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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1993 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the transition period from to
Commission file number 1-8309.
PRICE COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 13-2991700
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
45 Rockefeller Plaza, New York, New York l0020
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 757-5600
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par value $.01 per share American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by Sections 12, 13
or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under its Plan of Reorganization as
confirmed by the court.
Yes X No
Indicate by check mark whether the registrant (l) has
filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of l934 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 the filing
requirements for the past 90 days. YES X NO .
Page l of Pages
The Exhibit Index Appears on Page
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K ( 229.405 of this chapter)
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 the Form 10-K. [ ]
AGGREGATE MARKET VALUE OF THE VOTING STOCK
HELD BY NONAFFILIATES OF THE COMPANY
Aggregate market value of the Common Stock held by non-
affiliates of the Company, based on the last sale price on the
American Stock Exchange ("AMEX") on February 28, 1994 ($4.50 as
reported in the Wall Street Journal): approximately $43.5 million.
(For this purpose, all outstanding shares of Common Stock have been
considered held by non-affiliates, other than the shares
beneficially owned by directors, executive officers and principal
shareholders of the Company; certain of such persons disclaim that
they are affiliates of the Company.)
Indicate the number of shares outstanding of each of the
Company's classes of common stock as of the latest practicable
date:
9,892,290 shares of Common Stock, par value $.01 per share,
were outstanding as of February 28, 1994.
DOCUMENTS INCORPORATED BY REFERENCE: None.
PART I
Item l. Business.
General
References to the "Company" or "Price" in this Report include
Price Communications Corporation and its subsidiaries, unless the
context otherwise indicates.
The Company is a nationwide diversified communications company
whose current primary businesses are owning and operating
television and radio stations through wholly-owned indirect
subsidiaries. The Company's television properties currently
consist of three NBC affiliated television stations, KSNF-TV,
serving Joplin, Missouri/Pittsburg, Kansas; KJAC-TV, serving
Beaumont/Port Arthur, Texas; and KFDX-TV, serving Wichita Falls,
Texas/Lawton, Oklahoma. The Company currently owns three AM and
three FM radio stations serving the Fort Wayne, Indiana; Buffalo,
New York; and West Palm Beach, Florida markets. See "Recent
Developments" regarding the Company's agreement to purchase WHTM-
TV, serving the Harrisburg-York-Lancaster-Lebanon, Pennsylvania
market, for approximately $41 million and its agreements to sell
the Buffalo and Fort Wayne radio stations.
The Company's business strategy is to acquire communications
properties at prices it considers attractive, finance such
properties on terms satisfactory to it, manage such properties in
accordance with its operating strategy and dispose of them if and
when the Company determines such disposition to be in its best
interest, although such acquisition and (except as disclosed
herein) divestiture activity ceased during the pendency of the
Company's reorganization and the negotiations preceding such
reorganization. See "Recent Developments" regarding sales and
acquisitions of properties since the Company's reorganization
became effective. For the foregoing reasons, the results of the
Company's historical operations are not comparable to or indicative
of results in the future. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
The Company was organized in New York in l979 and began active
operations in l98l. Its principal executive offices are located at
45 Rockefeller Plaza, New York, New York l0020, and its telephone
number is (2l2) 757-5600.
Recent Developments
On December 30, 1992, the Company's consensual Plan of
Reorganization (the "Plan"), which had been approved by the United
States Bankruptcy Court for the Southern District of New York in
July of that year became effective. Under the Plan, the following
occurred:
(a) Holders of approximately $31 million principal amount of
the Company's 10% Convertible Senior Subordinated
Debentures (the "10% Debentures") received new $31
million face amount of seven year 5% Senior Secured Notes
(the "Secured Notes"). This debt was retired during 1993
(see below).
(b) Apollo Investment Fund, L.P. and James Finkelstein
purchased 75% of the common stock of Alexandra Publishing
Corporation which owns the stock of The New York Law
Publishing Company in exchange for the cancellation of
approximately $19 million of principal amount of 10%
Debentures, the payment to the Company of approximately
$7.5 million in cash, and, in addition, the assumption or
repayment of certain liabilities of the Company totalling
approximately $45 million.
(c) The holders of the subordinated debt received 94.5% of
the common stock of Price.
(d) Shareholders received shares which constituted 3.5% of
the common stock of the restructured corporation, and
Robert Price, President of the Company, received 2%. In
addition, Robert Price entered into a three-year
employment contract.
The Company's goal for the period immediately following its
emergence from bankruptcy was to dispose of assets that did not
produce cash flow for the Company (such as investments in Northstar
Television Group, Inc. ("NTG"), Fairmont Communications Corporation
("Fairmont"),its cellular interests and the Company's remaining 25
percent interest in The New York Law Publishing Company) and to use
the proceeds from such sales to retire its remaining debt.
Pursuant to that goal, on October 1, 1993, the Company sold its 74
percent interest in PriCellular Corporation for $11 million. All
of the proceeds from that transaction, combined with approximately
$10 million of the Company's existing liquid assets, were used to
retire $23.2 million face amount of the Company's Secured Notes
during October of 1993. The Company recognized gains of
approximately $1.5 million on the retirement of this debt.
On November 24, 1993, the Company purchased from investment
advisory clients of W.R. Huff Asset Management Co., L.P. ("Huff")
a block of 2,249,086 shares of its Common Stock for a price of
$3.75 per share in cash, plus the stock of its indirect wholly-
owned subsidiary Price Publishing Corporation ("PPC"). The stock
had a book value of approximately $3.8 million. PPC owns 100
percent of the common stock of Alexandra Publishing Corporation
which in turn owns 25 percent of the common stock of The New York
Law Publishing Company. Concurrent with the purchase of the stock,
several nominees of Huff resigned from the Company's Board of
Directors. See Note 13 of Notes to Consolidated Financial
Statements for accounting treatment of this transaction.
In December 1993, the Company sold its common and preferred
stock positions in NTG for approximately $2.4 million in cash.
This investment had no book value and a gain of $2.4 million was
recognized on the sale. The proceeds of the sale were used to
retire a portion of the amount borrowed under the Line of Credit
described below, leaving a remaining balance of $3.2 million as of
December 31, 1993.
On December 21, 1993, certain subsidiaries of the Company
entered into a Line of Credit Agreement (the "Line of Credit") with
the Bank of Montreal. The Line of Credit is for $10 million,
reduced periodically beginning quarterly on March 31, 1994, bears
interest at a rate equal to the Bank of Montreal base rate, as
defined (or other rates at the borrowers' option) and is secured by
the assets of the subsidiaries. There is also a fee of 1/2 percent
per annum on the unused portion of the Line of Credit. On December
24, 1993, the Company borrowed $5.6 million pursuant to this
agreement and the proceeds were used to retire the remaining $7.6
million face amount of Secured Notes. The Company recognized an
additional gain of approximately $500,000 on this early
extinguishment of debt.
On December 27, 1993, the Company announced that it entered
into an agreement to sell substantially all the assets of its radio
stations, WWKB-AM and WKSE-FM in Buffalo, New York, for $5 million
in cash. This transaction has been approved by the Federal
Communications Commission ("FCC") and management expects it to
close during the first half of 1994. The Company expects to
realize a gain on this transaction.
On February 16, 1994, the Company entered into an agreement to
purchase WHTM-TV, Channel 27, serving the Harrisburg-York-
Lancaster-Lebanon, Pennsylvania market for approximately $41
million. The transaction is subject to FCC approval. The Company
expects to close on this purchase during the second half of 1994.
During February of 1994, the Company sold its outdoor
advertising business for a total of $875,000, including $200,000
cash and a note from the buyer for $675,000. A pre-tax loss of
approximately $340,000 will be recognized on the sale in 1994.
In March, 1994, the Company entered into an agreement to sell
radio stations WOWO-AM and WOWO-FM in Fort Wayne, Indiana, for $2.3
million in cash. The transaction is subject to FCC approval and
management estimates it will close during the second half of 1994.
The Company expects to realize a gain on this transaction.
Due to the developments described above, the Company's
historical results of operations should not be regarded as
indicative of its future results.
Segment Data
See Note 12 of Notes to Consolidated Financial Statements for
segment data concerning the Company's television, radio and other
operations. The Company's television, radio and other segments
contributed 52 percent, 45 percent and 3 percent, respectively, of
the Company's net revenue for the year ended December 31, 1993. As
discussed above, the Company sold 75 percent of its interest in The
New York Law Publishing Company at the end of 1992, and during
1993, accounted for its remaining 25 percent as an investment under
the equity method of accounting. For the years ended December 31,
1992 and 1991, the Company's television, radio and publishing and
other segments contributed 21 and 21 percent, 17 and 17 percent and
62 and 62 percent, respectively.
Acquisitions and Divestitures
Historically, the Company actively acquired and divested
broadcasting and other properties, although such acquisition and
divestiture activity ceased during the pendency of the Company's
reorganization and the negotiations preceding it (with the
exception of the dispositions which occurred pursuant to the
Company's Plan). With the completion of the Company's
reorganization, the Board of Directors of the Company has
determined to investigate and pursue acquisition possibilities.
See "Recent Developments."
In pursuing its acquisition and divestiture strategy, the
Company has no fixed formula for determining the purchase price of
properties it seeks. With respect to media properties, to date,
the Company generally concentrates its acquisition activities on
properties that have a history of generating Media Cash Flow
(operating profits before deductions for interest, depreciation,
amortization and income taxes) or properties that have potential
for growth. In seeking acquisitions of media properties, the
Company generally gives greater weight to a property's Media Cash
Flow than to its net income, because such Media Cash Flow is a
standard widely used in the industry to evaluate media properties.
The Company's strategy is to seek properties that can be purchased
at attractive multiples of "trailing" Media Cash Flow, the Media
Cash Flow for the twelve months immediately prior to such
acquisition, either in anticipation that such Media Cash Flow will
continue at historical levels, or in anticipation that the Company
will be able to improve it. However, the Company may consider
acquiring properties without such cash flow if it believes them to
have sufficient potential for growth or to otherwise be consistent
with the Company's objectives.
Prices of media properties are affected by a number of factors
in addition to a property's Media Cash Flow, including the
characteristics and anticipated growth of the market area, the
terms of purchase, programming, the competitive situation within
the market area, the possibility of improving Media Cash Flow, the
dial position and signal strength (in the case of radio stations),
operating history, network affiliation and assigned signal
frequency (in the case of television stations), and the value of
the fixed assets acquired in connection with the purchase.
To finance its acquisitions and to provide funds for other
purposes, the Company may consider using a variety of sources,
including the proceeds of debt sold to the public, borrowings from
banks and other institutional lenders, seller financing,
convertible preferred stock and common stock issued by the Company
or its subsidiaries, and cash on hand. Historically, the Company
often acquired properties through newly organized subsidiaries,
based on the credit of the properties being acquired or by
borrowing or issuing securities at the parent company level.
From time to time brokers and potential buyers approach the
Company with respect to the potential sale of certain of its media
properties. The Company has generally not listed its properties
with brokers, but management follows the practice of permitting
potential responsible buyers to visit its media properties and of
presenting bona fide offers from financially responsible parties to
the Company's Board of Directors for consideration. Proceeds of
asset sales will be used to retire outstanding debt, to repurchase
equity, to finance the Company's investments in new properties or
for other corporate purposes as determined by the Board of
Directors.
Broadcasting Properties
The Company's broadcasting properties include three NBC
affiliated television stations: KSNF-TV, serving Joplin,
Missouri/Pittsburg, Kansas; KJAC-TV, serving Beaumont/Port Arthur,
Texas; and KFDX-TV, serving Wichita Falls, Texas/Lawton, Oklahoma;
three AM and three FM radio stations, WOWO-AM and WOWO-FM serving
Fort Wayne, Indiana; WWKB-AM and WKSE-FM, serving Buffalo, New
York; and WBZT-AM and WIRK-FM, serving West Palm Beach, Florida,
and debt and equity interests in Fairmont, which interests
currently have no book value. For a description of the Company's
interests in Fairmont see "Interests in Fairmont" below. For a
discussion of the pending acquisition of WHTM-TV, serving
Harrisburg-York-Lancaster-Lebanon, Pennsylvania and dispositions of
the Buffalo and Fort Wayne radio stations see "Recent
Developments."
Interests in Fairmont
In connection with the sale in l987 of seven radio stations to
Fairmont for an aggregate sale price of $120 million, the Company
loaned $50 million to Fairmont (the "Fairmont Notes") and acquired
a 27% equity interest in Fairmont. The Fairmont Notes were issued
in three series of 12 1/2% increasing rate subordinated notes due
in 1992, extendible at Fairmont's option to 1994. Interest on the
notes was payable quarterly in cash or additional notes at
Fairmont's election.
On August 28, 1992, Fairmont filed for voluntary relief under
Chapter 11 of the U.S. Bankruptcy Code. At that date, the Company
ceased to record additional notes related to interest paid in kind
since it is not entitled to interest after that date under the
Bankruptcy Code.
