<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, 1997
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, 1997.......................................... 2
Statement of Net Assets Available for Benefits as of December 31, 1996.......................................... 3
Statement of Changes in Net Assets Available for Benefits for the year ended
December 31, 1997............................................................................................. 4
Notes to Financial Statements................................................................................... 5
SCHEDULES:
Assets Held for Investment Purposes............................................................................. 9
Reportable Transactions......................................................................................... 10
Schedules omitted because there were no such items for the year ended
December 31, 1997:
Loans or Fixed Income Obligations
Leases in Default or Classified as Uncollectible
Nonexempt Transactions
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrators of the American Telecasting, Inc.
401(k) Retirement Plan:
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, 1997 and 1996, and the related statement of changes in net assets available
for benefits for the year ended December 31, 1997. These financial statements
are the responsibility of the Plan'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 net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in net assets available for benefits
for the year ended December 31, 1997, in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
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 for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. 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.
ARTHUR ANDERSEN LLP
Denver, Colorado
June 26, 1998
1
<PAGE> 4
AMERICAN TELECASTING, INC.
401(k) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PUTNAM
THE GEORGE GROWTH AND PUTNAM
ATI PUTNAM INCOME GLOBAL
COMMON FUND FUND GROWTH
STOCK OF BOSTON II FUND
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS
Investments (at fair value):
American Telecasting, Inc.
Common Stock (Note 1) .......... $ 74,344 $ -- $ -- $ --
The George Putnam Fund of Boston ... -- 210,362 -- --
Putnam Growth and Income Fund II ... -- -- 90,196 --
Putnam Global Growth Fund .......... -- -- -- 167,427
Putnam OTC and Emerging Growth
Fund ............................ -- -- -- --
Putnam Voyager Fund II ............. -- -- -- --
Putnam Income Fund ................. -- -- -- --
Putnam Loans to Participants ....... -- -- -- --
Putnam Money Market Fund ........... -- -- -- --
BT Alex. Brown Money Market Fund ... -- -- -- --
---------------------------------------------------------------------------
Total investments ..................... 74,344 210,362 90,196 167,427
Contributions receivable from American
Telecasting, Inc. .................. 9,066 12,012 25,788 12,447
Other receivable ...................... -- -- -- --
Due to/(from) other funds ............. 988 2,532 4,316 2,331
---------------------------------------------------------------------------
Total assets .......................... 84,398 224,906 120,300 182,205
LIABILITIES
Payable to Plan participants for
excess contributions ............... (5,243) (5,793) (5,318) (1,989)
---------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ..... $ 79,155 $ 219,113 $ 114,982 $ 180,216
===========================================================================
<CAPTION>
PUTNAM OTC
AND EMERGING PUTNAM PUTNAM
GROWTH VOYAGER FUND PUTNAM LOANS TO
FUND II INCOME FUND PARTICIPANTS
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (at fair value):
American Telecasting, Inc.
Common Stock (Note 1) .......... $ -- $ -- $ -- $ --
The George Putnam Fund of Boston ... -- -- -- --
Putnam Growth and Income Fund II ... -- -- -- --
Putnam Global Growth Fund .......... -- -- -- --
Putnam OTC and Emerging Growth
Fund ............................ 388,636 -- -- --
Putnam Voyager Fund II ............. -- 148,862 -- --
Putnam Income Fund ................. -- -- 18,096 --
Putnam Loans to Participants ....... -- -- -- 13,356
Putnam Money Market Fund ........... -- -- -- --
BT Alex. Brown Money Market Fund ... -- -- -- --
-------------------------------------------------------------------------
Total investments ..................... 388,636 148,862 18,096 13,356
Contributions receivable from American
Telecasting, Inc. .................. 49,435 32,018 4,505 --
Other receivable ...................... -- -- -- --
Due to/(from) other funds ............. 8,591 6,525 822 --
-------------------------------------------------------------------------
Total assets .......................... 446,662 187,405 23,423 13,356
LIABILITIES
Payable to Plan participants for
excess contributions ............... (13,559) (3,269) -- --
-------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ..... $ 433,103 $ 184,136 $ 23,423 $ 13,356
=========================================================================
<CAPTION>
PUTNAM BT ALEX. BROWN
MONEY MARKET MONEY MARKET
FUND FUND OTHER TOTAL
------------ --------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (at fair value):
American Telecasting, Inc.
