<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, 1998
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
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT.................................................................................1
FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
Statement of Net Assets Available for Benefits, December 31, 1998............................................2
Statement of Net Assets Available for Benefits, December 31, 1997............................................3
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 1998..........................................................................................4
Statement of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 1997..........................................................................................5
Notes to Financial Statements................................................................................6
SUPPLEMENTAL SCHEDULES
Item 27A -- Assets Held for Investment Purposes, December 31, 1998...........................................12
Item 27D -- Reportable Transactions for the Year Ended December 31, 1998.....................................13
</TABLE>
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
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, 1998, and the related statements of changes in net assets available for
benefits for the year then ended. 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 audit. The financial
statements of American Telecasting, Inc. 401(k) Retirement Plan as of December
31, 1997 were audited by other auditors whose report, dated June 26, 1998,
expressed an unqualified opinion on those statements.
We conducted our audit 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 audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998, and the changes in net assets available for benefits for the year then
ended in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic 1998
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 of each fund. Such schedules and fund information have been subjected
to the auditing procedures applied in the audit 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.
STOCKMAN KAST RYAN & COMPANY, P.C.
Colorado Springs, Colorado
May 21, 1999
-1-
<PAGE> 4
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
<TABLE>
<CAPTION>
THE GEORGE PUTNAM PUTNAM PUTNAM OTC
ATI PUTNAM GROWTH AND GLOBAL AND PUTNAM PUTNAM
COMMON FUND INCOME GROWTH EMERGING VOYAGER INCOME
STOCK OF BOSTON FUND II FUND GROWTH FUND FUND II FUND
---------- ----------- ----------- ------------ ------------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments (at fair value)
(Note 3):
American Telecasting, Inc.
common stock (Note 1) $ 14,117
The George Putnam Fund
of Boston $ 245,638
Putnam Growth and Income
Fund II $ 137,324
Putnam Global Growth Fund $ 227,920
Putnam OTC and Emerging
Growth Fund $ 471,205
Putnam Voyager Fund II $278,543
Putnam Income Fund $ 30,869
Loans to Participants
Putnam Money Market Fund
BT Alex. Brown Money
Market Fund
---------- ----------- ----------- ------------ ------------ -------- --------
Total investments 14,117 245,638 137,324 227,920 471,205 278,543 30,869
Contributions receivable from
American Telecasting, Inc. 669 4,844 5,002 3,149 8,688 8,574 719
Due to (from) other funds 651 4,543 4,987 2,807 7,489 7,624 625
---------- ----------- ----------- ------------ ------------ -------- --------
Total assets 15,437 255,025 147,313 233,876 487,382 294,741 32,213
LIABILITIES
Excess contributions payable
to Plan participants (1,643) (1,627) (1,686) (10,160) (3,327)
---------- ----------- ----------- ------------ ------------ -------- --------
Net assets available for benefits $ 15,437 $ 253,382 $ 145,686 $ 232,190 $ 477,222 $291,414 $ 32,213
========== =========== =========== ============ ============ ======== ========
<CAPTION>
PUTNAM
MONEY BT ALEX. BROWN
LOANS TO MARKET MONEY MARKET
PARTICIPANTS FUND FUND TOTAL
------------ --------- -------------- ----------
<S> <C> <C> <C> <C>
ASSETS
Investments (at fair value)
(Note 3):
American Telecasting, Inc.