The $94.8 million principal amount of Fairmont Notes owned by
the Company as of December 31, 1993 (which includes accrued
interest paid in additional Fairmont Notes) and the Company's
equity investment in Fairmont had no book value as of December 3l,
l993.
By order dated September 10, 1993, the United States
Bankruptcy Court for the Southern District of New York confirmed
the chapter 11 plan of reorganization (the "Fairmont Plan") for
Fairmont and the Fairmont Subsidiaries. Essentially, the Fairmont
Plan provides for the orderly liquidation of the assets of Fairmont
and the Fairmont Subsidiaries, and the distribution of the proceeds
derived therefrom according to the relative priorities of the
parties asserting interests therein. The Company believes that the
level of asset sales may be sufficiently high to provide for some
recovery upon the Fairmont Notes, although the exact amount of any
such recovery is unclear at this time.
Operating Strategy
At the outset, the Company develops specific plans for each
property acquired in an effort to improve its efficiency. The
Company attempts to increase the Media Cash Flow of its
broadcasting properties and to make each property a significant one
relative to its competitors. The Company's goal is to realize
annual increases in the net revenue of its properties that exceed
increases in operating expenses.
The Company has sought both to elevate its television and
radio stations' positions in their markets and to increase
advertising rates, although the position of stations in their
markets tends to fluctuate. Station revenue growth benefits from
the advertising revenue growth of the markets themselves, which the
Company believes can generally be measured by the growth in retail
sales in the areas involved.
Local demographic considerations and promotion play less of a
role in television station programming than in the case of radio
stations, because a significant portion of station programming is
provided by the television networks to the Company's network
affiliated television stations. The Company strives to improve or
maintain the ratings of its television stations by fine tuning non-
network programming and news coverage, improving promotional
activities and upgrading physical and technical facilities where
necessary.
Within each radio market, the Company targets key demographic
groups (determined by age and/or sex), based on advertiser demand
and the nature of competition in the market. Research is
periodically conducted by outside consultants to help refine and
improve the programming of each station, and the Company attempts
to direct its sales efforts, both local and national, to obtain the
largest possible share of advertising budgets. Although broadcast
ratings normally reflect all teenage and adult listeners in a
market and the Company's stations may perform well in the overall
ratings, the Company's emphasis is on superior performance in the
targeted demographic group, which it believes can result in
substantial improvement in Media Cash Flow by attracting
advertisers interested in reaching the target groups. The Company
also seeks to generate revenues through promotional events and
print-media tie-ins, techniques that may be particularly important
as a station grows more successful and its ability to increase the
number of commercials sold becomes more limited.
The Television Broadcasting Industry
Television station revenues are primarily derived from local,
regional and national advertising and from fees paid by television
networks for the local broadcast of network programming, with a
small percentage of revenue sometimes obtained from studio rental
and programming-related activities. The primary costs involved in
owning and operating television stations are salaries, programming,
promotion, depreciation and amortization, and selling expenses.
The majority of national and local advertising contracts are
short-term, generally running for only a few weeks, while
advertising contracts sold by networks are typically for longer
periods. National spot and local advertising revenues are more
susceptible to fluctuations in the economy than network
compensation. Advertising rates charged by a television station
vary, depending upon the population and number of television sets
in the area served by the station, a program's popularity among the
viewers an advertiser wishes to attract, the number of advertisers
vying for available time, the prices being charged by competitors
and the availability of alternative media in the market area. The
number of television sets in an area and a program's popularity are
reflected in surveys made by a rating service of the number of sets
tuned to the station at various times. Advertising rates are
highest during the most desirable viewing hours. Local and most
regional sales of advertising time are made by a station's sales
staff. National sales are made by a national "rep firm",
specializing in television advertising sales on the national level,
which is compensated on a commission-only basis.
For most network programming that is broadcast by a network
affiliate, the network pays the affiliate a fee, which varies in
amount depending upon the time of day during which the program is
broadcast. "Prime-time" programming (7 to 11 P.M. E.S.T. Sundays
and 8 to 11 P.M. E.S.T. other days) generally earns the highest
fees. Recent trends indicate a general reduction in network
compensation levels. It is widely expected that this reduction
will continue in the foreseeable future. However, a network often
allocates portions of advertising time during network broadcasts
for direct sale by the local station to advertisers and these time
slots have generally been increasing.
While revenues are spread over the calendar year, the first
quarter generally reflects the lowest and the fourth quarter the
highest revenue for the year. The increase in retail advertising
each fall in preparation for the holiday season, combined with
political advertising in election years and new fall television
programming, tend to increase fourth quarter revenues.
A significant portion of the programs broadcast by the
Company's network affiliated television stations is provided by
their networks. Programming costs are generally lower for network
affiliates than for independent television stations, and network
programs generally achieve higher ratings than non-network
programs. The Company's television stations also acquire programs
from non-network sources. Programs obtained from non-network
sources usually consist of syndicated television shows, some of
which have been shown previously on a network, and feature films.
The competitive position of a network affiliated television
station is significantly affected by viewer acceptance of the
network's programs. Network affiliation agreements are generally
for a term of one or two years, and are generally renewed
automatically. A network affiliate may reject particular network
programs, which might then be offered to other stations in the
area. The FCC has eliminated the two-year limitation on the terms
of network affiliation agreements, although the major television
networks have not yet modified their standard practices. The
Company does not believe that the FCC's action will have a material
effect on its business.
Competitive factors, in addition to management experience,
include a station's authorized transmitter power and antenna
location, assigned frequency, network affiliation, carriage of the
station's signal on local cable television systems, viewer
acceptance of network and local programming and the strength of
local competition. Generally, a television broadcasting station in
one market does not compete with stations in another market.
Competition for advertising and viewers may also come from
low-power television stations, multichannel multipoint distribution
service ("MMDS" or "wireless cable") systems or, increasingly in
recent years, cable television systems importing out-of-market
television broadcast stations and cable programming networks.
Newspapers also compete strongly with television stations for local
advertisers' budgets, as do radio and outdoor advertising.
During the past several years, there has been a steady growth
of cable communications systems and a significant liberalization of
FCC rules which allow cable systems, satellite master antenna
systems, and MMDS services located in areas served by the stations
to provide additional program choices. To date, the existence of
additional program services has not had a demonstrably adverse
effect upon the Company's television stations. The FCC has adopted
"must carry" and "retransmission consent" rules at the direction of
Congress pursuant to the 1992 Cable Television Consumer Protection
and Competition Act. Under this new regulatory regime, virtually
all cable systems that carried the Company's television stations
have continued to do so. Some systems have agreed to provide
compensation to the Company's television stations in return for
carriage on the cable system under the new regulations, although
such compensation is not substantial. A number of cable television
entities have appealed the must carry and retransmission consent
rules. A three-judge panel of the U.S. District Court for the
District of Columbia upheld the rules, but the U.S. Supreme Court
decided to review the ruling and heard oral argument in January
1994. A decision by the Court is expected in the next few months.
Television broadcasters generally have been supportive of cable
regulation. In any event, the Company believes that cable
subscriber demand for programming carried by the Company's
television stations makes it unlikely that the stations will cease
to be carried by cable systems served by those stations, even in
the absence of must carry rules.
The Company's television broadcast properties also may
experience competition from other forms of home entertainment such
as video cassette recorders and laser disk players, CD-ROM
multimedia and other computer programs, and, in varying degrees
from other sources of entertainment in the area, including motion
picture theaters, live theater and sporting events.
Several other new technologies are in their developmental
stages, such as high definition television capable of transmitting
television pictures with higher resolution, truer color and wider
aspect ratios. The FCC has recently determined that local
television stations such as the Company's will be entitled to
frequencies necessary to broadcast high definition television so
long as those frequencies are used within a specified time period.
These developing technologies have had no immediate impact on the
television broadcast industry, and their potential impact on the
Company's business cannot be predicted.
The Radio Broadcasting Industry
Virtually all of the revenue of a radio station is derived
from local and national advertising, and to a minor extent from
network compensation. Local sales are made by a station's sales
staff. National sales are made by a national "rep firm",
specializing in radio advertising sales on the national level,
which is compensated on a commission-only basis. The majority of
national and local advertising contracts are short-term, generally
running for only a few weeks. Advertising rates charged by a radio
station are based primarily on the station's ability to attract
audiences in the market area. A station's listenership is
reflected in rating service surveys of the number of radios tuned
to the station at various times. Rates are generally highest
during morning and evening drive-time hours. The primary costs
incurred in owning and operating radio stations are salaries,
programming, depreciation and amortization, promotion and
advertising, rental of premises for studios and transmitting
equipment, music license royalty fees and selling expenses.
Radio broadcasting revenues are spread over the calendar year,
with the first quarter generally reflecting the lowest and the
fourth quarter the highest revenues for the year, due in part to
increases in retail advertising in the fall in preparation for the
holiday season, and, in election years, to political advertising.
The radio industry, like the television industry, is
continually faced with technological changes and inventions.
Currently, the FCC is considering the authorization of Digital
Audio Broadcasting ("DAB") which would permit the transmission of
radio signals in a digital mode, in contrast to the current analog
transmission used in AM and FM radio broadcast service. Cable
television systems have the capability of delivering digital audio
services and some digital music services are currently in
operation. The radio industry is also continually faced with the
possible rise in popularity of competing entertainment and
communications media, changes in labor conditions, governmental
restrictions and actions of Congress and Federal regulatory bodies,
including the FCC, any of which could have a material effect on the
Company's business. However, in general, radio stations have
enjoyed growth in listeners and value within the past several
decades. Increased population and greater availability of radios,
particularly car and portable radios, have contributed to this
growth.
The Company's radio broadcasting stations compete with the
other broadcasting stations in their respective market areas, as
well as with other advertising media such as newspapers, broadcast
and cable television, magazines, outdoor advertising, transit
advertising and direct mail marketing. Competition within the
radio broadcasting industry occurs primarily in individual market
areas, so that a station in one market does not generally compete
with stations in other market areas. In addition to management
experience, factors that are material to competitive position
include the station's rank in its market, authorized power,
assigned frequency, audience characteristics, local program
acceptance and the number and characteristics of other stations in
the market area. The Company attempts to improve its competitive
position with promotional campaigns aimed at the demographic groups
targeted by its stations, and by sales efforts designed to attract
advertisers that have done little or no radio advertising; these
latter efforts emphasize the effectiveness of radio advertising in
increasing the advertisers' revenues, rather than the station's
ratings in its market.
Federal Regulation of Broadcasting
Radio and television broadcasting (as well as some other
potential communications investments of the Company) are subject to
the jurisdiction of the FCC under the Communications Act of l934,
as amended ("Communications Act"). The Communications Act, among
other things, prohibits the assignment of a broadcast license or
the transfer of control of a corporation holding a license without
the prior approval of the FCC. Legislation has been introduced
from time to time which would amend the Communications Act in
various respects and the FCC from time to time considers new
regulations or amendments to its existing regulations. The Company
cannot predict the effect of any such new legislation or amendments
on the Company.
Radio station licenses are issued and renewable for terms of
seven years. Television licenses are issued and renewable for
terms of five years. The Company's licenses have the following
expiration dates, until renewed:
KSNF-TV..................February l, l998
KJAC-TV..................*
KFDX-TV..................August l, l998
WBZT-AM..................February l, l996
WIRK-FM..................February l, l996
WOWO-AM..................August l, l996
WOWO-FM..................August l, l996
WWKB-AM..................June 1, 1998
WKSE-FM..................June l, l998
* The license term for KJAC-TV was to have expired on
August 1, 1993. KJAC-TV filed a timely application for
renewal, thereby extending the license term until action
is taken on the renewal application. That application
remains pending due to a viewer complaint about the Phil
Donahue program. The Company expects the station's
license to be renewed during 1994 for a term ending
August 1, 1998.
In the vast majority of cases, radio and television licenses
are renewed by the FCC. Current FCC regulations permit cognizable
ownership by one entity of up to 18 FM radio stations, 18 AM radio
stations and 12 television stations. With respect to television
stations, however, there is an additional ownership limit based on
audience reach. Under the audience reach limitation, an entity may
acquire cognizable ownership interests in up to 12 television
stations only if the aggregate number of television households
reached by the television stations does not exceed 25% of the
national television household audience as determined by the
Arbitron ADI market rankings. The percentage of the national
television household audience reached by the Company's television
stations is significantly under these limitations.
The FCC's rules generally prohibit the common ownership of a
television station and an AM radio station, an FM radio station or
general circulation daily newspaper in the same market, although an
AM-FM station combination by itself is permitted. Ownership of a
CATV system and television station in the same market is also
prohibited. These rules apply to entities such as the Company,
that seek new authorizations or approval of a transfer of an
existing combination. The FCC has recently relaxed its ownership
restrictions such that common ownership of television and radio
stations may be permissible in the 25 largest markets and in most
radio markets, common ownership of three or four radio stations may
now be permissible. No more than two of the stations in a given
market may be AM stations and no more than two may be FM stations.
