<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
/x/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to _________
Commission file number 0-23008
AMERICAN TELECASTING, INC. 401(K) RETIREMENT PLAN
AMERICAN TELECASTING, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 54-1486988
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5575 TECH CENTER DRIVE, SUITE 300
COLORADO SPRINGS, COLORADO 80919
(Address of principal executive offices) (Zip Code)
Registrant's phone number, including area code: (719) 260-5533
================================================================================
<PAGE> 2
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS: PAGE
----
<S> <C>
Report of Independent Public Accountants ................................................... 1
Statement of Net Assets Available for Benefits as of December 31, 1996...................... 2
Statement of Net Assets Available for Benefits as of December 31, 1995 ..................... 3
Statement of Changes in Net Assets Available for Benefits for the year ended
December 31, 1996 ........................................................................ 4
Notes to Financial Statements .............................................................. 5
SCHEDULES:
Assets Held for Investment ................................................................. 9
Purposes
Reportable ................................................................................. 10
Transactions
Schedules omitted because there were no such items for the year ended December 31, 1996:
Loans or Fixed Income Obligations
Leases in Default or Classified as Uncollectible
Nonexempt Transactions
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To American Telecasting, Inc. 401(K) Retirement Plan Investment Committee:
We have audited the accompanying statements of net assets available for
benefits of American Telecasting, Inc. 401(K) Retirement Plan (the "Plan") as
of December 31, 1996 and 1995, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1996. These
financial statements and the schedules referred to below are the responsibility
of the Plan'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 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 net assets available for benefits of the Plan as of
December 31, 1996 and 1995, and the changes in net assets available for
benefits for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purposes of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations of Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in
the statements of net assets available for benefits and the statement of
changes in net assets available for benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund.
The supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
As explained in the notes thereto, information presented in the schedule of
reportable transactions does not disclose the historical cost of certain
investments. Disclosure of this information is required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
ARTHUR ANDERSEN, LLP
Denver, Colorado
June 30, 1997
1
<PAGE> 4
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PUTNAM
THE GEORGE GROWTH AND PUTNAM OTC
ATI COMMON PUTNAM FUND INCOME FUND PUTNAM GLOBAL EMERGING
STOCK FUND OF BOSTON II GROWTH FUND GROWTH FUND
<S> <C> <C> <C> <C> <C>
ASSETS
Investments (at fair value):
American Telecasting, Inc.
Common Stock Fund (Note 1)................ 130,789 -- -- -- --
The George Putnam Fund of Boston ........... -- 207,697 -- -- --
Putnam Growth and Income Fund .............. -- -- -- -- --
Putnam Global Growth Fund II................ -- -- -- 143,783 --
Putnam OTC & Emerging Growth Fund........... -- -- -- -- 270,025
Putnam Voyager Fund II ..................... -- -- -- -- --
Putnam Income Fund ......................... -- -- -- -- --
Putnam Money Market Fund ................... -- -- -- -- --
Money Market Fund .......................... -- -- -- -- --
------------------------------------------------------------------
Total investments ............................. 130,789 207,697 -- 143,783 270,025
Contributions receivable from American
Telecasting, Inc. .......................... 20,688 9,641 24,660 12,719 47,773
Other receivable from American
Telecasting, Inc. .......................... -- -- -- -- --
Due to/from other funds ....................... 16,524 7,805 17,285 14,922 47,902
------------------------------------------------------------------
Total assets .................................. 168,001 225,143 41,945 171,424 365,700
LIABILITIES
Payable to Plan participants for
excess contributions ....................... (22,854) (8,514) (4,148) (5,930) (17,095)
------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ............. 145,147 216,629 37,797 165,494 348,605
===================================================================
<CAPTION>
PUTNAM PUTNAM
VOYAGER FUND PUTNAM MONEY MARKET MONEY MARKET
II INCOME FUND FUND FUND TOTAL
<S> <C> <C> <C> <C> <C>
ASSETS
Investments (at fair value):
American Telecasting, Inc.
