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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended Commission file number:
December 31, 2000 333-02302
ALLBRITTON COMMUNICATIONS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 74-180-3105
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
808 Seventeenth Street, N.W.
Suite 300
Washington, D.C. 20006-3910
(Address of principal executive offices)
Registrant's telephone number, including area code: 202-789-2130
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
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Number of shares of Common Stock outstanding as of February 14, 2001:
20,000 shares.
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CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
THIS QUARTERLY REPORT ON FORM 10-Q, INCLUDING ITEM 2 "MANAGEMENT'S DISCUSSION
AND ANALSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS," CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT ARE NOT HISTORICAL FACTS AND INVOLVE A
NUMBER OF RISKS AND UNCERTAINTIES. THERE ARE A NUMBER OF FACTORS THAT COULD
CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED IN
SUCH FORWARD-LOOKING STATEMENTS. THESE FACTORS INCLUDE, WITHOUT LIMITATION, THE
COMPANY'S OUTSTANDING INDEBTEDNESS AND ITS HIGH DEGREE OF LEVERAGE; THE
RESTRICTIONS IMPOSED ON THE COMPANY BY THE TERMS OF THE COMPANY'S INDEBTEDNESS;
THE HIGH DEGREE OF COMPETITION FROM BOTH OVER-THE-AIR BROADCAST STATIONS AND
PROGRAMMING ALTERNATIVES SUCH AS CABLE TELEVISION, WIRELESS CABLE, IN-HOME
SATELLITE DISTRIBUTION SERVICE AND PAY-PER-VIEW AND HOME VIDEO AND ENTERTAINMENT
SERVICES; THE IMPACT OF NEW TECHNOLOGIES; CHANGES IN FEDERAL COMMUNICATIONS
COMMISSION REGULATIONS; AND THE VARIABILITY OF THE COMPANY'S QUARTERLY RESULTS
AND THE COMPANY'S SEASONALITY.
ALL WRITTEN OR ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY ARE
EXPRESSLY QUALIFIED BY THE FOREGOING CAUTIONARY STATEMENTS.
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS WHICH REFLECT MANAGEMENT'S VIEW ONLY AS OF THE DATE HEREOF. THE
COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE RESULT OF ANY REVISIONS
TO THESE FORWARD-LOOKING STATEMENTS WHICH MAY BE MADE TO REFLECT EVENTS OR
CIRCUMSTANCES AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF
UNANTICIPATED EVENTS.
ALLBRITTON COMMUNICATIONS COMPANY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2000
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Consolidated Statements of Operations and Retained Earnings
for the Three Months Ended December 31, 1999 and
2000........................................................ 1
Consolidated Balance Sheets as of September 30, 2000 and
December 31, 2000........................................... 2
Consolidated Statements of Cash Flows for the Three Months
Ended December 31, 1999 and 2000............................ 3
Notes to Interim Consolidated Financial Statements.......... 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 5
Item 3. Quantitative and Qualitative Disclosures About Market Risk.. 10
PART II OTHER INFORMATION
Item 1. Legal Proceedings........................................... 11
Item 4. Submission of Matters to a Vote of Security Holders......... 11
Item 6. Exhibits and Reports on Form 8-K............................ 11
Signatures............................................................ 12
Exhibit Index......................................................... 13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ALLBRITTON COMMUNICATIONS COMPANY
(an indirectly wholly-owned subsidiary of Perpetual Corporation)
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(Dollars in thousands)
(unaudited)
Three Months Ended
December 31,
-------------------
1999 2000
---- ----
Operating revenues, net .......................... $ 56,181 $ 58,310
-------- --------
Television operating expenses, excluding
depreciation and amortization ................ 29,951 29,756
Depreciation and amortization .................... 3,863 3,417
Corporate expenses ............................... 1,100 1,381
-------- --------
34,914 34,554
-------- --------
Operating income ................................. 21,267 23,756
-------- --------
Nonoperating income (expense)
Interest income
Related party ............................ 643 656
Other .................................... 66 160
Interest expense ............................. (10,847) (10,208)
Other, net ................................... (298) (352)
-------- --------
(10,436) (9,744)
-------- --------
Income before income taxes ....................... 10,831 14,012
Provision for income taxes ....................... 4,495 6,303
-------- --------
Net income ....................................... 6,336 7,709
Retained earnings, beginning of period ........... 54,054 71,238
-------- --------
Retained earnings, end of period ................. $ 60,390 $ 78,947
======== ========
See accompanying notes to interim consolidated financial statements.
