporated by reference
to Exhibit 10.32 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1991)
10.34* LIN Employee Plans, established in connection with
the McCaw-AT&T Merger Agreement
10.35* LIN Broadcasting Deferred Compensation Plan, dated
December 15, 1993.
21 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP**
23.2 Consent of Deloitte & Touche
23.3 Consent of Arthur Andersen & Co.
24 Powers of Attorney with respect to Certain
Signatures
------------------------------
* Management contract or compensatory plan or arrangement.
** Filed herewith.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
December 31, 1993.<PAGE>
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly
caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
LIN BROADCASTING CORPORATION
By: DONALD GUTHRIE
----------------------
Donald Guthrie
Senior Vice President-
Finance
September 20, 1994
<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Report of Ernst & Young LLP, Independent Auditors..........F-1
Consolidated Financial Statements of the Company
Consolidated Balance Sheets at December 31,
1993 and 1992.........................................F-2
Consolidated Statements of Operations for the Years
Ended December 31, 1993, 1992 and 1991................F-4
Consolidated Statements of Stockholders' Deficit
for the Years Ended December 31, 1993,
1992 and 1991.........................................F-6
Consolidated Statements of Cash Flows for the Years
Ended December 31, 1993, 1992 and 1991................F-7
Notes to Consolidated Financial Statements..............F-10
Report of Ernst & Young LLP, Independent Auditors.........F-31
Independent Auditors' Report..............................F-32
Report of Independent Public Accountants..................F-33
Combined Financial Statements of the Company's
Unconsolidated Affiliates
Combined Balance Sheets at December 31,
1993 and 1992 .......................................F-34
Combined Statements of Income for the Years Ended
December 31, 1993, 1992 and 1991.....................F-36
Combined Statements of Ventures' Equity for the Years
Ended December 31, 1993, 1992 and 1991...............F-37
Combined Statements of Cash Flows for the Years
Ended December 31, 1993, 1992 and 1991...............F-38
Notes to Combined Financial Statements.................F-41
Financial Statement Schedules of the Company
VIII - Valuation and Qualifying Accounts and
Reserves for the Years Ended
December 31, 1993, 1992 and 1991................F-49
Financial Statement Schedules of the Company's Unconsolidated
Affiliates
II - Amounts Receivable from Related Parties
for the Years Ended December 31,
1993, 1992 and 1991.............................F-50
IV - Indebtedness to Related Parties for the Years
Ended December 31, 1993, 1992 and 1991..........F-51
V - Property and Equipment for the Years Ended
December 31, 1993, 1992 and 1991................F-52
VI- Accumulated Depreciation and Amortization
of Property and Equipment for the Years
Ended December 31, 1993, 1992 and 1992..........F-53
VIII- Valuation and Qualifying Accounts and
Reserves for the Years Ended December 31,
1993, 1992 and 1991.............................F-54
X - Supplementary Income Statement Information
for the Years Ended December 31,
1993, 1992 and 1991............................F-55<PAGE>
<PAGE> F-1
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Stockholders of
LIN Broadcasting Corporation
We have audited the accompanying consolidated balance sheets of
LIN Broadcasting Corporation and subsidiaries as of December 31,
1993 and 1992, and the related consolidated statements of
operations, stockholders' deficit, and cash flows for each of the
three years in the period ended December 31, 1993. Our audits
also included the financial statement schedules listed in the
Index at Item 14(a). These financial statements and schedules
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform our audits 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 consolidated
financial position of LIN Broadcasting Corporation and
subsidiaries at December 31, 1993 and 1992, and the consolidated
results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993, in conformity
with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedules, when
considered in relation to the basic financial statements taken as
a whole, present fairly, in all material respects, the
information set forth therein.
ERNST & YOUNG LLP
Seattle, Washington
February 4, 1994
<PAGE>
<PAGE> F-2
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
(Dollars in thousands)
ASSETS 1993 1992
- - ----------------------------------------------------------------
Current Assets:
Cash and cash equivalents $86,366 $102,909
Marketable securities 16,465 19,586
Accounts receivable, less allowance
for doubtful accounts
(1993-$18,138; 1992-$13,398) 156,784 122,749
Film contract rights, prepaid
expenses and other
current assets 21,960 18,334
- - ----------------------------------------------------------------
Total current assets 281,575 263,578
- - ----------------------------------------------------------------
Property and equipment, at cost,
less accumulated depreciation 405,762 348,179
Other noncurrent assets 61,807 68,911
Investments in and advances to
unconsolidated affiliates 264,172 244,317
Cellular FCC licenses, less
accumulated amortization
(1993-$148,672; 1992-$104,962) 1,627,371 1,634,202
Other intangible assets,
less accumulated amortization
(1993-$145,853; 1992-$109,355) 268,836 303,723
- - ----------------------------------------------------------------
Total Assets $2,909,523 $2,862,910
================================================================
(continued)<PAGE>
<PAGE> F-3
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (continued)
DECEMBER 31, 1993 AND 1992
(Dollars in thousands)
LIABILITIES AND STOCKHOLDERS' DEFICIT 1993 1992
- - ----------------------------------------------------------------
Current Liabilities:
Current portion of long-term debt $146,891 $75,344
Accrued income taxes 34,241 42,828
Accounts payable 37,975 39,169
Unearned revenues 25,880 20,000
Accrued interest payable 2,685 5,444
Payable to McCaw 16,064 12,261
Other accruals 87,108 75,112
- - ----------------------------------------------------------------
Total current liabilities 350,844 270,158
- - ----------------------------------------------------------------
Long-term debt 1,551,447 1,694,338
Deferred income taxes 735,049 708,402
Film contract obligations and
other noncurrent liabilities 13,091 11,919
Minority interests in equity of
consolidated subsidiaries 56,209 53,881
Redeemable preferred stock of
a subsidiary 1,305,248 1,170,948
Stockholders' Deficit:
Common stock, $.01 par value,
150,000,000 shares
authorized, 55,329,000
shares issued 553 553
Paid-in capital 224,689 222,081
Deficit (1,150,205) (1,089,478)
- - ----------------------------------------------------------------
(924,963) (866,844)
- - ----------------------------------------------------------------
Less common stock in treasury,
at cost (1993-3,826,000 shares;
1992-3,904,000 shares) 177,402 179,892
- - ----------------------------------------------------------------
Total stockholders' deficit (1,102,365) (1,046,736)
- - ----------------------------------------------------------------
Total Liabilities and
Stockholders' Deficit $2,909,523 $2,862,910
================================================================
See accompanying notes.<PAGE>
<PAGE> F-4
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands, except per share amounts)
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Revenues $688,557 $572,521 $468,137
Operating Costs and Expenses:
Direct operating 123,081 110,966 107,750
Selling, general and administrative 261,549 205,365 157,267
Corporate expenses 8,340 7,571 12,714
Depreciation 45,940 39,676 29,869
Amortization of intangible assets 79,190 78,928 79,107
Provision for loss on
cellular equipment 42,152 -- --
- - --------------------------------------------------------------------------------------
560,252 442,506 386,707
- - --------------------------------------------------------------------------------------
Operating Income 128,305 130,015 81,430
- - --------------------------------------------------------------------------------------
Other Income (Expenses):
Equity in income of unconsolidated
affiliates 103,125 96,977 82,338
Investment and other income 7,015 9,295 12,367
Litigation settlement -- 7,032 --
Interest expense (95,407) (125,218) (168,113)
- - --------------------------------------------------------------------------------------
14,733 (11,914) (73,408)
- - --------------------------------------------------------------------------------------
Income Before Income Tax Expense,
Minority Interests and Cumulative
Effect of the Change in Accounting
for Income Taxes 143,038 118,101 8,022
Income Tax Expense 65,569 33,897 3,888
- - --------------------------------------------------------------------------------------
(continued)<PAGE>
<PAGE> F-5
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands, except per share amounts)
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income Before Minority Interests
and Cumulative Effect of
the Change in Accounting
for Income Taxes 77,469 84,204 4,134
Minority Interests:
In net income of consolidated
subsidiaries (3,896) (18,856) (14,130)
Provision for preferred stock
dividends of a subsidiary (134,300) (134,300) (134,300)
- - --------------------------------------------------------------------------------------
Loss Before Cumulative Effect of
the Change in Accounting for
Income Taxes (60,727) (68,952) (144,296)
- - --------------------------------------------------------------------------------------
Cumulative Effect of the
Change in Accounting
for Income Taxes -- -- (693,835)
- - --------------------------------------------------------------------------------------
Net Loss ($60,727) ($68,952) ($838,131)
======================================================================================
Per share amounts:
Loss before cumulative effect of
the change in accounting for
income taxes ($1.18) ($1.34) ($2.81)
Cumulative effect of the change
in accounting for income taxes -- -- (13.50)
- - --------------------------------------------------------------------------------------
Net loss ($1.18) ($1.34) ($16.31)
======================================================================================
See accompanying notes.
<PAGE>
<PAGE> F-6
LIN BROADCASTING CORPORATION AND
CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
Total
Common Paid-in Treasury Stockholders'
Stock Capital Deficit Stock Deficit
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1990 $553 $220,754 ($182,395) ($181,246) ($142,334)
Net loss -- -- (838,131) -- (838,131)
3,630 shares purchased for
treasury -- -- -- (193) (193)
30,263 shares issued from
treasury for stock option exercises
and related tax benefits -- 1,012 -- 1,073 2,085
- - ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1991 553 221,766 (1,020,526) (180,366) (978,573)
Net loss -- -- (68,952) -- (68,952)
17,911 shares purchased for
treasury -- -- -- (1,429) (1,429)
39,192 shares issued from treasury
for employee stock purchase plan,
stock option exercises and
related tax benefits -- 315 -- 1,903 2,218
- - ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1992 553 222,081 (1,089,478) (179,892) (1,046,736)
Net loss -- -- (60,727) -- (60,727)
19,218 shares purchased for
treasury -- -- -- (1,798) (1,798)
97,040 shares issued from treasury
for employee stock purchase plan,
stock option exercises and
related tax benefits -- 2,608 -- 4,288 6,896
- - ----------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1993 $553 $224,689 ($1,150,205) ($177,402) ($1,102,365)
- - ----------------------------------------------------------------------------------------------------------------------
See accompanying notes.