Common Stock Fund (Note 1) ............... -- -- -- -- 130,789
The George Putnam Fund of Boston ........... -- -- -- -- 207,697
Putnam Growth and Income Fund .............. -- -- -- -- --
Putnam Global Growth Fund .................. -- -- -- -- 143,783
Putnam OTC Emerging Growth Fund ............ -- -- -- -- 270,025
Putnam Voyager Fund II ..................... 3,072 -- -- -- 3,072
Putnam Income Fund ......................... -- -- -- -- --
Putnam Money Market Fund ................... -- -- 78,287 -- 78,287
Money Market Fund........................... -- -- -- 145,368 145,368
---------------------------------------------------------------------
Total investments ............................. 3,072 -- 78,287 145,368 979,021
Contributions receivable from American
Telecasting, Inc. .......................... 36,926 2,905 16,627 -- 171,939
Other receivable from American
Telecasting, Inc. .......................... -- -- 13,321 -- 13,321
Due to/from other funds ....................... 30,661 4,344 5,925 (145,368) --
---------------------------------------------------------------------
Total assets .................................. 70,659 7,249 114,160 -- 1,164,281
LIABILITIES
Payable to Plan participants for
excess contributions ....................... (4,930) (273) (8,078) -- (71,822)
---------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ............. 65,729 6,976 106,082 -- 1,092,459
=====================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
ATI COMMON
STOCK FUND BALANCED FUND FOREIGN FUND
<S> <C> <C> <C>
ASSETS
American Telecasting, Inc. Common Stock
Fund ..................................... $313,418 $ -- $ --
Balanced Fund .............................. -- 134,717 --
Foreign Fund ............................... -- -- 87,526
Aggressive Growth Fund ..................... -- -- --
Money Market Fund .......................... -- -- --
-------------------------------------------------
Total investments ............................. 313,418 134,717 87,526
Contributions receivable from American
Telecasting, Inc. .......................... 44,001 24,306 14,519
Due to/from other funds ....................... 9,486 3,283 1,356
Cash .......................................... 5,620 2,969 5,475
-------------------------------------------------
Total assets .................................. 372,525 165,275 108,876
LIABILITIES
Payable to Plan participants for
excess contributions ....................... (42,207) (11,472) (6,276)
-------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ............. $330,318 $153,803 $102,600
=================================================
<CAPTION>
AGGRESSIVE MONEY MARKET
GROWTH FUND FUND TOTAL
<S> <C> <C> <C>
ASSETS
American Telecasting, Inc. Common Stock
Fund ..................................... $ -- $ -- $313,418
Balanced Fund .............................. -- -- 134,717
Foreign Fund ............................... -- -- 87,526
Aggressive Growth Fund ..................... 145,988 -- 145,988
Money Market Fund .......................... -- 57,781 57,781
-------------------------------------------------
Total investments ............................. 145,988 57,781 739,430
Contributions receivable from American
Telecasting, Inc. .......................... 24,913 6,943 114,682
Due to/from other funds ....................... 4,004 (18,129) --
Cash .......................................... 3,545 1,021 18,630
-------------------------------------------------
Total assets .................................. 178,450 47,616 872,742
LIABILITIES
Payable to Plan participants for
excess contributions ....................... (11,527) (2,081) (73,563)
-------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ............. $166,923 $ 45,535 $799,179
=================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
ATI COMMON AGGRESSIVE MONEY MARKET
STOCK FUND BALANCED FUND FOREIGN FUND GROWTH FUND FUND
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income (loss):
Net realized and unrealized
appreciation (depreciation)
in fair value of investments ..... (244,275) (21,539) 3,296 49,323 --
Dividends .......................... -- 4,221 1,810 -- 3,789
--------------------------------------------------------------------------------
Total investment income (loss) ........ (244,275) (17,318) 5,106 49,323 3,789
