SEC Info - Acme Television LLC - ‘10-K’ for 12/31/97

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Acme Television LLC – ‘10-K’ for 12/31/97

As of: Friday, 4/10/98 · For: 12/31/97 · Accession #: 892569-98-1042 · File #: 333-40281

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 4/10/98  Acme Television LLC               10-K       12/31/97    2:45K                                    Bowne - Biv/FA

Annual Report — Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Form 10-K for the Period Ended December 31, 1997      18     81K 
 2: EX-27       Financial Data Schedule                                1      6K

10-K — Form 10-K for the Period Ended December 31, 1997

10-K 1st Page of 18 TOC ↑Top Previous Next ↓Bottom Just 1st
 

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UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

------------------------
SPECIAL FINANCIAL REPORT ON 
FORM 10-K 
(MARK ONE)                                                                      

[X]*  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE          
SECURITIES EXCHANGE ACT OF 1934                         

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 

   *  THIS SPECIAL REPORT CONTAINS ONLY FINANCIAL STATEMENTS FOR THE
   YEAR ENDED DECEMBER 31, 1997 IN ACCORDANCE WITH RULE 15d-2.

OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE       
SECURITIES EXCHANGE ACT OF 1934                           

FOR THE TRANSITION PERIOD FROM                 TO         
                                      ---------------    ---------------

COMMISSION FILE NUMBER 0-27588

ACME TELEVISION, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                                        [Enlarge/Download Table]
                                                                                               
            DELAWARE                          4833                         52-2050589          
(STATE OR OTHER JURISDICTION OF   (PRIMARY STANDARD INDUSTRIAL  (I.R.S. EMPLOYER IDENTIFICATION
  INCORPORATION OR ORGANIZATION)  CLASSIFICATION CODE NUMBER)               NUMBER)            

 2101 E. FOURTH ST., SUITE 202
 SANTA ANA, CA 92705
(714) 245-9499
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES) 

 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 [ ]  No [X] 

   (Registrant has not been subject to such filing requirements for the past
90 days).                                                                       

    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]                                                                  

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10-K 2nd Page of 18 TOC 1st Previous Next ↓Bottom Just 2nd
 INDEX TO FINANCIAL STATEMENTS

                                                        [Enlarge/Download Table]


                                                                                                 PAGE

                                                                                                     
ACME TELEVISION, LLC                                                                                 
Report of KPMG Peat Marwick LLP................................................................. F-2 
Consolidated Balance Sheet as of December 31, 1997.............................................. F-3 
Consolidated Statement of Operations and Members' Capital for the year ended December 31, 1997.. F-4 
Consolidated Statement of Cash Flows for the year ended December 31, 1997....................... F-5 
Notes to Consolidated Financial Statements...................................................... F-6 
Financial Statement Schedule I - Condensed Financial Information of ACME Television, LLC........ F-12

 F-1

10-K 3rd Page of 18 TOC 1st Previous Next ↓Bottom Just 3rd

INDEPENDENT AUDITORS' REPORT

The Members                                                                     
ACME Television, LLC:                                                           

We have audited the accompanying consolidated balance sheet of ACME Television, 
LLC and subsidiaries as of December 31, 1997, and the related consolidated      
statements of operations and members' capital and cash flows for the year then  
ended. In connection with our audit of the consolidated financial statements, we
have also audited the financial statement schedule. These consolidated financial
statements and financial statement schedule are the responsibility of the       
Company's management. Our responsibility is to express an opinion on these      
consolidated financial statements and financial statement schedule based on our 
audit.                                                                          

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, the consolidated financial statements referred to above present 
fairly, in all material respects, the financial position of ACME Television, LLC
and subsidiaries as of December 31, 1997 and the results of their operations and
their cash flows for the year then ended, in conformity with generally accepted 
accounting principles. Also, in our opinion, the related financial statement    
schedule, when considered in relation to the basic consolidated financial       
statements taken as a whole, presents fairly, in all material respects, the     
information set forth therein.                                                  

 KMPG PEAT MARWICK LLP

Los Angeles, California                                                         
March 11, 1998,                                                                 
except as to the third                                                          
paragraph of Note 4                                                             
which is as of March 13, 1998.                                                  

 F-2

10-K 4th Page of 18 TOC 1st Previous Next ↓Bottom Just 4th
 ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
 DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

ASSETS

                                                        [Enlarge/Download Table]


                                                                                              1997    
                                                                                                      
Current assets:                                                                                       
  Cash and cash equivalents................................................................  $  8,820 
  Accounts receivable, less allowance for doubtful accounts of $51.........................       699 
  Due from affiliates......................................................................       162 
  Current portion of programming rights....................................................       614 
  Prepaid expenses and other current assets................................................     3,032 
                                                                                             -------- 
       Total current assets................................................................    13,327 
                                                                                             -------- 