The FCC has also initiated a rule making proceeding in which it is
considering relaxation of both its national and local television
ownership restrictions. In July 1992, the FCC relaxed its ban on
ownership of cable television systems by local telephone companies,
permitting telephone companies to offer video dialtone service.
The Company is unable to predict at this time the impact of these
initiatives on its television broadcast operations.
The FCC requires the attribution to a broadcast company not
only of licenses held by the company, but also of licenses
attributable to its officers and directors and certain of its
stockholders and their affiliates, such that there would be a
violation of FCC regulations where such an officer, director,
stockholder or stockholder's affiliate together held attributable
interests in more than the permitted number of stations on a
nationwide or local market basis. In general, under FCC rules
attribution of broadcast licenses would occur where any officer,
director, or five percent or greater stockholder of a broadcasting
company directly, indirectly or through affiliates owns, operates,
controls or has a five percent or greater voting interest in or is
an officer or director of any other broadcasting company. The
Company's By-Laws state that the Board of Directors shall prohibit
any voting or transfer of its capital stock, including its Common
Stock, which would cause the Company to violate the Communications
Act or FCC regulations.
The foregoing is only a brief summary of certain provisions of
the Communications Act and the regulations of the FCC. Reference
is made to the Communications Act, FCC regulations and the public
notices promulgated by the FCC for further information. The
Company is unable to predict what impact, if any, changes in these
laws would have on its operations.
Employees
As of December 3l, l993, the Company employed approximately
236 full time persons at its radio and television stations. The
stations have not experienced any significant labor problems under
the Company's ownership and the Company considers its labor
relations on the whole to be good.
The Company relies on experienced managers for its
broadcasting operations, who are given considerable authority at
the local level. Where appropriate, the Company has also hired new
management in an effort to improve the operations of a particular
property.
Item 2. Properties.
The Company and its subsidiaries own or lease space for
offices, studio and production facilities, antenna sites and
certain equipment for each of its stations. The Company believes
that its other facilities are suitable and adequate for carrying on
its broadcasting and other operations and that no major capital
improvements will be necessary over the next year. Renewal options
are available for the majority of the leases. (See Note 15 of the
Notes to Consolidated Financial Statements for information on
minimum lease payments of the Company and its subsidiaries for the
next five years.) Certain subsidiaries of the Company own the land
which is used for transmitter sites and studio facilities.
Item 3. Legal Proceedings.
On November 29, 1993, Apollo Investment Fund, L.P. ("Apollo"),
commenced an action by way of temporary restraining order and order
to show cause in the Supreme Court of the State of New York, County
of New York, entitled Apollo Investment Fund, L.P. v. Price
Communications Corporation, Price Publishing Corporation, W.R. Huff
Asset Management Co., L.P., and William R. Huff, Index No.
130011/93, seeking to enjoin the Company and PPC from selling their
interest in Alexandra Publishing Corporation ("Alexandra"), to the
Huff defendants, or in the alternative, if the sale had already
been completed, rescission of the transaction. Apollo based its
claim on an Amended and Restated Shareholders Agreement, dated as
of May 8, 1992, (the "Shareholders Agreement"), among Apollo, the
Company, PPC, Alexandra, and The New York Law Publishing Company,
which purports to restrict the sale of shares of Alexandra held by
the Company or PPC.
On December 20, 1993, the Company answered the complaint
asserting that the challenged transaction involved only the sale of
shares of PPC, Alexandra's parent, which was not restricted by the
Shareholders Agreement. The Company also asserted a counterclaim
against Apollo pursuant to paragraph 11 of the Shareholders
Agreement, for the legal fees and expenses incurred in connection
with the defense of the litigation.
On December 23, 1993, the defendants filed a joint opposition
to plaintiff's motion for a preliminary injunction, and also filed
a joint cross-motion for summary judgment dismissing the complaint.
Shortly thereafter, settlement discussions began and are
continuing. The hearing on the motion and cross-motion were
adjourned pending the outcome of the settlement discussions.
The Company believes that this suit may have errors and has
not been brought on sound legal advice of Plaintiffs' Counsel and
that it is without merit and the Company intends to vigorously
defend this action if it is not settled.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive Officers of the Registrant
The following table sets forth the executive officers of the
Company, their respective ages, the year in which each was first
elected an executive officer and the office of the Company held by
each. Each executive officer will hold office until removed or
until their respective successors have been duly elected and
qualified.
Executive
Officer's Name Age Position Officer Since
Robert Price 61 President, 1979
Chief Executive
Officer and Treasurer
Bill Bengtson 62 Senior Vice 1989
President/
Television
Kim I. Pressman 37 Senior Vice 1984
President
Lee K. Strasser 37 Vice President/Radio 1992
Alisa R. Diamond-Lichaw 31 Vice President- l990
Corporate Affairs and
Secretary
Robert Price (Director, President, Chief Executive
Officer and Treasurer of the Company), an attorney, is a former
General Partner of Lazard Freres & Co. He has served as an
Assistant United States Attorney, practiced law in New York and
served as Deputy Mayor of New York City. In the early sixties, Mr.
Price served as President and Director of Atlantic States
Industries, a corporation owning weekly newspapers and four radio
stations. After leaving public office, Mr. Price became Executive
Vice President of The Dreyfus Corporation and an Investment Officer
of The Dreyfus Fund. In 1972 he joined Lazard Freres & Co. Mr.
Price has served as a Director of Holly Sugar Corporation, Atlantic
States Industries, The Dreyfus Corporation, Graphic Scanning Corp.
and Lane Bryant, Inc., and is currently a member of The Council on
Foreign Relations. Mr. Price is also a Director and Chairman of
TLM Corporation, and a Director and President of Atlas Cellular
Corporation.
Bill Bengtson has held a variety of positions in the
broadcasting industry for 34 years and assumed his current position
in July 1989. Mr. Bengtson is also Vice President and General
Manager of KSNF-TV, the Company's NBC affiliate in Joplin,
Missouri/Pittsburg, Kansas, a position he has held since April
1987. From January 1985 to March 1987, he was Vice President and
General Manager of KRCG-TV, a CBS affiliate in Jefferson
City/Columbia, Missouri formerly owned by the Company. Prior to
joining the Company in 1985, Mr. Bengtson was Vice President and
General Manager of KOAM-TV in Pittsburg, Kansas for 12 years. Mr.
Bengtson has served on the National Association of Broadcasters'
Television Board of Directors, and as President of the Pittsburg,
Kansas Chamber of Commerce, President of the Pittsburg, Kansas
Industrial Development Corporation and Mayor of Pittsburg, Kansas.
Kim I. Pressman, a certified public accountant, is a
graduate of Indiana University and holds an M.B.A. from New York
University. Before assuming her present office as Senior Vice
President in January 1990, Ms. Pressman was Vice President and
Treasurer of the Company from November 1987 to December 1989. She
was also Secretary of the Company from July 1989 to February 1990.
She was Vice President-Broadcasting and Vice President, Controller,
and Assistant Treasurer of the Company from 1984 to October 1987.
Prior to joining the Company in 1984, Ms. Pressman was employed for
three years by Peat, Marwick, Mitchell & Co., a national certified
public accounting firm, and for more than three years thereafter
was Supervisor, Accounting Policies for International Paper Company
and then Manager, Accounting Operations for Corinthian Broadcasting
Division of Dun & Bradstreet Company, a large group owner of
broadcasting stations. Ms. Pressman is a Director, Vice President,
Treasurer and Secretary of TLM Corporation, and a Director, Vice
President and Treasurer of Atlas Cellular Corporation.
Lee K. Strasser is a cum laude graduate of the University
of Miami's School of Communications. Mr. Strasser is also Vice
President and General Manager of WIRK-FM/WBZT-AM, the Company's
Country FM and news/talk AM radio stations in West Palm Beach,
Florida, a position he has held since December 1991. Previously,
he served as General Sales Manager of the stations from 1987 to
December 1991. Prior to joining the Company in 1987, Mr. Strasser
had been an account executive in the Palm Beach County marketplace
since 1985. He began his career in the Miami radio market in 1981
at WNWS radio.
Alisa R. Diamond-Lichaw attended Washington University in
St. Louis and is a graduate of New York University. Ms. Diamond-
Lichaw has been Vice President - Corporate Affairs since January
1990 and became Secretary in December 1991. Previously, Ms.
Diamond-Lichaw had been Assistant Vice President of the Company
since June 1989. She was also an Assistant Secretary of the
Company from September 1987 to January 1990. She served as
Administrator-Corporate Services of the Company from November 1986
to June 1989 and prior to that was employed in a variety of
positions at the Company since joining it in October 1984. Before
joining the Company Ms. Diamond-Lichaw was employed at MTV in
promotion and marketing, worked in marketing sales services at NBC
and was an Account Executive at Izod Lacoste. Ms. Diamond-Lichaw
is also an Assistant Secretary of TLM Corporation.
PART II
Item 5. Market for Company's Common Stock and
Related Stockholder Matters
a) Market for Common Stock
The Company's Common Stock is listed for trading on the
American Stock Exchange ("AMEX") under the ticker symbol "PR". The
range of high and low last sale prices for the Company's Common
Stock on the AMEX for each of the four quarters of l993 and l992,
as reported by the AMEX (adjusted for stock dividends and stock
splits, including the 1 for 20 reverse stock split which occurred
on December 30, 1992, and rounded to the nearest eighth) was:
l993 l992
Quarter High Low High Low
First 2 7/8 2 7 1/2 1 7/8
Second 2 15/16 2 6 1/4 1 7/8
Third 3 3/16 2 3/8 3 3/4 1 1/4
Fourth 4 3/8 2 3/4 2 1/2* 1 1/4*
[*through 12/24/92]
The high and low last sale prices for the Company's Common
Stock on the AMEX for January l994, as reported by the AMEX were 4
3/8 and 3 1/2, respectively. The Common Stock of the Company, as
reorganized pursuant to the Plan of Reorganization, began trading
on a when issued basis on the AMEX on December 28, 1992. The high
and low last sale prices of the Reorganized Company's Common Stock
for the remainder of the Fourth Quarter of 1992 were 2 3/4 and 1
7/8, respectively. The Company's Common Stock has been afforded
unlisted trading privileges on the Pacific Stock Exchange under the
ticker symbol "PR.P", on the Chicago Stock Exchange under the
ticker symbol "PR.M" and on the Boston Stock Exchange under the
ticker symbol "PR.B".
b) Holders
On January 31, l994, there were 749 holders of record of the
Company's Common Stock. The Company estimates that brokerage firms
hold Common Stock in street name for approximately 5,000 persons.
c) Dividends
The Company, to date, has paid no cash dividends on its Common
Stock. The Board of Directors will determine future dividend
policy based on the Company's earnings, financial condition,
capital requirements and other circumstances. In addition, it is
the present policy of the Board of Directors to retain cash and any
earnings of the Company for the operation of the Company, and
therefore it is not anticipated that dividends will be paid on its
Common Stock in the foreseeable future.
Item 6. Selected Financial Data.
The following table sets forth certain selected consolidated
financial data with respect to the Company for each of the five
years in the period ended December 3l, l993, derived from audited
consolidated financial statements of the Company and Notes thereto.
A vertical black line has been placed to separate pre-
reorganization consolidated operating statement and balance sheet
items from the post-reorganization consolidated operating statement
and balance sheet items since they are not prepared on a comparable
basis (See Note 1 of Notes to Consolidated Financial Statements).
Consolidated Operating Statement Items
(in thousands, except for per share amounts)
Year Ended December 31
Reorganized
Company Predecessor Company
1993 1992 1991 1990 1989
Net Revenue $22,790 $53,957 $48,452 $48,150 $67,335
Operating Expenses 16,335 39,567 37,182 37,146 50,722
Corporate Expenses 3,649 4,973 6,123 5,189 2,810
Other Expense (Income) - Net 539 (35) 12,925 19,535 (14,389)
Interest Expense 1,485 17,768 41,473 40,184 43,808
Amortization of Debt Discount and
Deferred Debt Expense 766 1,004 2,039 2,534 4,974
Depreciation and Amortization 2,343 4,873 5,132 4,957 16,076
Unrealized Noncash (Recovery)
Loss on Marketable Securities (1) 146 (146) (8,476) 890 7,107
Share of Loss of Partially
Owned Companies 1,118 2,934 9,005 9,546 3,221
Loss from Continuing Operations
Before Reorganization Items,
Income Taxes, and Extraordinary Items (3,591) (16,981) (56,951) (71,831) (46,994)
Reorganization Items - (5,983) - - -
Loss from Continuing Operations Before
Income Taxes and Extraordinary Items (3,591) (22,964) (56,951) (71,831) (46,994)
Income Tax (Expense) Benefits (124) (499) 327 (591) (1,619)
Loss from Continuing Operations Before
Extraordinary Items (3,715) (23,463) (56,624) (72,422) (48,613)
Loss from Discontinued Operations - - - - (1,491)
Extraordinary Items (Net of Income Taxes):
Gain on Early Extinguishments of Debt 2,010 - - 5,287 9,919
Gain on Forgiveness of Debt and Partial
Sale of Subsidiary - 312,678 - - -
Net (Loss) Income $(1,705) $289,215 ($56,624) ($67,135) ($40,185)
Per Share Amounts (2):
Loss from Continuing Operations
Before Extraordinary Items $(0.31)
Extraordinary Items $ 0.17
Net Loss $(0.14)
(1) See Note 1 of Notes to Consolidated Financial Statements
(2) Per share amounts for the Predecessor Company are neither comparable
nor meaningful due to the forgiveness of debt,
partial sale of subsidiary, issuance of new common stock and
adoption of Fresh Start Reporting.