Contributions:
Participant ........................ 153,984 86,893 57,429 148,557 178,841
American Telecasting, Inc. ......... 20,688 -- -- -- --
Other American Telecasting, Inc. ... -- -- -- -- --
--------------------------------------------------------------------------------
Total contributions ................... 174,672 86,893 57,429 148,557 178,841
--------------------------------------------------------------------------------
Total additions ....................... (69,603) 69,575 62,535 197,880 182,630
DEDUCTIONS
Benefits paid to participants ......... 100,288 17,305 21,780 50,439 5,350
Refund of excess contributions ........ 22,854 -- -- -- --
Transfer to related plans ............. 5,359 -- -- -- --
--------------------------------------------------------------------------------
Total deductions ...................... 128,501 17,305 21,780 50,439 5,350
Net increase (decrease) prior to
interfund transfers ................ (198,104) 52,270 40,755 147,441 177,280
Interfund transfers ................... 12,933 (206,073) (143,355) (314,364) (222,815)
--------------------------------------------------------------------------------
Net increase (decrease) ............... (185,171) (153,803) (102,600) (166,923) (45,535)
Net assets available for
benefits at beginning of period .... 330,318 153,803 102,600 166,923 45,535
--------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF PERIOD .......... 145,147 -- -- -- --
================================================================================
<CAPTION>
THE GEORGE PUTNAM GROWTH PUTNAM OTC PUTNAM
PUTNAM FUND AND INCOME PUTNAM GLOBAL EMERGING VOYAGER FUND
OF BOSTON FUND II GROWTH FUND GROWTH FUND II
<S> <C> <C> <C> <C> <C>
ADDITIONS
Investment income (loss):
Net realized and unrealized
appreciation (depreciation)
in fair value of investments ..... (347) -- (4,149) (43,039) (85)
Dividends .......................... 13,323 -- 9,832 16,369 --
-----------------------------------------------------------------------------
Total investment income (loss) ........ 12,976 -- 5,683 (26,670) (85)
Contributions:
Participant ........................ -- -- -- 3,158 3,157
American Telecasting, Inc. ......... 9,641 24,660 12,719 47,773 36,926
Other American Telecasting, Inc. ... -- -- -- -- --
-----------------------------------------------------------------------------
Total contributions ................... 9,641 24,660 12,719 50,931 40,083
-----------------------------------------------------------------------------
Total additions (reductions)........... 22,617 24,660 18,402 24,261 39,998
DEDUCTIONS
Benefits paid to participants ......... -- -- -- -- --
Refund of excess contributions ........ 8,514 4,148 5,930 17,095 4,930
Transfer to related plans ............. 11,352 -- 5,255 20,827 --
-----------------------------------------------------------------------------
Total deductions ...................... 19,866 4,148 11,185 37,922 4,930
Net increase (decrease) prior to
interfund transfers ................ 2,751 20,512 7,217 (13,661) 35,068
Interfund transfers ................... 213,878 17,285 158,277 362,266 30,661
-----------------------------------------------------------------------------
Net increase (decrease) ............... 216,629 37,797 165,494 348,605 65,729
Net assets available for
benefits at beginning of period .... -- -- -- -- --
-----------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF PERIOD .......... 216,629 37,797 165,494 348,605 65,729
==============================================================================
<CAPTION>
PUTNAM
PUTNAM INCOME MONEY MARKET
FUND FUND TOTAL
<S> <C> <C> <C>
ADDITIONS
Investment income (loss):
Net realized and unrealized
appreciation (depreciation)
in fair value of investments ..... -- -- (260,815)
Dividends .......................... -- 1,501 50,845
------------------------------------------------
Total investment income (loss) ........ -- 1,501 (209,970)
Contributions:
Participant......................... -- -- 632,019
American Telecasting, Inc........... 2,905 16,627 171,939
Other American Telecasting, Inc. ... -- 13,321 13,321
------------------------------------------------
Total contributions ................... 2,905 29,948 817,279
------------------------------------------------
