UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the period ended March 31, 1995.
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from _____________ to ________________
Commission File Number: 0-2481
LIN Broadcasting Corporation
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(Exact name of registrant as specified in its charter)
Delaware 62-0673800
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5295 Carillon Point, Kirkland, WA 98033
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(Address of principal executive offices) (Zip Code)
(206) 828-1902
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(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at April 30, 1995
--------------------- -----------------------------
Common Stock, $0.01 par value 51,714,736<PAGE>
<PAGE> 1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
March 31, December 31,
1995 1994
------------ -----------
ASSETS
- --------------------------
Current Assets:
Cash and cash equivalents $35,183 $47,467
Accounts receivable, less
allowance for doubtful
accounts 135,852 136,279
Inventories 16,123 16,848
Prepaid expenses and
other current assets 8,643 9,907
--------- ---------
Total current assets 195,801 210,501
Property and equipment, at cost,
less accumulated depreciation 465,762 450,698
Other noncurrent assets 45,662 47,150
Investments in and advances to
unconsolidated affiliates 293,998 274,830
Intangible assets, less accumulated
amortization 1,923,462 1,940,694
--------- ---------
Total assets $2,924,685 $2,923,873
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Current portion of long-term
bank debt $167,563 $151,875
Accounts payable, accrued expenses
and other current liabilities 186,645 230,574
--------- ---------
Total current liabilities 354,208 382,449
(continued)<PAGE>
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (continued)
(Dollars in thousands)
(Unaudited)
March 31, December 31,
1995 1994
------------ -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
(Continued)
- ------------------------------------
Long-term bank debt 1,453,688 1,443,125
Deferred income taxes 735,185 735,313
Other noncurrent liabilities 7,303 6,741
Minority interests in equity of
consolidated subsidiaries 61,185 58,507
Stockholders' Equity:
Common stock (55,329,000
shares issued) 553 553
Paid-in capital 1,055,893 1,055,169
Deficit (573,354) (586,055)
--------- ---------
483,092 469,667
Less common stock in treasury,
at cost (3,633,000 and
3,678,000 shares, respectively) 169,976 171,929
--------- ---------
Total stockholders' equity 313,116 297,738
--------- ---------
Total liabilities and
stockholders' equity $2,924,685 $2,923,873
========== ==========
See notes to condensed consolidated financial statements.<PAGE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
---------------------------
1995 1994
----------- ----------
Net Revenues $199,227 $191,627
---------- ----------
Operating Costs and Expenses:
Direct costs and expenses 136,309 128,516
Corporate expenses 2,966 2,613
Depreciation 14,687 13,081
Amortization of intangible assets 17,232 19,701
---------- ----------
171,194 163,911
---------- ----------
Operating Income 28,033 27,716
---------- ----------
Other Income (Expense):
Equity in income of
unconsolidated affiliates 30,191 31,848
Investment and other income 1,031 1,237
Interest expense (32,264) (22,520)
---------- ----------
(1,042) 10,565
---------- ----------
Income Before Income Tax Expense
and Minority Interests 26,991 38,281
Income Tax Expense 6,894 12,914
---------- ----------
Income Before Minority Interests 20,097 25,367
(continued)<PAGE>
<PAGE> 4
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended March 31,
---------------------------
1995 1994
----------- ----------
Minority Interests:
In net income of consolidated
subsidiaries 7,396 6,887
Provision for preferred stock
dividends of a subsidiary -- 33,575
---------- ----------
Net Income (Loss) $12,701 $(15,095)
========== ==========
Net Income (Loss) Per Share $0.24 $ (0.29)
Average Common and Equivalent
Shares Outstanding 52,231 51,511
See notes to condensed consolidated financial statements.