1
ALLBRITTON COMMUNICATIONS COMPANY
(an indirectly wholly-owned subsidiary of Perpetual Corporation)
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31,
September 30, 2000
2000 (unaudited)
------------- ------------
Assets
Current assets
Cash and cash equivalents ............................. $ 11,913 $ 7,069
Accounts receivable, net .............................. 37,802 45,823
Program rights ........................................ 19,945 14,389
Deferred income taxes ................................. 967 967
Interest receivable from related party ................ 492 1,045
Other ................................................. 2,535 2,384
--------- ---------
Total current assets .............................. 73,654 71,677
Property, plant and equipment, net ........................ 42,185 41,511
Intangible assets, net .................................... 136,718 135,619
Deferred financing costs and other ........................ 8,412 8,122
Cash surrender value of life insurance .................... 8,038 8,325
Program rights ............................................ 927 751
--------- ---------
$ 269,934 $ 266,005
========= =========
Liabilities and Stockholder's Investment
Current liabilities
Current portion of long-term debt ..................... $ 1,759 $ 1,869
Accounts payable ...................................... 3,105 3,743
Accrued interest payable .............................. 11,156 7,838
Program rights payable ................................ 25,257 18,798
Accrued employee benefit expenses ..................... 4,798 3,573
Other accrued expenses ................................ 4,503 6,327
--------- ---------
Total current liabilities ......................... 50,578 42,148
Long-term debt ............................................ 425,970 425,950
Program rights payable .................................... 1,568 1,340
Deferred rent and other ................................... 2,341 2,211
Accrued employee benefit expenses ......................... 1,644 1,661
Deferred income taxes ..................................... 7,729 9,210
--------- ---------
Total liabilities ................................. 489,830 482,520
--------- ---------
Stockholder's investment
Preferred stock, $1 par value, 800 shares authorized,
none issued ....................................... -- --
Common stock, $.05 par value, 20,000 shares authorized,
issued and outstanding ............................ 1 1
Capital in excess of par value ........................ 6,955 6,955
Retained earnings ..................................... 71,238 78,947
Distributions to owners, net .......................... (298,090) (302,418)
--------- ---------
Total stockholder's investment .................... (219,896) (216,515)
--------- ---------
$ 269,934 $ 266,005
========= =========
See accompanying notes to interim consolidated financial statements.
2
ALLBRITTON COMMUNICATIONS COMPANY
(an indirectly wholly-owned subsidiary of Perpetual Corporation)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
Three Months Ended
December 31,
------------------
1999 2000
---- ----
Cash flows from operating activities:
Net income .................................................... $ 6,336 $ 7,709
--------- ---------
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Depreciation and amortization .............................. 3,863 3,417
Other noncash charges ...................................... 314 314
Provision for doubtful accounts ............................ 77 98
Loss (gain) on disposal of assets .......................... (14) 23
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable ................................... (12,218) (8,119)
Program rights ........................................ 4,919 5,732
Interest receivable from related party ................ (553) (553)
Other current assets .................................. (1,222) 151
Other noncurrent assets ............................... (287) (282)
Increase (decrease) in liabilities:
Accounts payable ...................................... 1,757 638
Accrued interest payable .............................. (3,375) (3,318)
Program rights payable ................................ (2,641) (6,687)
Accrued employee benefit expenses ..................... (1,409) (1,208)
Other accrued expenses ................................ 1,422 1,824
Deferred rent and other liabilities ................... (190) (130)
Deferred income taxes ................................. 758 1,481
--------- ---------
(8,799) (6,619)
--------- ---------
Net cash (used in) provided by operating activities.. (2,463) 1,090
--------- ---------
Cash flows from investing activities:
Capital expenditures .......................................... (1,868) (1,182)
Proceeds from disposal of assets .............................. 37 5
--------- ---------
Net cash used in investing activities ............... (1,831) (1,177)
--------- ---------
Cash flows from financing activities:
Draws under revolving credit facility, net .................... 5,000 --
Principal payments on capital lease obligations ............... (569) (429)
Distributions to owners, net of certain charges ............... (147,788) (17,803)
Repayments of distributions to owners ......................... 145,500 13,475
--------- ---------
Net cash provided by (used in) financing activities.. 2,143 (4,757)
--------- ---------
Net decrease in cash and cash equivalents .......................... (2,151) (4,844)
Cash and cash equivalents, beginning of period ..................... 14,437 11,913
--------- ---------
Cash and cash equivalents, end of period ........................... $ 12,286 $ 7,069
========= =========
Non-cash investing and financing activities:
Equipment acquired under capital leases ....................... $ -- $ 490
========= =========
See accompanying notes to interim consolidated financial statements.