Total additions ....................... 2,905 31,449 607,309
DEDUCTIONS
Benefits paid to participants ......... -- -- 195,162
Refund of excess contributions ........ 273 8,078 71,822
Transfer to related plans ............. -- 4,252 47,045
------------------------------------------------
Total deductions ...................... 273 12,330 314,029
Net increase (decrease) prior to
interfund transfers ................ 2,632 19,119 293,280
Interfund transfers ................... 4,344 86,963 --
------------------------------------------------
Net increase (decrease) ............... 6,976 106,082 293,280
Net assets available for
benefits at beginning of period .... -- -- 799,179
------------------------------------------------
NET ASSETS AVAILABLE FOR
BENEFITS AT END OF PERIOD .......... 6,976 106,082 1,092,459
================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- DESCRIPTION OF THE PLAN AND SIGNIFICANT EVENTS
General. The American Telecasting, Inc. 401(K) Retirement Plan (the "Plan")
is a defined contribution plan covering all eligible employees of the Company.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
Liquidity and Capital Resources Requirements and Limitations. Historically, the
Company has generated operating and net losses on a consolidated basis and can
be expected to do so for the foreseeable future. Such losses may increase as the
Company's analog subscriber base declines, unless and until the Company is able
to successfully introduce other revenue-producing wireless services. As a result
of its history of net losses, the Company currently has a negative tangible net
worth and total liabilities exceeded total assets as of March 31, 1997. By
letter dated May 1, 1997, the Nasdaq Stock Market, Inc. ("NASDAQ") informed the
Company that, based upon a review of the Company's Form 10-K for the fiscal year
ended December 31, 1996, the Company no longer meets the net tangible asset
requirement for continued listing on the Nasdaq National Market. The rules of
The Nasdaq Stock Market, Inc. require, among other things, that the Company have
net tangible assets (defined by NASDAQ as total assets less liabilities and
goodwill) of at least $4,000,000. At December 31, 1996, the Company's net
tangible worth, as defined, was a deficit of $12,050,000. Pursuant to the letter
received by the Company, the Company is required to provide NASDAQ with its
proposal to achieve compliance with NASDAQ National Market listing requirements.
If NASDAQ determines that the Company's proposal does not warrant continued
listing of the Company's Class A Common Stock NASDAQ may commence a delisting
process. The Company submitted its proposal to NASDAQ requesting continuation of
National Market listing status. NASDAQ has reviewed the Company's proposal and
has ruled to delist the Company's Class A Common Stock. This delisting could
result in a decline in the trading market for the Company's Class A Common
Stock, which could potentially further depress the Company's stock and bond
prices, among other consequences. The Company has appealed the decision made by
NASDAQ and a date of July 25, 1997 has been set for an oral hearing on the
Company's appeal of the determination by the staff of NASDAQ to delist the
Company from the national stock market. A substantial portion of the Plan's
assets are invested in the Company's Common Stock. A further decline in the
trading value of the Company's Common Stock would have a significant, negative
impact on the value of the Plan's assets. As of June 27, 1997, the Company's
stock was quoted at $.66 per share. Shares of ATI Class A Common Stock held by
the Plan at December 31, 1996, are presented in the accompanying Statement of
Net Assets Available for Benefits at $5.25 per share, the current market value
as of December 31, 1996. The aggregate decline in value with respect to those
shares since December 31, 1996 was approximately $114,346 based on the market
value as of June 27, 1997.
Plan Amendment. Effective October 1, 1996, the Plan was amended and restated
("Plan Amendment") and a new trustee, administrator and custodian ("Trustee") of
the Plan was appointed. Plan assets transferred to the new Trustee were
transferred into funds comparable to those offered by the previous custodian.