Common Stock (Note 1) .......... $ -- $ -- $ -- $ 74,344
The George Putnam Fund of Boston ... -- -- -- 210,362
Putnam Growth and Income Fund II ... -- -- -- 90,196
Putnam Global Growth Fund .......... -- -- -- 167,427
Putnam OTC and Emerging Growth
Fund ............................ -- -- -- 388,636
Putnam Voyager Fund II ............. -- -- -- 148,862
Putnam Income Fund ................. -- -- -- 18,096
Putnam Loans to Participants ....... -- -- -- 13,356
Putnam Money Market Fund ........... 120,214 -- -- 120,214
BT Alex. Brown Money Market Fund ... -- 37,653 -- 37,653
-------------------------------------------------------------------------
Total investments ..................... 120,214 37,653 -- 1,269,146
Contributions receivable from American
Telecasting, Inc. .................. 7,367 -- -- 152,638
Other receivable ...................... -- -- 25,985 25,985
Due to/(from) other funds ............. 2,307 (28,412) -- --
-------------------------------------------------------------------------
Total assets .......................... 129,888 9,241 25,985 1,447,769
LIABILITIES
Payable to Plan participants for
excess contributions ............... (2,745) -- -- (37,916)
-------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ..... $ 127,143 $ 9,241 $ 25,985 $ 1,409,853
=========================================================================
</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, 1996
<TABLE>
<CAPTION>
THE GEORGE PUTNAM
ATI PUTNAM GROWTH AND PUTNAM
COMMON FUND INCOME GLOBAL GROWTH
STOCK OF BOSTON FUND II FUND
----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS
Investments (at fair value):
American Telecasting, Inc. ..........
Common Stock (Note 1) ........... $ 130,789 $ -- $ -- $ --
The George Putnam Fund of Boston .... -- 207,697 -- --
Putnam Growth and Income Fund II .... -- -- -- --
Putnam Global Growth Fund ........... -- -- -- 143,783
Putnam OTC and Emerging Growth
Fund ............................ -- -- -- --
Putnam Voyager Fund II .............. -- -- -- --
Putnam Income Fund .................. -- -- -- --
Putnam Money Market Fund ............ -- -- -- --
BT Alex. Brown Money Market Fund .... -- -- -- --
--------------------------------------------------------------------------
Total investments ..................... 130,789 207,697 -- 143,783
Contributions receivable from American
Telecasting, Inc. .................. 20,688 9,641 24,660 12,719
Other receivable from American
Telecasting, Inc. .................. -- -- -- --
Due to/(from) other funds ............. 16,524 7,805 17,285 14,922
--------------------------------------------------------------------------
Total assets .......................... 168,001 225,143 41,945 171,424
LIABILITIES
Payable to Plan participants for
excess contributions ............... (22,854) (8,514) (4,148) (5,930)
--------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ..... $ 145,147 $ 216,629 $ 37,797 $ 165,494
==========================================================================
<CAPTION>
PUTNAM OTC PUTNAM
AND EMERGING MONEY
GROWTH PUTNAM VOYAGER PUTNAM MARKET
FUND FUND II INCOME FUND FUND
------------ -------------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (at fair value):
American Telecasting, Inc. ..........
Common Stock (Note 1) ........... $ -- $ -- $ -- $ --
The George Putnam Fund of Boston .... -- -- -- --
Putnam Growth and Income Fund II .... -- -- -- --
Putnam Global Growth Fund ........... -- -- -- --
Putnam OTC and Emerging Growth
Fund ............................ 270,025 -- -- --
Putnam Voyager Fund II .............. -- 3,072 -- --
Putnam Income Fund .................. -- -- -- --
Putnam Money Market Fund ............ -- -- -- 78,287
BT Alex. Brown Money Market Fund .... -- -- -- --
--------------------------------------------------------------------------
Total investments ..................... 270,025 3,072 -- 78,287
Contributions receivable from American
Telecasting, Inc. .................. 47,773 36,926 2,905 16,627
Other receivable from American
Telecasting, Inc. .................. -- -- -- 13,321
Due to/(from) other funds ............. 47,902 30,661 4,344 5,925
--------------------------------------------------------------------------
Total assets .......................... 365,700 70,659 7,249 114,160
LIABILITIES
Payable to Plan participants for
excess contributions ............... (17,095) (4,930) (273) (8,078)
--------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ..... $ 348,605 $ 65,729 $ 6,976 $ 106,082
==========================================================================
<CAPTION>
BT ALEX. BROWN
MONEY MARKET
FUND TOTAL
--------------- -----------
<S> <C> <C>
ASSETS
Investments (at fair value):
American Telecasting, Inc. ..........