Property and equipment, net................................................................     7,346 
Programming rights, net of current portion.................................................       587 
Broadcast licenses, net of accumulated amortization of $761................................    36,004 
Deposits...................................................................................   143,000 
Other assets...............................................................................    17,418 
                                                                                             -------- 

 ........Total assets.......................................................................  $217,682
                                                                                             ======== 

                        LIABILITIES AND MEMBERS' CAPITAL                                              
Current liabilities:                                                                                  
  Accounts payable.........................................................................  $  3,361 
  Accrued expenses.........................................................................       651 
  Current portion of programming rights payable............................................       653 
  Current portion of obligations under lease...............................................       292 
                                                                                             -------- 

       Total current liabilities...........................................................     4,957 

Programming rights payable, net of current portion.........................................     1,351 
Obligations under lease, net of current portion............................................       443 
Senior discount notes......................................................................   130,833 
                                                                                             -------- 

       Total liabilities...................................................................   137,584 
                                                                                             -------- 

Members' capital...........................................................................    85,516 
Accumulated deficit........................................................................    (5,418)
                                                                                             -------- 
       Total members' capital..............................................................    80,098 
                                                                                             -------- 
               Total liabilities and members' capital....................................... $217,682 
                                                                                             ======== 

 See accompanying notes to financial statements.

 F-3

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 ACME TELEVISION, LLC AND SUBSIDIARIES
 CONSOLIDATED STATEMENT OF OPERATIONS AND MEMBERS' CAPITAL
YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

                                                        [Enlarge/Download Table]


                                                                                              1997   

                                                                                                     
Broadcast revenues.......................................................................... $11,347 
                                                                                             ------- 

Operating expenses:                                                                                  

  Programming...............................................................................   3,608 

  Selling, general and administrative.......................................................   7,965 

  Depreciation and amortization.............................................................   1,215 
                                                                                             ------- 

         Total operating expenses...........................................................  12,788 

         Operating loss.....................................................................  (1,441)

  Interest income...........................................................................     273 

  Interest expense..........................................................................  (4,250)
                                                                                             ------- 

         Net loss...........................................................................  (5,418)

  Parent's contribution.....................................................................  85,516 
                                                                                             ------- 

         Members' capital at December 31, 1997.............................................. $80,098 
                                                                                             ======= 


 See accompanying notes to financial statements.

 F-4

10-K 6th Page of 18 TOC 1st Previous Next ↓Bottom Just 6th
 ACME TELEVISION, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                             1997    
                                                                                             ----    
                                                                                                     
Cash flows from operating activities:                                                                
  Net loss................................................................................ $ (5,418) 
  Adjustments to reconcile net loss to net cash provided by operating activities:                    
     Depreciation and amortization........................................................    1,215  
     Amortization of discount on Senior Discount Notes and debt issuance costs............    3,908  
     Changes in assets and liabilities:                                                              
       Increase in accounts receivable, net...............................................     (699) 
       Increase in programming rights.....................................................     (706) 
       Increase in prepaid expenses and other current assets..............................   (3,194) 
       Increase in accounts payable.......................................................    3,361  
       Increase in accrued expenses.......................................................       651 
       Increase in programming rights payable.............................................       381 
                                                                                            -------- 

         Net cash used in operating activities............................................      (501)
                                                                                            -------- 

Cash flows from investing activities--                                                               
  Deposit relating to acquisition agreement...............................................  (143,000)
  Purchase of property and equipment......................................................    (6,077)
  Purchase of Tennessee station...........................................................   (13,454)
  Other...................................................................................   (10,470)
                                                                                            -------- 

         Net cash used in investing activities............................................  (173,001)
                                                                                            -------- 
Cash flows from financing activities:                                                                
  Contribution from parent................................................................    62,441 
  Repayment of capital leases.............................................................       (97)
  Issuance of Senior Discount Notes.......................................................   127,370 
  Debt issuance costs.....................................................................    (7,392)
                                                                                            -------- 

         Net cash provided by financing activities........................................   182,322 
                                                                                            -------- 

         Net increase (decrease) in cash..................................................     8,820 
Cash at beginning of period...............................................................        -- 
                                                                                            -------- 

Cash at end of period.....................................................................  $  8,820 
                                                                                            ======== 

Supplemental disclosures of cash flow information: Cash paid during the period for:                  
     Interest.............................................................................  $    514 
     Income taxes.........................................................................        -- 
                                                                                            ======== 

  Non cash transactions:                                                                             
     Contribution of the net assets of ACME Television of Oregon, LLC from Parent in                 
      exchange for membership units.......................................................  $ 23,075 
                                                                                            ======== 

 See accompanying notes to financial statements.