common stock (Note 1) $ 14,117
The George Putnam Fund
of Boston 245,638
Putnam Growth and Income
Fund II 137,324
Putnam Global Growth Fund 227,920
Putnam OTC and Emerging
Growth Fund 471,205
Putnam Voyager Fund II 278,543
Putnam Income Fund 30,869
Loans to Participants $ 41,022 41,022
Putnam Money Market Fund $ 167,854 167,854
BT Alex. Brown Money
Market Fund $ 37,832 37,832
---------- --------- ---------- ----------
Total investments 41,022 167,854 37,832 1,652,324
Contributions receivable from
American Telecasting, Inc. 1,602 33,247
Due to (from) other funds 1,116 (29,842)
---------- --------- ---------- ----------
Total assets 41,022 170,572 7,990 1,685,571
LIABILITIES
Excess contributions payable
to Plan participants (4,711) (23,154)
---------- --------- ---------- ----------
Net assets available for benefits $ 41,022 $ 165,861 $ 7,990 $1,662,417
========== ========= ========== ==========
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
-2-
<PAGE> 5
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
THE GEORGE PUTNAM PUTNAM PUTNAM OTC
ATI PUTNAM GROWTH AND GLOBAL AND PUTNAM PUTNAM
COMMON FUND INCOME GROWTH EMERGING VOYAGER INCOME LOANS TO
STOCK OF BOSTON FUND II FUND GROWTH FUND FUND II FUND PARTICIPANTS
-------- ---------- --------- ---------- ----------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments (at fair value)
(Note 3):
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
Loans to Participants $ 13,356
Putnam Money Market Fund
BT Alex. Brown Money
Market Fund
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Total investments 74,344 210,362 90,196 167,427 388,636 148,862 18,096 13,356
Contributions receivable from
American Telecasting, Inc. 9,066 12,012 25,788 12,447 49,435 32,018 4,505
Other receivable
Due to (from) other funds 988 2,532 4,316 2,331 8,591 6,525 822
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Total assets 84,398 224,906 120,300 182,205 446,662 187,405 23,423 13,356
LIABILITIES
Excess contributions payable
to Plan participants (5,243) (5,793) (5,318) (1,989) (13,559) (3,269)
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Net assets available for
benefits $ 79,155 $ 219,113 $ 114,982 $ 180,216 $ 433,103 $ 184,136 $ 23,423 $ 13,356
======== ========== ========= ========== ========= ========== ========= =========
<CAPTION>
PUTNAM
MONEY BT ALEX. BROWN
MARKET MONEY MARKET
FUND FUND OTHER TOTAL
---------- ------------- -------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments (at fair value)
(Note 3):
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
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
Excess contributions payable
to Plan participants (2,745) (37,916)
---------- -------- -------- -----------
Net assets available for
benefits $ 127,143 $ 9,241 $ 25,985 $ 1,409,853
========== ======== ======== ===========
</TABLE>
See notes to 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, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THE GEORGE PUTNAM PUTNAM PUTNAM OTC
ATI PUTNAM GROWTH AND GLOBAL AND PUTNAM PUTNAM
COMMON FUND INCOME GROWTH EMERGING VOYAGER INCOME LOANS TO
STOCK OF BOSTON FUND II FUND GROWTH FUND FUND II FUND PARTICIPANTS
--------- ---------- ---------- ---------- ----------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income (loss):
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments
(Note 3) $ (77,982) $ (757) $ (2,055) $ 41,653 $ 14,826 $ 31,915 $ (867)
Dividends and interest 608 24,267 15,019 8,393 20,289 14,693 2,162 $ 2,104
--------- ---------- --------- ---------- --------- ---------- --------- ---------
Total investment income
(loss) (77,374) 23,510 12,964 50,046 35,115 46,608 1,295 2,104
--------- ---------- --------- ---------- --------- ---------- --------- ---------
Contributions:
Participant 14,859 38,562 60,233 36,619 121,059 85,875 10,321
American Telecasting, Inc. 7,151 17,867 27,051 13,757 52,157 39,073 4,048
Loan repayments 253 1,374 3,099 1,618 8,221 5,305 290 (20,279)
Pending transfers 651 4,543 4,987 2,807 7,490 7,623 625
Other
--------- ---------- --------- ---------- --------- ---------- --------- ---------
Total contributions 22,914 62,346 95,370 54,801 188,927 137,876 15,284 (20,279)
--------- ---------- --------- ---------- --------- ---------- --------- ---------