Common Stock (Note 1) ........... $ -- $ 130,789
The George Putnam Fund of Boston .... -- 207,697
Putnam Growth and Income Fund II .... -- --
Putnam Global Growth Fund ........... -- 143,783
Putnam OTC and Emerging Growth
Fund ............................ -- 270,025
Putnam Voyager Fund II .............. -- 3,072
Putnam Income Fund .................. -- --
Putnam Money Market Fund ............ -- 78,287
BT Alex. Brown Money Market Fund .... 145,368 145,368
--------------------------------
Total investments ..................... 145,368 979,021
Contributions receivable from American
Telecasting, Inc. .................. -- 171,939
Other receivable from American
Telecasting, Inc. .................. -- 13,321
Due to/(from) other funds ............. (145,368) --
--------------------------------
Total assets .......................... -- 1,164,281
LIABILITIES
Payable to Plan participants for
excess contributions ............... -- (71,822)
--------------------------------
NET ASSETS AVAILABLE FOR BENEFITS ..... $ -- $ 1,092,459
================================
</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, 1997
<TABLE>
<CAPTION>
PUTNAM
THE GEORGE GROWTH AND PUTNAM
ATI PUTNAM INCOME GLOBAL
COMMON FUND FUND GROWTH
STOCK OF BOSTON II FUND
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
ADDITIONS
Investment income (loss):
Net realized and unrealized
appreciation (depreciation)
in fair value of investment $ (96,694) $ 18,332 $ 2,387 $ (9,112)
Dividends and interest ....... 298 19,896 8,466 30,343
-------------------------------------------------------------------------
Total investment income (loss) .. (96,396) 38,228 10,853 21,231
Contributions:
Other ........................ -- -- -- --
Participant .................. 52,804 30,238 66,759 41,139
American Telecasting, Inc. .. 9,066 12,012 25,788 12,447
Loan repayments .............. 135 240 55 388
Pending transfers ............ 988 2,532 4,316 2,331
-------------------------------------------------------------------------
Total contributions ............. 62,993 45,022 96,918 56,305
Total additions ................. (33,403) 83,250 107,771 77,536
DEDUCTIONS:
Benefits paid to participants 13,231 54,118 21,699 50,003
Refund of excess contributions 5,243 5,793 5,318 1,989
Loan Issues .................. 1,298 2,800 453 2,550
Loan disbursements ........... -- -- -- --
Forfeitures .................. 1,179 2,804 4,006 3,694
-------------------------------------------------------------------------
Total deductions ................ 20,951 65,515 31,476 58,236
Net increase (decrease) prior to
interfund transfers .......... (54,354) 17,735 76,295 19,300
Interfund transfers ............. (11,638) (15,251) 890 (4,578)
-------------------------------------------------------------------------
Net increase (decrease) ......... (65,992) 2,484 77,185 14,722
Net assets available for benefits
at the beginning of the period 145,147 216,629 37,797 165,494
-------------------------------------------------------------------------
Net assets available for benefits
at the end of the period ..... $ 79,155 $ 219,113 $ 114,982 $ 180,216
=========================================================================
<CAPTION>
PUTNAM OTC
AND EMERGING PUTNAM PUTNAM
GROWTH VOYAGER FUND PUTNAM LOANS TO
FUND II INCOME FUND PARTICIPANTS
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
ADDITIONS
Investment income (loss):
Net realized and unrealized
appreciation (depreciation)
in fair value of investment $ 48,959 $ 25,991 $ 329 $ --
Dividends and interest ....... 217 386 916 598
Total investment income (loss) .. 49,176 26,377 1,245 598
Contributions:
Other ........................ -- -- -- --
Participant .................. 136,534 92,591 16,967 --
American Telecasting, Inc. .. 49,435 32,018 4,505 --
Loan repayments .............. 1,026 1,163 -- (3,699)
Pending transfers ............ 8,591 6,525 822 --
------------------------------------------------------------------------
Total contributions ............. 195,586 132,297 22,294 (3,699)