Consolidated Balance Sheet Items
(in thousands, including notes)
As of December 31
Reorganized Company Predecessor Company
1993 1992 1991 1990 1989
Total Current Assets $8,925 $28,494 $18,464 $23,895 $87,196
Total Assets 37,272 74,327 92,347 114,887 198,810
Total Current Liabilities (1) 3,292 11,373 338,274 297,605 32,920
Long-Term Debt (2) 3,200 22,100 41,198 45,310 327,152
Shareholders' Equity (Deficit) 30,705 40,646 (287,823) (231,199) (163,210)
(1) Net of unamortized original issue discount of $5,124, $6,203 and
$589 as of December 31, 1991, 1990 and 1989, respectively.
(2) Net of unamortized original issue discount of $8,705 and $7,615 as
of December 31, 1992 and 1989, respectively.
/TABLE
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.
The Company reorganized and emerged from bankruptcy
proceedings on December 30, 1992 and adopted Fresh Start Reporting
in accordance with the guidelines established by the American
Institute of Certified Public Accountants in Statement of Position
90-7 "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code". Under Fresh Start Reporting, assets and
liabilities were recorded at their estimated fair market value and
the historical deficit was eliminated. Accordingly, the Company's
financial statements have been prepared as if it is a new reporting
entity and a vertical black line has been placed to separate the
pre-reorganization consolidated statements of operations and cash
flows from the post-reorganization consolidated statements of
operations and cash flows since they are not prepared on a
comparable basis.
Due to pending and subsequent acquisitions and dispositions
discussed under Business - Recent Developments, the retirement of
the Company's Secured Notes, the consummation of the Plan of
Reorganization and the adoption of Fresh Start Reporting, the
Company's historical results of operations should not be regarded
as indicative of its future results. The following discussion
should be read in conjunction with the Consolidated Financial
Statements and the Notes thereto.
Results of Operations - General
Results for future periods will be affected by the nature and
timing of future acquisitions or dispositions. Future acquisitions
could substantially increase the Company's operating expenses,
depreciation and amortization charges and, if additional financing
is required, interest expense, as well as increasing revenues. For
these reasons, the results of the Company's historical operations
may not be comparable from period to period or indicative of
results in the future.
1993 Compared to 1992
The Company's net revenue, operating expenses and depreciation
and amortization for the year ended December 31, 1993 are not
comparable to the year ended December 31, 1992 due to the sale of
75 percent of its stock of The New York Law Publishing Company as
part of the Plan. The Company's net revenue decreased by
approximately $31.2 million and operating expenses by $23.2 million
as the result of that sale. However, net revenue from the
broadcasting segment increased by $1.5 million or 7.1 percent, due
to an overall improvement in the market for broadcast advertising,
the impact of political revenues and an improvement in market
shares at certain of the Company's properties. Operating expenses
for the broadcasting segment increased 4% primarily as the result
of programming additions at the Company's radio properties.
The Company's corporate expenses decreased from 1992 primarily
because professional fees and administrative expenses incurred
during the Company's reorganization negotiations, excluding those
that are classified as reorganization items decreased during 1993.
Interest expense and the amortization of debt discount during 1993
decreased from 1992 primarily because the Company's long-term debt
was substantially reduced as a result of its Plan of
Reorganization. Additionally, approximately $23.2 million face
amount of the new Secured Notes were retired in October 1993,
further reducing those expenses.
The Company's share of loss of partially owned companies
decreased in 1993 primarily because the Company ceased to record
losses on its share of PriCellular Corporation, once that
investment was reduced to its realizable value of $11 million, the
amount that the Company sold it for in October of 1993. The
decrease was offset, in part, by losses related to The New York Law
Publishing Company which was accounted for under the equity method
in 1993. The Company's "other (income) expense, net," decreased to
an expense of $539,000 in 1993, as a result of the purchase of the
2,249,086 shares of the Company's common stock from Huff (see
Business-Recent Developments and Note 13 of Notes to Consolidated
Financial Statements) on which a loss of approximately $4.0 million
was recognized. This loss was offset in part by the sale of the
Company's preferred and common stock in NTG for $2.4 million, which
resulted in a gain of the same amount since the stock was carried
at a book value of zero. Additionally, the Company had a recovery
of approximately $300,000 on the repayment of the note from LL
Broadcasting which had been recorded at $2.9 million under Fresh
Start Reporting. As a result of the foregoing, the Company
recognized a loss before extraordinary item of approximately $3.7
million as compared to a loss of $23.5 million in 1992. The 1992
loss also includes net reorganization expense items totalling
approximately $6 million relating to the Company's period under
Chapter 11.
Extraordinary income for 1992 was approximately $313 million
due to the forgiveness of debt and the partial sale of The New York
Law Publishing Company as part of the Company's Plan of
Reorganization. Extraordinary income for 1993 was approximately $2
million due to the early extinguishment of the Company's Secured
Notes.
The Company had net loss per share before extraordinary item
of $.31 and net loss per share of $.14 for 1993. Per share amounts
for prior periods are not comparable or meaningful due to the
forgiveness of debt, partial sale of subsidiary, issuance of new
common stock and adoption of Fresh Start Reporting.
1992 Compared to 1991
The Company's net revenue for 1992 increased by approximately
$5.5 million or 11.4% compared to 1991. Net revenue from the
broadcasting segment increased by $2.1 million or 11.3%, due to an
overall improvement in the market for broadcast advertising and the
impact of political and Olympic revenues. Net revenue from the
publishing and other segment increased by $3.4 million or 11.4%
primarily because of increases in display and legal advertising and
subscription revenues which resulted primarily from increases in
subscription prices. Operating expenses increased by 6.4% during
1992 primarily as a result of the increase in revenues. The
Company's corporate expenses decreased from 1991 primarily because
professional fees and administrative expenses incurred during the
Chapter 11 proceedings are classified as Chapter 11 reorganization
items rather than corporate expenses. In addition, the overall
reorganization expenses declined from approximately $3.9 million in
1991 to $2.8 million in 1992. Interest expense and the
amortization of debt discount during 1992 decreased from 1991
primarily because the Company discontinued, effective May 8, 1992,
the accrual of interest expense and amortization of debt discount
on prepetition debt. The Company's share of loss of partially
owned companies decreased in 1992 primarily because the Company
ceased to record its share of Fairmont's losses once the book value
of its equity interest in Fairmont declined to zero during the
fourth quarter of 1991. Also, during the third quarter of 1992,
the Company ceased to record its share of PriCellular's losses as
the book value of that investment declined to zero (as a result of
Fresh Start Reporting, this investment was recorded at $11.5
million on the Company's balance sheet as of December 31, 1992).
The Company's "other (income) expense, net," was net income for
1992 versus a net expense for 1991 because of a significant
decrease in loss on sale of securities, the existence of recoveries
on notes receivable during 1992, and the absence of an accrual of
a bonus during 1992 due to the expiration of a long-term employment
agreement, partially offset by an increased loss on disposition of
equipment during 1992.
The improvements to net income during 1992 were partially
offset by the valuation adjustment under Fresh Start Reporting. In
addition, during 1991 there was an unrealized noncash recovery on
marketable securities which was de minimis during 1992. As a
result of the foregoing, the Company's net loss before
extraordinary item decreased by approximately $33.2 million from
1991 to approximately $23.5 million in 1992.
Liquidity and Capital Resources
The Company had approximately $1.4 million in cash and cash
equivalents and net working capital of approximately $6.0 million
at December 31, 1993. Long-term debt of $3.2 million was owed by
the Company as of December 31, 1993.
The Company will require substantial funds to complete the
approximately $41 million acquisition of WHTM-TV (See "Business-
Recent Developments") and funds available under the Line of Credit
Agreement combined with the Company's existing liquid assets and
proceeds from the sales of properties may not be sufficient. In
that case, the Company will consider expanding its credit lines or
selling additional assets to raise the capital required for the
purchase. Additionally, if the Company's acquisition strategy (see
"Business-Acquisitions and Divestitures") continues to be
successful the Company may require substantial capital to finance
them. The Company may use a variety of sources including the
proceeds of debt sold to the public, additional borrowings from
banks and other institutional lenders, seller financing,
convertible preferred stock and common stock issued at the parent
company or subsidiary level. There can be no assurance that the
Company will be successful in obtaining funds from those sources.
Although the Company has incurred substantial depreciation and
amortization expense as a result of the purchase of its properties,
it does not anticipate the need to make major capital expenditures
in respect of its existing media properties (see "Properties")
during 1994 and it does not believe that such lack of major capital
expenditures will affect its competitive position. Capital
expenditures for 1993 were approximately $650,000.
The Company's sources of funds historically have been its
liquid assets, cash flow from its operating and investment
activities, proceeds from the sale of properties and proceeds from
loans and financings. The Company intends to seek to improve cash
flow from operations by continuing to impose stringent budget
procedures on its media properties and by continuing to seek to
increase revenues at its properties in excess of increases in
operating expenses.
Certain of the Company's subsidiaries currently have in place
a Line of Credit with the Bank of Montreal for up to $10 million on
which $3.2 million is currently outstanding. The Line of Credit is
reduced periodically, beginning quarterly on March 31, 1994, bears
interest at a rate equal to the Bank of Montreal base rate, as
defined (or other rates at the borrowers' option) and is secured by
the assets of the Company's subsidiaries who are the borrowers on
the Line of Credit. See Note 9 of Notes to Consolidated Financial
Statements.
Item 8. Financial Statements and Supplementary Data.
Price Communications Corporation and Subsidiaries Consolidated
Financial Statements are set forth on the following pages of this
Part II.
INDEX TO FINANCIAL STATEMENTS
__________
PRICE COMMUNICATIONS CORPORATION and SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Reports of Independent Auditors II-10-1
Consolidated Balance Sheets at December 31,
1993 and 1992 II-10-3
Consolidated Statements of Operations for
Years ended December 31, 1993,
1992 and 1991 II-10-5
Consolidated Statements of Shareholders' Equity
(Deficit) for Years ended December 31,
1993, 1992 and 1991 II-10-6
Consolidated Statements of Cash Flows
for Years ended December 31, 1993,
1992 and 1991 II-10-7
Notes to Consolidated Financial Statements II-10-9
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
Audited Consolidated Financial Statements
and Schedules
Price Communications Corporation
and Subsidiaries
December 31, 1993 and 1992 and for each of
the three years in the period ended
December 31, 1993
with Reports of Independent Auditors
Report of Independent Auditors
The Board of Directors and Shareholders
Price Communications Corporation
We have audited the accompanying consolidated balance sheet
of Price Communications Corporation and Subsidiaries as of
December 31, 1993 (the "Company") and the related
consolidated statements of operations, shareholders' equity,
and cash flows for the year then ended. Our audit also included the
financial statement schedules listed in the Index at Item 14(a).
These consolidated financial statements and financial statement schedules
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements and financial statement schedules 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 financial statements referred to above
present fairly, in all material respects, the financial
position of Price Communications Corporation and
Subsidiaries at December 31, 1993, 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
schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth
therein.
March 8, 1994
Ernst & Young
Independent Auditors' Report
The Board of Directors and Shareholders
Price Communications Corporation:
We have audited the accompanying consolidated balance sheet of
Price Communications Corporation and subsidiaries as of December
31, 1992 (Reorganized Company) and the related consolidated
statements of operations, shareholders' equity (deficit), and cash
flows for each of the years in the two-year period ended December
31, 1992 (Predecessor Company). In connection with our audits of
the consolidated financial statements, we have also audited the
related financial statement schedules as listed in Part IV, Item
14(a). These consolidated financial statements and financial
statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedules
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Price Communications Corporation and subsidiaries as of
December 31, 1992, and the results of their operations and their
cash flows for each of the years in the two-year period ended
December 31, 1992 in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement
schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
As discussed in note 1 to the consolidated financial statements,
effective December 30, 1992, Price Communications Corporation was
reorganized under a plan confirmed by the Federal Bankruptcy Court
and adopted a new basis of accounting whereby all remaining assets
and liabilities were revalued at their estimated fair values. As
discussed in notes 1 and 10, Price Communications Corporation and
subsidiaries (Reorganized Company) have changed their method of
accounting for income taxes in 1992 to adopt the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."