 F-5

10-K 7th Page of 18 TOC 1st Previous Next ↓Bottom Just 7th
 ACME TELEVISION, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1997

(1) DESCRIPTION OF BUSINESS AND FORMATION                                       

ACME Television, LLC (the Company) was formed on August 8, 1997. Upon formation,
the Company received a contribution from ACME Television Holdings, LLC (ACME    
Parent), through ACME Intermediate Holdings, LLC (ACME Intermediate), of ACME   
Parent's wholly owned subsidiaries--ACME Television of Oregon, LLC (ACME Oregon)
and ACME Television of Tennessee, LLC (ACME Tennessee) and certain other net    
assets. This contribution of $25,455,000 (including cash of $2,380,000), was    
made in exchange for membership units in the Company and was treated as a       
transaction between entities under common control, similar to a pooling of      
interests. Accordingly, the transaction was recorded at historical cost and the 
Company has reflected the result of operations of the entities contributed for  
the period presented. In addition, on September 30, 1997, ACME Intermediate made
an additional contribution of $60,061,000 in exchange for membership units in   
the Company.                                                                    

The Company's subsidiaries (hereinafter referred to in this paragraph           
collectively as 'Subsidiary Guarantors') are fully, unconditionally, and jointly
and severally liable for the Company's senior discount notes referred to in note
5. The Subsidiary Guarantors are wholly owned and constitute all of the         
Company's direct and indirect subsidiaries except for ACME Finance Corporation, 
a wholly owned finance subsidiary of the Company with essentially no independent
operations that is jointly and severally liable with the Company on the Notes   
(as defined). The Company has not included separate financial statements of the 
aforementioned subsidiaries because (1) the Company is a holding Company with no
assets or independent operations other than its investments in its subsidiaries 
and (ii) the separate financial statements and other disclosures concerning such
subsidiaries are not deemed material to investors.                              

Various agreements to which the Company and/or the Subsidiary Guarantors are    
parties restrict the ability of the Subsidiary Guarantors to make distributions 
to the Company. The Investment and Loan Agreement (the 'Investment Agreement'), 
dated June 17, 1997, as amended, among ACME Parent and the parties thereto and  
the Limited Liability Company Agreement (the 'LLC Agreement'), dated June 17,   
1997, as amended, among ACME Parent and the parties thereto each contain certain
restrictions on the ability of the Subsidiary Guarantors to declare or pay      
dividends to the Company in the absence of the consent of certain parties       
thereto. The Indenture governing the Notes prevents the Subsidiary Guarantors   
from declaring or paying any dividend or distribution to the Company unless     
a default has not occurred and certain financial covenants are satisfied.       
The Loan Agreement (as defined) also prohibits distributions from the Subsidiary
Guarantors to the Company except in certain circumstances during which default  
has not occurred thereunder.                                                    

ACME Parent owns, directly and indirectly, 92% of the outstanding members units 
of ACME Intermediate. ACME Intermediate owns, directly or indirectly, 100% of   
the outstanding members units of the Company.                                   

ACME Oregon was formed on March 5, 1997 to acquire Station KWBP, serving the    
Portland, Oregon market from Channel 32, Incorporated. Prior to the acquisition 
of Station KWBP (June 17, 1997), ACME Oregon operated the station and financed  
its losses, effective January 1, 1997 pursuant to a Local Marketing Agreement   
with the Channel 32, Incorporated. The acquisition was completed on June 17,    
1997 (see note 3). ACME Tennessee was formed on April 17, 1997 to acquire       
Station WINT, serving the Knoxville, Tennessee market. This acquisition was     
completed on October 7, 1997 (See Note 3) and the call letters for the station  
have subsequently been changed to WBXX.                                         

On July 25, 1997 the Company formed ACME Television Holdings of Missouri, Inc.  
(formerly known as ACME Television Licenses of Missouri, Inc.; "ACME Missouri") 
for the purpose of acquiring Station KPLR and on October 31, 1997 adopted       
limited liability company agreements for ACME Television of Utah, LLC (ACME     
Utah) and ACME Television of New Mexico, LLC (ACME New Mexico) for the purpose  
of acquiring the licensee of Stations KZAR and the assets of Station KAOU,      
respectively. On December 15, 1997, ACME Utah completed its acquisition of a 49%
interest in the licensee of Station KZAR (See Note 3). The acquisition of       
Station KAUO did not occur on or prior to December 31, 1997. (See Note 4)       

 F-6

10-K 8th Page of 18 TOC 1st Previous Next ↓Bottom Just 8th
 ACME TELEVISION, LLC AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEAR ENDED DECEMBER 31, 1997

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                  

Basis of Consolidation                                                          

The Consolidated Financial Statements include the accounts of the Company and   
its subsidiaries. All significant intercompany transactions have been           
eliminated.                                                                     

Revenue Recognition                                                             

Revenue from to the sale of airtime related to advertising and contracted time  
is recognized at the time of broadcast. The Company receives such revenues net  
of commissions deducted by advertising agencies and national sales              
representatives.                                                                