3
ALLBRITTON COMMUNICATIONS COMPANY
(an indirectly wholly-owned subsidiary of Perpetual Corporation)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
NOTE 1 - The accompanying unaudited interim consolidated financial statements of
Allbritton Communications Company (an indirectly wholly-owned subsidiary of
Perpetual Corporation) and its subsidiaries (collectively, the "Company") have
been prepared pursuant to instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in conformity with generally
accepted accounting principles have been omitted or condensed where permitted by
regulation. In management's opinion, the accompanying financial statements
reflect all adjustments, which were of a normal recurring nature, and
disclosures necessary for a fair presentation of the consolidated financial
statements for the interim periods presented. The results of operations for the
three months ended December 31, 2000 are not necessarily indicative of the
results that can be expected for the entire fiscal year ending September 30,
2001. The interim consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
for the year ended September 30, 2000 which are contained in the Company's Form
10-K.
NOTE 2 - For the three months ended December 31, 1999 and 2000, distributions to
owners were as follows:
1999 2000
---- ----
Distributions to owners, beginning of period ....... $ 272,357 $ 298,090
Cash advances ................................... 150,954 21,770
Repayment of cash advances ...................... (145,500) (13,475)
Charge for Federal and state income taxes ....... (3,166) (3,967)
--------- ---------
Distributions to owners, end of period ............. $ 274,645 $ 302,418
========= =========
Weighted average amount of non-interest bearing
advances outstanding during the period .......... $ 289,524 $ 282,599
========= =========
4
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
(Dollars in thousands)
Overview
Allbritton Communications Company and its subsidiaries (on a consolidated basis,
the "Company") own ABC network-affiliated television stations serving seven
diverse geographic markets: WJLA-TV in Washington, D.C.; WCFT-TV in Tuscaloosa,
Alabama, WJSU-TV in Anniston, Alabama and WBMA-LP, a low power television
station licensed to Birmingham, Alabama (the Company operates WCFT-TV and
WJSU-TV in tandem with WBMA-LP serving the viewers of the Birmingham, Tuscaloosa
and Anniston market); WHTM-TV in Harrisburg, Pennsylvania; KATV in Little Rock,
Arkansas; KTUL in Tulsa, Oklahoma; WSET-TV in Lynchburg, Virginia; and WCIV in
Charleston, South Carolina.
The Company's advertising revenues are generally highest in the first and third
quarters of each fiscal year, due in part to increases in retail advertising in
the period leading up to and including the holiday season and active advertising
in the spring. The fluctuation in the Company's operating results is generally
related to fluctuations in the revenue cycle. In addition, advertising revenues
are generally higher during election years due to spending by political
candidates, which is typically heaviest during the Company's first and fourth
fiscal quarters.
As compared to the same period in the prior fiscal year, the Company's results
of operations for the three months ended December 31, 2000 principally reflect
an increase in political advertising revenues in all of the Company's markets,
partially offset by a decrease in national and local/regional advertising
revenues in the Washington, D.C. market.