<PAGE>
<PAGE> 5
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Three Months Ended March 31,
---------------------------
1995 1994
----------- ----------
Net cash provided (used) by
operating activities $(15,475) $58,573
--------- ---------
Investing Activities:
Proceeds from sale of
marketable securities -- 3,092
Capital expenditures (30,562) (33,684)
Cellular acquisitions -- (1,500)
Net advances from unconsolidated
affiliates 3,324 8,913
--------- ---------
Net cash used in
investing activities (27,238) (23,179)
--------- ---------
Financing Activities:
Proceeds from borrowings 60,000 --
Repayment of bank debt (33,750) (28,285)
Proceeds from common stock
issued for stock purchase
plan and stock options 4,179 1,292
Purchase of common stock
for treasury -- (484)
--------- ---------
Net cash provided by (used
in) financing activities 30,429 (27,477)
--------- ---------
(continued)<PAGE>
<PAGE> 6
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Three Months Ended March 31,
---------------------------
1995 1994
----------- ----------
Increase (decrease) in Cash
and Cash Equivalents (12,284) 7,917
--------- ---------
Cash and Cash Equivalents at
Beginning of Period 47,467 86,366
Cash and Cash Equivalents
at End of Period $35,183 $94,283
======== ========
Supplemental Disclosures Of Cash Flow Information
Interest payments were $30,024 and $16,866 for the three months
ended March 31, 1995 and 1994, respectively. Net tax payments
were $6,390 and $12,121 for the three months ended March 31, 1995
and 1994, respectively.
See notes to condensed consolidated financial statements.
<PAGE>
<PAGE> 7
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(Unaudited)
1. Basis Of Presentation:
The condensed consolidated financial statements include the
accounts of LIN Broadcasting Corporation (LIN), its wholly-owned
subsidiaries and cellular partnerships (principally
New York and Dallas) in which LIN has voting control (the
Company). The Company's investments in cellular
partnerships in which it has voting interests of 50% or less
but more than 20% (principally Los Angeles and Houston) are
accounted for on the equity method.
These financial statements have been prepared without audit,
pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such
rules and regulations. These condensed consolidated
financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto
included in the Company's Form 10-K for the year ended
December 31, 1994.
The financial information included herein reflects all
adjustments (consisting of normal recurring adjustments)
which are, in the opinion of management, necessary to a fair
presentation of the results for interim periods. The
results of operations for the three month period ended March
31, 1995 are not necessarily indicative of the results to be
expected for the full year.
2. Summarized Financial Data
The table below provides summarized income statement
information for the cellular ventures accounted for on the
equity method for the three months ended March 31, 1995 and
1994. The information for the two periods is not directly
comparable due to the disposition of the Company's equity
investment in the Philadelphia cellular operation in June
1994.
<PAGE>
<PAGE> 8
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Three Months Ended March 31,
---------------------------
At 100% 1995 1994
------------- ------ ------
Net revenues $205,901 $213,427
Net income 70,800 75,624
LIN's equity in net income 30,191 31,848
<PAGE>
<PAGE> 9
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
THREE MONTHS 1995 v. THREE MONTHS 1994
The results for the two periods are not directly comparable
due to the previously reported spin-off of the LIN Television
Corporation ("LIN Television") operations and the divestiture of
the Philadelphia cellular equity investment and the
GuestInformant publishing operations. See Note 3 to the
Consolidated Financial Statements in the Company's 1994 Form
10-K.
The Company's net revenues for the first quarter of 1995
were $199.2 million, a 4% increase over first quarter 1994 net
revenues. The revenue increase was the result of a 29% increase
in revenues attributable to consolidated cellular operations,
offset by a decrease in revenues attributable to media operations
due to the divestiture of LIN Television and GuestInformant. The
increase in cellular revenues was primarily due to a 45% increase
in the consolidated subscriber base since March 31, 1994, offset
in part by a 10% decrease in average monthly revenue per
subscriber. Average monthly revenue per subscriber continues to
trend downward as market penetration increases, reflecting the
continuation of a change in the mix of customers toward more
casual users as a percentage of the total customer base. Average
monthly minutes of usage declined approximately 6%. In addition,
pricing changes and promotional activities have resulted in a
lower average revenue per minute of usage.
Direct costs and expenses increased 6% due to increased
costs at the cellular operations offset by the absence of costs
from the divested LIN Television and GuestInformant operations.
Operating expenses of the consolidated cellular operations
increased 26% due to increased system operations costs, customer
support and other administrative expenses related to increases in
the subscriber base. Marketing expenses of the consolidated
cellular operations increased 37% due to a 51% increase in gross
subscriber additions offset by a 9% decrease in cost per
additional subscriber.
Depreciation expense increased 12% principally due to higher
levels of cellular property and equipment in service.