Total additions (54,460) 85,856 108,334 104,847 224,042 184,484 16,579 (18,175)
--------- ---------- --------- ---------- --------- ---------- --------- ---------
DEDUCTIONS
Benefits paid to participants 6,730 34,410 62,365 38,286 132,505 62,902 7,144
Refund of excess contributions 1,643 1,627 1,686 10,161 3,327
Loan issues 1 5,655 4,488 8,843 20,037 8,775 111 (48,837)
Loan disbursements 2,996
Forfeitures 844 3,254 9,210 3,372 17,144 7,701 534
--------- ---------- --------- ---------- --------- ---------- --------- ---------
Total deductions 7,575 44,962 77,690 52,187 179,847 82,705 7,789 (45,841)
--------- ---------- --------- ---------- --------- ---------- --------- ---------
Interfund transfers (1,683) (6,625) 60 (686) (76) 5,499
--------- ---------- --------- ---------- --------- ---------- --------- ---------
Net increase (decrease) in net
assets available for
benefits (63,718) 34,269 30,704 51,974 44,119 107,278 8,790 27,666
Net assets available for
benefits at the beginning
of the period 79,155 219,113 114,982 180,216 433,103 184,136 23,423 13,356
--------- ---------- --------- ---------- --------- ---------- --------- ---------
Net assets available for
benefits at the end of the
period $ 15,437 $ 253,382 $ 145,686 $ 232,190 $ 477,222 $ 291,414 $ 32,213 $ 41,022
========= ========== ========= ========== ========= ========== ========= =========
<CAPTION>
PUTNAM
MONEY BT ALEX. BROWN
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 investments
(Note 3) $ 6,733
Dividends and interest $ 16,277 $ 1,427 105,239
---------- -------- -------- -----------
Total investment income
(loss) 16,277 1,427 111,972
---------- -------- -------- -----------
Contributions:
Participant 35,505 27,164 430,197
American Telecasting, Inc. 15,170 176,274
Loan repayments 119
Pending transfers 1,116 (29,842)
Other $(25,985) (25,985)
---------- -------- -------- -----------
Total contributions 51,910 (2,678) (25,985) 580,486
---------- -------- -------- -----------
Total additions 68,187 (1,251) (25,985) 692,458
---------- -------- -------- -----------
DEDUCTIONS
Benefits paid to participants 46,395 390,737
Refund of excess contributions 4,711 23,155
Loan issues 927
Loan disbursements 2,996
Forfeitures (19,053) 23,006
---------- -------- -------- -----------
Total deductions 32,980 439,894
---------- -------- -------- -----------
Interfund transfers 3,511
---------- -------- -------- -----------
Net increase (decrease) in net
assets available for
benefits 38,718 (1,251) (25,985) 252,564
Net assets available for
benefits at the beginning
of the period 127,143 9,241 25,985 1,409,853
---------- -------- -------- -----------
Net assets available for
benefits at the end of the
period $ 165,861 $ 7,990 $ -- $ 1,662,417
========== ======== ======== ===========
</TABLE>
See notes to financial statements.
- --------------------------------------------------------------------------------
-4-
<PAGE> 7
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>
THE GEORGE PUTNAM PUTNAM PUTNAM OTC
ATI PUTNAM GROWTH AND GLOBAL AND PUTNAM PUTNAM
COMMON FUND INCOME GROWTH EMERGING VOYAGER INCOME LOANS TO
STOCK OF BOSTON FUND II FUND GROWTH FUND FUND II FUND PARTICIPANTS
-------- ---------- --------- ---------- ----------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment income (loss):
Net realized and
unrealized appreciation
(depreciation) in fair
value of investments
(Note 3) $(96,694) $ 18,332 $ 2,387 $ (9,112) $ 48,959 $ 25,991 $ 329
Dividends and interest 298 19,896 8,466 30,343 217 386 916 $ 598
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Total investment
income (loss) (96,396) 38,228 10,853 21,231 49,176 26,377 1,245 598
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Contributions:
Participant 52,804 30,238 66,759 41,139 136,534 92,591 16,967
American Telecasting, Inc. 9,066 12,012 25,788 12,447 49,435 32,018 4,505
Loan repayments 135 240 55 388 1,026 1,163 (3,699)
Pending transfers 988 2,532 4,316 2,331 8,591 6,525 822
Other
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Total contributions 62,993 45,022 96,918 56,305 195,586 132,297 22,294 (3,699)
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Total additions (33,403) 83,250 107,771 77,536 244,762 158,674 23,539 (3,101)