Total additions ................. 244,762 158,674 23,539 (3,101)
DEDUCTIONS:
Benefits paid to participants 116,104 37,329 6,872 --
Refund of excess contributions 13,559 3,269 -- --
Loan Issues .................. 11,822 2,435 435 (27,493)
Loan disbursements ........... -- -- -- 11,036
Forfeitures .................. 7,026 4,912 222 --
------------------------------------------------------------------------
Total deductions ................ 148,511 47,945 7,529 (16,457)
Net increase (decrease) prior to
interfund transfers .......... 96,251 110,729 16,010 13,356
Interfund transfers ............. (11,753) 7,678 437 --
------------------------------------------------------------------------
Net increase (decrease) ......... 84,498 118,407 16,447 13,356
Net assets available for benefits
at the beginning of the period 348,605 65,729 6,976 --
------------------------------------------------------------------------
Net assets available for benefits
at the end of the period ..... $ 433,103 $ 184,136 $ 23,423 $ 13,356
========================================================================
<CAPTION>
PUTNAM BT ALEX. BROWN
MONEY MARKET MONEY MARKET
FUND FUND OTHER TOTAL
------------ -------------- ----------- -----------
<S> <C> <C> <C> <C>
ADDITIONS
Investment income (loss):
Net realized and unrealized
appreciation (depreciation)
in fair value of investment $ -- $ -- $ -- $ (9,808)
Dividends and interest ....... 5,971 2,715 -- 69,806
Total investment income (loss) .. 5,971 2,715 -- 59,998
Contributions:
Other ........................ -- -- 25,985 25,985
Participant .................. 19,854 34,938 -- 491,824
American Telecasting, Inc. .. 7,367 -- -- 152,638
Loan repayments .............. 692 -- -- --
Pending transfers ............ 2,307 (28,412) -- --
-------------------------------------------------------------------------
Total contributions ............. 30,220 6,526 25,985 670,447
Total additions ................. 36,191 9,241 25,985 730,445
DEDUCTIONS:
Benefits paid to participants 25,762 -- -- 325,118
Refund of excess contributions 2,745 -- -- 37,916
Loan Issues .................. 5,700 -- -- --
Loan disbursements ........... -- -- -- 11,036
Forfeitures .................. 15,138 -- -- 38,981
-------------------------------------------------------------------------
Total deductions ................ 49,345 -- -- 413,051
Net increase (decrease) prior to
interfund transfers .......... (13,154) 9,241 25,985 317,394
Interfund transfers ............. 34,215 -- -- --
-------------------------------------------------------------------------
Net increase (decrease) ......... 21,061 9,241 25,985 317,394
Net assets available for benefits
at the beginning of the period 106,082 -- -- 1,092,459
-------------------------------------------------------------------------
Net assets available for benefits
at the end of the period ..... $ 127,143 $ 9,241 $ 25,985 $ 1,409,853
=========================================================================
</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 American
Telecasting, Inc. ("ATI" or the "Company"). The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Liquidity and Trading of American Telecasting, Inc. Common Stock: In the early
part of 1997, the Company was notified by the Nasdaq Stock Market, Inc.
("Nasdaq") that the Company no longer met the net tangible asset requirements
for continued listing on the Nasdaq National Market. The Company submitted a
proposal to Nasdaq to achieve compliance, which proposal was denied. Upon appeal
by the Company, a temporary exception was granted by Nasdaq. Prior to the
expiration of the temporary exception, the Company submitted a request to Nasdaq
to move the listing of the Company's Class A Common Stock from the Nasdaq
National Market to the Nasdaq SmallCap Market due the Company's assessment of
its inability to achieve compliance with the National Market requirements within
the time allowed. Effective October 17, 1997, the Class A Common Stock began
trading on the Nasdaq SmallCap Market.