Amortization of intangibles decreased 13% due to the effect of
certain intangible assets becoming fully amortized in December
1994, offset in part by additional amortization resulting from
cellular acquisitions completed in May 1994. <PAGE>
<PAGE> 10
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS (Continued)
Equity in the income of unconsolidated cellular affiliates
decreased 5% due primarily to a slight decrease in net income at
the Los Angeles and Houston operations. Revenues at the
unconsolidated affiliates (Los Angeles, Houston and Galveston)
rose 21% due to a 30% increase in subscribers offset by a
decrease in monthly revenue per subscriber. Direct costs and
expenses increased 39% largely from higher marketing costs
resulting primarily from a 36% increase in gross subscribers
added for the quarter.
Interest expense (which includes the amortization of the
financing and commitment fees) increased $9.7 million, due to
higher interest rates, offset in part by the absence of the
divested LIN Television Corporation debt.
The provision for preferred stock dividends of a subsidiary
is no longer required due to the redemption of the LCH
Communications preferred stock in the second quarter of 1994.
See note 7 to the Consolidated Financial Statements in the
Company's 1994 Form 10-K.
REGULATION AND COMPETITION
Governmental regulation of the Company's cellular interests
is described in the Company's Annual Report on Form 10-K. Since
the filing of that report, the Federal Communications Commission
has announced that it has denied all petitions from state utility
commissions requesting authority to continue regulating cellular
rates. Utility Commissions in three states where the Company
owns cellular interests - California, Connecticut and New York -
had filed petitions to retain rate regulation authority. The
states where petitions have been denied will have the right to
request the FCC to reconsider its decision. If they do so, they
will be able to continue regulating cellular rates until the FCC
acts on their reconsideration requests, or until August 10, 1995
if no FCC action has been taken by that date.
<PAGE>
<PAGE> 11
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
The Company utilizes capital primarily to expand and improve
its cellular systems, to make acquisitions of cellular interests
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.
The Company's principal sources of funds are its operations
and two bank credit facilities, a senior secured facility and a
senior unsecured facility (together the "Bank Credit
Facilities"). Under its Bank Credit Facilities, the Company had
$1.6 billion outstanding on March 31, 1995. The Company had an
additional $160 million available on its Bank Credit Facilities
as of March 31, 1995.
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 indebtedness to its cellular
cash flows as of the end of each quarter. As of March 31, 1995,
the Company was in compliance with or had obtained appropriate
waivers from all covenants under the Bank Credit Facilities.
Further discussion of the Company's Bank Credit Facilities,
including restrictions on certain activities by the Company, is
set forth in the Company's Form 10-K for the year ended December
31, 1994.
Net cash used in operating activities totaled $15.5 million
for the quarter ended March 31, 1995, compared to cash provided
by operating activities of $58.6 million for the same period in
1994. The decrease was primarily due to the increase in the
reduction of accounts payable and accrued expenses during the
first quarter of 1995 as compared to 1994, a switch from advance
billing to arrears billing for cellular access charges in the New
York market, as well as a decrease in cash received from equity
affiliates during the period compared to the prior year.
Cash used by investing activities increased 18%, primarily
due to a decrease in net advances from unconsolidated affiliates
offset by a decrease in capital expenditures due to the
divestiture of LIN Television and GuestInformant operations.
Cash generated from financing activities increased significantly
during the first quarter of 1995 due to additional borrowings of
$60 million needed for increased operating capital related to
accelerated subscriber growth, capital expenditures and the <PAGE>
<PAGE> 12
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES (continued)
billing change in the New York market offset by scheduled
principal payments of $33.8 million during the quarter.
The Company's indebtedness is due and payable over several
years, with the amortization increasing significantly during the
next few years. While the Company expects to have sufficient
funds from operations and available under the Bank Credit
Facilities to fund its operations and repay its indebtedness when
due, there can be no assurance that this will occur as 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 modify its operations or borrow additional
amounts under its Bank Credit Facilities. 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
refinance the Bank Credit Facilities, issue additional debt
through a private or public offering, sell equity or sell certain
cellular interests or other assets. There can be no assurance
that the Company will be able to obtain such refinancings,
additional financing or asset sales when needed, or if carried
out, that the terms will be favorable to the Company or its
stockholders.