<PAGE>
<PAGE> F-7
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net Loss ($60,727) ($68,952) ($838,131)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 125,130 118,604 108,976
Amortization of cost associated
with long-term debt 9,793 10,477 10,002
Litigation settlement -- (5,900) --
Provision for loss on cellular equipment 42,152 -- --
Minority interests in net income of
consolidated subsidiaries 3,896 18,856 14,130
Provision for preferred stock dividends 134,300 134,300 134,300
Provision for losses on accounts
receivable 14,359 14,930 13,130
Cumulative effect of accounting change -- -- 693,835
Equity in income of unconsolidated
affiliates (103,125) (96,977) (82,338)
Changes in operating assets
and liabilities:
Increase in accounts receivable (48,394) (34,554) (34,858)
Decrease in federal tax receivable -- -- 47,825
Increase in other current assets (3,626) (2,580) (3,545)
Cash received from equity investees 67,447 70,927 45,295
Increase (decrease) in accrued
income taxes (8,587) 8,359 12,543
Increase (decrease) in other
current liabilities 24,041 (2,346) 37,488
Increase (decrease) in deferred
income taxes 26,647 (6,563) (9,971)
Decrease in minority interests (1,568) (9,268) (646)
Other, net (2,184) (6,017) 14,564
- - --------------------------------------------------------------------------------------
Total adjustments 280,281 212,248 1,000,730
- - --------------------------------------------------------------------------------------
Net cash provided by
operating activities 219,554 143,296 162,599
(continued)<PAGE>
<PAGE> F-8
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTING ACTIVITIES:
Proceeds from sales of
marketable securities 46,677 34,780 63,657
Purchases of marketable securities (43,705) (22,260) (85,938)
Capital expenditures (150,475) (71,505) (166,521)
Cellular acquisitions (36,879) -- --
Investments in and advances
to/from unconsolidated
affiliates, net 15,854 (26,709) (13,476)
- - --------------------------------------------------------------------------------------
Net cash used for investing
activities ($168,528) ($85,694) ($202,278)
- - --------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds from long-term bank loans $ -- $ -- $120,000
Repayment of long-term bank loans (71,344) (31,818) (58,500)
Proceeds from common stock issued
for stock purchase plan, stock options
and related tax benefits 5,573 1,923 1,206
Purchase of common stock for treasury (1,798) (1,429) (193)
- - --------------------------------------------------------------------------------------
Net cash provided by (used for)
financing activities (67,569) (31,324) 62,513
- - --------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and
Cash Equivalents (16,543) 26,278 22,834
- - --------------------------------------------------------------------------------------
Cash and Cash Equivalents at Beginning
of Year 102,909 76,631 53,797
- - --------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $86,366 $102,909 $76,631
- - --------------------------------------------------------------------------------------
(Continued) <PAGE>
<PAGE> F-9
LIN BROADCASTING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<S> <C> <C> <C>
Cash paid (received) for:
Interest $88,373 $119,823 $162,251
Income taxes $47,612 $34,384 ($47,216)
See accompanying notes.
</TABLE>
<PAGE>
<PAGE> F-10
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- Organization and Operations
The Company is engaged in the ownership and operation of cellular
telephone systems, television stations and a publishing company.
McCaw Cellular Communications, Inc. ("McCaw") currently owns
approximately 52% of the outstanding shares of the Company.
NOTE 2 -- Significant Accounting Policies
PRINCIPLES OF CONSOLIDATION: The consolidated financial
statements include the accounts of the Company, its majority-
owned subsidiaries and cellular ventures in which the Company has
voting control. The Company's investments in cellular ventures
in which it has voting interests of at least 20% but not more
than 50% (Los Angeles, Philadelphia, Houston and Galveston) are
accounted for on the equity method. All significant intercompany
accounts and transactions have been eliminated.
CELLULAR FCC LICENSES AND OTHER INTANGIBLE ASSETS: Cellular FCC
licenses represent costs to acquire cellular licenses authorized
by the Federal Communications Commission. Other intangible
assets primarily represent costs allocated in acquisitions to
network affiliations, goodwill and other intangibles. Intangible
assets acquired subsequent to October 31, 1970 are being
amortized over the lesser of their useful lives or forty years,
in accordance with Accounting Principles Board Opinion No. 17.
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES: Certain highly
liquid, short-term investments which have a maturity of three
months or less when purchased are considered cash equivalents.
The Company's excess cash is invested in U.S. Government
obligations and money market instruments. Investments which do
not meet the definition of a cash equivalent are classified as
marketable securities. Marketable securities are carried at
aggregate cost which approximates market value. Net realized
gains and losses on security transactions are determined on a
specific cost basis.
PROPERTY AND EQUIPMENT: Property and equipment, including
renewals and betterments to existing facilities, are recorded at
cost. Depreciation is computed on a straight-line basis over the
estimated useful lives of the assets.
INCOME TAXES: Accelerated depreciation methods are used for tax
purposes. The Company provides deferred taxes relating to these
and other timing differences.
During the first quarter of 1993, the Company retroactively
adopted SFAS No. 109, "Accounting for Income Taxes," effective
January 1, 1991 and has restated its 1992 and 1991 financial
statements. See Note 8 for further discussion.<PAGE>
<PAGE> F-11
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 -- Significant Accounting Policies (continued)
NET LOSS PER SHARE: Net loss per share is based upon the
weighted average common shares outstanding during the year.
Common stock equivalents are excluded from the calculation when
their effect is antidilutive. Average common shares outstanding
for the years ended December 31, 1993, 1992 and 1991 totalled
51,445,000, 51,417,000 and 51,395,000, respectively.
FILM CONTRACT RIGHTS: Film contract rights are recorded as
assets when the films are available for broadcasting, are
amortized over the estimated usage of the films, and are
classified as current or noncurrent on that basis.
REVENUE RECOGNITION: Cellular airtime is recorded as revenue
when earned. Access fees that are billed in advance to cellular
customers are recognized as revenue in the period when the
cellular services are provided. Broadcast revenue is billed when
contracted and recognized during the period the advertising is
aired. Publishing revenue and the related costs and commissions
are recognized as income during the year that the edition in
which the advertising appears is published.
INTEREST RATE CAP AND SWAP AGREEMENTS: The costs of interest
rate cap agreements are capitalized and charged to interest
expense over the lives of the related contracts. See Note 5 for
additional discussion.
NOTE 3 -- Property and Equipment
The major classifications of property and equipment are as
follows:
December 31,
1993 1992
(in thousands)
Land $5,860 $5,855
Buildings and improvements 48,307 43,621
Broadcasting and publishing
equipment 70,001 67,475
Cellular equipment 412,824 358,235
Construction in progress
and other 154,061 74,121
------- -------
691,053 549,307
Less accumulated depreciation 285,291 201,128
------- -------
$405,762 $348,179
======== =======
<PAGE>
<PAGE> F-12
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 -- Investments in and Advances to Unconsolidated
Affiliates
As indicated in Note 2, the Company's investments in cellular
partnerships or corporations in which it has voting interests of
at least 20% but not more than 50% (Los Angeles, Philadelphia,
Houston and Galveston) are accounted for on the equity method.
At December 31, 1993 and 1992, the investments accounted for
under the equity method exceeded the Company's share of the
underlying net assets by approximately $30.1 million and $35.3
million, respectively.
The Company has direct and indirect equity interests in American
Mobile Satellite Corporation ("AMSC") totalling 7.6% and 19.6% as
of December 31, 1993 and 1992, respectively. These interests are
accounted for at cost and amounted to $27.3 million as of
December 31, 1993 and 1992. The fair value of the Company's
investment in AMSC is estimated at $38.1 million based on the
closing price of AMSC's publicly traded equity on December 31,
1993.
The Company also has loans and advances totalling $10.2 and $26
million as of December 31, 1993 and 1992, respectively, to
Houston Cellular Telephone Company, AMSC and Galveston Cellular
Telephone Company. The interest rates on these loans range from
prime plus 1% (7% as of December 31, 1993) to 12%. The
maturities range from 1994 to 2002.
The following is a summary of combined results of operations,
assets, liabilities and equity of significant investments
accounted for under the equity method:<PAGE>
<PAGE> F-13
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 -- Investments in and Advances to Unconsolidated Affiliates (Continued)
<CAPTION>
At 100% 1993 1992 1991
(in thousands)
<S> <C> <C> <C>
Net revenues $ 704,550 $ 606,277 $ 494,549
Net income $ 255,685 $ 238,084 $ 207,779
LIN's equity in income $ 103,125 $ 96,977 $ 82,338
Current assets $ 183,577 $ 137,553 $ 119,500
Noncurrent assets 488,052 423,676 366,278
--------- --------- ---------
Total assets $ 671,629 $ 561,229 $ 485,778
========= ========= ==========
Current liabilities $ 127,976 $ 83,152 $ 75,622
Noncurrent liabilities 100,950 130,932 42,516
--------- --------- ---------
Total liabilities 228,926 214,084 118,138
Equity 442,703 347,145 367,640
--------- --------- ---------
Total liabilities and equity $ 671,629 $ 561,229 $ 485,778
========= ========= ==========
</TABLE>
<PAGE>
<PAGE> F-14
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 -- Long-Term Debt
Long-term debt consists of the following:
December 31,
1993 1992
(in thousands)
Bank Credit Facilities
LIN Television Corporation:
Term credit facility $ 159,088 $ 189,682
Revolving credit facility 63,000 70,000
---------- ----------
222,088 259,682
LIN Cellular Network Inc.:
Term credit facility 1,316,250 1,350,000
Revolving credit facility 160,000 160,000
---------- ----------
1,476,250 1,510,000
---------- ----------
1,698,338 1,769,682
Less current portion of long-
term debt 146,891 75,344
---------- ----------
$1,551,447 $1,694,338
========== ==========
The Company has two bank facilities: a Cellular Facility and a
Broadcast Facility. LIN Cellular Network, Inc. ("LCNI"), a
wholly owned subsidiary of the Company (owning all of the
Company's cellular operations other than Philadelphia), has an
aggregate of $1.48 billion outstanding and $240 million available
as of December 31, 1993. LIN Television Corporation ("LTC"), a
wholly owned subsidiary of the Company (owning all the Company's
television operations other than WOOD-TV), has $222 million
outstanding and no additional funds available as of December 31,
1993.
During the second quarter of 1993, the Company renegotiated its
Cellular Facility. This resulted in an extension in the
commencement of amortization of the $400 million revolving
portion of the Cellular Facility from September 1993 to March
1996 and a change in certain financial covenants and other terms.
<PAGE>
<PAGE> F-15
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 -- Long-Term Debt (continued)
Fees incurred in connection with the Bank Credit Facilities are
classified as noncurrent assets and are being amortized over the
contracted terms of the facilities. The aggregate amounts of
principal maturities on the utilized portions of the Bank Credit
Facilities subsequent to December 31, 1993 are as follows:
(in thousands)
1994 $146,891
1995 186,503
1996 239,924
1997 289,628
1998 342,392
Thereafter 493,000
--------
$1,698,338
==========
Under the Bank Credit Facilities, interest is payable, at the
Company's discretion, at the prevailing prime rate, LIBOR or CD
rates, plus an applicable margin. Interest is fixed for a period
ranging from one month to twelve months, depending on
availability of the interest basis selected, although if the
Company selects a prime-based loan, the interest rate will
fluctuate during the period as the prime rate fluctuates. The
applicable margin for each loan will be determined each quarter
based on the borrowing subsidiaries' ratio of adjusted senior
debt (as determined under the appropriate Bank Credit Facility)
to cash flow, as defined. Due to the frequent repricing of the
borrowings under the Bank Credit Facilities, the book values at
December 31, 1993 approximate fair values.