Cash and Cash Equivalents                                                       

For purposes of reporting the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three     
months or less to be cash equivalents.                                          

Programming Rights                                                              

Programming rights represent costs incurred for the right to broadcast certain  
features and syndicated television programs. Programming rights are stated at   
the lower of amortized cost or estimated realizable value. The cost of such     
programming rights and the corresponding liability are recorded when the initial
program becomes available for broadcast under the contract. Generally,          
programming rights are amortized over the life of the contract on a             
straight-line basis related to the usage of the program. The portion of the cost
estimated to be amortized within one year and after one year are reflected in   
the balance sheets as current and noncurrent assets, respectively. The payments 
under these contracts that are due within one year and after one year are       
similarly classified as current and noncurrent liabilities.                     

Commitments for programming rights that have been executed, but which have not  
been recorded in the accompanying financial statements, as the underlying       
programming is not yet available for broadcast, were approximately $7,010,000 as
of December 31, 1997.                                                           

Property and Equipment                                                          

Property and equipment are stated at cost. The cost of maintenance is expensed. 

Depreciation and amortization are computed using the straight-line method over  
the estimated useful lives of the respective assets. The principal lives used in
determining depreciation rates of various assets are as follows:                

                                                                [Download Table]
                                                                               
Broadcasting and other equipment..............................       3-20 years
Furniture and fixtures........................................        5-7 years
Vehicles......................................................          5 years

Barter and Trade Transactions                                                   

Revenue and expenses associated with barter agreements in which broadcast time  
is exchanged for programming rights are recorded at the average rate of the     
airtime exchanged. Trade transactions, which represent the exchange of          
advertising time for goods or services, are recorded at the estimated fair value
of the products or services received. Barter and trade revenue is recognized    
when advertisements are broadcast. Merchandise or services received from airtime
trade sales are charged to expense or capitalized when used or received.        

 F-7

10-K 9th Page of 18 TOC 1st Previous Next ↓Bottom Just 9th
 ACME TELEVISION, LLC AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEAR ENDED DECEMBER 31, 1997

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-- (CONTINUED)                    
Carrying Value of Long-Lived Assets                                             

The Company has adopted the provisions of Statement of Financial Accounting     
Standards No. 121, 'Accounting for the Impairment of Long-Lived Assets and for  
Long-Lived Assets to Be Disposed Of.' The carrying value of long-lived assets   
(tangible and intangible) is reviewed if the facts and circumstances suggest    
that they may be impaired. For purposes of this review, assets are grouped at   
the operating company level which is the lowest level for which there are       
identifiable cash flows. If this review indicates that an asset's carrying value
will not be recoverable, as determined based on future expected, undiscounted   
cash flows, the carrying value is reduced to fair market value.                 

Income Taxes                                                                    

The Company is a limited liability company, therefore, no income taxes have been
provided for its operations. Any liability or benefit from the income or loss is
the responsibility of the individual members.                                   

Use of Estimates in the Preparation of Financial Statements                     

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. These
estimates include the allowance for doubtful accounts, net realizable value of  
programming rights and the evaluation of intangible assets. Actual results could
differ from those estimates.                                                    

Concentration of Credit Risk                                                    

Financial instruments which potentially subject the Company to concentration of 
credit risk consist primarily of accounts receivable and cash. The Company      
believes that concentrations of credit risk with respect to accounts receivable,
which are unsecured, are limited due to the Company's ongoing relationship with 
its clients. The Company provides its estimate of uncollectible accounts. The   
Company has not experienced significant losses relating to accounts receivable. 

Certain Compensation Arrangements                                               

ACME Parent has issued Management Carry Units to members of management. These   
units entitle holders to certain distribution rights upon achievement of certain
returns by non-management investors and are subject to forfeiture or repurchase 
by ACME Parent in the event of termination of each individual's employment by   
ACME Parent under certain specified circumstances. The Company has determined   
the value of these at the issuance date to be immaterial. These Management Carry
Units will be accounted for as a variable plan resulting in an expense when it  
is probable that any such distributions will be made. Any such expense relating 
to the Management Carry Units issued by ACME Parent will be recorded by the     
Company. As of December 31, 1997, there were 100 Management Carry Units         
outstanding and no expense recorded.                                            

(3) ACQUISITIONS                                                                

On June 17, 1997, ACME Parent acquired substantially all of the assets and      
assumed certain liabilities of Channel 32, Incorporated, relating to the        
operations of Station KWBP, in exchange for $18,675,000 in cash and $4,400,000  
of membership units in ACME Parent. The acquisition was accounted for using the 
purchase method. The excess of the purchase price plus the fair value of net    
liabilities assumed of approximately $23,478,000, has been recorded as broadcast
licenses and is being amortized over a period of 20 years. In addition, the     
results of station KWBP were recorded by the Company beginning January 1, 1997  
pursuant to a Local Marketing Agreement whereby ACME Oregon effectively operated
the station and funded the station's losses during the period from January 1,   
1997 to June 17, 1997 (the acquisition date).                                   