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.
AGREEMENT AND PLAN OF MERGER
On April 28, 1995, an Agreement and Plan of Merger was
executed and delivered by and among McCaw Cellular
Communications, Inc. ("McCaw"), a wholly owned subsidiary of AT&T
Corp., MMM Holdings, Inc. ("MMM"), a wholly owned subsidiary of
McCaw, MMM Acquisition Corp., a wholly owned subsidiary of MMM
and the Company (the "Merger Agreement"). A more complete
description of the Merger Agreement and the transactions
contemplated therein is contained in the Report on Form 8-K dated
April 28, 1995 filed by the Company.<PAGE>
<PAGE> 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is from time to time a defendant in and is
threatened with various legal proceedings arising from its
regular business activities. The Company is 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
Company.
In August 1993 and in December 1993, two dealers for the Los
Angeles cellular partnership (LACTC) filed lawsuits against the
partnership and certain other parties in California state court,
seeking injunctive relief, damages, treble damages, punitive
damages and restitution. (Goldenwest Cellular Corp. v. Los
Angeles SMSA Ltd. Partnership; PacTel Cellular; The Good Guys
Inc., Case No. 715479 (Superior Court of California, Orange
County), and Autophone, Inc. v. Los Angeles Cellular Telephone
Co.; Los Angeles SMSA Ltd. Partnership; PacTel Cellular, et al.,
Case No. 722299 (Superior Court of California, Orange County)).
These cases are now set for trial in June 1995 and have been
consolidated. 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 and conspiracy. A third lawsuit addressing similar
facts and raising many of the same claims (Cellular Activators,
et al. v. Los Angeles Cellular Telephone Company, et al., Case
No. 729278 (Superior Court of California, Orange County)) was
filed in May 1994. Plaintiffs in this case seek damages in excess
of $1,400,000, punitive damages, treble damages, restitution, and
injunctive relief. A fourth suit was filed in February 1994 (Cel-Tech
Communications, Inc. et al. v. Los Angeles Cellular
Telephone Company et al., Case No. VC015535 (Superior Court of
California, Los Angeles County)) containing claims relating to
equipment sales and seeking injunctive relief, restitution and
monetary damages. This case was tried in February and March 1995;
after presentation of the plaintiff's case, the judge granted
LACTC's motion to dismiss the case in its entirety.
In August 1994 a class action was filed against LACTC in
California state court on behalf of the partnership's cellular
telephone service customers and former customers in the greater
Los Angeles area (Thomas and Nicola v. Los Angeles Cellular
Telephone Company, et al., Case No. 734316, Superior Court of
California, Orange County). The complaint alleges that LACTC has <PAGE>
<PAGE> 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings (continued)
engaged in price fixing for cellular service rates with other
cellular carriers in violation of California law. The complaint
seeks actual damages on behalf of the class in excess of
$100,000,000. The complaint further seeks treble damages and
injunctive relief. A similar class action complaint was also
filed in California state court in November 1994 on behalf of the
customers of Los Angeles SMSA (Euros Cady v. Los Angeles Cellular
Corp., Case No. 739101, Superior Court of California, Orange
County). Plaintiffs are seeking to consolidate the Thomas and
Cady cases with the Garabedian case referenced below.
Another similar class action complaint was filed against
LACTC in federal court in October of 1994, on behalf of former
and current cellular customers of both LACTC and its competitor
Los Angeles SMSA. This case also specifically named Los Angeles
SMSA and its affiliate AirTouch Cellular (PacTel Cellular) as
defendants. (Kagan and Sifuentes v. Los Angeles Cellular
Telephone Company, et al., Case No. 94-6923, U.S. District Court,
Central District of California). The complaint alleged that
defendants engaged in price fixing for cellular service rates in
violation of Sections 1 and 2 of the Sherman Act and sought
damages, treble damages and injunctive relief. In March 1995, the
judge entered an order granting LACTC's motion for a summary
judgment in this case. Plaintiffs have appealed this decision.
A class action complaint similar to the Thomas case was
filed in November 1993 against PacTel Cellular (AirTouch), Los
Angeles SMSA and others in California state court (Garabedian v.