On March 31, 1991 and September 30, 1993, LTC and LCNI,
respectively, began making payments amortizing the amounts
outstanding under the Bank Credit Facilities. Quarterly payments
will continue until December 31, 1998 for LTC and June 30, 2000
for LCNI. In addition, both LTC and LCNI will be required to
apply cash proceeds from certain sales of assets, not reinvested
in similar assets, and excess cash flow, as defined, to the
prepayment of loans. The Company has not guaranteed the
repayment of amounts under the Bank Credit Facilities.
<PAGE>
<PAGE> F-16
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 -- Long-Term Debt (continued)
The Bank Credit Facilities contain covenants restricting certain
activities by LCNI and LTC and their respective subsidiaries,
including, without limitation, restrictions on (i) acquisitions
and investments, (ii) the incurrence of debt, (iii) distributions
and dividends to stockholders, (iv) mergers and sales of assets,
(v) prepayments of subordinated indebtedness, (vi) the creation
of liens and (vii) the issuance of preferred stock.
In addition, LCNI and LTC are required to maintain compliance
with certain financial covenants set forth in the Bank Credit
Facilities, including ratios of senior debt and combined debt to
cash flow and cash flow to debt service or fixed charges. Under
the Cellular Facility, LCNI pledged as security the capital stock
of certain of its subsidiaries, including those owning the
Company's interests in the New York, Dallas-Fort Worth and
Houston cellular partnerships. Under the Broadcast Facility, LTC
pledged as security the capital stock of each of its
subsidiaries, which owns all the Company's television properties
(other than WOOD-TV). The Company also pledged as security the
capital stock of LCNI and LTC under the Bank Credit Facilities.
The Bank Credit Facilities contain provisions concerning
customary events of default, including (i) failure to make
principal or interest payments when due, (ii) failure to comply
with covenants, (iii) misrepresentations, (iv) defaults on other
indebtedness, (v) material adverse change in the business,
condition, operations, performance or properties of the borrower,
(vi) unpaid judgments and (vii) standard ERISA and bankruptcy
defaults. In addition, it shall be an event of default if the
Designated Party (as defined in the McCaw Shareholders'
Agreement) fails to be entitled to appoint a majority of the
Board of Directors of the Company or if the McCaw Family (as
defined) fails to hold at least 20 million McCaw shares subject
to such Shareholders' Agreement.
The weighted average interest rates were 4.46% and 4.69% for the
Cellular Facility and the Broadcast Facility, respectively, at
December 31, 1993. The Bank Credit Facilities provide for annual
fees of .5% of the unused commitments.
In order to comply with covenants under its Bank Credit
Facilities and to provide protection against rising interest
rates, the Company entered into interest rate cap agreements with
notional amounts of $840 million, $1.35 billion and $1.35 billion
as of December 31, 1993, 1992 and 1991, respectively. The rate
cap agreements in effect as of December 31, 1993 have expiration
dates ranging from August 1994 to January 1997. All of the
interest rate caps were based on three month LIBOR and have
strike rates ranging from 8%-9%. During the past three years,
the prevailing market rates have been below the rate caps in
effect, thus the only effect on the Company's interest expense<PAGE>
<PAGE> F-17
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 -- Long-Term Debt (continued)
has been the amortization of the cost of the caps of $1,951,
$2,669 and $2,205 during the years ended December 31, 1993, 1992
and 1991, respectively. The Company was also party to one
interest rate swap agreement with a notional amount of $50
million which expired in February 1994. Under the swap
agreement, the Company paid a fixed interest rate of 7.8% plus
applicable margin.
NOTE 6 -- Redeemable Preferred Stock of a Subsidiary
LCH Communications, Inc. ("LCH"), a wholly-owned subsidiary of
the Company, has issued 1,500 shares of Class A Redeemable
Preferred Stock with a stated value of $850 million (par value
$10 per share). The Preferred Stock accrues dividends at the
rate of 15.8% per year. LCH is not required to declare or pay
dividends in cash, but they do accrue on a cumulative basis and
must be paid in the event of certain redemptions of the Preferred
Stock (see below). The holder of the Preferred Stock , Comcast
Corporation, is entitled to appoint two members of the LCH Board
of Directors.
LCH may redeem the Preferred Stock at any time at a price equal,
at its option, to either:
(1) all of the issued and outstanding capital stock of LIN-Penn
(which holds the Company's Philadelphia cellular interest
and its GuestInformant specialty publishing business), plus
cash equal to 15% of the fair market value of all businesses
(currently, only WOOD-TV) then operated by LCH (the
"Operating Business Portion"); or
(2) a cash amount equal to the greater of (a) the fair market
value of the issued and outstanding capital stock of LIN-
Penn plus the Operating Business Portion and (b) $850
million, plus, in each case, dividends which would have
accrued on the Preferred Stock from the issuance date (to
the extent not previously paid) at the rate of 15.8% per
year.
LCH is required to redeem the Preferred Stock in the year 2000
(if not redeemed prior to such time) at a price comparable to
that described above. In certain circumstances, the holder of
the Preferred Stock may require the corporate parent of LCH to
purchase the Preferred Stock. The terms of the Stock Acquisition
Agreement executed pursuant to the issuance of the Preferred
Stock contain numerous covenants pertaining to LCH which, among
other things, include restrictions on (i) the incurrence of debt,
(ii) liens, (iii) forgiveness of debt, (iv) mergers, etc., (v)
disposition of assets and (vi) dispositions of certain stock.
Management estimates the fair value of the Preferred Stock at <PAGE>
<PAGE> F-18
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 -- Redeemable Preferred Stock of a Subsidiary (continued)
December 31, 1993 to be $555 million. This represents the
estimated fair value of the capital stock of LIN-Penn plus 15% of
the Operating Business Portion at December 31, 1993 based on
various valuation approaches.
NOTE 7 -- Stockholders' Deficit
McCaw Cellular Communications, Inc. currently owns approximately
52% of the outstanding Common Stock of the Company. McCaw has
agreed, pursuant to a Private Market Value Guarantee ("PMVG"), to
either offer to purchase the remaining shares of the Company in
1995 for private market value (as defined) or put the Company up
for sale.
The Company is authorized to issue 2,000,000 shares of preferred
stock, without par value, none of which is outstanding. The
Company's board of directors is empowered to set the dividend,
redemption and liquidation rights pertaining to any series of
preferred stock that may be issued from time to time, to
designate whether preferred shares of any series shall be
convertible and the terms of such convertibility, and to
establish the voting rights and any special rights or
restrictions that are to apply to preferred shares of any series.
The Company has never paid or declared a cash dividend on its
common stock. Its dividend policy is subject to future earnings,
financial conditions and other relevant factors (including,
without limitation, dividend restrictions in credit and loan
agreements between the Company and banks).
Pursuant to the Company's 1969 stock option plan, as amended,
incentive and nonqualified options have been granted or are
available for grant to officers and key employees at prices not
less than fair market value at date of grant.
Options are generally not exercisable until one year after grant,
have vesting terms ranging from two to five years, and expire ten
years from date of grant. Changes in incentive and nonqualified
stock options granted and outstanding are as follows:<PAGE>
<PAGE> F-19
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 -- Stockholders' Deficit (continued)
Shares Prices Per Share
Options outstanding at
December 31, 1990 376,947 $ 6.90 - $90.94
Granted 480,500 $71.50
Exercised (30,263) $22.35 - $49.82
Cancelled or expired (8,828) $30.17 - $89.40
--------
Options outstanding at
December 31, 1991 818,356 $ 6.90 - $90.94
Granted 521,350 $76.50 - $77.50
Exercised (25,101) $6.90 - $49.81
Cancelled or expired (51,410) $43.50 - $90.94
--------
Options outstanding at
December 31, 1992 1,263,195 $8.03 - $90.94
Granted 473,300 $88.50 - $110.50
Exercised (84,911) $9.31 - $77.50
Cancelled or expired (52,335) $22.35 - $76.50
--------
Options outstanding at
December 31, 1993 1,599,249 $8.03 - $110.50
=========
As of December 31, 1993, there were 611,905 exercisable options
to purchase shares and there were 954,840 options available for
future grants.
Pursuant to the Company's stock option plan, in the event of a
"change in control" (as defined in the plan) of the Company,
vested options at the time of the change in control may be
surrendered by officers of the Company, subject to Section 16 of
the Securities Exchange Act of 1934, as amended, in exchange for
a cash payment per share by the Company equal to the difference
between the exercise price for the option and the greater of the
highest amount paid to any holder of common stock by the acquiror
in connection with the resulting change in control or the highest
selling price of the common stock during the 90-day period prior
to the date of surrender of the option. Notwithstanding the
foregoing, if a change in control results in the consolidation or
merger of the Company with McCaw or a successor to McCaw under
the PMVG and McCaw or any such successor is the surviving company
or if McCaw becomes the beneficial owner of 80% or more of the
Company's stock (other than pursuant to a private market sale, as
defined in the Company's Private Market Value Guarantee with
McCaw), each outstanding option shall be converted into an option<PAGE>
<PAGE> F-20
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 -- Stockholders' Deficit (continued)
to purchase McCaw's Class A Common Stock or the common stock of
any such successor (or in the event that McCaw or any such
successor is not publicly traded, the ultimate parent thereof).
If a change in control results from a private market sale, upon a
vote by a majority of the Company's independent directors, each
outstanding option will be converted into an option to purchase
the common stock of the acquiror. If the independent directors
do not approve the conversion, the Company may (but is not
required to) cancel each such option in exchange for a payment
per share in cash equal to the excess of the purchase price per
share in the private market sale over the exercise price of such
option.
The Company's Employee Stock Purchase Plan (ESPP) allows eligible
employees to purchase shares of the Company's common stock,
through regular payroll deductions, at 85% of the closing market
price of the stock as of the last trading day of each month. The
ESPP restricts a participant to purchase no more than $25,000 of
stock in any calendar year. A total of 300,000 shares have been
authorized under the ESPP. There are no charges or credits to
income in connection with the ESPP. During 1993, common stock
was purchased and distributed to employees at prices ranging from
$66.09 to $100.51 per share.
The Company has a Stockholder Rights Plan designed to strengthen
its bargaining position on behalf of its stockholders in the
event of coercive stock accumulation programs, inadequate offers
or other tactics that may be used to gain control of the Company
without offering a fair and adequate price to all stockholders.