 F-8

10-K 10th Page of 18 TOC 1st Previous Next ↓Bottom Just 10th
 ACME TELEVISION, LLC AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEAR ENDED DECEMBER 31, 1997

(3) ACQUISITIONS-- (CONTINUED)                                                  

On October 7, 1997, the Company acquired Crossville Limited Partnership, the    
owner of Station WINT, in exchange for $13,200,000 in cash. Subsequent to the   
acquisition, the Company changed the call letters of the station to WBXX. The   
acquisition was accounted for using the purchase method. The excess of the      
purchase price over the fair value of net assets acquired of approximately      
$13,287,000, has been recorded as broadcast licenses and is being amortized over
a period of 20 years.                                                           

The unaudited pro forma financial information set forth below reflects the net  
revenue and net loss assuming the KWBP and WBXX transactions had occurred on    
January 1, 1997. No pro forma adjustment has been made for the WBXX transaction 
because WBXX did not begin broadcasting or significant operations until         
subsequent to the acquisition date. This unaudited pro forma financial          
information does not necessarily reflect the results of operations that would   
have occurred had the acquisition occurred on January 1, 1997.                  

YEAR ENDED DECEMBER 31, 1997

                                                                [Download Table]
                                                                         
Net Revenues.......................................          $11,347,000 
Net Loss...........................................          $(5,934,000)

During 1997, ACME Parent entered into and contributed to the Company the right  
to: (i) acquire 49% of the licensee of Station KZAR in exchange for member units
in ACME Parent valued at $6 million, (ii) pay $3 million for an option to       
acquire the remaining 51% of the licensee of Station KZAR for $5 million,       
exercisable immediately after the station commences on-air operations, which is 
expected to occur in the second quarter of 1998.                                

On December 15, 1997, the Company acquired the 49% interest in the licensee of  
Station KZAR, paid $3 million to acquire the option and loaned the sellers $4   
million. In the event the Company exercises the option to acquire the remaining 
51%, the $4 million loan will be applied against the remaining purchase price.  
In addition, the Company considers the $3 million paid to acquire the option as 
part of the purchase price. Accordingly, at December 31, 1997, the amount paid  
to acquire the option and the loan have been included in other non-current      
assets.                                                                         

On January 22, 1998, ACME Parent issued $6 million of its member units to the   
sellers of the 49% interest in the licensee of Station KZAR in connection with  
the above transaction. ACME Parent contributed this investment to the Company in
exchange for membership units in the Company.                                   

(4) SUBSEQUENT AND PENDING ACQUISITIONS                                         

On July 29, 1997, ACME Parent entered into and subsequently contributed to      
ACME Missouri a stock purchase agreement to acquire Koplar Communications, Inc. 
(KCI). On September 30, 1997, ACME Missouri placed $143 million into an escrow  
account, classified as a deposit on the accompanying Consolidated Balance Sheet,
in connection with this acquisition, entered into a long-term LMA with Station  
KPLR and filed requisite applications with the FCC for the transfer of the      
Station's license to ACME Missouri.                                             

Pursuant to the LMA entered into on September 30, 1997 relating to Station KPLR,
the Company retained all revenues generated by the station, bore substantially  
all operating expenses of the station and was obligated to pay an LMA fee. These
revenues and expenses for the period October 1 through December 31, 1997 are    
included in the Company's operating results. However, since the Company did not 
acquire KCI until after December 31, 1997, the assets and liabilities of KCI are
not included in the Company's consolidated balance sheet at December 31, 1997.  

On March 13, 1998, the acquisition of KCI was consummated and the LMA was       
terminated.                                                                     

In connection with the acquisition of KCI, ACME Missouri entered into a         
management agreement with Edward J. Koplar (the 'Management Agreement'),        
providing for an annual fee of $1 million over an initial term of three years   
(which is deemed to have commenced on October 1, 1997). Mr. Koplar has the right
to voluntarily terminate his services thereunder at any time and be paid any    
remaining consulting fees that would be payable for the remaining term of the   
agreement at the effective date of such termination. The Company does not intend
to renew the Management Agreement and has no right to require Mr. Koplar to     
provide services pursuant thereto in exchange for the compensation payable      
thereunder. Accordingly, the Company intends to treat the $3 million payable    
pursuant to the Management Agreement as additional purchase price in connection 
with the acquisition, allocate such amount to broadcast licenses, and amortize  
such amount over a 20-year period.                                              