California, Case No. 721144, Superior Court of California, Orange
County). The complaint, brought on behalf of current and former
customers of Los Angeles SMSA and LACTC, alleges that PacTel
Cellular and LACTC conspired to fix cellular service prices. Like
the Thomas case, the Garabedian complaint seeks damages in excess
of $100,000,000, treble damages and injunctive relief. In March
1995, the court granted the motion of AirTouch and Los Angeles
SMSA to add LACTC as a defendant in this case, and granted the
plaintiffs' motion to certify the class. LACTC is seeking
reconsideration of those orders. No trial date has been set in
this case.
LACTC intends to continue to defend the above-referenced
lawsuits vigorously, and believes that it has meritorious
defenses to the allegations contained in the complaints. The
Company does not expect that the decisions in these legal
proceedings will have a material adverse effect on its financial
position or results of operations.<PAGE>
<PAGE> 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings (continued)
The Company is aware of an antitrust investigation that was
conducted by the California State Attorney General involving the
pricing of cellular telephone service in the Los Angeles area
market from about 1986 to the early 1990s. No formal charge or
complaint was filed. LACTC has been informed that the Attorney
General does not intend to file antitrust claims against LACTC or
the Company.
In August 1993, a class action lawsuit was filed on behalf
of Texas cellular subscribers in state court in Texas (Crowley,
et al. v. Houston Cellular Telephone Company, et al., Case No.
93-0879, Harrison County, Texas, 71st Judicial District). The
defendants in this action are Houston Cellular Telephone Company,
LIN Broadcasting Corporation, Metroplex Telephone Co., McCaw
Cellular Communications, Inc., and the affiliates of these
entities providing cellular service in the State of Texas. The
most recent petition, filed in March 1995, generally challenges
the liquidated damages and automatic renewal provisions in annual
cellular subscriber contracts. Plaintiffs have made the following
allegations: (1) the contracts are unconscionable and violate the
Texas Deceptive Trade Practices Act; (2) the liquidated damages
provisions contained in the contracts constitute an illegal
penalty; (3) the defendants have engaged in an antitrust
conspiracy with each other and with their competitors to divide
the cellular market in Texas by including the challenged
provisions in their subscriber contracts and have therefore
violated the Texas Free Enterprise and Antitrust Act; (4) the
defendants engaged in a civil conspiracy by which the challenged
provisions were included in the subscriber contracts; and (5) the
defendants fraudulently concealed their illegal acts such that
the running of any applicable statute of limitations has been
suspended. Plaintiffs allege two separate sub-classes: the
"damages" class, consisting of persons who breached their
contracts and were thereby charged liquidated damages; and the
"contracts" class, consisting of persons who are currently
subject to the challenged provisions in their subscriber
contracts. Neither of these sub-classes has been certified by the
court at this time. Plaintiffs seek declaratory relief, damages,
fees, costs and interest. Written and deposition discovery has
commenced. No trial or class certification hearing dates have
been set. The defendants intend to defend the lawsuit vigorously,
and believe they have meritorious defenses to the allegations
contained in the complaint. The Company does not expect that the
decision in this legal proceeding will have a material adverse
effect on its financial position or results of operations. The
Company has been informed that the Office of the Attorney General
of the State of Texas notified the Houston Partnership in March
1995 of that office's intention to file claims against that <PAGE>
<PAGE> 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings (continued)
partnership that are largely similar to the claims presented in
the Crowley case. Discussions have been held with
representatives of the Attorney General's Office and are
scheduled to continue.
In April of 1995 a class action lawsuit was filed in the
United States District Court, Southeastern District of Texas at
Houston, against many advertisers and advertising agencies
alleging defendants had sent unsolicited fax advertisements in
violation of federal and state law. One of the alleged
advertising defendants is the Houston Cellular Telephone Company
("HCTC") (The Chair King, Inc., et al. v. Houston Cellular
Corporation [sic], et al., No. 95-1066). The complaint alleges
that class members are entitled to damages of $500 for each
unsolicited fax or actual losses, treble damages and punitive
damages. Given the recent date of the filing, HCTC has not yet
answered or evaluated the allegations in the complaint. No
discovery has occurred. The class has not been certified.
Motions challenging the complaint are scheduled to be filed on
July 3, 1995.