Under the Rights Plan, each stockholder has one right for each
share of the Company's outstanding common stock that entitles the
holder to purchase one one-thousandth (1/1000th) of a share of a
participating preferred stock. At the present time, the rights
are attached to the common stock and are not exercisable, and
they do not represent any significant value to stockholders. The
rights become valuable, as a result of becoming exercisable into
capital stock at a substantial discount price, if any person
acquires 15% or more of the Company's outstanding common stock or
upon the occurrence of certain other events, including a merger
or other business combination involving the Company. The
Stockholder Rights Plan was amended to provide that the McCaw
acquisition and the Private Market Value Guarantee as well as the
acquisition of McCaw by American Telephone and Telegraph Company
would not constitute a Triggering Event or cause McCaw or any of
its affiliates to become an Acquiring Person (each as defined)
under the Stockholder Rights Plan.
<PAGE>
<PAGE> F-21
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 -- Income Taxes
Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes," established new standards for
determining and reporting income tax liabilities. The Company
adopted SFAS No. 109 during the first quarter of 1993 effective
January 1, 1991. The principal impact of SFAS No. 109 on the
Company relates to the requirement that a deferred tax liability
be provided to recognize the differences in book and tax basis
for certain intangible assets recorded as a result of purchase
business combinations, such as the Company's 1990 acquisition of
an additional 46% interest in the New York City cellular
licensee. The transition provisions of SFAS No. 109 permit
companies to adopt either by recording the cumulative effect of
the change in the statement of operations for the period of
initial application or by retroactively restating any number of
consecutive prior years to conform to the new rules. The Company
has restated the years ended December 31, 1992 and 1991. As a
result, the Company recorded a cumulative effect adjustment and a
deferred tax liability of $693.8 million or $13.50 per share as
of January 1, 1991. For the year ended December 31, 1992 and
1991, income tax expense and net loss before cumulative effect of
the change in accounting were reduced by $26.1 million or $0.51
per share and $25.9 million or $0.50 per share, respectively.
Deferred taxes are determined based on the estimated future tax
effects of differences between the financial statement and the
tax basis of assets and liabilities given the provisions of the
enacted tax laws. The components of the net deferred tax
liability, as restated for the adoption of SFAS No. 109 as of
January 1, 1991, are as follows:
Deferred Income Taxes
Assets Liabilities
------ -----------
December 31, 1993
Intangible Assets $ -- $628,822
Property and equipment -- 82,813
Other 2,365 25,779
------- --------
Total $2,365 $737,414
======= ========
December 31, 1992
Intangible Assets $ -- $641,817
Property and equipment -- 63,345
Net operating loss and
alternative minimum
tax credit carryforwards 22,494 --
Other 1,766 27,500
------- --------
Total $24,260 $732,662
======= ========<PAGE>
<PAGE> F-22
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 -- Income Taxes (continued)
The components of income tax expense are as follows:
(in thousands)
1993 1992 1991
---- ---- ----
Current:
Federal $33,984 $29,753 $4,501
State 4,938 14,216 11,306
-------- ------- -------
38,922 43,969 15,807
Deferred:
Federal 26,800 (5,828) (6,901)
State (153) (4,244) (5,018)
-------- ------- -------
26,647 (10,072) (11,919)
-------- ------- -------
$65,569 $33,897 $3,888
======= ======= =======
The deferred tax benefit in prior years results largely from the
amortization of intangible assets, offset in part by the excess
of tax over financial statement depreciation.
The Omnibus Budget Reconciliation Act of 1993 increased the
corporate tax rate to 35 percent from 34 percent effective as of
January 1, 1993. Pursuant to Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," the Company
recorded an additional tax expense of $15.3 million in the third
quarter of 1993, with a corresponding increase in deferred tax
liability.
<PAGE>
<PAGE> F-23
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 -- Income Taxes (continued)
The following table reconciles the amount which would be provided
by applying the 35% federal statutory rate to income before
income tax expense to the federal income taxes actually provided.
(in thousands)
1993 1992 1991
---- ---- ----
Expense
assuming federal
statutory rate $50,064 $40,154 $2,726
Equity investments (5,672) (4,169) (3,770)
State and local taxes, net of
federal tax benefit 3,110 6,582 4,150
Tax expense not
provided on minority
partners' share of
income 1,027 (4,734) (3,343)
Change in statutory tax
rate from 34% to 35% 15,335 -- --
Other 1,705 (3,936) 4,125
-------- -------- -------
Total income tax
expense $65,569 $33,897 $3,888
======= ======= =======
NOTE 9 -- Retirement Plans
The Company has a contributory retirement plan covering certain
employees of the Company and its wholly owned television
subsidiaries who meet certain requirements, including length of
service and age. Pension benefits vest upon completion of five
years of service and are computed, subject to certain
adjustments, by multiplying 1.25% of the employee's last three
years average annual compensation times the number of years of
credited service. Funding is based upon legal requirements and
tax considerations. No funding was required during the three-
year period ended December 31, 1993.
<PAGE>
<PAGE> F-24
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 -- Retirement Plans (continued)
The components of the net pension expense were as follows:
1993 1992 1991
---- ---- ----
(in thousands)
Service cost of current period $791 $583 $454
Interest cost on projected
benefit obligation 2,632 2,458 2,241
Actual return on plan assets (962) (2,053) (7,812)
Net amortization of unrecognized
net transition assets and
deferral of variance from
actual return on assets (906) 466 6,494
------- ------- -------
Net pension expense $1,555 $1,454 $1,377
======= ======= =======
The following table sets forth the pension plans' funded status
and amounts recognized in the balance sheet at December 31, 1993
and 1992:
1993 1992
------------------ ----------------
Funded Unfunded Funded Unfunded
(in thousands)
Actuarial present value
of accumulated plan
benefits (including
vested benefits
of $35,385 in 1993
and $31,247 in 1992) $36,668 $370 $32,165 $216
Plan assets at fair
value, primarily
publicly traded
stocks and bonds $37,593 $ -- $37,783 $ --
Less projected benefit
obligation for
service rendered
to date 38,896 641 33,394 360
------- ------ ------- -------
(continued)<PAGE>
<PAGE> F-25
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 -- Retirement Plans (continued)
1993 1992
------------------ ----------------
Funded Unfunded Funded Unfunded
(in thousands)
Plan assets in excess
of (less than)
projected benefit
obligation (1,303) (641) 4,389 (360)
Unrecognized prior
service cost 6,603 76 7,831 90
Unrecognized net
(gain) loss (2,005) 262 (7,182) 109
Unrecognized net
transition (asset)
obligation being
recognized
over 15 years (2,507) (130) (2,820) (146)
------- ------- ------- -------
Prepaid (accrued)
pension cost
included in balance
sheet $ 788 $(433) $2,218 ($307)
======= ======= ======= =======
The assumed weighted average discount rate was 7.0% for 1993 and
7.75% for 1992 and 1991. The rate of increase in future
compensation levels is assumed to be 5.5% for 1993 and 7.0% for
1992 and 1991. The expected long-term rate of return on assets
is assumed to be 8.0% for 1993 and 8.5% for 1992 and 1991.
Due to a change in the Internal Revenue Code Section 415 limits
in April 1992, plan benefit changes resulting from the McCaw
acquisition that were expected to be paid from the unfunded plan
have been shifted to the funded plan for the year ended 1992. As
a result of this change, $1.1 million of the accrued liability of
the unfunded plan was shifted to the funded plan during 1992.
Employees of the Company's consolidated cellular operations are
covered by 401(k) plans that provide matching contributions from
the Company.
<PAGE>
<PAGE> F-26
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 -- Retirement Plans (continued)
In December 1990, the Financial Accounting Standards Board issued
Statement No. 106, "Employers' Accounting for Postretirement
Benefits Other than Pensions." This statement is effective for
fiscal years beginning after December 15, 1992 and requires
employers to accrue the cost of benefits provided to retirees,
other than pensions, over the employees' active service lives.
The Company has not offered such benefits to retirees.
NOTE 10 -- Commitments and Contingencies
Total rent expense amounted to $15.9 million, $13.2 million and
$10.2 million in 1993, 1992 and 1991, respectively.
Annual commitments for rental payments, principally on real
property operating leases, after December 31, 1993 are as
follows: 1994-$16.6 million; 1995-$16.0 million; 1996-$14.5
million; 1997-$13.6 million; 1998-$13.0 million and thereafter-
$130.8 million.
Film broadcasting rights under contract but not yet available for
telecasting amounted to $4.6 million at December 31, 1993.
The Company and its subsidiaries are from time to time defendants
in and are threatened with various legal proceedings arising from
their regular business activities. Management, after consulting
with legal counsel, does not expect that the ultimate results of
these legal proceedings will have a material adverse effect on
the financial position, results of operations or the cash flows
of the Company.
NOTE 11 -- Segment Data
The Company is engaged in both cellular telephone operations and
the media business. Cellular revenues primarily represent fees
charged for providing cellular telephone service to subscribers.
Media revenues are principally from the sale of television time
to advertisers and also include revenues from the Company's
specialty publishing operation. The cellular business segment
data reflects the consolidation of the Company's controlling
interests (principally New York and Dallas). Cellular interests
in Philadelphia, Los Angeles, Galveston and Houston are accounted
for by the equity method of accounting, and thus are not included
in the cellular business segment data which follows: <PAGE>
<PAGE> F-27
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 -- Segment Data (Continued)
<CAPTION>
Cellular Media Corporate Total
(in thousands)
1993
<S> <C> <C> <C> <C>
Net revenues $520,131 $168,426 $ -- $688,557
Depreciation and amortization 114,894 10,061 175 125,130
Income (loss) from operations 77,993 58,828 (8,516) 128,305
Capital expenditures 136,662 8,599 92 145,353
Identifiable assets 2,589,995 257,839 61,689 2,909,523
1992
Net revenues $407,721 $164,800 $ -- $572,521
Depreciation and amortization 109,263 9,149 192 118,604
Income (loss) from operations 77,273 60,516 (7,774) 130,015
Capital expenditures 89,254 4,489 95 93,838
Identifiable assets 2,554,972 250,259 57,679 2,862,910
1991
Net revenues $317,806 $150,331 $ -- $468,137
Depreciation and amortization 99,483 9,209 284 108,976
Income (loss) from operations 41,912 52,610 (13,092) 81,430
Capital expenditures 160,298 5,693 530 166,521
Identifiable assets 2,500,888 241,162 56,894 2,798,944
</TABLE>
<PAGE>
<PAGE> F-28
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - Related Party Transactions
Under an inter-company services agreement negotiated between the
Company and McCaw, McCaw provided management and other services
to the Company during 1993, 1992 and 1991. LIN also provided
certain services to McCaw during the same time periods. The
Company incurred $7.3 million, $5.3 million and $5.4 million for
the net value of management and other services rendered under the
inter-company services agreement during 1993, 1992 and 1991,
respectively. The related payables for such services were $16.1
million and $12.3 million as of December 31, 1993 and 1992,
respectively.