KPMG Peat Marwick
New York, New York
February 18, 1993
Price Communications Corporation
and Subsidiaries
Consolidated Balance Sheets
December 31
1993 1992
- -----------------------------
Assets
Current assets:
Cash and cash equivalents $1,395,102 $9,119,527
Marketable securities (Note 1) - 9,778,100
- -----------------------------
1,395,102 18,897,627
Accounts receivable, net of
allowance for doubtful accounts
of $487,576 in 1993 and $565,351 4,006,801 3,652,743
in 1992
Film broadcast rights 565,929 611,289
Notes receivable (Note 3) - 2,900,000
Prepaid expenses and other 2,957,235 2,432,763
current assets
- -----------------------------
Total current assets 8,925,067 28,494,422
- -----------------------------
Investment in partially owned - 4,000,000
company (Note 4)
Property and equipment, at cost,
less accumulated depreciation 13,728,171 14,949,417
(Note 6)
Broadcast licenses, less
accumulated amortization of 12,797,559 13,204,000
$406,441 in 1993 (Note 1)
Film broadcast rights 138,383 302,971
Investment in cellular
communication properties - 11,500,000
(Note 5)
Other assets 470,031 600,000
Reorganization value in excess of
amounts allocable to identifiable
assets, less accumulated 1,212,289 1,276,094
amortization of $63,805 in 1993
(Note 1)
- -----------------------------
Total assets $37,271,500 $74,326,904
=============================
(Continued)
Price Communications Corporation
and Subsidiaries
Consolidated Balance Sheets, Continued
December 31
1993 1992
- -----------------------------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued
expenses $2,249,404 $4,108,417
(Note 7)
Repurchase agreement - 4,930,083
Accrued interest (Note 9) 7,233 350,835
Other current liabilities (Note 8) 1,035,585 1,984,069
- -----------------------------
Total current liabilities 3,292,222 11,373,404
- -----------------------------
Long-term debt, net of
unamortized discount of 3,200,000 22,100,000
$8,705,000 in 1992 (Note 9)
Other liabilities (Note 8) 74,747 207,089
Commitments and contingencies
(Note 15)
Shareholders' equity (Notes 13
and 14):
Common stock, par value $.01 per
share; authorized 40,000,000
shares; outstanding 9,883,717
shares in 1993 and 12,109,583 98,837 121,096
shares in 1992
Additional paid-in capital 32,310,285 40,525,315
Accumulated deficit (1,704,591) -
- -----------------------------
Total shareholders' equity 30,704,531 40,646,411
- -----------------------------
Total liabilities and $37,271,500 $74,326,904
shareholders' equity
=============================
See accompanying notes to consolidated financial statements.
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Operations
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Revenue $26,010,294 | $57,178,019
$51,156,970
Agency and 3,220,102 | 3,221,385 2,704,832
representatives' |
commissions |
- --------------------------------------------
Net revenue 22,790,192 | 53,956,634
48,452,138
- --------------------------------------------
Operating expenses 16,334,761 | 39,567,392
37,181,862
Corporate expenses 3,648,524 | 4,973,287 6,123,146
Other expense (income), 539,289 | (35,492)
12,925,224
net (Note 11) |
Interest expense |
(contractual interest 1,485,389 | 17,768,032
41,473,136
was $43,105,988 in |
1992) |
Amortization of debt |
discount and deferred 766,075 | 1,003,578 2,038,509
debt expense |
Depreciation and 2,343,015 | 4,873,136 5,132,446
amortization |
Unrealized noncash |
(recovery) loss on 145,884 | (145,884)
(8,475,606)
marketable securities |
Share of loss of |
partially owned 1,118,293 | 2,933,763 9,004,587
companies |
(Notes 4 and 5) |
- --------------------------------------------
26,381,230 | 70,937,812
105,403,304
- --------------------------------------------
Loss before |
reorganization items, (3,591,038) | (16,981,178)
(56,951,166)
income taxes and |
extraordinary item |
|
Reorganization items: |
Interest income - | 357,000 -
Professional fees and - | (1,312,579) -
other |
Valuation adjustment - | (5,026,967) -
(Note 1 and 17) |
- --------------------------------------------
Loss before |
income taxes and (3,591,038) | (22,963,724)
(56,951,166)
extraordinary item |
Income tax (expense) (123,885) | (499,326) 326,782
benefit (Note 10) |
Loss before (3,714,923) | (23,463,050)
(56,624,384)
extraordinary item |
Extraordinary item, net |
of income taxes of $0 |
in 1993 and $900,000 in 2,010,332 | 312,678,036 -
1992 (Notes 2, 9, 10
and 17) |
- --------------------------------------------
Net (loss) income $(1,704,591) | $289,214,986
$(56,624,384)
============================================
(Loss) income per share |
(Note 1): |
Loss before |
extraordinary item $(.31) *
*
Extraordinary item $.17 | * *
Net loss $(.14) | * *
============================================
* Per share amounts for the Predecessor Company are neither
comparable nor meaningful due to forgiveness of debt,
partial sale of subsidiary, issuance of new common stock and
adoption of Fresh Start Reporting.
See accompanying notes to consolidated financial statements.
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Shareholders' Equity (Deficit)
Years ended December 31, 1993, 1992 and 1991
Predecessor Company
Junior
Common Stock Common Stock Treasury Stock
No. of Par Value No. of Par Value No. of Par Value
Shares Shares Shares
Balance, December 31, 1990 9,028,890 $90,289 500,000 $5,000 608,800 $(489,298)
Net Loss - - - - - -
Balance, December 31, 1991 9,028,890 90,289 500,000 5,000 608,800 (489,298)
Net income - - - - - -
Treasury stock (552,182) (5,522) - - (608,800) 489,298
Reorganized Company
common stock issued
on conversion of
Predecessor Company
common stock and
junior common stock (8,476,708) (84,767) (500,000) (5,000) - -
Reorganized Company
common stock issued on
conversion of
debentures - - - - - -
Elimination of deficit
under Fresh
Start Reporting - - - - - -
Reorganized Company:
Balance, December 31, 1992 - - - - - -
Net loss - - - - - -
Fractional shares
issued on
conversion of
Predecessor Company
common stock - - - - - -
Purchase of common stock - - - - - -
Stock options exercised - - - - - -
Balance, December 31, 1993 - $ - - $ - - $ -
Reorganized Company Additional
Common Stock Paid-in Accumulated
No. of Par Value Capital Deficit Total
Shares
Balance, December 31, 1990 - $ - $28,393,444 $(259,198,681) $(231,199,246)
Net Loss - - - (56,624,384) (56,624,384)
Balance, December 31, 1991 - - 28,393,444 (315,823,065) (287,823,630)
Net income - - - 289,214,986 289,214,986
Treasury stock - - (438,272) - 45,504
Reorganized Company
common stock issued
on conversion of
Predecessor Company
common stock and
junior common stock 666,027 6,660 883,107 - 800,000
Reorganized Company
common stock issued
on conversion of
debentures 11,443,556 114,436 38,295,115 - 38,409,551
Elimination of
deficit under Fresh
Start Reporting - - (26,608,079) 26,608,079 -
Reorganized Company:
Balance, December 31, 1992 12,109,583 121,096 40,525,315 - 40,646,411
Net loss - - - (1,704,591) (1,704,591)
Fractional shares
issued on
conversion of
Predecessor Company
common stock 2,168 22 (22) - -
Purchase of common stock (2,249,089) (22,491) (8,271,014) - (8,293,505)
Stock options exercised 21,055 210 56,006 - 56,216
Balance, December 31, 1993 9,883,717 $ 98,837 $32,310,285 $(1,704,591) $30,704,531
See accompanying notes to consolidated financial statements.
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Cash flows (used in) |
provided by operating |
activities |
Net (loss) income $(1,704,591) | $289,214,986
$(56,624,384)
- --------------------------------------------
Adjustments to |
reconcile net (loss) |
income to net cash |
(used in) provided by |
operating activities: |
Items not affecting |
cash: |
Amortization of debt |
discount and deferred 766,075 | 1,003,578
2,038,509
debt expense |
Depreciation and 2,343,015 | 4,873,136
5,132,446
amortization |
Share of loss of |
partially owned 1,118,293 | 2,933,763
9,004,587
companies |
Loss on disposition 425 | 364,024 54,333
of equipment |
Reserves for losses on - | -
2,915,712
notes receivable |
Deficiency of film |
broadcast rights - | (103,320)
(339,475)
amortization over |
payments |
(continued)
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Unrealized noncash |
loss (recovery) on 145,884 | (145,884)
(8,475,606)
marketable securities |
Valuation |
adjustment, net of - | 6,732,774 -
working capital |
valuation |
Change in assets and |
liabilities, net of |
effects of |
reorganization: |
(Increase) decrease in |
net accounts receivable (354,058) | (959,580) 214,844
(Increase) |
decrease in prepaid (297,915) | 395,910
(930,882)
expenses and other |
assets |
Decrease in film 209,948 | 129,953 42,659
broadcast rights |
Decrease in due from - | 1,410,960 605,857
broker/dealer |
(Decrease) increase in |
accounts payable and (1,859,013) | 1,028,242 425,740
accrued expenses |
(Decrease) |
increase in accrued (343,602) | 15,243,681
35,673,639
interest payable, net |
of forgiveness |
(continued)
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
(Decrease) |
increase in other (1,080,826) | (514,252)
2,032,559
liabilities |
Reclassification of |
transactions to |
investing and financing |
activities: |
Loss on purchase of
Common Stock 3,976,597
Gain on early |
extinguishments of debt (2,010,332) | - -
Gain on |
forgiveness of debt and - | (312,678,036) -
partial sale of |
subsidiary |
(Gain) loss on sale of (6,609) | (6,940)
7,996,741
securities |
Recovery on notes (2,730,432) | (387,588) -
receivable |
- --------------------------------------------
Total adjustments (122,550) | (280,679,579)
56,391,663
- --------------------------------------------
Net cash (used in) |
provided by operating (1,827,141) | 8,535,407
(232,721)
activities |
- --------------------------------------------
(continued)
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Cash flows provided by |
(used in) investing |
activities |
Sale of businesses and $11,000,214 | $4,738,627 $-
equipment |
Investment in (454,337) | - -
businesses |
Purchases of securities |
under agreements to (8,050,811) | - -
resell |
Capital expenditures (577,918) | (704,681)
(514,467)
Purchases of marketable |
securities and mutual (36,704,873) | (10,476,315)
(9,551,596)
funds |
Proceeds from sale of |
marketable securities 54,394,512 | 1,034,640
13,932,705
and mutual funds |
Proceeds from notes 5,630,432 | 654,707 32,851
receivable |
- --------------------------------------------
Net cash provided by |
(used in) investing 25,237,219 | (4,753,022)
3,899,493
activities |
Cash flows used in |
financing activities |
Repurchases and (20,846,643) | (5,300,960)
(5,126,035)
payments of long-term |
debt |
Net borrowings under |
(repayment of) (4,930,083) | 4,930,083 -
repurchase agreements |
Net borrowings under 3,020,065 | - -
line of credit |
agreement |
(continued)
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Purchase of common (8,434,058) | - -
stock |
Proceeds from stock 56,216 | - -
options exercised |
- --------------------------------------------
Net cash used in (31,134,503) | (370,877)
(5,126,035)
financing activities |
- --------------------------------------------
Net (decrease) |
increase in cash and (7,724,425) | 3,411,508
(1,459,263)
cash equivalents |
Cash and cash |
equivalents at 9,119,527 | 5,708,019
7,167,282
beginning of year |
- --------------------------------------------
Cash and cash $1,395,102 | $9,119,527
$5,708,019
equivalents at end |
of year |
============================================
Supplemental |
disclosures of cash |
flow information |
Income taxes paid, net $158,878 | $ 255,225 $55,046
of refunds |
============================================
Interest paid $1,828,991 | $3,170,272
$5,799,497
============================================
Chapter 11 items: |
Interest received $- | $357,000 $-
============================================
Professional and |
administrative expenses $26,085 | $505,144 $-
paid |
============================================
See accompanying notes to consolidated financial statements.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
a. Basis of Presentation-The consolidated financial
statements include the accounts of Price Communications
Corporation (the "Company" or "Price") and its subsidiaries.
All significant intercompany items and transactions have
been eliminated.
b. Fresh Start Reporting-The Company reorganized and
emerged from Chapter 11 bankruptcy proceedings on December
30, 1992 (the "Effective Date"-see Note 2), and adopted
Fresh Start Reporting in accordance with the guidelines
established by the American Institute of Certified Public
Accountants in Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization Under the Bankruptcy
Code." Under Fresh Start Reporting, assets and liabilities
are recorded at their estimated fair market value and the
historical deficit is eliminated. Accordingly, the Company's
financial statements have been prepared as if it is a new
reporting entity (referred to as the "Reorganized Company")
as of the Effective Date. A vertical black line has been
placed to separate the consolidated statements of operations
and cash flows of the Company prior to the reorganization
(referred to as the "Predecessor Company") from those of the
Reorganized Company, since they are not prepared on a
comparable basis.
The Company's operations for the two-day period of
December 30 and December 31, 1992 were insignificant.
Accordingly, December 31, 1992 was used as the cut-off date
for financial reporting purposes in lieu of the Effective
Date.