The conversion initiated a "Black Out" period beginning October 1, 1996 and
continued through January 16, 1997. During this period, funds could not be
applied to the employee selected funds with the Trustee or withdrawn from the
Plan until the Trustee had time to accurately complete the conversion. During
this period, employee contributions continued to be made through payroll
deductions and the contributions were deposited and held in the Money Market
Fund until the completion of the Black Out period. At the end of the Black Out
period, these funds were transferred to the new Trustee and invested in funds
as requested by each participant.
Contributions. Each year participants in the Plan may contribute up to 15
percent of their pretax annual compensation, as defined in the Plan.
Participants may also contribute amounts representing distributions from other
qualified defined benefit or contribution plans. Matching contributions by
American Telecasting, Inc. ("ATI" or the "Company") are discretionary and are
determined each year by the Company's Board of Directors. Such discretionary
employer contributions are based upon the first 12 percent of pretax annual
compensation that a participant contributes to the Plan. Employer matching
contributions for the year ended December 31, 1996 were $171,939. This amount
less forfeitures held by the plan at year end was received in June 1997.
Participant Accounts. Each participant's account is credited with the
participant's contribution and allocations of Company contributions and Plan
earnings. Allocations of Plan earnings are based on participant account
balances. Forfeited balances of terminated participants' nonvested accounts are
used to reduce future Company contributions. As of December 31, 1996, forfeited
balances that will be used to reduce future employer contributions totaled
$38,971. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's vested account.
5
<PAGE> 8
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
NOTE 1 -- DESCRIPTION OF THE PLAN AND SIGNIFICANT EVENTS -- CONTINUED
Vesting. Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's discretionary matching contributions
portion of their accounts plus actual earnings thereon is based on years of
continuous service. Prior to the Plan Amendment, participants were vested after
five years of credited service under a five year cliff vesting schedule.
Effective October 1, 1996, the Plan was amended to include the following vesting
schedule:
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
<S> <C>
1 20%
2 40%
3 60%
4 80%
5 100%
</TABLE>
Investment Options. Prior to the Plan Amendment, upon enrollment in the Plan, a
participant could direct employee contributions in five percent increments in
any of five investment options. Participants could change their investment
options quarterly. The five options were as follows:
- -- American Telecasting, Inc. Common Stock Fund -- Funds were invested in
shares of ATI Common Stock.
- -- Balanced Fund -- Funds were invested in the Fidelity Advisor Income &
Growth Portfolio, which invests in fixed income and equity securities.
- -- Foreign Fund -- Funds were invested in the MFS World Total Return Fund,
which invests in foreign and domestic equity securities.
- -- Aggressive Growth Fund -- Funds were invested in the AIM Constellation
Fund, which invests in small to medium sized emerging growth companies
and trading in securities in the short term.
- -- Money Market Fund -- Funds were invested in the Alex. Brown Cash Reserve
Fund, which invests in a diversified portfolio of money market
instruments.
Effective October 1, 1996, a participant may direct employee contributions
in one percent increments in any of eight investment options. Participants may
change their investment options daily. The eight options are as follows:
- -- American Telecasting, Inc. Common Stock Fund -- Funds are invested in
shares of ATI Common Stock.
Growth and Income Funds:
- -- The George Putnam Fund of Boston -- Fund seeks to provide a balanced
investment composed of a well-diversified portfolio of stocks and bonds
which will produce both capital growth and current income.
- -- Putnam Growth and Income Fund II -- Fund seeks capital growth as a
primary objective and current income as a secondary objective by
investing primarily in a portfolio of common stocks that offer the
potential for capital growth, current income or both.
- -- Putnam Voyager II -- Fund invests in small to medium-sized companies with
the potential for high growth rates and in stocks of larger companies
that are undergoing changes that could improve their earnings.
Growth Funds:
- -- Putnam Global Growth Fund -- Fund seeks capital appreciation by investing
primarily in common stocks traded in securities markets located in a
number of foreign countries and in the United States.