During the first quarter of 1998, Nasdaq informed the Company that it was not in
compliance with the new net tangible asset/market capitalization/net income
requirements for continued listing on the Nasdaq SmallCap Market, which require
all listed companies to have net tangible assets of at least $2 million, a
market capitalization of at least $35 million, or net income of at least
$500,000 for two of the last three years. The new maintenance criteria became
effective on February 23, 1998. By letter dated February 26, 1998, Nasdaq
informed the Company that the Company's Class A Common Stock was scheduled for
delisting, effective as of the close of business on March 16, 1998. The Company
has requested a temporary exception under Nasdaq rules by appealing the
delisting. The appeal has the effect of staying the delisting until completion
of the appeal process. The Company made a written submission to Nasdaq on March
27, 1998, to support its request for continued listing. To date, Nasdaq has not
responded to the written submission made on March 27, 1998.
There can be no assurance that the Company will be able to meet or continue to
meet the minimum requirements for continued listing on the SmallCap Market. If
the Company is unable to meet such requirements, the Class A Common Stock will
likely be delisted from the SmallCap Market. In such event, it will likely be
more difficult to buy or sell the Class A Common Stock or to obtain timely and
accurate quotations of trading prices. Delisting will likely result in a decline
in the trading market for the Class A Common Stock, which could depress the
Company's stock and bond prices, among other consequences.
Plan Amendment. Effective October 1, 1996, the Plan was amended and restated
("Plan Amendment") and a new trustee, record keeper 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 BT Alex. Brown
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 the
Company are discretionary and are determined each year by the Company's Board of
Directors. Beginning in 1998, the Company's Board of Directors authorized
discretionary matching contributions to be made quarterly unless determined
otherwise by the Board. 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, 1997, were $152,638. This amount, less forfeitures held by the Plan
at year end, was received in March 1998.
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
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. During 1997, forfeited balances
used to reduce employer contributions totaled $38,981. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
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. The Plan has 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. 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:
o American Telecasting, Inc. Common Stock -- Funds are invested in
shares of ATI Common Stock.
GROWTH AND INCOME FUNDS:
o 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.
o 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.
o Putnam Voyager Fund 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:
o 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.
o Putnam OTC and 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 FUND:
o 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:
o 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.
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.
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
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 Administrators.
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 of 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. In accordance with
generally accepted accounting principles, participant distributions payable in
the amount of $11,598 for 1997, have not been shown as a liability of the Plan.
These amounts are included in net assets in the accompanying financial
statement. However, such amounts will be classified as a liability for Form 5500
reporting.
Plan Administrative Costs. All administrative costs and expenses of the Plan are
paid by the Company.
NOTE 3 -- INVESTMENTS
The fair value of the Plan's investments as of December 31, 1997 and 1996 is
presented in the following table. Investments which represent 5 percent or more
of the Plan's net assets are separately identified.
<TABLE>
<CAPTION>
1997 1996
---------- --------
<S> <C> <C>
American Telecasting, Inc. Common Stock (59,475 and
24,912 shares respectively).......................................................... $ 74,344 $130,789
Putnam Money Market Fund................................................................ 120,214 78,287
BT Alex. Brown Money Market Fund........................................................ 37,653 145,368
The George Putnam Fund of Boston........................................................ 210,362 207,697
Putnam Global Growth Fund............................................................... 167,427 143,783
Putnam OTC and Emerging Growth Fund..................................................... 388,636 270,025
Putnam Growth and Income Fund II........................................................ 90,196 --
Putnam Voyager Fund II.................................................................. 148,862 --
Other investments which do not exceed 5% threshold...................................... 31,452 3,072
---------- --------
$1,269,146 $979,021
========== ========
</TABLE>
7
<PAGE> 10
AMERICAN TELECASTING, INC.
401(k) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 4 -- 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 5 -- 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 6 - RELATED PARTY TRANSACTIONS
Plan investments as of December 31, 1997, 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, 1997 and 1996, the Plan also held 59,475 and 24,912 shares of
American Telecasting, Inc. Common Stock, respectively. These transactions also
qualify as party-in-interest.
BT Alex. Brown & Sons, Inc. serves as the Plan's Broker of Record. Therefore,
all transactions occurring in the BT Alex. Brown Money Market Fund qualify as
party-in-interest.
NOTE 7 - RISKS AND UNCERTAINTIES
The Plan provides for various investment options in mutual funds and Company
stock. Investment securities, in general, are exposed to various risks, such as
interest rate, credit and overall market volatility risk. Due to the level of
risk associated with certain investment securities, it is reasonably possible
that changes in the values of investment securities will occur in the near term
and that such changes could materially affect participants' account balances and
amounts presented in the Statement of Net Assets Available for Benefits.