The revaluation of the Company's assets and liabilities as
of December 31, 1992 was based on an independent appraisal,
modified as appropriate, and resulted in a reduction in net
carrying values of assets and liabilities of approximately
$5,027,000. The components of this adjustment are shown in the
"Fresh Start Reporting" column of Note 17.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
c. Depreciation and Amortization-Depreciation is computed
on the straight-line method on the basis of estimated useful
lives, as follows:
Buildings-15 to 25 years
Broadcasting equipment-10 to 12 years
Leasehold improvements-the life of the underlying lease
Furniture and fixtures-3 to 10 years
Transportation equipment-3 years
d. Intangible Assets:
i. Excess of purchase price over the fair value of net
assets acquired prior to December 31, 1992 includes FCC
licenses, station call letters, and goodwill. As a result of
the implementation of Fresh Start Reporting, unamortized
goodwill has been eliminated and FCC licenses have been
restated at their approximate fair value as of December 31,
1992. These assets are integral determinants of a communica
tions property's economic value, and have long and
productive lives. The Predecessor Company amortized such
intangible assets over a 40-year period, the maximum life
allowable under Accounting Principles Board Opinion No. 17.
The Reorganized Company continues to amortize the assets
over a 40-year life commencing from the original date of
acquisition.
ii. Deferred expenses associated with debt instruments were
amortized under the straight-line method over their
respective lives. Debt discounts are amortized under the
effective interest method. As of December 31, 1992, the
unamortized carrying value of deferred debt expense and
unamortized debt discount associated with debt forgiven or
exchanged under the Company's Plan of Reorganization (the
"Plan"-see Note 2) was eliminated.
e. Reorganization Value in Excess of Amounts Allocable to
Identifiable Assets-The reorganization value in excess of
amounts allocable to identifiable assets, which results from
the implementation of Fresh Start Reporting is amortized
using the straight-line method over 20 years.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
f. Per Share Data-Primary income per common share is based
on income for the period divided by the weighted average
number of shares of common stock and common stock
equivalents outstanding, which was approximately 11.9
million shares for 1993. Per share amounts for the
Predecessor Company are not presented because they are
neither comparable nor meaningful due to forgiveness of
debt, partial sale of subsidiary, issuance of new common
stock and adoption of Fresh Start Reporting.
g. Allowance for Doubtful Accounts-The Company provides an
allowance for doubtful accounts based on reviews of its
customers' accounts. Included in operating expense is bad
debt expense of approximately $264,000, $514,000, and
$780,000 for the years ended December 31, 1993, 1992 and
1991, respectively.
h. Barter Transactions-Revenue from barter transactions
(advertising provided in exchange for goods and services) is
recognized as income when advertisements are broadcast, and
merchandise or services received are charged to expense when
received or used.
i. Advertising Revenues-Sales of advertisements are
recognized as income when advertisements are broadcasted or
printed.
j. Film Broadcast Rights-The capitalized cost of film
broadcast rights is amortized on the basis of the estimated
number of showings or, if unlimited showing are permitted,
over the term of the broadcast license agreements.
Unamortized film broadcast rights are classified as current
or noncurrent on the basis of their estimated future usage.
Amortization of film broadcast rights is included in
operating expenses and amounted to approximately $800,000,
$940,000, and $1,036,000 for the years ended December 31,
1993, 1992, and 1991, respectively.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
k. Cash and Cash Equivalents-For purposes of the
consolidated statements of cash flows, the Company considers
all highly liquid debt instruments, including Treasury
bills, purchased with maturities of three months or less at
the time of purchase to be cash equivalents.
l. Marketable Securities-Investment in marketable
securities was stated at the lower of aggregate cost or
market. Dividend and interest income were accrued as earned.
As of December 31, 1992, the carrying value of marketable
securities, which consisted of 6.375% U.S. Treasury Notes
due August 15, 2002, was increased by approximately
$146,000, to reflect the increase in market value over cost,
in accordance with Fresh Start Reporting.
Net realized gains (losses) on sales of investment in
mutual funds and marketable securities are based upon
weighted average cost (see Note 11).
m. Income Taxes-Effective December 31, 1992, the Company
adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," ("Statement 109") issued by
the Financial Accounting Standards Board (see Note 10). The
cumulative effect of this change had no significant impact
on the Company's consolidated financial statements,
including income tax expense. Under the asset and liability
method of Statement 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable
to differences between the financial statement carrying
amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
m. (continued)
Prior to December 31, 1992, the Company accounted for
income taxes pursuant to the deferred method under APB
Opinion 11. Under the deferred method, deferred income taxes
were recognized for income and expense items that were
reported in different years for financial reporting purposes
and income tax purposes using the tax rate applicable for
the year of calculation.
2. Reorganization
On December 30, 1992, the Plan, which had been approved by
the United States Bankruptcy Court for the Southern District
of New York in July of that year, became effective. Under
the Plan, the following occurred:
a. Holders of approximately $31 million principal amount
of the Company's 10% Convertible Senior Subordinated
Debentures (the "10% Debentures") received new $31 million
face amount seven-year 5% Senior Secured Notes (the "Secured
Notes"-see Note 9).
b. Apollo Investment Fund, L.P. and James Finkelstein
purchased 75% of Alexandra Publishing Corporation, which
owns The New York Law Publishing Company, in exchange for
the cancellation of approximately $19 million of principal
amount of 10% Debentures, and the payment to the Company of
approximately $7.5 million in cash and the assumption or
repayment of certain liabilities of the Company totaling
approximately $45 million. See note 13 for subsequent
disposal of the remaining 25% interest in the publishing
subsidiaries.
c. The holders of the existing subordinated debt received
94.5% of the common stock of Price.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Reorganization (continued)
d. Shareholders received shares which constitute 3.5% of
the common stock of the Reorganized Company, and Robert
Price, President of the Company, received 2% of such common
stock in exchange for the junior common stock, all of which
was held by Mr. Price. In addition, Mr. Price entered into a
three-year employment contract.
The gain on the partial sale of publishing companies and the
gain from cancellation of indebtedness resulted in
extraordinary income of approximately $312.7 million which
is net of a tax provision of $900,000 relating to the sale
of the publishing companies. The gain resulting from the
forgiveness of debt is not taxable for Federal income tax
purposes.
In a related transaction, on August 5, 1992, the Company
exchanged its interest in TLM Corporation (until then a 90.7%
owned subsidiary) for 90.7% of the assets of TLM Corporation.
These assets consisted of cash and common stock and certain
public debt securities of the Company. The Company's loss
from the transaction was de minimis.
3. Notes Receivable
Investments in notes made through private placements include
the following:
a. The note receivable at December 31, 1992 represented a
14-1/2% $3.2 million subordinated note due in 1993 from the
buyers of WIBA-AM/FM stated at its approximate fair value
based on the independent appraisal (see Note 1) completed in
connection with Fresh Start Reporting. In 1993, this note
was paid in full, resulting in a recovery of approximately
$300,000.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Notes Receivable (continued)
b. In connection with the sale in 1987 of seven radio
stations to Fairmont Communications Corporation ("Fairmont")
for an aggregate sale price of $120 million, the Company
loaned $50 million to Fairmont (the "Fairmont Notes") and
acquired a 27% equity interest in Fairmont. The Fairmont
Notes were issued in three series of 12 1/2% increasing rate
subordinated notes due in 1992, extendible at Fairmont's
option to 1994. Interest on the notes was payable quarterly
in cash or additional notes at Fairmont's election.
On August 28, 1992, Fairmont filed for voluntary relief
under Chapter 11 of the U.S. Bankruptcy Code. At that date
the Company ceased to record additional notes related to
interest paid in kind since it is not entitled to interest
after that date under the Bankruptcy Code.
The $94.8 million principal amount of Fairmont Notes owned
by the Company (which includes accrued interest paid in
additional Fairmont Notes) and the Company's equity investment
in Fairmont had no book value as of December 31, 1993 and 1992.
By order dated September 10, 1993, the United States
Bankruptcy Court for the Southern District of New York
confirmed the Chapter 11 Plan of Reorganization (the
"Fairmont Plan") for Fairmont and the Fairmont subsidiaries.
Essentially, the Fairmont Plan provides for the orderly
liquidation of the assets of Fairmont and the Fairmont
subsidiaries, and the distribution of the proceeds derived
therefrom according to the relative priorities of the
parties asserting interests therein. The Company believes
that the level of asset sales may be sufficiently high to
provide for some recovery upon the Fairmont Notes, although
the exact amount of any such recovery is unclear at this
time.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Investment in Partially Owned Company
On December 30, 1992, the Company, in connection with its
Plan of Reorganization, sold 75% of its publishing
subsidiaries (see Note 2). The Company retained a 25%
interest in Alexandra Publishing Corporation which owns 100%
of The New York Law Publishing Company. This investment was
recorded at its approximate fair value of $4 million as of
December 31, 1992 as a result of Fresh Start Reporting (see
Note 1).
In November 1993, in connection with the repurchase of
common stock (see Note 13), the Company transferred its
remaining 25% interest in Alexandra Publishing, which had a
carrying value of approximately $3.8 million.
For the years ended December 31, 1992 and 1991, these
subsidiaries were consolidated in the statement of
operations and cash flows of the Predecessor Company. Based upon
audited financial information, Alexandra Publishing Corporation and
subsidiary had net revenue and income of approximately $32.6
million and $2.9 million (including intercompany expenses of $1.3
million), respectively, for the year ended December 31, 1992. For
the year ended December 31, 1993, the 25% interest in such
subsidiaries was accounted for by the equity method of
accounting and the Reorganized Company recognized a charge
to operations of approximately $230,000 for its period of
ownership.
5. Investment in Cellular Communication Properties
The Company accounted for its investment in PriCellular
Corporation ("PriCellular") under the equity method of
accounting as it believed its control in PriCellular to be
temporary. The Company recognized 75% of PriCellular's
losses as a charge to operations to the extent of its
investment in PriCellular representing $2.9 million and $4.3
million for the years ended December 31, 1992 and 1991,
respectively. Prior to Fresh Start Reporting, the
Predecessor Company's investment in PriCellular had been
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Investment in Cellular Communication Properties (continued)
reduced to zero book value. In accordance with the court approved
Plan, the Company transferred 1% of PriCellular's common
stock to Robert Price, reducing the Company's interest to
74%. The consolidated financial statements of the
Reorganized Company as of December 31, 1992 reflect an
approximate fair value of the investment of $11.5 million,
in connection with Fresh Start Reporting (see Note 1).
On October 1, 1993, the Company sold its remaining 74%
interest in PriCellular to a subsidiary of PriCellular for
$11 million in cash. Under the agreement of sale,
PriCellular and such subsidiary indemnified the Company
against all liabilities and claims relating to PriCellular
and its business. The proceeds from the sale have been used
to repurchase a portion of the Secured Notes, in accordance
with the terms of the indenture of such notes (see Note 9).
During 1993, the Company recognized a charge of
approximately $890,000 related to its share of PriCellular's
losses through October 1, 1993, and realized no gain or loss
from the sale of its interest in PriCellular.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
6. Property and Equipment
Property and equipment consist of the following:
December 31
1993 1992
---------------------------
Land $2,328,000 $2,328,000
Buildings 3,468,209 3,439,000
Broadcasting equipment 7,720,940 7,315,000
Outdoor fixtures 801,320 756,417
Leasehold improvements 229,783 229,000
Furniture and fixtures 619,870 541,000
Transportation equipment 432,814 341,000
---------------------------
15,600,936 14,949,417
Less, accumulated 1,872,765 -
depreciation
---------------------------
Net property and equipment $13,728,171 $14,949,417
===========================
As discussed in Note 1, in conjunction with the consummation
of the Plan, the Company implemented Fresh Start Reporting.
Accordingly, as of December 31, 1992, all property and
equipment were restated to reflect approximate fair value
and accumulated depreciation was eliminated.
7. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the
following:
December 31
1993 1992
---------------------------
Accounts payable-suppliers $906,770 $1,186,035
Accrued professional fees 299,113 979,214
Accrued Chapter 11 expenses 47,664 807,435
Other 995,857 1,135,733
---------------------------
$2,249,404 $4,108,417
===========================
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
8. Other Liabilities
Other liabilities consist of:
December 31
1993 1992
---------------------------
Liability for film $507,603 $724,199
broadcast rights
Income and franchise taxes 522,512 1,250,000
payable
Other 80,217 216,959
---------------------------
1,110,332 2,191,158
Less, amounts due currently (1,035,585) (1,984,069)
---------------------------
$74,747 $207,089
===========================
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Long-Term Debt
Long-term debt consists of the following notes payable by
the Company and its wholly-owned subsidiaries at December
31, 1993 and 1992 as follows:
December 31
1993 1992
---------------------------
Subsidiaries:
Atlantic Broadcasting
Corporation, Southeast Texas
Broadcasting Corporation,
Texoma Broadcasting
Corporation and Tri-State
Broadcasting Corporation: $3,200,000
Note payable to Bank of -
Montreal under term loan
agreement (A)
Parent Company:
5% Senior Secured Notes, due
October 9, 1999; interest
payable semiannually; net
of unamortized discount - $22,100,000
of $8,705,000 (effective
interest rate of 11.04%) (B)
---------------------------
Total debt $3,200,000 $22,100,000
===========================
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Long-Term Debt (continued)
(A) On December 21, 1993, certain subsidiaries of the
Company entered into a Line of Credit Agreement (the "Line
of Credit") with the Bank of Montreal ("BOM"). The Line of
Credit is for $10 million, reduced by $2 million, $2.5
million, $2.5 million and $3 million in 1994, 1995, 1996 and
1997, respectively. Borrowings under the Line of Credit
bear interest at the BOM Base Rate, as defined (or at other
rates at the borrowers' option), and are secured by the
assets of the subsidiaries which have book value of
approximately $26 million. There is also a fee of 1/2 of
1% on the unused portion of the Line of Credit. On December
24, 1993, the Company borrowed $5.6 million pursuant to this
agreement and the proceeds were used to retire the remaining
$7.6 million face amount of Secured Notes. On December 31,
1993, the proceeds from the sale of the Company's position
in Northstar Television Group ("NTG" - see Note 11) were
used to repay $2.4 million of borrowings under the Line of
Credit.
(B) In connection with the Plan, the Company issued
$30,805,000 face amount of the Senior Notes. The Company
recorded these notes net of a discount of $8,705,000 under
Fresh Start Reporting (see Note 1). Accrued interest related
to these notes was approximately $351,000 at December 31,
1992. During October and December 1993, the Company
repurchased all of the Secured Notes for approximately $20.8
million, plus accrued interest, and realized a gain of
approximately $2.0 million, net of taxes of zero.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Income Taxes
As discussed in Note 1, the Company adopted Statement 109 as
of December 31, 1992. The cumulative effect of this change
had no significant impact on the Company's consolidated
financial statements, including tax expense, for the year
then ended.
The Company had, as of December 31, 1993 and 1992, deferred
tax assets, which were subject to a valuation allowance of
approximately $46,031,000 and $44,604,000, respectively, and
deferred tax liabilities of approximately $3,943,000 and
$4,169,000, respectively. These deferred tax assets and
liabilities consist of the following:
December 31,
1993 1992
Deferred tax assets
Accounts receivable, principally due to
allowance for doubtful accounts $166,000 $ 192,000
Notes from and investment in partially owned 15,251,000 31,785,000
companies
Minimum tax credit carryforward 642,000 -
Capital loss carryforwards 19,905,000 -
Net operating loss carryforwards 13,910,000 13,931,000
Investment tax credit carryforwards 100,000 100,000
Notes Receivable, principally due to reserves - 787,000
Investment in cellular communications
properties, principally due to Fresh
Start Reporting - 1,978,000
$49,974,000 $48,773,000
December 31,
1993 1992
Deferred tax liabilities
Property and equipment, principally due to
differences in depreciation and the effects
of Fresh Start Reporting $3,662,000 $3,393,000
Deferred compensation 281,000 -
Unamortized debt discount - 727,000
Unrealized gain on marketable securities - 49,000
$3,943,000 $4,169,000
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Income Taxes (continued)
Income tax expense in 1993 and 1992 consist of approximately
$124,000 and $499,000, respectively, primarily for state and
local income taxes. In addition, a provision of $900,000,
primarily for Federal alternative minimum tax, has been
included in extraordinary items for the year ended December
31, 1992 (see Note 2).
Income tax benefit in 1991 consists of refunds for Federal
alternative minimum tax of $505,104 related to the carryback
of capital losses incurred in 1991 and 1990 and state and
local taxes of $178,322.
Net operating loss carryforwards aggregating approximately
$41.0 million are available for federal income tax
purposes at December 31, 1993. These carryforwards expire
in the years 2002 through 2006. The Company also has
available investment tax credit carryforwards of
approximately $100,000 expiring in the year 2000. All of
these carryforwards arose prior to the reorganization
and are subject to the limitations of Internal Revenue
Code Sections 382 and 383.
11. Other Expense (Income)-Net
Other expense (income)-net consist of:
1993 1992 1991
-------------------------------------
(Gains) loss on sales $(6,609) $(6,940) $7,996,741
of securities
Interest income (715,918) (543,252) (1,092,880)
Loss on disposition of 425 364,024 54,333
equipment
Compensation-bonus
under employment - - 2,512,200
contract
(Recovery) reserves
for losses on notes (2,730,432) (387,588) 2,915,712
receivable
Loss on purchase of
Common Stock (Note 13) 3,976,597 - -
Other-net 15,226 538,264 539,118
-------------------------------------
$539,289 $(35,492) $12,925,224
=====================================
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. Other Expense (Income)-Net (continued)
As of December 31, 1992, in conjunction with the adoption of
Fresh Start Reporting, the investment in common and
preferred stock of NTG was removed from the Company's
consolidated balance sheet since its estimated realizable
value was zero (see Note 1). In December 1993, the Company
sold its investment in NTG for approximately $2.4 million in
cash and recognized a gain of approximately $2.4 million on the
sale.
12. Segment Data
The Reorganized Company's business operations are classified
into two segments: Television and Radio Broadcasting and
Other. The Predecessor Company's business operations
included Publishing with Other. The Company's Publishing
operations were transferred to third parties in 1992 (see
Note 2) and therefore, are no longer consolidated in the
Reorganized Company's operations. There are no transfers
between segments of the Company. The segment data follows:
Year ended December 31, 1993
---------------------------------------------------
Broadcasting
Television Radio Other Consolidated
---------------------------------------------------
Net revenue $11,744,547 $10,271,892 $773,753 $22,790,192
Operating 7,484,486 8,226,346 623,929 16,334,761
expenses
Depreciation
and 1,153,860 834,346 354,809 2,343,015
amortization
---------------------------------------------------
Operating $3,106,201 $1,211,200 $(204,985) $4,112,416
income (loss)*
===================================================
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. Segment Data (continued)
Year ended December 31, 1992
---------------------------------------------------
Broadcasting Publishing
Television Radio and Other Consolidated
---------------------------------------------------
Net revenue $11,239,395 $9,309,229 $33,408,010 $53,956,634
Operating 7,570,105 7,544,032 24,453,255 39,567,392
expenses
Depreciation
and 1,683,309 1,074,407 2,115,420 4,873,136
amortization
---------------------------------------------------
Operating $1,985,981 $690,790 $6,839,335 $9,516,106
income*
===================================================
Year ended December 31, 1991
---------------------------------------------------
Broadcasting Publishing
Television Radio and Other Consolidated
---------------------------------------------------
Net revenue $10,359,913 $8,095,942 $29,996,283 $48,452,138
Operating 7,472,675 7,334,037 22,375,150 37,181,862
expenses
Depreciation
and 1,778,524 1,045,864 2,308,058 5,132,446
amortization
---------------------------------------------------
Operating $1,108,714 $(283,959) $5,313,075 $6,137,830
income (loss)*
===================================================
* Operating income (loss) is before corporate expenses,
other expense (income)-net, interest expense, amortization
of debt discount and deferred debt expense, unrealized non-
cash loss (recovery) on marketable securities, share of loss
of partially owned companies, reorganization items, income
taxes and extraordinary items.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. Segment Data (continued)
Identifiable Capital
Assets Expenditures
------------------------------
1993:
Television broadcasting $16,208,021 $397,604
Radio broadcasting 13,988,511 200,600
Other 3,673,912 50,069
Corporate 3,401,056 3,885
------------------------------
Consolidated $37,271,500 $652,158
==============================
1992:
Television broadcasting $17,067,971 $354,779
Radio broadcasting 17,584,247 253,442
Publishing and other 19,322,971 273,955
Corporate 20,351,715 19,959
------------------------------
Consolidated $74,326,904 $902,135
==============================
1991:
Television broadcasting $38,099,678 $448,543
Radio broadcasting 15,692,764 33,400
Publishing and other 21,714,768 173,486
Corporate 16,839,618 9,933
Consolidated $92,346,828 $665,362
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. Shareholders' Equity (Deficit)
A. Refer to notes 1 and 2 for a description of changes to
shareholders' equity (deficit) pursuant to the Plan of
Reorganization.
B. On November 24, 1993, the Company purchased from
investment advisory clients of W. R. Huff Asset Management
Co., L.P. ("Huff") a block of 2,249,086 shares of its common
stock. The purchase price consisted of $3.75 per share in
cash, plus the stock of its indirect wholly-owned
subsidiary, Price Publishing Corporation, which held the
remaining 25% interest in the New York Law Publishing
Company (see Note 2). The stock of Price Publishing Corporation had
a book value of approximately $3,836,000 at such date which in the
opinion of management approximated its fair value (see Note 4). In
connection with this transaction, the Company recorded a loss of
approximately $3,977,000 reflecting the difference between the value
of the cash and stock of Price Publishing Corporation transferred to
Huff and the then current trading market price of the common stock.
The loss has been included in other expense (income) in the
accompanying statement of operations (see Note 11) and the common
stock purchased from Huff has been treated as constructively retired
in the accompanying balance sheet at December 31, 1993. The purchase
agreement includes a provision for certain additional payments to
Huff (or rescission of the agreement if such payments are not made)
if, among other things, litigation, as defined, is pending at the end
of one year from the purchase date. Also, additional payments to
Huff may be required if there has been a change in control of or
other specified transaction involving the Company at such purchase
anniversary date.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. Shareholders' Equity (Deficit) (continued)
In connection with the Company's purchase of common stock
from Huff, the Company has deposited $1,500,000 with a
collateral agent to secure certain obligations under the
purchase agreement.
C. In connection with the Plan, warrants on the Company's
common stock, originally issued on April 12, 1990, were
amended. The warrants will be exercisable for approximately
124,000 shares of the Reorganized Company's common stock at
an exercise price of $4.23 per share during the five-year
period commencing October 1, 1993.
D. The Company has an employment agreement with Robert
Price, covering base salary and incentive compensation based
on Company performance. The agreement provides for bonuses
payable in common stock to Mr. Price during specified
periods after December 30, 1992 commencing on specified
events and/or performance achievements by the Company and
its subsidiaries. The number of shares awarded under such
agreement will be based upon a predetermined percentage of
the then outstanding shares of Price's common stock.
14. Stock Option Plan
A long-term incentive plan, (the "1992 Long Term Incentive
Plan") was established under the Plan, which provides for
granting incentive stock options, as defined under current
tax law, and other stock-based incentives to key employees
and officers. The maximum number of shares of the Company
that are subject to awards granted under the 1992 Long Term
Incentive Plan is 1,000,000. The exercise of such options,
other than those granted on December 10, 1992, will be exer
cisable at a price not less than the fair market value on
the date of the grant, for a period up to ten years.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
14. Stock Option Plan (continued)
New incentive stock options were granted on December 10,
1992 under the 1992 Long Term Incentive Plan to key
employees and officers. The number of options issued
represents essentially a 1 for 2 reverse split for all
previously awarded stock options granted, which were
canceled pursuant to the Plan, except for options previously
awarded to Robert Price which were surrendered by Mr. Price.
Options granted on December 10, 1992 represent 170,911
shares and the exercise price was set at $2.67 per share.
During 1993, options for 21,055 shares were exercised and as
of December 31, 1993, options for 140,630 shares remained
outstanding. Also, at December 31, 1993, common stock of
838,315 shares remain reserved for the issuance of stock
options.
15. Commitments and Contingencies
The Company is involved in various claims and litigation
arising in the ordinary course of business. In the opinion
of legal counsel and management, the ultimate disposition of
these matters will not have a material adverse effect on the
Company's financial condition.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
15. Commitments and Contingencies (continued)
The Company and its subsidiaries lease a variety of assets
used in their operations, including office space and antenna
sites. Renewal options are available in the majority of
leases. The following is a schedule of the Company's minimum
rental commitment for operating leases of real and personal
property for each of the five years subsequent to 1993 and
in the aggregate:
Operating
Leases
----------
Year:
1994 $261,000
1995 257,000
1996 269,000
1997 268,000
1998 263,000
Thereafter 210,000
----------
Total minimum lease payments $1,528,000
==========
Rental expense for operating leases was approximately
$312,000, $1,468,000, and $1,384,000 for the years ended
December 31, 1993, 1992 and 1991, respectively.
At December 31, 1993, the Company is committed to the
purchase of film broadcast rights of various syndicated
programming aggregating approximately $135,000,
$235,000, $21,000 and $11,000 for the years 1994, 1995, 1996
and 1997, respectively.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements
16. Subsequent Events
On December 27, 1993, the Company announced that it entered
into an agreement to sell substantially all the assets of
its radio stations, WWKB-AM and WKSE-FM in Buffalo, New
York, for $5 million in cash. This transaction has been
approved by the Federal Communications Commission ("FCC")
and management expects it to close during the first half of
1994. The Company expects to realize a gain on the
transaction.