On August 22, 1997, ACME New Mexico entered into an agreement with affiliates of
the sellers of Station KZAR to acquire 100% of the interests in the construction
permit for Station KAUO for a consideration of $10,000. This agreement was      
consummated on January 22, 1998.                                                

 F-9

10-K 11th Page of 18 TOC 1st Previous Next ↓Bottom Just 11th
 ACME TELEVISION, LLC AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEAR ENDED DECEMBER 31, 1997

(5) SENIOR DISCOUNT NOTES                                                       

On September 30, 1997, the Company issued Senior Discount Notes (Notes) with a  
face value of $175 million and received $127,370,000 in gross proceeds from such
issuance. These Notes provide for semi-annual cash interest payments at an      
annual rate of 10.875% beginning in the fourth year with the first interest     
payment due on March 31, 2001. The Notes are subordinated to the Company's bank 
revolver (see Note 6) and to the Company's capital equipment finance facilities.
The Notes mature on September 30, 2004 and may not be prepaid without penalty.  

The Notes contain certain covenants and restrictions including restrictions on  
future indebtedness and limitations on investments, and transactions with       
affiliates. ACME Television was in compliance with all such covenants and       
restrictions at December 31, 1997.                                              

The Loan Agreement contains covenants and restrictions including restrictions on
future indebtedness and limitations on investments and transactions with        
affiliates. The Company was in compliance with all such covenants and           
restrictions at December 31, 1997.                                              

Costs associated with the issuance of these notes, including the underwriters   
fees and related professional fees are included in long-term other assets and   
will be amortized over the term of the notes.                                   

(6) BANK REVOLVER                                                               

On August 15, 1997, the Company entered into a $22.5 million revolving credit   
facility (the Loan Agreement) with Canadian Imperial Bank Corporation (CIBC), as
agent and lead lender. Under the terms of the Loan Agreement, advances bear     
interest at either the alternative base rate or the adjusted LIBOR rate, as     
defined in the Loan Agreement. On December 2, 1997, the Loan Agreement was      
amended to provide the Company with an increased credit line to $40 million,    
more favorable interest rates and a lengthened term. There was no outstanding   
balance due under the Loan Agreement as of December 31, 1997.                   

The Loan Agreement contains covenants and restrictions including restrictions   
on future indebtedness and limitations on investments and transactions with     
affiliates. The Company was in compliance with all such covenants and           
restrictions at December 31, 1997.                                              

Costs associated with the procuring of bank credit facilities, including loan   
fees and related professional fees, are included in long-term other assets and  
are amortized over the term of the Loan Agreement.                              

(7) COMMITMENTS AND CONTINGENCIES                                               

Obligations under Leases                                                        

The Company is obligated under noncancelable operating leases for office space  
and its transmission sites. Future minimum lease payments as of December 31,    
1997 under noncancelable operating leases with initial or remaining terms of one
year or more are as follows:                                                    

                                                        [Enlarge/Download Table]


Year ending December 31:                                                                           

                                                                                                   
   1998................................................................................ $   532,000
   1999................................................................................ $   536,000
   2000................................................................................ $   523,000
   2001................................................................................ $   502,000
   2002................................................................................ $   523,000
   2003  & Thereafter.................................................................. $ 3,999,000

Total rental expense under operating leases for the twelve months ended December
31, 1997 was approximately $166,000.                                            

F-10

10-K 12th Page of 18 TOC 1st Previous Next ↓Bottom Just 12th
 ACME TELEVISION, LLC AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
YEAR ENDED DECEMBER 31, 1997

(7) COMMITMENTS AND CONTINGENCIES--(CONTINUED)                                  

Programming Rights Payable                                                      

Maturities on the Company's programming rights payables (including commitments  
not recognized in the accompanying financial statements due to the lack of      
current availability for broadcast) for each of the next five years are as      
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                                                                
1998................................................................................ $ 1,803,000
1999................................................................................ $ 1,840,000
2000................................................................................ $ 2,233,000
2001................................................................................ $ 1,721,000
2002................................................................................ $   970,000
2003 & Thereafter................................................................... $    91,000

Legal Proceedings                                                               

The Company is party to routine claims and suits brought against it in the      
ordinary course of business. In the opinion of management, the outcome of such  
routine claims will not have a material adverse effect on the Company's         
business, financial condition, results of operations or liquidity.              