-------- ---------- --------- ---------- --------- ---------- --------- ---------
DEDUCTIONS
Benefits paid to participants 13,231 54,118 21,699 50,003 116,104 37,329 6,872
Refund of excess contributions 5,243 5,793 5,318 1,989 13,559 3,269
Loan issues 1,298 2,800 453 2,550 11,822 2,435 435 (27,493)
Loan disbursements 11,036
Forfeitures 1,179 2,804 4,006 3,694 7,026 4,912 222
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Total deductions 20,951 65,515 31,476 58,236 148,511 47,945 7,529 (16,457)
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Interfund transfers (11,638) (15,251) 890 (4,578) (11,753) 7,678 437
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Net increase (decrease) in
net assets available
for benefits (65,992) 2,484 77,185 14,722 84,498 118,407 16,447 13,356
Net assets available for
benefits at the beginning
of the period 145,147 216,629 37,797 165,494 348,605 65,729 6,976
-------- ---------- --------- ---------- --------- ---------- --------- ---------
Net assets available for
benefits at the end of the
period $ 79,155 $ 219,113 $ 114,982 $ 180,216 $ 433,103 $ 184,136 $ 23,423 $ 13,356
======== ========== ========= ========== ========= ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
PUTNAM
MONEY BT ALEX. BROWN
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 investments
(Note 3) $ (9,808)
Dividends and interest $ 5,971 $ 2,715 69,806
---------- -------- -------- -----------
Total investment
income (loss) 5,971 2,715 59,998
---------- -------- -------- -----------
Contributions:
Participant 19,854 34,938 491,824
American Telecasting, Inc. 7,367 152,638
Loan repayments 692
Pending transfers 2,307 (28,412)
Other $ 25,985 25,985
---------- -------- -------- -----------
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
---------- -------- -------- -----------
Interfund transfers 34,215
---------- -------- -------- -----------
Net increase (decrease) in
net assets available
for benefits 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>
See notes to financial statements.
- --------------------------------------------------------------------------------
-5-
<PAGE> 8
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN AND SIGNIFICANT EVENTS
SUMMARY PLAN DESCRIPTION -- The following brief description of the
American Telecasting, Inc. 401(k) Retirement Plan (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.
GENERAL -- The Plan is a defined contribution plan covering all
eligible employees of American Telecasting, Inc. (the Company). The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
PENDING SPRINT TRANSACTION -- On April 26, 1999, the Company, DD
Acquisition Corp. ("Acquisition"), a wholly owned subsidiary of Sprint
Corporation ("Sprint") and Sprint entered into an Agreement and Plan of
Merger (the "Merger Agreement"), pursuant to which Acquisition would be
merged with and into the Company, with the Company being the surviving
corporation of such merger (the "Merger"), upon the terms and subject
to the conditions of the Merger Agreement. After the completion of the
Merger, the Company will be wholly owned by Sprint.
At the effective time of the Merger, each outstanding share of the
Company's Class A Common Stock would be converted into the right to
receive $6.50 in cash. Upon the conversion to cash, plan participants
will be required to direct such cash into one of the remaining
investment options of the Plan. The consummation of the Merger is
subject to certain conditions, including approval by the stockholders
of the Company and the receipt of all necessary regulatory approvals.
No decision has been made with respect to the possibility of
terminating the Plan or merging the Plan with Sprint's retirement plan.
LIQUIDITY AND TRADING OF AMERICAN TELECASTING, INC. COMMON STOCK --
Effective on October 28,1998, the Nasdaq Stock Market, Inc. (Nasdaq)
delisted the Company's Class A Common Stock. The delisting by Nasdaq
makes it more difficult to buy or sell the Company's Class A Common
Stock or to obtain timely and accurate quotations of trading prices.
Subsequent to the delisting, the Company's Class A Common Stock has
commenced trading on the Over-the-Counter (OTC) Bulletin Board.