Results of Operations
Set forth below are selected consolidated financial data for the three months
ended December 31, 1999 and 2000 and the percentage change between the periods:
Three Months Ended December 31,
-------------------------------
Percent
1999 2000 Change
---- ---- ------
Operating revenues, net ........... $ 56,181 $ 58,310 3.8%
Total operating expenses .......... 34,914 34,554 -1.0%
-------- --------
Operating income .................. 21,267 23,756 11.7%
Nonoperating expenses, net ........ 10,436 9,744 -6.6%
Income tax provision .............. 4,495 6,303 40.2%
-------- --------
Net income ........................ $ 6,336 $ 7,709 21.7%
======== ========
5
Net Operating Revenues
The following table depicts the principal types of operating revenues, net of
agency commissions, earned by the Company for the three months ended December
31, 1999 and 2000, and the percentage contribution of each to the total
broadcast revenues earned by the Company, before fees:
Three Months Ended December 31,
-------------------------------
1999 2000
---- ----
Dollars Percent Dollars Percent
------- ------- ------- -------
Local/regional <F1> ....... $ 27,591 47.6 $ 26,099 43.4
National <F2> ............. 25,286 43.6 22,463 37.4
Network compensation <F3>.. 624 1.1 674 1.1
Political <F4> ............ 376 0.6 6,812 11.3
Trade and barter <F5> ..... 2,272 3.9 2,039 3.4
Other revenue <F6> ........ 1,848 3.2 2,048 3.4
-------- ----- -------- -----
Broadcast revenues ........ 57,997 100.0 60,135 100.0
===== =====
Fees <F7> ................. (1,816) (1,825)
-------- --------
Operating revenues, net ... $ 56,181 $ 58,310
======== ========
<FN>
<F1> Represents sale of advertising time to local and regional advertisers or
agencies representing such advertisers.
<F2> Represents sale of advertising time to agencies representing national
advertisers.
<F3> Represents payment by networks for broadcasting or promoting network
programming.
<F4> Represents sale of advertising time to political advertisers.
<F5> Represents value of commercial time exchanged for goods and services
(trade) or syndicated programs (barter).
<F6> Represents miscellaneous revenue, principally receipts from tower rental,
production of commercials and revenue from the sales of University of
Arkansas sports programming to advertisers and radio stations.
<F7> Represents fees paid to national sales representatives and fees paid for
music licenses.
</FN>
Net operating revenues for the three months ended December 31, 2000 totaled
$58,310, an increase of $2,129, or 3.8%, when compared to net operating revenues
of $56,181 for the three months ended December 31, 1999. The increase resulted
principally from increased political advertising revenues in all of the
Company's markets, partially offset by decreased national and local/regional
advertising revenues in the Washington, D.C. market.
Local/regional advertising revenues decreased 5.4% during the three months ended
December 31, 2000 versus the comparable period in Fiscal 2000. The decrease for
the three months ended December 31, 2000 of $1,492 from the three months ended
December 31, 1999 was primarily attributable to decreased local/regional
advertising revenues in the Washington, D.C. market.
National advertising revenues decreased $2,823, or 11.2%, for the three months
ended December 31, 2000 from the comparable period in Fiscal 2000. The decrease
for the three months ended December 31, 2000 was primarily attributable to
decreased national advertising revenues in the Washington, D.C. market,
including a substantial decrease in the strong internet-related advertising
which occurred in the Washington, D.C. market during the first quarter of Fiscal
2000.
6
Political advertising revenues increased $6,436 during the three months ended
December 31, 2000 due primarily to the national presidential election and
high-profile local political races affecting the Little Rock, Washington, D.C.
and Lynchburg markets in November 2000 with no comparable political elections
occurring during the same period in Fiscal 2000.
No individual advertiser accounted for more than 5% of the Company's broadcast
revenues during the three months ended December 31, 1999 or 2000.
Total Operating Expenses
Total operating expenses for the three months ended December 31, 2000 totaled
$34,554, a decrease of $360, or 1.0%, compared to total operating expenses of
$34,914 for the three-month period ended December 31, 1999. This net decrease
consisted of a decrease in television operating expenses, excluding depreciation
and amortization, of $195, a decrease in depreciation and amortization of $446
and an increase in corporate expenses of $281.