(8) SUBSEQUENT EVENTS                                                           

On March 2, 1998, the Company entered into an asset purchase agreement to       
acquire WTVK-Channel 46 serving the Ft. Myers / Naples, Florida marketplace for 
$13 million in cash and 2,500 membership units in ACME Parent. Concurrently, the
Company entered into an LMA agreement with WTVK wherein the Company, effective  
March 3, 1998, will retain all revenues generated by the station, bear all      
operating expenses of the station and have the right to program the station     
(subject to WTVK's ultimate authority for programming) and assume the station's 
existing programming commitments. The LMA will terminate upon the consummation  
of the asset purchase transaction, which is subject to the receipt of regulatory
approvals.                                                                      

The Company has an agreement in principle with Paxson Communications Corporation
("Paxson") to exchange the Company's FCC licenses and transmission facilities   
for Station KUWB for the FCC licenses and transmission facilities for Station   
KUPX (formerly KOOG) - Channel 30, also serving the Salt Lake City, Utah        
marketplace. The consummation of this transaction is subject to regulatory      
approvals and to the commencement of on-air operations on KUWB, which is        
expected to occur during the second quarter of 1998. Paxson and the Company will
enter into reciprocal Time Brokerage Agreements (TBA) which provide each party  
the right to program the other's to be exchanged station, and to retain all     
revenue derived therefrom and to pay all operating expenses incurred therewith, 
effective on or about the commencement of Station KUWB's on-air operations.     
These TBA's will terminate upon completion of the station exchange.             

F-11

10-K 13th Page of 18 TOC 1st Previous Next ↓Bottom Just 13th
 ACME TELEVISION, LLC (PARENT COMPANY)
 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 BALANCE SHEET
 (IN THOUSANDS OF DOLLARS)

 DECEMBER 31, 1997

                                                        [Enlarge/Download Table]

                                                                                                    
ASSETS:                                                                                             
     Cash & Equivalents.................................................................  $   8,693 
     Due from affiliates................................................................        162 
     Prepaid expenses and other current assets..........................................        177 
                                                                                          --------- 

         Total Current Assets...........................................................      9,032 

     Property and equipment, net........................................................        139 
     Investment in and advances to subsidiaries.........................................    197,888 
     Prepaid financing costs, less current portion......................................      7,079 
                                                                                         ---------- 
         Total Assets................................................................... $  214,138 
                                                                                         ========== 

LIABILITIES:                                                                                        
     Accounts payable................................................................... $    2,774 
     Accrued liabilities................................................................        433 
                                                                                         ---------- 
         Total Current Liabilities......................................................      3,207 

     Senior Discount Notes..............................................................    130,833 
                                                                                         ---------- 

         Total Liabilities..............................................................    134,040 
                                                                                         ---------- 

MEMBERS' CAPITAL:                                                                                   
     Members' capital...................................................................     85,516 
     Accumulated deficit................................................................     (5,418)
                                                                                         ---------- 

         Total Members' Capital.........................................................     80,098 
                                                                                         ---------- 

         TOTAL LIABILITIES & EQUITY..................................................... $  214,138 
                                                                                         ========== 

 See accompanying notes to condensed financial statements.

F-12

10-K 14th Page of 18 TOC 1st Previous Next ↓Bottom Just 14th
 ACME TELEVISION, LLC (PARENT COMPANY)
 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 STATEMENT OF OPERATIONS
 (IN THOUSANDS OF DOLLARS)

YEAR ENDED DECEMBER 31, 1997

                                                        [Enlarge/Download Table]


                                                                                            1997  

                                                                                                  
Revenues................................................................................. $    -- 

Selling, general and administrative expenses.............................................   1,415 
Depreciation and amortization............................................................       9 
                                                                                          ------- 
     Operating loss......................................................................  (1,424)

Interest income from subsidiaries........................................................   5,631 
Other interest income....................................................................     273 
Interest expense.........................................................................  (3,712)
                                                                                          --------
     Net income before equity in net loss of subsidiaries................................     768 

Equity in net loss of subsidiaries.......................................................  (6,186)
                                                                                          --------

     Net loss............................................................................ ($5,418)
                                                                                          ========

 See accompanying notes to condensed financial statements.

F-13

10-K 15th Page of 18 TOC 1st Previous Next ↓Bottom Just 15th
 ACME TELEVISION, LLC (PARENT COMPANY)
 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 STATEMENT OF CASH FLOWS
 (IN THOUSANDS OF DOLLARS)

YEAR ENDED DECEMBER 31, 1997

                                                        [Enlarge/Download Table]


                                                                                             1997  

                                                                                                   
Net Loss................................................................................   ($5,418)

Adjustment to reconcile net loss to net cash used in operating activities:                         
  Depreciation and amortization.........................................................         9 
    Accretion on Senior Discount Notes..................................................     3,463 
  Equity in net loss of subsidiaries....................................................     6,186 
  Changes in assets and liabilities:                                                               
     Increase in due from affiliates....................................................      (162)
     Increase in prepaid expenses and other current assets..............................      (177)
     Increase in accounts payables......................................................     2,774 
     Increase in accrued liabilities....................................................       433 
                                                                                         --------- 

       Net cash provided by operating activities........................................     7,108 
                                                                                         --------- 
Cash flows from investing activities:                                                              
  Purchase of property and equipment....................................................      (148)
  Investment in and advances to affiliates..............................................  (180,999)
                                                                                         --------- 