PLAN AMENDMENT -- Effective January 1, 1998, the Plan was amended to
modify the eligibility requirements to receive employer matching
contributions under the Plan. The amendment eliminated the requirement
that a participant be employed on the last day of the plan year or have
retired, died or become disabled during the plan year in order the be
eligible to receive an employer matching contribution for such plan
year. It also reduced from 1,000 to 1 the number of hours of service in
a plan year a participant must have to be eligible to receive an
employer matching contribution.
-6-
<PAGE> 9
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 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 years ended December 31, 1998 and 1997,
were $176,274 and $152,638, respectively.
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 1998 and 1997, forfeited balances used to reduce employer
contributions totalled $23,006 and $38,981, respectively. 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 any of eight investment options. Participants may change their
investment options daily. The investment options are as follows:
o American Telecasting, Inc. Common Stock -- Funds are invested in
shares of the Company's 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.
-7-
<PAGE> 10
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 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 $5,000 or less, a participant will receive the
value of his or her account as a lump-sum distribution.
2. SUMMARY OF 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
were classified as a liability in the 1997 Form 5500. There were no
distributions payable as of December 31, 1998.
-8-
<PAGE> 11
PLAN ADMINISTRATIVE COSTS -- All administrative costs and expenses of
the Plan are paid by the Company.
3. INVESTMENTS
The fair value of the Plan's investments as of December 31, 1998 and
1997 is presented in the following table. Investments which represent 5
percent or more of the Plan's net assets are separately identified.
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Putnam OTC and Emerging Growth Fund $ 471,205 $ 388,636
Putnam Voyager Fund II 278,543 148,862
The George Putnam Fund of Boston 245,638 210,362
Putnam Global Growth Fund 227,920 167,427
Putnam Money Market Fund 167,854 120,214
Putnam Growth and Income Fund II 137,324 90,196
American Telecasting, Inc. Common Stock 14,117 74,344
Other investments which do not exceed 5% threshold 109,723 69,105
------------- --------------
$ 1,652,324 $ 1,269,146
============= ==============
</TABLE>
During 1998 and 1997, the Plan's investments (including investments
bought, sold and held during the year) appreciated (depreciated) in
value as follows:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
American Telecasting, Inc. Common Stock $ (77,982) $ (96,694)
The George Putnam Fund of Boston (757) 18,332
Putnam Growth and Income Fund II (2,055) 2,387
Putnam Global Growth Fund 41,653 (9,112)
Putnam OTC and Emerging Growth Fund 14,826 48,959
Putnam Voyager Fund II 31,915 25,991
Putnam Income Fund (867) 329
------------- --------------
Net appreciation (depreciation) in fair value
of investments $ 6,733 $ (9,808)
============= ==============
</TABLE>
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 fully vested in their
accounts.
-9-
<PAGE> 12
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. The Plan obtained its
latest determination letter on April 16, 1997, in which the Internal
Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue
code. The Plan has been amended since receiving the determination
letter. However, 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.
6. RELATED PARTY TRANSACTIONS
Plan investments as of December 31, 1998 and 1997, represent shares of
investment funds managed by Putnam Fiduciary Trust Company. Putnam
Fiduciary Trust Company is the trustee of the Plan, and therefore,
those transactions qualify as party-in-interest transactions.
As of December 31, 1998 and 1997, the Plan also held 67,912 and 59,475
shares of American Telecasting, Inc. Common Stock, respectively. These
transactions also qualify as party-in-interest transactions.
BT Alex. Brown & Sons, Inc. serves as the Plan's broker of record.
Therefore, transactions occurring in the BT Alex. Brown Money Market
Fund qualify as party-in-interest transactions.
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, 1998 and 1997, 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.