In addition to the transactions described above, the Company or
its affiliates routinely enters into transactions with McCaw or
its affiliates in the ordinary course of business. The Company
pays McCaw for providing cellular service to the Company's
subscribers under roaming agreements, and McCaw pays the Company
for similar services provided by the Company to McCaw's
subscribers. The Company's cellular operations also participate
in certain programs managed by McCaw, such as national
advertising campaigns, national accounts marketing, and the North
American Cellular Network, among other things. Such transactions
are not separately disclosed in the financial statements as they
are carried out in the normal course of business.
All of such agreements and arrangements between the Company and
McCaw are on terms that the Company believes are as favorable to
it as would have been obtained with an unrelated third party.
Under the Company's Private Market Value Guarantee with McCaw,
approval of the majority of LIN's independent directors is
required before the Company enters into any material transactions
with McCaw or its affiliates.
NOTE 13 - Provision for Loss on Cellular Equipment
In June 1993, the Company began the replacement of the cellular
system assets currently used in its Dallas cellular operations
with a new system. As a result, the Company recorded a non-cash
pre-tax charge of $42.2 million to reflect the estimated loss on
the disposal of the current system. After taxes and minority
interests, this charge was approximately $14.8 million, or $0.29
per share.
<PAGE>
<PAGE> F-29
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 -- Other Income and Expenses
In June 1992, the Company settled a lawsuit relating to the McCaw
acquisition. Under the terms of the settlement, the Company
received from the defendants a payment of $3 million and certain
other considerations in July 1992 and a payment of $2 million in
July 1993. In addition, the Company will receive payments of $2
million from McCaw on June 30, 1994 and 1995, respectively.
After payment of legal fees and other related costs, this
settlement resulted in a net gain to the Company of approximately
$7.0 million.
NOTE 15 -- Acquisitions
On October 6, 1993, the Company acquired a 100% interest in the
Newton, Texas (Texas RSA-17) A Block cellular system for
approximately $36 million cash. The acquisition was accounted
for using the purchase method and the excess of the cost over
fair market value of the tangible assets acquired has been
assigned to Cellular FCC licenses.
The Company has also entered into an agreement to acquire the
Litchfield, Connecticut (Connecticut RSA-1) A Block cellular
system for aggregate consideration of approximately $30 million.
This transaction is expected to be completed during 1994.
NOTE 16 -- Quarterly Results of Operations (Unaudited)
The financial information presented below reflects all
adjustments (consisting of normal recurring adjustments) which
are, in the opinion of management, necessary to a fair
presentation of the results for the interim periods.
Summarized quarterly financial data for 1993 and 1992 is as
follows:<PAGE>
<PAGE> F-30
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 -- Quarterly Results of Operations (Unaudited) (continued)
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
(in thousands)
1993
<S> <C> <C> <C> <C>
Net revenues $151,233 $171,198 $175,145 $190,981
Operating income 32,707 553 44,593 50,452
Equity in income of unconsolidated
affiliates 24,729 24,580 26,906 26,910
Net loss (14,592) (16,614) (26,483) (3,038)
Net loss per share $(0.29) $(0.32) $(0.51) $(0.06)
1992
Net revenues $123,925 $142,887 $145,699 $160,010
Operating income 18,036 33,708 36,069 42,202
Equity in income of unconsolidated
affiliates 23,805 25,953 26,443 20,776
Net loss (30,692) (12,675) (16,674) (8,911)
Net loss per share $(0.60) $(0.25) $(0.32) $(0.17)
</TABLE>
<PAGE>
<PAGE> F-31
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders of
LIN Broadcasting Corporation
We have audited the accompanying combined balance sheets of LIN
Broadcasting Corporation's Unconsolidated Affiliates listed in
Note 1 (the Ventures) as of December 31, 1993 and 1992, and the
related combined statements of income, Ventures' equity, and cash
flows for each of the three years in the period ended December
31, 1993. Our audits also included the financial statement
schedules listed in the Index at Item 14(a). These financial
statements and schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits. We did
not audit the 1993 and 1992 consolidated financial statements of
AWACS, Inc. and subsidiaries, which statements reflect total
assets constituting 24% and 20% as of December 31, 1993 and 1992,
respectively and net revenues constituting 19% and 17% for the
years then ended of the related combined totals. Those
statements were audited by other auditors whose report, which
also places reliance on other auditors, has been furnished to us,
and our opinion, insofar as it relates to data included for
AWACS, Inc. and subsidiaries, is based solely on the reports of
the other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform our audits 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 and the reports of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and the reports of other
auditors, the combined financial statements referred to above
present fairly, in all material respects, the combined financial
position of the Ventures at December 31, 1993 and 1992, and the
combined results of their operations and their cash flows for
each of the three years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles. Also,
in our opinion, based on our audits and the reports of other
auditors, the related financial statement schedules, when
considered in relation to the basic financial statements taken as
a whole, present fairly, in all material respects, the
information set forth therein.
ERNST & YOUNG LLP
Seattle, Washington
February 4, 1994<PAGE>
<PAGE> F-32
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
AWACS, Inc.
Wayne, Pennsylvania
We have audited the consolidated balance sheet of AWACS, Inc. and
subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of operations and retained earnings and
of cash flows for the years then ended (not presented separately
herein). These financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We
did not audit the financial statements of Garden State
Cablevision L.P. ("Garden State"), the Company's investment in
which is accounted for by the use of the equity method. The
Company's equity of $32,302,000 and $22,369,000 in Garden State's
deficit at December 31, 1993 and 1992, respectively, and of
$9,933,000 and $2,985,000 in that entity's net losses for the
years then ended are included in the accompanying consolidated
financial statements. The financial statements of Garden State
were audited by other auditors whose report has been furnished to
us, and our opinion, insofar as it relates to the amounts
included for Garden State, is based solely on the report of such
other auditors.
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, based on our audits and the report of other
auditors, such consolidated financial statements present fairly,
in all material respects, the financial position of AWACS, Inc.
and subsidiaries as of December 31, 1993 and 1992 and the results
of their operations and their cash flows for the years then ended
in conformity with generally accepted accounting principles.
As discussed in the notes to the consolidated financial
statements, the Company changed its method of accounting for
income taxes effective January 1,1993 to conform with Statement
of Financial Accounting Standards No. 109 "Accounting for Income
Taxes."
DELOITTE & TOUCHE
Philadelphia, Pennsylvania
February 18, 1994<PAGE>
<PAGE> F-33
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Garden State Cablevision L.P.:
We have audited the accompanying balance sheets of Garden State
Cablevision L.P. (a Delaware Limited Partnership) as of December
31,1993 and 1992, and the related statements of operations,
partners' (deficit) capital and cash flows for the years then
ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements 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 financial statements referred to above
present fairly, in all material respects, the financial position
of Garden State Cablevision L.P. as of December 31,1993 and 1992,
and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming
that the Partnership will continue as a going concern. As
discussed in Note 2, the Partnership has obtained financing
proposals for the repayment of the Senior Debt and Subordinated
Debt which become due in 1994. As of the date of this report, the
Partnership has not received a written commitment for the
required financing and this raises substantial doubt about its
ability to continue as a going concern. Management's plans in
regard to this matter are described in Note 2. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
ARTHUR ANDERSEN & CO.
Philadelphia, Pa.,
February 23, 1994 <PAGE>
<PAGE> F-34
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
(Dollars in thousands)
ASSETS 1993 1992
- - ----------------------------------------------------------------
Current assets:
Cash and cash equivalents $54,357 $40,815
Accounts receivable, less
allowance for doubtful
accounts (1993-$9,829;
1992-$14,440) 111,723 84,926
Prepaid expenses and other 17,497 11,812
- - ----------------------------------------------------------------
Total current assets 183,577 137,553
- - ----------------------------------------------------------------
Property and equipment, at
cost, less accumulated
depreciation 452,447 417,297
Other assets 2,108 1,143
Cellular FCC licenses, less
accumulated amortization
(1993-$506) 13,564 --
Organization costs, less
accumulated amortization
(1993-$6,785; 1992-$5,780) 3,265 4,270
Due from majority stockholder
of AWACS 16,387 --
Notes receivable, less allowance
for doubtful accounts
(1993-$150; 1992-$198) 281 966
- - ----------------------------------------------------------------
Total assets $671,629 $561,229
================================================================
(continued)<PAGE>
<PAGE> F-35
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED BALANCE SHEETS (continued)
DECEMBER 31, 1993 AND 1992
(Dollars in thousands)
LIABILITIES AND EQUITY 1993 1992
- - ----------------------------------------------------------------
Current liabilities:
Accounts payable $37,801 $22,378
Accrued expenses 39,180 27,889
Unearned revenues 27,610 16,818
Commissions payable 14,439 10,868
Notes payable 2,946 --
Other current liabilities 6,000 5,199
- - ----------------------------------------------------------------
Total current liabilities 127,976 83,152
- - ----------------------------------------------------------------
Notes payable to affiliates 63,126 93,827
Investment in affiliate 32,302 22,369
Deferred income taxes 4,236 13,434
Other long-term liabilities 1,286 1,302
Equity:
Contributed capital 78,690 63,817
Excess cost of limited
partnership interest (70,384) (70,384)
Retained earnings 434,397 353,712
- - ----------------------------------------------------------------
Total equity 442,703 347,145
- - ----------------------------------------------------------------
Total liabilities and equity $671,629 $561,229
================================================================
See accompanying notes.