- -- Putnam OTC & Emerging Growth Fund -- Fund seeks capital appreciation
through common stocks traded in the over-the-counter (OTC) market and
common stocks of emerging growth companies listed on Securities
Exchanges.
Income Funds:
- -- Putnam Income Fund -- Fund seeks high current income by primarily
investing in a portfolio of debt securities, both government and corporate
obligations, preferred stocks and dividend-paying common stocks.
Money Market Fund:
- -- Putnam Money Market Fund -- Fund seeks current income consistent with
preservation of capital and maintenance of liquidity. The fund achieves
its objective by investing in a portfolio of high-grade short-term
obligations.
6
<PAGE> 9
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
NOTE 1 -- DESCRIPTION OF THE PLAN AND SIGNIFICANT EVENTS - CONTINUED
Payment of Benefits. Upon death, disability, retirement or termination of
service, a participant may elect to receive either a lump-sum amount equal to
the value of the participant's vested interest in his or her account, or
monthly, quarterly, semiannual or annual installments over the participant's
remaining life expectancy. For account balances of $3,500 or less, a
participant will receive the value of his or her account as a lump-sum
distribution.
Taxation to Participants. Generally, under federal tax law, contributions made
by the Company to the Plan and elective deferrals made by participants are not
treated as taxable income to the participants. In addition, plan earnings are
not subject to current taxation. Upon distribution of a participant's account,
all contributions and earnings distributed are generally treated as taxable
income. In addition, an excise tax may be imposed on participants for certain
early distributions. The foregoing is intended only as a general summary of the
federal tax laws applicable to qualified retirement plans, and should not be
relied upon by an individual participant in determining his or her particular
tax consequences. For further information, the Summary Plan Description (as
described below) or the Plan Administrator should be consulted.
Summary Plan Description. The foregoing description of the Plan provides
general information only. Participants should refer to the pamphlet, Summary
Plan Description, for a more complete description of the Plan's provisions.
Copies of the pamphlet are available from the American Telecasting, Inc. 401(K)
Retirement Plan Investment Committee (the "Investment Committee").
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting. The financial statements of the Plan are prepared under
the accrual method of accounting.
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investment Valuation and Income Recognition. The Plan's investments are stated
at fair value. Shares of registered investment companies are valued at quoted
market prices which represent the net asset value of shares held by the Plan at
year-end. ATI Common Stock is valued at its quoted market price as the date of
the financial statements. Purchases and sales of securities are recorded on a
trade-date basis. Interest income is recorded on an accrual basis.
Payment of Benefits. Benefits are recorded when paid.
Plan Administrative Costs. All administrative costs and expenses of the Plan
are paid by the Company.
NOTE 3 - PLAN SPIN-OFF
Prior to the Plan Amendment as described in Note 1, the Plan included employees
of Fresno MMDS Associates and Superchannels of Las Vegas, Inc. Both companies
are less than 80 percent owned by ATI and thus are not considered controlled
groups. At the time of conversion, the participant accounts for the employees of
these companies were spun-off to create two new individual 401(K) Retirement
Plans. Effective October 1, 1996, assets related to the participants of these
three plans were transferred out of the plan. The transfer of these spun-off
assets is included in transfers to related plans on the Statement of Changes in
Net Assets Available For Benefits.
7
<PAGE> 10
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
NOTE 4 -- INVESTMENTS
The fair value of the Plan's investments as of December 31, 1996 and 1995
follow. Investments which represent 5 percent or more of the Plan's net assets
are separately identified.