Television operating expenses, excluding depreciation and amortization,
decreased $195, or 0.7%, to $29,756 for the three months ended December 31, 2000
as compared to $29,951 for the three months ended December 31, 1999. The
decrease in Fiscal 2001 was primarily attributable to decreased programming
expenses related to a reduction in the number of one-time and non-recurring
programming events occurring during the first quarter of Fiscal 2001 as compared
to the same period in Fiscal 2000. Excluding these expenses, television
operating expenses increased 2.3% for the three months ended December 31, 2000
as compared to the three months ended December 31, 1999.
Depreciation and amortization expense of $3,417 for the first three months of
Fiscal 2001 decreased $446, or 11.5%, versus the comparable period in Fiscal
2000. The decrease for the three months ended December 31, 2000 was principally
the result of the completion of the acquisition of WJSU on March 22, 2000. Prior
to March 22, 2000, the costs to acquire the option to purchase WJSU were
amortized over the ten-year term of the option. Upon completion of the
acquisition, the portion of the purchase price assigned to the broadcast license
and network affiliation of WJSU is being amortized over its estimated useful
life of 40 years.
Corporate expenses increased $281, or 25.5% during the quarter ended December
31, 2000 versus the comparable period in Fiscal 2000. The increase was primarily
due to increased personnel and key-man life insurance expenses.
Operating Income
For the three months ended December 31, 2000, operating income of $23,756
increased $2,489, or 11.7%, when compared to operating income of $21,267 for the
three months ended December 31, 1999. For the three months ended December 31,
2000, the operating margin increased to 40.7% from 37.9% for the comparable
period in Fiscal 2000. The increases in operating income and margin were the
result of increased net operating revenues and decreased total operating
expenses as discussed above.
Nonoperating Expenses, Net
Interest expense of $10,208 for three months ended December 31, 2000 decreased
$639, or 5.9%, as compared to $10,847 for the three-month period ended December
31, 1999. This decrease was due to a decreased average debt balance during the
first three months of Fiscal 2001. The average balance of debt outstanding,
including capital lease obligations, was $459,693 and $429,239 for
7
the three months ended December 31, 1999 and 2000, respectively, and the
weighted average interest rate on debt was 9.4% for each of the three months
ended December 31, 1999 and 2000.
Income Taxes
The provision for income taxes for the three months ended December 31, 2000
totaled $6,303, an increase of $1,808, or 40.2%, when compared to the provision
for income taxes of $4,495 for the three months ended December 31, 1999. The
increase was directly related to the $3,181, or 29.4%, increase in the Company's
income before income taxes as well as an increase in the Company's overall
effective income tax rate in Fiscal 2001.
Net Income
Net income for the three months ended December 31, 2000 was $7,709 as compared
to net income of $6,336 for the three months ended December 31, 1999. The
increase of $1,373, or 21.7% , was due to the factors discussed above.
Balance Sheet
Significant balance sheet fluctuations from September 30, 2000 to December 31,
2000 consisted of increased accounts receivable and decreases in program rights,
accrued interest payable and program rights payable. The increase in accounts
receivable was the result of the seasonality of the Company's revenue cycle as
well as continued revenue growth. The decrease in program rights and program
rights payable reflects the annual cycle of the underlying program contracts
which generally begins in September of each year. The decrease in accrued
interest payable reflects the timing of the Company's interest payments under
its debt obligations.
Liquidity and Capital Resources
As of December 31, 2000, the Company's cash and cash equivalents aggregated
$7,069, and the Company had an excess of current assets over current liabilities
of $29,529.
Cash Provided by Operations. The Company's principal source of working capital
is cash flow from operations and borrowings under its revolving credit facility.
As reported in the consolidated statements of cash flows, the Company's net cash
used in operating activities was $2,463 for the three months ended December 31,
1999. For the three months ended December 31, 2000, the Company's net cash
provided by operating activities was $1,090. The $3,553 increase in cash flows
from operating activities was primarily due to increased net income as well as
decreased accounts receivable and other current assets, partially offset by
decreased program rights payable.