<PAGE>
<PAGE> F-36
<TABLE>
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Revenues $704,550 $606,277 $494,549
Operating Costs and Expenses:
Direct operating 75,140 60,732 51,698
Selling, general and administrative 277,040 236,597 185,098
Depreciation and amortization 69,833 52,595 41,684
- - --------------------------------------------------------------------------------------
422,013 349,924 278,480
- - --------------------------------------------------------------------------------------
Operating Income 282,537 256,353 216,069
- - --------------------------------------------------------------------------------------
Other Income (Expense):
Interest expense (8,138) (3,901) (2,558)
Investment income 2,578 1,685 2,245
Provision for loss on cellular
equipment -- (4,604) --
Litigation settlements (12,254) -- --
Equity in loss of affiliate (9,933) (2,985) --
- - --------------------------------------------------------------------------------------
(27,747) (9,805) (313)
Income Before Provision for Income
Taxes and Cumulative Effect
of Accounting Changes 254,790 246,548 215,756
Provision for Income Taxes 11,247 8,464 7,977
- - --------------------------------------------------------------------------------------
Income before Cumulative Effect
of Accounting Changes 243,543 238,084 207,779
Cumulative Effect of Accounting Changes 12,142 -- --
- - --------------------------------------------------------------------------------------
Net Income $255,685 $238,084 $207,779
======================================================================================
See accompanying notes.<PAGE>
<PAGE> F-37
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF VENTURES' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
Excess Cost
of Limited
Contributed Partnership Retained Total
Capital Interest Earnings Equity
- - ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1990 $61,137 $ -- $221,074 $282,211
Net income -- -- 207,779 207,779
Distributions to partners -- -- (122,350) (122,350)
Balance at December 31, 1991 61,137 -- 306,503 367,640
Net income -- -- 238,084 238,084
Distributions to partners -- -- (185,945) (185,945)
Acquisition of interest in
Garden State Cable -- (70,384) -- (70,384)
Acquisition of interest in
Galveston Cellular
Telephone Company 2,680 -- (4,930) (2,250)
- - ------------------------------------------------------------------------------------------
Balance at December 31, 1992 63,817 (70,384) 353,712 347,145
Net income -- -- 255,685 255,685
Distributions to partners -- -- (175,000) (175,000)
Contributions 809 -- -- 809
In kind contribution of Cellular
FCC license 14,064 -- -- 14,064
- - ------------------------------------------------------------------------------------------
Balance at December 31, 1993 $78,690 ($70,384) $434,397 $442,703
==========================================================================================
See accompanying notes.
<PAGE>
<PAGE> F-38
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
<S> <C> <C> <C>
Net income $255,685 $238,084 $207,779
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 69,833 52,595 41,684
Equity in loss of affiliate 9,933 2,985 --
Non-cash interest expense 6,006 1,403 --
Provision for losses on accounts
receivable 20,945 21,127 13,506
Provision for loss of cellular equipment -- 4,604 --
Cumulative effect of accounting changes (12,142) -- --
Changes in operating assets and
liabilities
Increase in accounts receivable (47,742) (29,300) (31,058)
Increase (decrease) in accounts payable 15,423 (6,129) 8,943
Increase in accrued expenses 11,295 5,467 1,536
Increase in unearned revenues 10,792 3,445 2,896
Increase in commissions payable 3,571 2,553 1,808
Increase in deferred income taxes 3,319 3,244 2,763
Other, net (5,093) (1,069) (3,684)
- - --------------------------------------------------------------------------------------
Total adjustments 86,140 60,925 38,394
- - --------------------------------------------------------------------------------------
Net cash provided by
operating activities 341,825 299,009 246,173
(continued)<PAGE>
<PAGE> F-39
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
<S> <C> <S>
INVESTING ACTIVITIES:
Advances to/from majority
stockholder of AWACS (16,387) 9,259 (710)
Capital expenditures (103,944) (112,573) (126,250)
- - --------------------------------------------------------------------------------------
Net cash used for
investing activities (120,331) (103,314) (126,960)
FINANCING ACTIVITIES:
Proceeds from (repayment of)
revolving credit notes -- (3,800) 3,800
Proceeds from (repayment of)
notes payable to partners (33,761) 10,478 10,000
Contributions from partners 809 -- --
Distributions paid to partners (175,000) (185,945) (122,350)
- - --------------------------------------------------------------------------------------
Net cash used for
financing activities (207,952) (179,267) (108,550)
- - --------------------------------------------------------------------------------------
Net Increase in Cash and
Cash Equivalents 13,542 16,428 10,663
- - --------------------------------------------------------------------------------------
Cash and Cash Equivalents at
Beginning of Year 40,815 24,387 13,724
- - --------------------------------------------------------------------------------------
Cash and Cash Equivalents at
End of Year $54,357 $40,815 $24,387
=======================================================================================
(continued)<PAGE>
<PAGE> F-40
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<CAPTION>
1993 1992 1991
- - --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash paid for:
Income taxes $4,900 $6,600 $5,300
Interest
Partners 1,478 3,422 2,411
Others 242 540 414
Noncash investing and financing activities:
On September 30, 1992, an indirect subsidiary of AWACS issued a note for $51 million to
purchase from the majority stockholder of AWACS a 40% limited partnership interest in
Garden State Cablevision L.P. (see Note 5 to the combined financial statements).
In October 1992, a subsidiary of LIN, together with a third party, acquired an approximate
56% interest in the parent company of Galveston Cellular Telephone Company. In 1993, the
cost basis of this acquisition was pushed-down to the books of Galveston Cellular
Telephone Company.
See accompanying notes.
</TABLE>
<PAGE>
<PAGE> F-41
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 1 -- Basis of Presentation
These combined financial statements have been prepared to comply
with the Securities and Exchange Commission's Regulation S-X
requirement, in connection with LIN Broadcasting Corporation's
("LIN") consolidated financial statements, which requires
separate or combined financial statements of significant
subsidiaries 50% or less controlled.
These combined financial statements include 100% of the accounts
of the operating ventures listed in the table below in which LIN
has voting interests of 50% or less (the "Ventures"). These
Ventures are included in LIN's consolidated financial statements
on the equity accounting method. During 1992, LIN acquired an
indirect interest in Galveston Cellular Telephone Company. As a
result of this acquisition, the results of the Galveston venture
are included in the combined financial statements from the date
of acquisition.
Voting/
Name and Location Equity Management
- - -----------------------------------------------------------------
AWACS Inc., d/b/a
Comcast Metrophone Corporation 49.99% 49.99%
Philadelphia
Los Angeles Cellular
Telephone Co., Partnership 39.97% 50.00%
Los Angeles
Houston Cellular
Telephone Co., Partnership 56.25% 50.00%
Houston
Galveston Cellular
Telephone Co., Corporation 34.60% 50.00%
Galveston
NOTE 2 -- Significant Accounting Policies
The following are the Ventures' significant accounting policies:
CASH EQUIVALENTS: Certain highly liquid, short-term investments
which have a maturity of three months or less are considered cash
equivalents. Excess cash is primarily invested in U.S.
Government obligations.
PROPERTY AND EQUIPMENT: Cellular system equipment is recorded at
cost and is depreciated on a straight-line basis over an 8 or 10
year period. All other property and equipment, including
betterments to existing facilities, are recorded at cost and<PAGE>
<PAGE> F-42
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 2 -- Significant Accounting Policies (continued)
depreciated on a straight-line basis over their estimated useful
lives of three to twenty years. Beginning in 1993, AWACS revised
the useful lives used to compute depreciation for its cell site
equipment from 10 to 8 years and for its computer equipment from
5 to 3 years. The change had the effect of increasing
depreciation expense by approximately $4.4 million.
CELLULAR FCC LICENSES AND ORGANIZATION COSTS: Cellular FCC
Licenses represent costs to acquire cellular licenses authorized
by the Federal Communications Commission and are amortized using
the straight line method over 40 years. Organization costs,
consisting principally of legal fees, feasibility studies and
other costs related to obtaining required licenses and regulatory
approvals, are amortized using the straight-line method over a 10
year period.
INCOME TAXES: Accelerated depreciation methods are used for tax
purposes. AWACS, which is a corporation, provides deferred taxes
related to this and other timing differences. Effective January
1, 1993, AWACS adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes" (see Note 7). No provision is made for income taxes for
either the Los Angeles or Houston ventures as the income or loss
is includable in the tax returns of the respective partners of
these partnerships.
REVENUE RECOGNITION: Cellular airtime is recorded as revenue
when earned. Unearned revenues consist principally of amounts
billed to customers for access fees which are payable one month
in advance.
RECLASSIFICATIONS: Certain reclassifications have been made to
the prior years' combined financial statements in order to
conform to the 1993 presentation.
NOTE 3 -- Property and Equipment
The major classifications of property and equipment were as
follows:
December 31,
1993 1992
------------------
Land $1,379 $1,271
Buildings and improvements 6,583 5,084
Cellular equipment 576,655 511,993
Other 70,997 40,093
------- -------
655,614 558,441
Less accumulated depreciation 203,167 141,144
------- -------
$452,447 $417,297
======== ========<PAGE>
<PAGE> F-43
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 4 -- Notes Payable to Affiliates
The Houston venture has entered into agreements with the partners
under which it has borrowed $2,946 and $35,946 as of December 31,
1993 and 1992, respectively. The borrowings were made to fund
capital expenditures and to retire existing equipment vendor
financings. The notes to partners mature in June 1994, are
nonamortizing and bear interest at a rate of prime (6% as of
December 31, 1993) plus 1%. The Galveston venture also entered
into an agreement with an affiliate under which it has borrowed
$4,717 and $5,478 as of December 31, 1993 and December 31, 1992,
respectively. This note matures beginning in 1995 and bears
interest at prime plus 2%.
NOTE 5 -- Investment in Affiliate
On September 30, 1992, an indirect subsidiary of AWACS acquired
from the majority stockholder of AWACS a 40% limited partnership
interest in Garden State Cablevision L.P. ("Garden State").
Consideration consisted of a note with an initial principal
amount of $51,000 which is included in Notes payable to
affiliates. The note bears interest at a rate of 11% per annum.
Interest is payable on a quarterly basis to the extent of
available cash, with any unpaid interest added to principal. The
note is due September 30, 1997. AWACS anticipates there will be
no significant amount of cash available for payment of interest
on the note, and accordingly, interest accrued on the note during
1993 and 1992 of $6,006 and $1,403, respectively, was added to
principal.
AWACS' acquisition of the 40% interest in Garden State was
recorded as a negative investment in an affiliate of $19,384,
which represented the carryover basis from the majority
stockholder. AWACS' excess of purchase price over the carrying
value was recorded as a reduction of stockholders' equity in the
amount of $70,384. The investment is accounted for on the equity
method and under the terms of the partnership agreement, 49.5% of
the net losses of Garden State are allocated to AWACS. Such
losses, which amounted to $9,933 and $2,985 during 1993 and 1992,
respectively, were added to the investment in affiliate.
Summarized financial information for Garden State for the year
ended December 31, 1993 and the three months ended December 31,
1992 is as follows:<PAGE>
<PAGE> F-44
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 5 -- Investment in Affiliate (Continued)
Three Months
Year Ended Ended
December 31, December 31,
1993 1992
------------ -----------
(Unaudited)
Results of Operations
Revenues $90,824 $21,779
Costs and expenses 41,647 9,915
Depreciation and amortization 47,682 12,139
------- -------
Operating loss 1,495 (275)
Interest expense, net 20,904 5,755
------- -------
Loss before cumulative effect
of accounting change $(19,409) $(6,030)
Cumulative effect of
accounting change (657) --
------- -------
Net loss $(20,066) $(6,030)
======= ========
Equity in net loss $(9,933) $(2,985)
======= ========
Financial position at December 31, 1993 and 1992
Current assets $7,328 $15,861
Noncurrent assets 246,512 285,828
Current liabilities 294,325 23,198
Noncurrent liabilities 779 299,689
Garden State's Senior Loan Credit Agreement matures on March 30,
1994, but may be extended through December 31, 1999, upon the
satisfaction of certain conditions as specified by the agreement.