At December 31, 1997 and 1996, the Plan held no derivatives instruments
directly. However, the Plan held such instruments indirectly through their
investments in mutual funds, which under their trust agreements, may invest in
such instruments. These instruments consist mainly of futures contracts and
options. Investment risk exists with respect to these instruments.
8
<PAGE> 11
AMERICAN TELECASTING, INC.
401(k) RETIREMENT PLAN
ITEM 27A -- ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
<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 $ 292,749 $ 74,344
Funds:
* Putnam Money Market Fund Money Market Fund 120,214 120,214
* BT Alex. Brown Money Market Fund Money Market Fund 37,653 37,653
* The George Putnam Fund of Boston Mutual Fund 197,844 210,362
* Putnam Income Fund Mutual Fund 17,878 18,096
* Putnam Global Growth Fund Mutual Fund 185,114 167,427
* Putnam Voyager Fund II Mutual Fund 128,513 148,862
* Putnam Growth and Income Fund II Mutual Fund 90,458 90,196
* Putnam OTC and Emerging Growth Fund Mutual Fund 376,912 388,636
----------- ------------
1,154,586 1,181,446
Participants' Loans:
Putnam Loans to Participants
(Interest rates ranging from 9.0% to 9.5%) Loans 13,356 13,356
----------- ------------
$ 1,460,691 $ 1,269,146
=========== ============
</TABLE>
* Represents a party-in-interest (Note 6).
9
<PAGE> 12
AMERICAN TELECASTING, INC.
401(k) RETIREMENT PLAN
ITEM 27D -- REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<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)
- -------------------------- --------------------- --------- ------- ---------- -------- ------
Category (iii) - Series of transactions in excess of 5 percent of Plan assets as
of the beginning of the year
<S> <C> <C> <C> <C> <C> <C> <C>
* Putnam Investments 126,504.316 shares of
Putnam Money Market Fund 146 -- $126,504.32 $126,504.32 --
* Putnam Investments 84,577.474 shares of Putnam
Money Market Fund 178 84,577.49 -- 84,577.49 --
* Putnam Investments 63,308.943 shares of
American Telecasting, Inc.
common stock 59 -- 93,447.62 93,447.62 --
* Putnam Investments 28,746.096 shares of
American Telecasting, Inc.
common stock 103 53,199.14 137,265.92 53,199.14 (84,066.78)
* Putnam Investments 9,193.758 shares of Putnam
Growth and Income Fund II 55 -- 125,467.26 125,467.26 --
* Putnam Investments 2,605.323 shares of Putnam
Growth and Income Fund II 100 37,658.38 35,009.38 37,658.38 2,649.00
* Putnam Investments 10,963.75 shares of Putnam
Voyager II 55 -- 179,730.69 179,730.69 --
* Putnam Investments 3,372.369 shares of Putnam
Voyager II 107 59,932.85 54,375.53 59,932.85 5,557.32
* Putnam Investments 17,752.518 shares of Putnam
OTC and Emerging Growth Fund 68 -- 255,137.35 255,137.35 --
* Putnam Investments 12,251.055 shares of Putnam
OTC and Emerging Growth Fund 160 185,485.62 191,288.30 185,485.62 (5,802.68)
* Putnam Investments 9,670.458 shares of Putnam
Global Growth Fund 57 -- 106,928.33 106,928.33 --
* Putnam Investments 6,149.113 shares of Putnam
Global Growth Fund 119 74,171.85 69,745.82 74,171.85 4,426.03
* Putnam Investments 4,122.265 shares of The
George Putnam Fund of Boston 58 -- 72,839.77 72,839.77 --
* Putnam Investments 4,957.013 shares of The
George Putnam Fund of Boston 119 88,506.49 83,039.76 88,506.49 5,466.73
</TABLE>
There were no category (i), (ii) or (iv) reportable transactions during 1997.
* Represents a party-in-interest (Note 6).
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
By: /s/ Robert D. Hostetler
----------------------------
Robert D. Hostetler
Plan Administrator
By: /s/ David K. Sentman
----------------------------
David K. Sentman
Plan Administrator
Dated: June 26, 1998
11
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
23.2 Consent of Arthur Andersen LLP
</TABLE>
<PAGE> 1
EXHIBIT 23.2
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 26, 1998,
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 26, 1998