       Net cash used in investing activities............................................  (181,147)
                                                                                         --------- 

Cash flows from financing activities:                                                              
  Increase in other assets..............................................................    (7,079)
  Contributions from parent.............................................................    62,441 
  Issuance of Senior Discount Notes.....................................................   127,370 
                                                                                         --------- 

       Net cash provided from financing activities......................................   182,732 
                                                                                         --------- 

         Net increase in cash...........................................................     8,693 

         Cash at beginning of period....................................................         0 
                                                                                         --------- 

           Cash at end of period........................................................ $   8,693 
                                                                                         ========= 

       Supplemental disclosures of cash flow information:                                          

         Cash paid during the period for:                                                          
           Interest.....................................................................  $     71 
           Income taxes.................................................................        -- 

         Non cash transactions:                                                                    
           Contributions of the net assets of ACME Television of Oregon, LLC                       
              from Parent in exchange for membership units..............................    23,075 
                                                                                         ========= 

See accompanying notes to condensed financial statements.   

F-14

10-K 16th Page of 18 TOC 1st Previous Next ↓Bottom Just 16th
ACME TELEVISION, LLC
NOTES TO CONDENSED FINANCIAL INFORMATION

(1) BASIS OF PRESENTATION                                                       

Pursuant to the rules and regulations of the Securities and Exchange Commission,
the Condensed Financial Statements of the Registrant do not include all of the  
information and notes normally included with financial statements prepared in   
accordance with generally accepted accounting principles. It is therefore       
suggested that these Condensed Financial Statements be read in conjunction with 
the Consolidated Financial Statements and Notes thereto included elsewhere in   
this filing.                                                                    

(2) CASH DIVIDENDS                                                              

There have been no cash dividends declared by the Company.                      

(3) LONG-TERM DEBT                                                              

There are no cash interest payments due on the Company's Senior Discount Notes  
until March 31, 2001.                                                           

F-15

10-K 17th Page of 18 TOC 1st Previous Next ↓Bottom Just 17th

SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) 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.                       

                        ACME TELEVISION, LLC

                              By:       /s/ THOMAS ALLEN
                                              ----------------------------------
                                            Thomas Allen
                                           Executive Vice President, Chief
                                              Financial officer and Director

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
Annual Report on Form 10-K (containing only financial statements for the period 
in question in accordance with Rule 15d-2) has been signed by the following     
persons on behalf of the registrant in the capacities and on the dates          
indicated.                                                                      

                                                        [Enlarge/Download Table]

                      SIGNATURE                                     TITLE                    DATE     
                      ---------                                     -----                    ----     
                                                                                                      

                          *                            Chairman of the Board and Chief  April 10, 1998
-----------------------------------------------------  Executive Officer                              
                    Jamie Kellner                                                                     

                          *                            President, Chief Operating       April 10, 1998
-----------------------------------------------------  Officer, Secretary and Director                
                    Douglas Gealy                                                                     

                  /s/ THOMAS ALLEN                     Executive Vice President, Chief  April 10, 1998
-----------------------------------------------------  Financial Officer and Director                 
                    Thomas Allen                                                                      

By: /s/     THOMAS ALLEN                                                        
--------------------------------                                        
Thomas Allen                                        
Attorney-in-Fact                                        

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EXHIBIT INDEX 

Exhibit Number            Description                                           
--------------            -----------                                           
27                    Financial Data Schedule

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10-K’ Filing	Date	First	Last	Other Filings

	9/30/04	11
	3/31/01	11	16	10-Q
Filed on:	4/10/98	17
	3/13/98	3	10	8-K, 8-K/A
	3/11/98	3
	3/3/98	12
	3/2/98	12
	1/22/98	10
For Period End:	12/31/97	1	15	10-K/A
	12/15/97	7	10
	12/2/97	11
	10/31/97	7
	10/7/97	7	10
	10/1/97	10
	9/30/97	7	11
	8/22/97	10
	8/15/97	11
	8/8/97	7
	7/29/97	10
	7/25/97	7
	6/17/97	7	9
	4/17/97	7
	3/5/97	7
	1/1/97	7	10
				List all Filings

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Filing Submission 0000892569-98-001042 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Acme Television LLC – ‘10-K’ for 12/31/97

As of: Friday, 4/10/98 · For: 12/31/97 · Accession #: 892569-98-1042 · File #: 333-40281

Previous ‘10-K’: None · Next: ‘10-K/A’ on 12/18/98 for 12/31/97 · Latest: ‘10-K’ on 4/15/03 for 12/31/02

Annual Report — Form 10-KFiling Table of Contents

10-K — Form 10-K for the Period Ended December 31, 1997

Dates Referenced Herein and Documents Incorporated by Reference

Annual Report — Form 10-K
Filing Table of Contents