These conditions include, among other things, the refinancing of
the subordinated debt, which matures on June 30,1994, at terms
approved by the senior lenders. In connection therewith, Garden
State has obtained financing proposals for the repayment of the
senior debt ($196,475,000 at December 31, 1993) and subordinated
debt ($75,926,919 at December 31, 1993, including deferred
interest of $7,523,428). Management believes that Garden State
will be successful in obtaining the required financing. As of
February 18, 1994, Garden State had not received a written
commitment for the required financing. Garden State's ability to
continue as a going concern is dependent upon obtaining the
required financing.<PAGE>
<PAGE> F-45
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 5 -- Investment in Affiliate (Continued)
In November 1993, Garden State signed a letter of intent to
purchase the general partner's interest in Garden State. The
general partner has also retained its rights under the
Partnership Agreement that beginning August 15, 1994, for a
period of 90 days, it shall have the right to cause Garden State
to purchase all of its partnership interest. The purchase price
shall be equal to the greater of 150% of the general partner's
aggregate capital contributions or 120% of the general partner's
percentage of the system's fair market value as determined by an
independent appraisal.
During 1993 and 1994, the FCC adopted and modified various
regulations governing the rates charged to cable subscribers.
Because of these regulations, future revenue growth from cable
services will rely to a much greater extent that has been true in
the past on increased revenues from unregulated services and new
subscribers than from increases in previously unregulated rates.
NOTE 6 -- Equity
In accordance with the various partnership agreements, income of
the partnerships is allocated to each owner's respective capital
account in accordance with its respective equity interest.
Additional capital contributions may be called based on annual
construction and operating budgets submitted by the partnerships
and agreed upon by the operating committees of each partnership.
NOTE 7 -- Postretirement Benefits Other Than Pensions
Effective January 1, 1993, AWACS adopted SFAS No. 106. This
statement requires AWACS to accrue the estimated cost of retiree
benefits earned during the years the employee provides services.
AWACS previously expensed the cost of these benefits as claims
were incurred. AWACS recorded the cumulative effect of the
obligation for its allocated cost of such benefits in 1993.
AWACS' retiree benefit obligation is unfunded and all benefits
are paid by Comcast. The cumulative effect as of January 1, 1993
of the adoption of SFAS No. 106 was to reduce the AWACS net
income by approximately $375 (net of tax). The effect of SFAS
No. 106 on AWACS' income before cumulative effect of the
accounting changes was not significant to AWACS' results of
operations.
NOTE 8 -- Income Taxes
Effective January 1, 1993, AWACS adopted SFAS No. 109,
"Accounting for Income Taxes." As a result, AWACS recorded a
cumulative effect of accounting change of $12,517. The adoption
of SFAS No. 109 did not have a significant impact on the amount
of income tax expense recorded by AWACS during 1993.<PAGE>
<PAGE> F-46
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 8 -- Income Taxes (continued)
Income tax expense consists of the following:
Year Ended December 31,
1993 1992 1991
---- ---- ----
Current:
Federal $3,543 $3,179 $3,840
State 4,653 2,041 1,374
------ ------ ------
8,196 5,220 5,214
------ ------ ------
Deferred:
Federal 4,381 2,509 1,841
State (1,330) 735 922
------ ------ ------
3,051 3,244 2,763
------ ------ ------
$11,247 $8,464 $7,977
======= ======= ======
Total tax expense differs from the amount computed by multiplying
income before tax by the statutory federal tax rate primarily due
to non-deductible depreciation and amortization expense and state
income taxes.
Deferred taxes are attributable primarily to excess tax over book
depreciation and certain expenses not deductible for tax purposes
until paid.
NOTE 9 -- Related-Party Transactions
During the years ended December 31, 1993, 1992 and 1991, the two
partnerships recorded management fees payable to affiliates of
their partners of $4,200, $4,200 and $4,200, respectively, for
management consultation, legal services and various other
professional services.
AWACS is required to advance to its majority stockholder certain
amounts based on AWACS' cash flow (as defined) on a semiannual
basis. During 1993, AWACS advanced $15,970 to the majority
stockholder in the form of a note bearing interest at the prime
rate plus 1%. Pursuant to the terms of the note, unpaid interest
of $417 was capitalized and added to the principal outstanding.
For the year ended December 31, 1993, AWACS is required to
advance to the majority stockholder an additional $4,460 by April
30, 1994.
In addition to the transactions described above, the Ventures
routinely enter into transactions with the Company or other
affiliates of the Company (including McCaw), or other affiliates<PAGE>
<PAGE> F-47
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 9 -- Related-Party Transactions (continued)
of the partners. Such transactions include roaming agreements
and participation in the North American Cellular Network, among
other things. Such transactions are not separately disclosed in
the financial statements as they are carried out in the normal
course of business.
NOTE 10 -- Commitments
The Ventures lease office space, land and buildings for cell
sites and vehicles under operating leases which expire through
the year 2010. Total rent expense for the years ended December
31, 1993, 1992 and 1991 was $13,945, $11,909 and $8,788,
respectively. Some of the leases include escalation clauses
based on increases in the Consumer Price Index. Several of the
leases include options to extend the lease term.
Future minimum payments under noncancellable operating leases
with initial or remaining terms of one year or more at December
31, 1993 are:
1994 $14,286
1995 13,037
1996 10,841
1997 8,918
1998 6,811
1999 and beyond 10,809
--------
$64,702
========
NOTE 11 -- Contingencies
The Ventures are from time to time defendants in and are
threatened with various legal proceedings arising from their
regular business activities. The Ventures are also party to
routine filings with the FCC and state regulatory authorities and
customary regulatory proceedings pending in connection with
interconnection, rates, and practices and proceedings concerning
the telecommunications industry in general and other proceedings
which management does not expect to have a material adverse
effect on the financial position or results of operations of the
Ventures.
In August 1993 and in December 1993, two dealers for the Los
Angeles cellular partnership filed lawsuits against the
partnership and certain other parties in the California state
court, seeking injunctive relief and monetary damages. The
lawsuits allege various torts and statutory violations, including
price-fixing regarding cellular equipment and service, below-cost
sales of equipment, fraud, interference with economic
relationship, unfair competition, discrimination among agents,<PAGE>
<PAGE> F-48
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
(Dollars in thousands)
NOTE 11 -- Contingencies (continued)
and conspiracy. The lawsuits are in their early stages and
plaintiffs have made a motion to consolidate them. The
partnership intends to defend each lawsuit vigorously, believes
that it has meritorious defenses to the allegations contained in
the complaints, and does not expect that the ultimate results of
these legal proceedings will have a material adverse effect on
its financial position or results of operations.
In September 1993, a proposed class action lawsuit was filed by a
cellular subscriber in a District Court in Texas. The lawsuit
alleges that the renewal provisions and liquidated damages
provisions of the annual subscriber agreements of various
cellular carriers, including the Houston cellular partnership,
are void and unenforceable, and are contrary to public policy.
The plaintiffs also seek monetary damages. No class has yet been
certified. The partnership intends to defend the lawsuit
vigorously, believes that it has meritorious defenses to the
allegations contained in the complaint, and does not expect that
the ultimate results of this legal proceeding will have a
material adverse effect on its financial position or results of
operations.<PAGE>
<PAGE> F-49
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at Beginning of Year $13,398 $11,869 $12,518
Additions:
Charged to income 14,359 14,930 13,130
Recoveries 7,939 4,911 3,836
Deductions:
Accounts written off 17,558 18,312 17,615
- - ------------------------------------------------------------------------------------------
Balance at End of Year $18,138 $13,398 $11,869
==========================================================================================
<PAGE>
<PAGE> F-50
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
Deductions
Balance at ------------------------
Beginning of Amounts Amounts Balance at End of Year
Year Additions Collected Written Off Current Not current
- - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended December 31, 1993
Comcast Cellular
Communications, Inc. $ -- $16,387 $ -- $ -- $16,387 $ --
Promissory note,
bearing interest at prime plus 1%.
The note matures six months after a
Credit Agreement of CCCI is paid
in full, which is expected to be
in the year 2000.
Year Ended December 31, 1992
Metromedia Company $9,259 $ -- $9,259 $ -- $ -- $ --
Promissory note, bearing
interest at prime, due 9/30/94
if not previously called
Year Ended December 31, 1991
Metromedia Company $8,549 $710 $ -- $ -- $9,259 $ --
Promissory note, bearing
interest at prime, due
9/30/94 if not previously called
<PAGE>
<PAGE> F-51
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE IV - INDEBTEDNESS TO RELATED PARTIES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
Balance at
Beginning of Balance at
Year Additions Deductions End of Year
- - ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993:
LIN Cellular Communications $20,220 -- $18,563 $1,657 (1)
American Cellular
Communications 15,726 -- 14,437 1,289 (1)
Galveston Mobile Partnership 5,478 -- 761 4,717
Comcast Cellular 52,403 6,006 -- 58,409
- - ------------------------------------------------------------------------------------------
Totals $93,827 $6,006 $33,761 $66,072
==========================================================================================
Year Ended December 31, 1992:
LIN Cellular Communications $17,407 $2,813 $ -- $20,220
American Cellular
Communications 13,539 2,187 -- 15,726
Galveston Mobile Partnership -- 5,478 -- 5,478
Comcast Cellular -- 52,403 -- 52,403
- - ------------------------------------------------------------------------------------------
Totals $30,946 $62,881 $ -- $93,827
==========================================================================================
Year Ended December 31, 1991:
LIN Cellular Communications $11,782 $5,625 $ -- $17,407
American Cellular
Communications 9,164 4,375 -- 13,539
- - ------------------------------------------------------------------------------------------
Totals $20,946 $10,000 $ -- $30,946
==========================================================================================
(1) Classified as short term.