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
American Telecasting, Inc. Common Stock (24,912 and
21,615 shares respectively)............................. $130,789 $313,418
Putnam Money Market Fund ................................. 78,287 --
Money Market Fund ........................................ 145,368 57,781
The George Putnam Fund of Boston ......................... 207,697 --
Putnam Global Growth Fund ................................ 143,783 --
Putnam OTC & Emerging Growth Fund ........................ 270,025 --
Balanced Fund ............................................ -- 134,717
Foreign Fund ............................................. -- 87,526
Aggressive Growth Fund ................................... -- 145,988
Other investments which do not exceed 5% threshold ....... 3,072 --
-------- --------
$979,021 $739,430
======== ========
</TABLE>
NOTE 5 -- PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
NOTE 6 -- TAX STATUS
The Internal Revenue Service ruled (December 18, 1995) that the Plan and
related trust adopted on September 12, 1994, as designed, qualified under
Section 401(a) of the Internal Revenue Code and are, therefore, not subject to
tax under present income tax law. An Internal Revenue Service determination
letter has not been requested from the Internal Revenue Service for the Plan as
amended and restated October 1, 1996. The Plan Administrator believes that the
Plan as amended and restated is designed and is currently being operated in
compliance with the applicable requirements of the Internal Revenue Code.
NOTE 7 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
December 31,
----------------------------
1996 1995
----------------------------
<S> <C> <C>
Net assets available for benefits per the financial statements ..... $1,092,459 $ 799,179
Amounts allocated to withdrawing participants ...................... -- (33,090)
----------------------------
Net assets available for benefits per the Form 5500 ................ $1,092,459 $ 766,089
============================
</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements for the year ended December 31, 1996:
<TABLE>
<CAPTION>
<S> <C>
Benefits paid to participants per the financial statements... $195,162
Amounts allocated to withdrawing participants
at December 31, 1996 ...................................... --
Amounts allocated to withdrawing participants at
December 31, 1995 ......................................... (33,090)
--------
Benefits paid to participants per the Form 5500 ............. $162,072
========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
plan year-end but not yet paid as of that date.
NOTE 8 - RELATED PARTY TRANSACTIONS
Plan investments as of December 31, 1996 represent shares of investment funds
managed by Putnam Fiduciary Trust Company. Putnam Fiduciary Trust Company is
the Trustee, as defined in the Plan Agreement, and therefore, those
transactions qualify as party-in-interest.
As of December 31, 1996 and 1995, the Plan also held 24,912 and 21,615 shares
of American Telecasting, Inc. Common Stock, respectively. These transactions
also qualify as party-in-interest.
For the nine months ended September 30, 1996, Alex. Brown & Sons, Inc. served
as the Plan's Asset Custodian. Therefore, all transactions occurring in the
Alex. Brown Money Market Fund during that period qualify as party-in-interest.
NOTE 9 - SUBSEQUENT EVENTS
The Company has experienced a decrease in plan participants subsequent to year
end, which could possibly be deemed a partial termination of the Plan. The
Company is currently investigating the issue to determine if partial
termination has occurred. If the decrease in participants is deemed to be a
partial termination, participants who were terminated in connection with
the partial termination would become 100% vested in their account balances.
8
<PAGE> 11
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
ITEM 27A -- ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Identity of Issue, Borrower, Description of
Lessor or Similar Party Investment Cost Current Value
- -------------------------------------- ---------------------- ----------------- -----------------
<S> <C> <C> <C>
Common Stocks:
*American Telecasting, Inc. Common Stock $ 316,982 $ 130,789
Funds:
*Putnam Money Market Fund Money Market Fund 78,287 78,287
*Alex. Brown Cash Reserve Fund Money Market Fund 145,368 145,368
*George Putnam Fund of Boston Mutual Fund 208,044 207,697
*Putnam Global Growth Fund Mutual Fund 147,932 143,783
*Putnam Voyager II Mutual Fund 3,158 3,072
*Putnam OTC & Emerging Growth Fund Mutual Fund 313,063 270,025
----------- ----------
895,852 848,232
----------- ----------
$ 1,212,834 $ 979,021
=========== ==========
</TABLE>
* Represents a party-in-interest (Note 8).