-10-
<PAGE> 13
8. YEAR 2000
What is commonly known as the "Year 2000 issue" arises because many
computer hardware and software systems use only two digits to represent
the year. As a result, these systems and programs may not calculate
dates beyond 1999, which may cause errors in information or systems
failures. With respect to its internal systems, the Plan has assessed
the impact that the Year 2000 issue will have and does not expect the
costs of these efforts to be material. However, the Year 2000 readiness
of the entities with whom the Plan deals may vary. While the Plan does
not believe that the Year 2000 matters discussed above will have a
material impact on its financial condition or results of operations,
due to the unprecedented nature of the Year 2000 issue, its effects on
the Plan will not be fully determinable until the year 2000 or
thereafter.
-11-
<PAGE> 14
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
ITEM 27A -- ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER, DESCRIPTION OF CURRENT
LESSOR OR SIMILAR PARTY INVESTMENT COST VALUE
<S> <C> <C> <C>
Common stock:
* American Telecasting, Inc. Common Stock $ 200,927 $ 14,117
------------- --------------
Funds:
* The George Putnam Fund of Boston Mutual Fund 237,797 245,638
* Putnam Growth and Income Fund II Mutual Fund 139,068 137,324
* Putnam Global Growth Fund Mutual Fund 204,215 227,920
* Putnam OTC and Emerging Growth Fund Mutual Fund 440,929 471,205
* Putnam Voyager Fund II Mutual Fund 233,747 278,543
* Putnam Income Fund Mutual Fund 31,456 30,869
* Putnam Money Market Fund Money Market Fund 167,854 167,854
* BT Alex. Brown Money Market Fund Money Market Fund 37,832 37,832
------------- --------------
1,492,898 1,597,185
Loans to participants (interest rates
ranging from 9.0% to 9.5%), maturity
dates ranging from May 3, 1999 to
October 31, 2003 Loans 41,022 41,022
------------- --------------
$ 1,734,847 $ 1,652,324
============= ==============
</TABLE>
*Represents a party-in-interest (Note 6).
- --------------------------------------------------------------------------------
-12-
<PAGE> 15
AMERICAN TELECASTING, INC.
401(K) RETIREMENT PLAN
ITEM 27D -- REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT
VALUE OF
PURCHASE ASSET ON
IDENTITY OF PARTY NUMBER OF SELLING PRICE/COST TRANSACTION NET GAIN
INVOLVED DESCRIPTION OF ASSETS TRANSACTIONS PRICE OF ASSET DATE OR (LOSS)
<S> <C> <C> <C> <C> <C> <C>
SERIES OF TRANSACTIONS
* Putnam Investments 5,456.967 shares of The George 59 $ 101,266 $ 101,266
Putnam Fund of Boston
* Putnam Investments 6,820.187 shares of Putnam Global 60 78,322 78,322
Growth Fund
* Putnam Investments 16,504.092 shares of Putnam OTC 75 280,031 280,031
and Emerging Growth Fund
* Putnam Investments 13,311.808 shares of Putnam OTC 141 $ 212,289 216,014 212,289 $ (3,725)
and Emerging Growth Fund
* Putnam Investments 9,362.941 shares of Putnam Voyager II 72 195,998 195,998
* Putnam Investments 4,882.064 shares of Putnam Voyager II 130 98,232 90,764 98,232 7,468
* Putnam Investments 10,104.348 shares of Putnam Growth 74 146,326 146,326
and Income Fund II
* Putnam Investments 6,855.829 shares of Putnam Growth 110 97,142 97,715 97,142 (573)
and Income Fund II
* Putnam Investments 47,940.742 shares of American 76 20,198 129,774 20,198 (109,576)
Telecasting, Inc. Common Stock
* Putnam Investments 142,414.789 shares of Putnam Money 137 142,414 142,414
Market Fund
* Putnam Investments 142,414.789 shares of Putnam Money 57 94,775 94,775 94,775
Market Fund
</TABLE>
Note: Reportable transactions are included as defined in Section 2520.103-6 of
the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. In general terms,
reportable transactions are those transactions, or series of transactions when
aggregated, within the plan year which involve an amount in excess of five
percent of total assets as of the beginning of the plan year.
*Represents a party-in-interest (Note 6)
- --------------------------------------------------------------------------------
-13-
<PAGE> 16
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 29, 1999
-14-