See Notes 4 and 5 regarding terms of indebtedness.<PAGE>
<PAGE> F-52
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE V - PROPERTY AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
Balance at Balance at
Beginning of Retirements End of
Year Additions or Sales Reclassifications Year
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1993:
Land $1,271 $168 $60 -- $1,379
Buildings and improvements 5,084 1,499 -- -- $6,583
Cellular equipment 511,993 71,081 6,419 -- $576,655
Other 40,093 32,770 1,866 -- $70,997
- - ----------------------------------------------------------------------------------------------------------------------
Totals $558,441 $105,518 $8,345 -- $655,614
======================================================================================================================
Year Ended December 31, 1992:
Land $518 $753 $ -- $ -- $1,271
Buildings and improvements 3,321 1,763 -- -- 5,084
Cellular equipment 409,385 106,982 20,054 15,680 511,993
Other 46,970 13,932 5,129 (15,680) 40,093
- - ----------------------------------------------------------------------------------------------------------------------
Totals $460,194 $123,430 $25,183 $0 $558,441
======================================================================================================================
Year Ended December 31, 1991:
Land $395 $123 $ -- $ -- $518
Buildings and improvements 1,487 2,161 327 -- 3,321
Cellular equipment 321,188 88,197 -- -- 409,385
Other 33,688 13,379 97 -- 46,970
- - ----------------------------------------------------------------------------------------------------------------------
Totals $356,758 $103,860 $424 $ -- $460,194
======================================================================================================================
<PAGE>
<PAGE> F-53
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
Balance at Balance at
Beginning of Retirements End of
Year Additions or Sales Year
- - ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year Ended December 31, 1993:
Buildings and improvements $1,200 $969 $6 $2,163
Cellular equipment 129,640 58,040 1,994 185,686
Other 10,304 6,301 1,287 15,318
- - ---------------------------------------------------------------------------------------------------------
Totals $141,144 $65,310 $3,287 $203,167
=========================================================================================================
Year Ended December 31, 1992:
Buildings and improvements $633 $567 $ -- $1,200
Cellular equipment 93,219 47,272 10,851 129,640
Other 6,628 4,185 509 10,304
- - ---------------------------------------------------------------------------------------------------------
Totals $100,480 $52,024 $11,360 $141,144
=========================================================================================================
Year Ended December 31, 1991:
Buildings and improvements $307 $377 $51 $633
Cellular equipment 56,192 37,027 -- 93,219
Other 3,711 2,970 53 6,628
- - ---------------------------------------------------------------------------------------------------------
Totals $60,210 $40,374 $104 $100,480
=========================================================================================================
<PAGE>
<PAGE> F-54
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at Beginning of Year $14,638 $11,309 $10,387
Additions:
Charged to income 20,945 21,127 13,506
Recoveries 5,551 7,400 3,255
Deductions:
Accounts written off 31,155 25,198 15,839
- - ------------------------------------------------------------------------------------------
Balance at End of Year $9,979 (1) $14,638 (2) $11,309
=========================================================================================
(1) Includes $150 classified as long-term.
(2) Includes $198 classified as long-term.
<PAGE>
<PAGE> F-55
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(Dollars in thousands)
<CAPTION>
1993 1992 1991
- - ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Taxes - other than payroll and income taxes:
Property $8,960 $13,322 $6,054
Other 1,866 1,578 1,150
Advertising 29,719 19,459 15,017
Other items are not presented as such amounts are less than 1% of net revenues.
</TABLE>
<PAGE>
<PAGE>
EXHIBIT INDEX
3.1 Restated Certificate of Incorporation of LIN
Broadcasting Corporation (incorporated by reference
to Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1992)
3.2 By Laws, as amended (incorporated by reference to
Exhibit 3(b) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1989)
10.1* 1969 Stock Option Plan, as amended
10.2* Profit Sharing Plan, as amended and restated
effective January 1, 1989 (incorporated by reference
to Exhibit 10.2 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1992)
10.3* Deferred Compensation Plan, as amended (incorporated
by reference to Exhibit 10(d) to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1989)
10.4 Television affiliation contract for WAND-TV with
American Companies, Inc., dated February 8, 1990
(incorporated by reference to Exhibit 10.4 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.5 Television affiliation contract for WAVY-TV with
National Broadcasting Company, Inc., dated December
17, 1988 (incorporated by reference to Exhibit 10(f)
to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989)
10.6 Television affiliation contract for KXAS-TV with
National Broadcasting Company, Inc., dated October
5, 1989, as amended (incorporated by reference to
Exhibit 10.6 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.7 Television affiliation contract for KXAN-TV with
National Broadcasting Company, Inc., dated July 1,
1989, as amended (incorporated by reference to
Exhibit 10(h) to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1989)
10.8 Television affiliation contract for WOTV-TV with
National Broadcasting Company, Inc., dated January
1, 1981, as amended (incorporated by reference to
Exhibit 10.8 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.9 Television affiliation contract for WISH-TV with
CBS, Inc., dated November 1, 1992 (incorporated by
reference to Exhibit 10.9 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.10 Television affiliation contract for WANE-TV with
CBS, Inc., dated November 1, 1992 (incorporated by
reference to Exhibit 10.10 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.11 Partnership Agreement, dated as of March 18, 1983,
among LIN Cellular Communications Corporation,
Metromedia, Inc., and Cellular Systems, Inc.
(incorporated by reference to Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.12 Partnership Agreement, dated as of June 22, 1983,
between Los Angeles Cellular Corporation and LIN
Cellular Communications Corporation (incorporated by
reference to Exhibit 10.12 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.13 Stock Agreement, dated June 5, 1982, by and among
Radio Broadcasting Company, LIN Broadcasting
Corporation, LIN Cellular Communications
Corporation, Metromedia, Inc., and AWACS, Inc.
(incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.14 Amended and Restated Partnership Agreement, dated as
of November 9, 1984, among LIN Cellular
Communications Corporation, D/FW Signal, Inc., MCI
Cellular Telephone Company, Cellular Mobile Systems,
Inc., and Mid-America Cellular Systems, Inc.
(incorporated by reference to Exhibit 10.14 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992)
10.15 Amended and Restated Partnership Agreement, dated as
of December 12, 1984, among Metro Mobile CTS,
Cellular Systems, Inc., and Houston Mobile Cellular
Communications Company (incorporated by reference to
Exhibit 10.15 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1992)
10.16 Partnership Agreement, dated as of December 12,
1984, among American Mobile Communications of
Houston and the Gulf, Houston Cellular Corporation,
LIN Cellular Communications Corporation, MCI
Cellular Telephone Company, Charisma Communications
Corp. of the Southwest, and Cellular Mobile Systems
of Texas, Inc. (incorporated by reference to Exhibit
10.16 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992)
10.17 Partnership Agreement, dated as of September 1991,
by and between Galveston Mobile Corporation and LIN
Cellular Communications Corporation (incorporated by
reference to Exhibit 10.17 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.18 Agreement, dated December 11, 1989, between the
Company, MMM Holdings, Inc. and McCaw Cellular
Communications, Inc. (incorporated by reference to
Exhibit (c)(6) to Amendment No. 24 to Schedule 14D-1
and Amendment No. 30 to Schedule 13D relating to the
Offer filed by MMM Holdings, Inc. and McCaw with the
Securities and Exchange Commission on December 12,
1989)
10.19 Private Market Value Guarantee, dated December 11,
1989, between the Company and McCaw Cellular
Communications, Inc. (incorporated by reference to
Exhibit (c)(7) to Amendment No. 24 to Schedule 14D-1
and Amendment No. 30 to Schedule 13D relating to the
Offer filed by MMM Holdings, Inc. and McCaw with the
Securities and Exchange Commission on December 12,
1989)
10.20 Exercise, dated October 27, 1989, of the Company's
Rights of First Refusal to Acquire the Interests of
Metromedia Company in Metro One Cellular Telephone
Company, and Agreement of Purchase and Sale, dated
October 3, 1989, by and between McCaw Cellular
Communications, Inc. and Metromedia Company
(incorporated by reference to Exhibit 10(u) to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989)
10.21* Form of Severance Agreement between the Company and
Certain Officers of the Company (incorporated by
reference to Exhibit 10(u) to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1989)
10.22 Credit Agreement, dated as of August 1, 1990, among
LIN Cellular Network, Inc., Morgan Guaranty Trust
Company of New York and the Lenders Named therein
(incorporated by reference to Exhibit 10.21 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990)
10.23 Credit Agreement, dated as of August 1, 1990, among
LIN Television Corporation, The Toronto-Dominion
Bank Trust Company, and the Lenders Named therein
(incorporated by reference to Exhibit 10.22 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990)
10.24 Agreement for Change-Out System, dated as of October
2, 1990, among Ericsson Radio Systems Inc., Ericsson
GE Mobile Communications Holding Inc. and Cellular
Telephone Company (incorporated by reference to
Exhibit 10.23 to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990)
10.25 Stock Acquisition Agreement, dated as of May 7,
1990, between LCH Cellular, Inc. and Metromedia
Company (incorporated by reference to Exhibit (b)(i)
to the Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1990)
10.26 Restated Certificate of Incorporation of LCH
Communications, Inc. (formerly LCH Cellular, Inc.)
(incorporated by reference to Exhibit (b)(ii) to the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990)
10.27 Stockholders Agreement, dated as of August 10, 1990,
among Metromedia Company, LCH Holdings, Inc. and LCH
Communications, Inc. (incorporated by reference to
Exhibit (b)(iii) to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1990)
10.28* Employee Stock Purchase Plan (incorporated by
reference to Exhibit 4.3 to the Company's
Registration Statement on Form S-8 dated March 13,
1991 (Registration No. 33-39282))
10.29* Employment Agreement, dated as of October 17, 1990
of Gary Chapman (incorporated by reference to
Exhibit 10.28 to the Company's Annual Report on Form
10-K for the year ended December 31, 1991)
10.30* Employment Agreement, dated as of April 16, 1991, of
Donald Guthrie (incorporated by reference to Exhibit
10.30 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1991)
10.31* LIN Broadcasting Corporation Retirement Plan, as
amended and restated as of January 1, 1989
(incorporated by reference to Exhibit 10.31 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1991). Amendment thereto dated
January 1, 1993 (incorporated by reference to
Exhibit 10.32 to the Company's Annual Report on Form
10-K for the year ended December 31, 1992)
10.32* LIN Broadcasting Corporation Supplemental Benefit
Retirement Plan dated January 1, 1990 (incorporated
by reference to Exhibit 10.33 to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1992)
10.33* LIN Broadcasting Corporation 401(K) Plan & Trust,
dated as of July 1, 1991 (incorporated by reference
to Exhibit 10.32 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1991)
10.34* LIN Employee Plans, established in connection with
the McCaw-AT&T Merger Agreement
10.35* LIN Broadcasting Deferred Compensation Plan, dated
December 15, 1993.
21 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP**
23.2 Consent of Deloitte & Touche
23.3 Consent of Arthur Andersen & Co.
24 Powers of Attorney with respect to Certain
Signatures
-----------------------------
* Management contract or compensatory plan or arrangement.
** Filed herewith.
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration
Statements (Form S-8, Nos. 33-39282 and 2-82944) of LIN
Broadcasting Corporation and in the related Prospectus of our
report dated February 4, 1994, with respect to the consolidated
financial statements and schedules of LIN Broadcasting
Corporation included in Amendment No. 1 to the Annual Report
(Form 10-K/A) for the year ended December 31, 1993.
ERNST & YOUNG LLP
Seattle, Washington
September 15, 1994