A description of certain litigation related to the Merger
Agreement and the transactions contemplated therein is included
in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 and Amendment No. 1 thereto, each of which has
been filed with the Securities and Exchange Commission.
Item 5. Other Information
(a) Attachment of Supplemental Financial Data.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
2.1 Agreement and Plan of Merger By and Among McCaw
Cellular Communications, Inc., MMM Holdings, Inc.,
MMM Acquisition Corp. and LIN Broadcasting
Corporation dated April 28, 1995 (incorporated by
reference to Exhibit No. 2.1 to Amendment No. 1 to
the Company's Annual Report on Form 10-K for the
year ended December 31, 1994)
11 Statement re: Computation of Earnings per Share
27.1 Financial Data Schedule
<PAGE>
<PAGE> 17
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K (continued)
(b) Reports on Form 8-K
The Company filed the following Reports on Form 8-K during
the quarter ended March 31, 1995:
A Report on Form 8-K dated December 28, 1994 which described
the spin-off of LIN Television and a contemporaneous acquisition
of assets by LIN Television. This report included financial
statements and pro forma financial information related to these
transactions.
A report on Form 8-K dated March 7, 1995 which described the
results of the appraisal of the Company performed by Wasserstein
Perella & Co., Inc. pursuant to the Private Market Value
Guarantee dated December 11, 1989, as amended, between the
Company and McCaw.<PAGE>
<PAGE> 18
LIN BROADCASTING CORPORATION
SUPPLEMENTAL FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
The following table sets forth unaudited supplemental financial
data for the Company's cellular operations reflecting
proportionate consolidation of entities in which the Company has
an interest. This presentation differs from the consolidation
methodology used to prepare the Company's principal financial
statements in accordance with generally accepted accounting
principles (see Note 1 to the consolidated financial statements).
Three Months Ended March 31,
---------------------------
1995 1994
------ ------
Cellular:
Net revenues $261,831 $222,395
-------- --------
Direct costs and expenses 84,682 69,803
Marketing 86,226 67,775
Depreciation 20,441 17,424
Amortization 17,265 18,977
-------- --------
Total operating costs 208,614 173,979
-------- --------
Operating income -
proportionate basis $53,217 $48,416
======== ========
Proportionate subscribers(1) 1,199,000 958,000
(1) Calculated by multiplying (i) the total subscribers of a
licensee in which, as of the date specified, the Company
owned an interest, by (ii) the percentage ownership interest
in that licensee which the Company owned on such date.<PAGE>
<PAGE> 19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
LIN Broadcasting Corporation
(Registrant)
DONALD GUTHRIE
---------------------------------
Donald Guthrie
Senior Vice President - Finance
Date: May 15, 1995
EXHIBIT 11
Statement re Computation of Per Share Earnings
(Amounts in thousands except per share amounts)
Quarter Ended Quarter Ended
March 31, 1995 March 31, 1994
-------------- ---------------
Primary
Average shares outstanding 51,662 51,511
Net effect of dilutive
stock options based on
the treasury stock
method using the
average market price 569 --
------- -------
Total 52,231 51,511
======== ========
Net Income (Loss) $12,701 $(15,095)
======== ========
Net Income (Loss) per Share $0.24 $(0.29)
======== ========
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> MAR-31-1995
<CASH> 35,183
<SECURITIES> 0
<RECEIVABLES> 156,518
<ALLOWANCES> (20,666)
<INVENTORY> 16,123
<CURRENT-ASSETS> 195,801
<PP&E> 622,105
<DEPRECIATION> (156,343)
<TOTAL-ASSETS> 2,924,685
<CURRENT-LIABILITIES> 354,208
<BONDS> 1,453,688
<COMMON> 553
0
0
<OTHER-SE> 312,563
<TOTAL-LIABILITY-AND-EQUITY> 2,924,685
<SALES> 0
<TOTAL-REVENUES> 199,227
<CGS> 0
<TOTAL-COSTS> 30,050
<OTHER-EXPENSES> 101,141
<LOSS-PROVISION> 5,118
<INTEREST-EXPENSE> 32,264
<INCOME-PRETAX> 26,991
<INCOME-TAX> 6,894
<INCOME-CONTINUING> 12,701
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,701
<EPS-PRIMARY> 0.24
<EPS-DILUTED> 0.24
</TABLE>