Transactions with Owners. For the three months ended December 31, 1999 and 2000,
the Company made cash advances to owners, net of repayments and certain charges,
totaling $2,288 and $4,328, respectively. The Company periodically makes
advances in the form of distributions to its parent. At present, the primary
source of repayment of the net advances is through the ability of the Company to
pay dividends or make other distributions to its parent, and there is no
immediate intent for the advances to be repaid. Accordingly, these advances have
been treated as a reduction of Stockholder's Investment and described as
"distributions" in the Company's consolidated financial statements.
Stockholder's deficit amounted to $216,515 at December 31, 2000, a decrease of
$3,381, or 1.5%, from the September 30, 2000 deficit of $219,896. The decrease
was due to net income for the period of $7,709, partially offset by a net
increase in distributions to owners of $4,328.
8
Indebtedness. The Company's total debt, including the current portion of
long-term debt, increased from $427,729 at September 30, 2000 to $427,819 at
December 31, 2000. This debt, net of applicable discounts, consists of $274,196
of 9.75% Debentures, $150,000 of 8.875% Notes and $3,623 of capital lease
obligations. The increase of $90 in total debt from September 30, 2000 to
December 31, 2000 was primarily due to a net increase in capital lease
obligations. As of September 30, 2000 and December 31, 2000, there were no
amounts outstanding under the Company's $40,000 revolving credit facility. The
revolving credit facility is secured by the pledge of stock of the Company and
its subsidiaries and matures April 16, 2001. The Company has obtained oral
commitments for the funding of a new $50,000 revolving credit facility and is
currently in the process of completing the documentation for the facility to be
available no later than the maturity of the current facility.
Under the existing borrowing agreements, the Company is subject to restrictive
covenants that place limitations upon payments of cash dividends, issuance of
capital stock, investment transactions, incurrence of additional obligations and
transactions with affiliates. In addition, the Company must maintain specified
levels of operating cash flow and working capital and comply with other
financial covenants. Compliance with the financial covenants is measured at the
end of each quarter, and as of December 31, 2000, the Company was in compliance
with those financial covenants. The Company is also required to pay a commitment
fee of .375% per annum based on any unused portion of the revolving credit
facility.
Other Uses of Cash. The Company anticipates that capital expenditures for Fiscal
2001 will approximate $6,000. Fiscal 2001 capital expenditures will be primarily
for the acquisition of technical equipment and vehicles to support operations.
Capital expenditures during the three months ended December 31, 2000 totaled
$1,672, of which $490 was financed through capital lease transactions.
The Company anticipates that its existing cash position, together with cash
flows generated by operating activities and amounts available under revolving
credit arrangements will be sufficient to finance the operating cash flow
requirements of its stations, debt service requirements and anticipated capital
expenditures.
9
Item 3. Quantitative and Qualitative Disclosures About Market Risk
At December 31, 2000, the Company had other financial instruments consisting
primarily of long-term fixed interest rate debt. Such debt, with future
principal payments of $425,000, matures during the year ending September 30,
2008. At December 31, 2000, the carrying value of such debt was $424,196, the
fair value was $409,125 and the weighted average interest rate was 9.4%. The
fair market value of long-term fixed interest rate debt is subject to interest
rate risk. Generally, the fair market value of fixed interest rate debt will
increase as interest rates fall and decrease as interest rates rise. The Company
estimates the fair value of its long-term debt using either quoted market prices
or by discounting the required future cash flows under its debt using borrowing
rates currently available to the Company, as applicable. The Company actively
monitors the capital markets in analyzing its capital raising decisions.
10
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company currently and from time to time is involved in litigation incidental
to the conduct of its business, including suits based on defamation. The Company
is not currently a party to any lawsuit or proceeding which, in the opinion of
management, if decided adverse to the Company, would be likely to have a
material adverse effect on the Company's consolidated financial condition,
results of operations or cash flows.