9
<PAGE> 12
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
ITEM 27D -- REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
CURRENT
VALUE OF
ASSET ON NET
NUMBER OF PURCHASE TRANS- GAIN
TRANS- SELLING PRICE/COST ACTION OR
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSETS ACTIONS PRICE OF ASSET DATE (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Category (i) -- Single transactions in excess of 5 percent of Plan assets as of the beginning of the year
**Alex. Brown and Sons, Inc. 2,961.0 shares of American
Telecasting, Inc. Common Stock 1 $ 42,191 $ * $ 42,191 *
**Alex. Brown and Sons, Inc. 2,913.0 shares of American
Telecasting, Inc. Common Stock 1 -- 43,698 43,698 --
Alex. Brown and Sons, Inc. 11,140.1 shares in the MFS World Total
Return Fund 1 139,028 * 139,028 *
Alex. Brown and Sons, Inc. 13,082.7 shares in the Fidelity Advisor
Income & Growth Portfolio 1 204,481 * 204,481 *
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 1 73,572 * 73,572 *
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 1 -- 113,049 113,049 --
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 1 106,349 * 106,349 *
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 1 47,433 * 47,433 *
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 1 -- 46,360 46,360 --
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 1 -- 620,814 620,814 --
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 1 745,255 * 745,255 *
Alex. Brown and Sons, Inc. 10,673.8 shares in the AIM
Constellation Fund 1 277,305 * 277,305 *
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 1 -- 56,943 56,943 --
**Putnam Investments 11,715.16 shares in The George Putnam Fund
of Boston 1 -- 194,721 194,721 --
**Putnam Investments 12,368.87 shares in Putnam Global
Growth Fund 1 -- 138,100 138,100 --
**Putnam Investments 17,297.08 shares in Putnam OTC &
Emerging Growth Fund 1 -- 293,537 293,537 --
**Putnam Investments Putnam Money Market Fund 1 -- 76,786 76,786 --
Category (iii) -- Series of transactions in excess of 5 percent of plan assets as of the beginning of the year
**Alex. Brown and Sons, Inc. 15,569.0 shares of American
Telecasting, Inc. Common Stock 38 -- 214,712 214,712 --
**Alex. Brown and Sons, Inc. 7,816.0 shares of American
Telecasting, Inc. Common Stock 16 108,134 * 108,134 *
Alex. Brown and Sons, Inc. 6,059.9 shares in the MFS World Total
Return Fund 35 -- 76,017 76,017 --
Alex. Brown and Sons, Inc. 13,544.8 shares in the MFS World Total
Return Fund 16 169,030 * 169,030 *
Alex. Brown and Sons, Inc. 6,380.6 shares in the Fidelity Advisor
Income & Growth Portfolio 34 -- 100,959 100,959 --
Alex. Brown and Sons, Inc. 15,174.0 shares in the Fidelity Advisor
Income & Growth Portfolio 17 236,453 * 236,453 *
Alex. Brown and Sons, Inc. 7,283.9 shares in the AIM
Constellation Fund 38 -- 169,072 169,072 --
Alex. Brown and Sons, Inc. 14,867.0 shares in the AIM
Constellation Fund 15 337,512 * 337,512 *
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 96 -- 1,668,262 1,668,262 --
**Alex. Brown and Sons, Inc. Alex. Brown Cash Reserve Fund 82 1,467,412 * 1,467,412 *
There were no category (ii) or (iv) reportable transactions during 1996.
</TABLE>
* Historical cost information could not be obtained from the Plan's trustee.
** Represents a party-in-interest (Note 8).
10
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
American Telecasting, Inc.
401(K) Retirement Plan
David K. Sentman, Trustee
Dated: June 30, 1997
11
<PAGE> 14
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
23.2 Consent of Arthur Andersen, LLP
<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated June 30, 1997,
included in this Form 11-K, into the Company's previously filed Registration
Statement on Form S-8, File No. 33-86010.
ARTHUR ANDERSEN, LLP
Denver, Colorado
June 30, 1997