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of stockholders of the Company held on November 17, 2000,
each of the directors of the Company was re-elected to serve until the next
annual meeting and until his or her successor is elected and qualified.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
See Exhibit Index on pages 13-16.
b. Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALLBRITTON COMMUNICATIONS COMPANY
(Registrant)
February 14, 2001 /s/ Lawrence I. Hebert
----------------------- ------------------------------
Date Name: Lawrence I. Hebert
Title: Chairman and Chief
Executive Officer
February 14, 2001 /s/ Stephen P. Gibson
----------------------- ------------------------------
Date Name: Stephen P. Gibson
Title: Chief Financial Officer
12
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page No.
- ----------- ---------------------- --------
3.1 Certificate of Incorporation of ACC. (Incorporated by *
reference to Exhibit 3.1 of Company's Registration Statement
on Form S-4, No. 333-02302, dated March 12, 1996)
3.2 Bylaws of ACC. (Incorporated by reference to Exhibit 3.2 of *
Registrant's Registration Statement on Form S-4, No.
333-02302, dated March 12, 1996)
4.1 Indenture dated as of February 6, 1996 between ACC and State *
Street Bank and Trust Company, as Trustee, relating to the
Debentures. (Incorporated by reference to Exhibit 4.1 of
Company's Registration Statement on Form S-4, No. 333-02302,
dated March 12, 1996)
4.2 Indenture dated as of January 22, 1998 between ACC and State *
Street Bank and Trust Company, as Trustee, relating to the
Notes. (Incorporated by reference to Exhibit 4.1 of Company's
Registration Statement on Form S-4, No. 333-45933, dated
February 9, 1998)
4.3 Form of 9.75% Series B Senior Subordinated Debentures due *
2007. (Incorporated by reference to Exhibit 4.3 of Company's
Registration Statement on Form S-4, No. 333-02302, dated March
12, 1996)
4.4 Revolving Credit Agreement dated as of April 16, 1996 by and *
among Allbritton Communications Company certain Banks, and The
First National Bank of Boston, as agent. (Incorporated by
reference to Exhibit 4.4 of Company's Quarterly Report on Form
10-Q, No. 333-02302, dated August 14, 1996)
4.5 Modification No. 1 dated as of June 19, 1996 to Revolving *
Credit Agreement. (Incorporated by reference to Exhibit 4.5 of
Company's Quarterly Report on Form 10-Q, No. 333-02302, dated
May 15, 1997)
4.6 Modification No. 2 dated as of December 20, 1996 to Revolving *
Credit Agreement. (Incorporated by reference to Exhibit 4.6 of
Company's Quarterly Report on Form 10-Q, No. 333-02302, dated
May 15, 1997)
4.7 Modification No. 3 dated as of May 14, 1997 to Revolving *
Credit Agreement. (Incorporated by reference to Exhibit 4.7 of
Company's Quarterly Report on Form 10-Q, No. 333-02302, dated
May 15, 1997)
13
Exhibit No. Description of Exhibit Page No.
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4.8 Modification No. 4 dated as of September 30, 1997 to Revolving *
Credit Agreement. (Incorporated by reference to Exhibit 4.8 of
Company's Form 10-K, No. 333-02302, dated December 22, 1997)
10.1 Network Affiliation Agreement (Harrisburg Television, Inc.). *
(Incorporated by reference to Exhibit 10.3 of Company's
Pre-effective Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996)
10.2 Side Letter Amendment to Network Affiliation Agreement *
(Harrisburg Television, Inc.) dated August 10, 1999.
(Incorporated by reference to Exhibit 10.2 of Company's
Quarterly Report on Form 10-Q, No. 333-02302, dated August 16,
1999)
10.3 Network Affiliation Agreement (First Charleston Corp.). *
(Incorporated by reference to Exhibit 10.4 of Company's
Pre-effective Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996)
10.4 Side Letter Amendment to Network Affiliation Agreement (First *
Charleston Corp.) dated August 10, 1999. (Incorporated by
reference to Exhibit 10.4 of Company's Quarterly Report on
Form 10-Q, No. 333-02302, dated August 16, 1999)
10.5 Network Affiliation Agreement (WSET, Incorporated). *
(Incorporated by reference to Exhibit 10.5 of Company's
Pre-effective Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996)
10.6 Side Letter Amendment to Network Affiliation Agreement (WSET, *
Incorporated) dated August 10, 1999. (Incorporated by
reference to Exhibit 10.6 of Company's Quarterly Report on
Form 10-Q, No. 333-02302, dated August 16, 1999)
10.7 Network Affiliation Agreement (WJLA-TV). (Incorporated by *
reference to Exhibit 10.6 of Company's Pre-effective Amendment
No. 1 to Registration Statement on Form S-4, dated April 22,
1996)
10.8 Side Letter Amendment to Network Affiliation Agreement *
(WJLA-TV) dated August 10, 1999. (Incorporated by reference
to Exhibit 10.8 of Company's Quarterly Report on Form 10-Q,
No. 333-02302, dated August 16, 1999)
10.9 Network Affiliation Agreement (KATV Television, Inc.). *
(Incorporated by reference to Exhibit 10.7 of Company's
Pre-effective Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996)
14
Exhibit No. Description of Exhibit Page No.
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10.10 Side Letter Amendment to Network Affiliation Agreement (KATV *
Television, Inc.) dated August 10, 1999. (Incorporated by
reference to Exhibit 10.10 of Company's Quarterly Report on
Form 10-Q, No. 333-02302, dated August 16, 1999)
10.11 Network Affiliation Agreement (KTUL Television, Inc.). *
(Incorporated by reference to Exhibit 10.8 of Company's
Pre-effective Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996)
10.12 Side Letter Amendment to Network Affiliation Agreement (KTUL *
Television, Inc.) dated August 10, 1999. (Incorporated by
reference to Exhibit 10.12 of Company's Quarterly Report on
Form 10-Q, No. 333-02302, dated August 16, 1999)
10.13 Network Affiliation Agreement (TV Alabama, Inc.). *
(Incorporated by reference to Exhibit 10.9 of Company's
Pre-effective Amendment No. 1 to Registration Statement on
Form S-4, dated April 22, 1996)
10.14 Amendment to Network Affiliation Agreement (TV Alabama, Inc.) *
dated January 23, 1997. (Incorporated by reference to Exhibit
10.15 to the Company's Quarterly Report on Form 10-Q, No.
333-02302, dated February 14, 1997)
10.15 Side Letter Amendment to Network Affiliation Agreement (TV *
Alabama, Inc.) dated August 10, 1999. (Incorporated by
reference to Exhibit 10.15 of Company's Quarterly Report on
Form 10-Q, No. 333-02302, dated August 16, 1999)
10.16 Tax Sharing Agreement effective as of September 30, 1991 by *
and among Perpetual Corporation, ACC and ALLNEWSCO, Inc.,
amended as of October 29, 1993. (Incorporated by reference to
Exhibit 10.11 of Company's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996)
10.17 Second Amendment to Tax Sharing Agreement effective as of *
October 1, 1995 by and among Perpetual Corporation, ACC and
ALLNEWSCO, Inc. (Incorporated by reference to Exhibit 10.9 of
the Company's Form 10-K, No. 333-02302, dated December 22,
1998)
10.18 Master Lease Finance Agreement dated as of August 10, 1994 *
between BancBoston Leasing, Inc. and ACC, as amended.
(Incorporated by reference to Exhibit 10.16 of Company's
Registration Statement on Form S-4, No. 333-02302, dated March
12, 1996)
10.19 Master Equipment Lease Agreement dated as of November 22, 2000 *
between Fleet Capital Corporation and ACC. (Incorporated by
reference to Exhibit 10.19 of the Company's Form 10-K, No.
333-02302, dated December 28, 2000)
15
Exhibit No. Description of Exhibit Page No.
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10.20 Pledge of Membership Interests Agreement dated as of September *
30, 1997 by and among ACC; KTUL, LLC; KATV, LLC; WCIV, LLC;
and BankBoston, N.A. as Agent. (Incorporated by reference to
Exhibit 10.16 of Company's Form 10-K, No. 333-02302, dated
December 22, 1997)
10.21 $20,000,000 Promissory Note of ALLNEWSCO, Inc. payable to *
KTUL, LLC. (Incorporated by reference to Exhibit 10.16 of
Company's Form 10-K, No. 333-02302, dated December 22, 1998)
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*Previously filed
16