On February 16, 1994, the Company entered into an agreement
to buy WHTM-TV, Channel 27, serving the Harrisburg-York-Lancaster-
Lebanon, Pennsylvania market for approximately $41 million.
This transaction is subject to FCC approval. The Company
expects to close on this purchase during the second half of
1994.
On February 16, 1994, the Company sold its outdoor
advertising business for a total of $875,000, including
$200,000 cash and a note from the buyer for $675,000. A pre-
tax loss of approximately $340,000 will be recognized in
1994 on the sale.
In March 1994, the Company entered into an agreement to
sell radio stations WOWO-AM and WOWO-FM in Fort Wayne,
Indiana, for $2.3 million in cash. The transaction is
subject to FCC approval. The Company expects to realize a
gain on the transaction.
PRICE COMMUNICATIONS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(17)Plan of Reorganization
The following illustrates the effects of the consummation of the Plan, as described in note 2.
Exchange of Old
Pre-Effective Subord. Debt and Exchange of
Date Balance Apollo Old Stock for Senior Debt for Fresh Start Reorganized
Sheet Transaction Common Stock Secured Notes Reporting Balance Sheet
Assets
Current assets:
Cash, cash items and marketable
securities:
Cash and cash equivalents $ 9,463,053 (343,526) - - - 9,119,527
Marketable securities 9,778,100 - - - - 9,778,100
19,241,153 (343,526) - - - 18,897,627
Accounts receivable, net 7,699,152 (4,046,409) - - - 3,652,743
Film broadcast rights 611,289 - - - - 611,289
Note receivable 1,500,000 - - - 1,400,000 2,900,000
Prepaid expenses and other
current assets 3,269,155 (1,136,392) 300,000 - - 2,432,763
Total current assets 32,320,749 (5,526,327) 300,000 - 1,400,000 28,494,422
Notes receivable, net of reserves
Notes from and investment in
partially owned companies 174,800,315 1,818,538 - - (172,618,853) 4,000,000
Less, deferred income (169,907,697) - - - 169,907,697 -
Notes and equity in partially
owned companies 4,892,618 1,818,538 - - (2,711,156) 4,000,000
Property and equipment, at cost,
less accumulated depreciation 12,460,099 (694,981) - - 3,184,299 14,949,417
Broadcast licenses and other
intangible assets, less
accumulated amortization 46,398,883 (7,213,009) (3,296,385) (1,303,593) (21,381,896) 13,204,000
Investment in cellular
communication properties - - - - 11,500,000 11,500,000
Film broadcast rights 302,971 - - - - 302,971
Other assets 260,422 (260,422) 600,000 - - 600,000
Reorganization value in excess of
amounts allocable to
identifiable assets - - - - 1,276,094 1,276,094
Total assets $ 96,635,742 (11,876,201) (2,396,385) (1,303,593) (6,732,659) 74,326,904
(Continued)
PRICE COMMUNICATIONS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(17), Continued
Exchange of Old
Pre-Effective Subord. Debt and Exchange of
Date Balance Apollo Old Stock for Senior Debt for Fresh Start Reorganized
Sheet Transaction Common Stock Secured Notes Reporting Balance Sheet
Liabilities and Shareholders
Equity (Deficit)
Current liabilities:
Accounts payable and
accrued expenses $ 7,719,304 (2,398,728) - - (1,212,159) 4,108,417
Accrued interest 852,042 (852,042) - 350,835 - 350,835
Other current liabilities 7,558,602 (5,081,000) - - (493,533) 1,984,069
Repurchase agreement 4,930,083 - - - - 4,930,083
Long-term debt - current portion
net of unamortized discount 4,000,000 (4,000,000) - - - -
Total current liabilities 25,060,031 (12,331,770) - 350,835 (1,705,692) 11,373,404
Liabilities subject to compromise
under Chapter 11 proceedings 336,046,477 (27,068,331) (272,815,643) (36,162,503) - -
Long-term debt, net of
unamortized discount 41,000,000 (41,000,000) - 22,100,000 - 22,100,000
Other liabilities 310,295 (103,206) - - - 207,089
Shareholders equity (deficit):
Old Common Stock, par value $.01
per share; authorized 40,000,000
shares; outstanding:
9,028,890 shares 84,767 - (84,767) - - -
New Common Stock, par value $.01
per share; authorized 40,000,000
shares; outstanding:
12,109,583 - - 121,096 - - 121,096
Junior Common Stock, par value
$.01 per share; authorized,
issued and outsanding:
500,000 shares 5,000 - (5,000) - - -
Additional paid-in capital 27,955,172 - 39,178,222 - (26,608,079) 40,525,315
Accumulated deficit (333,826,000) 68,627,106 231,209,707 12,408,075 21,581,112 -
(305,781,061) 68,627,106 270,419,258 12,408,075 (5,026,967) 40,646,411
Total liabilities and shareholders
equity (deficit) $ 96,635,742 (11,876,201) (2,396,385) (1,303,593) (6,732,659) 74,326,904
The Apollo Transaction includes the sale of 75% of the Company's
interest in Alexandra Publishing Corporation, which owns The New
York Law Publishing Company. As a result of this transaction, the
Company will no longer consolidate its interest in these companies.
During 1992, The New York Law Publishing Company contributed
approximately $32.6 million to the Company's net revenue, $23.9
million to operating expenses and $1.6 million to depreciation and
amortization. The gain on the partial sale of publishing companies
and the gain from cancellation of indebtedness resulted in
extraordinary income of approximately $312.7 million which is net
of a tax provision of $900,000 relating to the sale of the
publishing companies. The gain resulting from the forgiveness of
debt is not taxable for Federal income tax purposes.
(18)Supplemental Cash
Flow Information
The following is a supplemental schedule of noncash investing
activities for
the years ended December 31, 1993, 1992 and 1991:
1993 1992 1991
Fairmont (Note 3):
Notes received - 8,983,281 11,064,240
Deferred income - (8,983,281) (11,064,240)
NTG (Note 11):
Dividends accumulated - 11,030,660 9,420,794
Deferred income - (11,030,660) (9,420,794)
/AUDIT-REPORT
PART III
The information called for by Items 10, 11, 12 and 13 is
incorporated herein by reference from the following portions of the
definitive proxy statement to be filed by the Company in connection
with its 1994 Meeting of Shareholders.
Item Incorporated from
Item 10. Directors and Executive Directors and Executive
Officers of the Company Officers
Item 11. Executive Compensation "Executive Compensation" and
"Certain Transactions"
Item 12. Security Ownership of "Principal Shareholders" and
Certain Beneficial "Securities Ownership of
Owners and Management Management"
Item 13. Certain Relationships "Executive Compensation" and
and Related Transactions "Certain Transactions"
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
(a) (1) and (2) List of financial statements and financial
statement schedules:
Independent Auditors' Reports
Consolidated Balance Sheets at December 31, 1993 and 1992
Consolidated Statements of Operations for Years ended
December 31, 1993, 1992 and 1991
Consolidated Statements of Shareholders' Equity (Deficit) for
Years ended December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows for the Years ended
December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements
III. Condensed Financial Information of Registrant
V. Property, Plant and Equipment
VI. Accumulated Depreciation and Amortization
of Property, Plant and Equipment
VIII. Valuation and Qualifying Accounts
X. Supplementary Income Statement Information
(Schedules other than those listed are omitted for
the reason that they are not required or are not
applicable or the required information is shown in
the financial statements or notes thereto.)
(3) Exhibits
See Exhibit Index at page E-l, which is incorporated
herein by reference.
(b) Reports on Form 8-K.
During the quarter ended December 31, 1993, Registrant
filed the following Current Reports on Form 8-K:
On October 14, 1993, Registrant filed a report on
Form 8-K wherein a disposition of assets occurring
on October 1, 1993 was reported at Item 2. No
financial statements were included in or as
exhibits to this Current Report.
On December 2, 1993, Registrant filed Amendment No.
1 to its Current Report on Form 8-K filed on
October 14, 1993. The Amendment No. 1 reported
certain recent developments and included certain
pro forma financial statements as Exhibit 99(ii).
Also on December 2, 1993, Registrant filed a report
on Form 8-K wherein a repurchase of Registrant's
common stock occurring on November 24, 1993, and
the institution of litigation against Registrant on
November 29, 1993, were reported at Item 5.
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Balance Sheets
December 31, 1993 and 1992
ASSETS: 1993 1992
Cash and cash equivalents $912,044 $8,471,613
Marketable securities - 9,778,100
Prepaid expenses and other current assets 2,023,123 1,264,003
Total current assets 2,935,167 19,513,716
Investments in and receivables from subsidiaries* 28,709,979 51,457,384
Property and equipment, net 166,693 238,000
Other 299,196 600,000
$32,111,035 $71,809,100
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and accrued expenses $885,599 $2,531,771
Accrued interest - 350,835
Other current liabilities 520,905 1,250,000
Repurchase agreement - 4,930,083
Total current liabilities 1,406,504 9,062,689
Long-term debt, net - 22,100,000
Shareholders' equity 30,704,531 40,646,411
$32,111,035 $71,809,100
* Eliminated in consolidation
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Statements of Operations
Year Ended December 31,
Reoganized
Company Predecessor Company
1993 1992 1991
Corporate expenses $3,648,524 $4,973,287 $6,123,146
Other expense - net 3,473,391 173,898 10,685,920
Interest expense 1,465,315 14,531,762 37,025,495
Amortization of debt discount and deferred debt expense 756,975 877,139 1,987,793
Depreciation and amortization 75,192 47,480 30,642
Unrealized noncash loss (recovery) on marketable securities 145,884 (145,884) (8,481,206)
Share of loss of partially owned company - - 4,734,087
(Earnings) loss of unconsolidated subsidiaries (5,850,243) (3,273,853) 4,973,060
Loss before reorganization items, income taxes
and extraordinary item (3,715,038) (17,183,829) (57,078,937)
Reorganization items - (5,802,959) -
Loss before income taxes
and extraordinary item (3,715,038) (22,986,788) (57,078,937)
Income tax benefit (expense) 115 (122,887) 454,553
Loss before extraordinary item (3,714,923) (23,109,675) (56,624,384)
Extraordinary item, net of income tax expense of 2,010,332 312,324,661 -
$900,000 in 1992
Net income (loss) $(1,704,591) $289,214,986 ($56,624,384)
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Statements of Cash Flows
Year Ended December 31,
Reoganized
Company Predecessor Company
1993 1992 1991
Cash flows used in operating activities:
Net income (loss) $(1,704,591) $289,214,986 ($56,624,384)
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Items not affecting cash:
Amortization of debt discount and deferred debt expense 756,975 877,139 1,987,793
Depreciation and amortization 75,192 47,480 30,642
Unrealized noncash loss (recovery) on marketable securities 145,884 (145,884) (8,481,206)
Share of loss of partially owned company - - 4,734,087
Reserve for loss on note receivable - - 1,000,000
(Earnings) loss of unconsolidated subsidiaries (5,850,243) (3,273,853) 4,973,060
Valuation adjustment, net of working capital valuation - 5,515,443 -
Change in assets and liabilities net of effects of reorganization:
Increase in prepaid expenses and other assets (458,316) (100,557) (534,926)
Decrease in due from broker/dealer - 237,498 1,499,371
(Decrease) increase in accounts payable and accrued expenses (1,646,172) 1,774,500 (200,083)
(Decrease) increase in other liabilities, net of forgiveness (729,095) (347,038) 1,968,059
(Decrease) increase in accrued interest, net of forgiveness (350,835) 14,477,864 37,015,303
Reclassification of transactions to investing and financing
activities:
Loss on purchase of common stock 3,976,597 - -
Gain on early extinguishments of debt (2,010,332) - -
Gain on forgiveness of debt and partial sale of subsidiary - (312,324,661) -
(Gain) loss on sale of securities, net (6,609) - 7,877,666
Recovery on note receivable - (50,000) -
Total adjustments (6,096,954) (293,312,069) 51,869,766
Net cash used in operating activities (7,801,545) (4,097,083) (4,754,618)
Cash flows provided by investing activities:
Cash received from (paid to) subsidiaries* 24,828,406 12,671,261 (216,177)
Purchases of marketable securities and mutual funds (36,704,873) (9,632,215) (1,696,818)
Purchases of securities under agreements to resell (8,050,811) - -
Proceeds from sales of marketable securities and mutual funds 54,394,512 - 6,388,825
Capital expenditures (3,885) (19,959) -
Investment in partially owned company (66,805) - -
Proceeds from note receivable - 50,000 -
Net cash provided by investing activities 34,396,544 3,069,087 4,475,830
Cash flows (used in) provided by financing activities:
Repurchases of long-term debt (20,846,643) - -
Purchases of common stock (8,434,058) - -
Proceeds from stock options exercised 56,216 - -
Net (repayments of) borrowings under repurchase agreements (4,930,083) 4,930,083 -
Net cash (used in) provided by financing activities (34,154,568) 4,930,083 -
Net (decrease) increase in cash and cash equivalents (7,559,569) 3,902,087 (278,788)
Cash and cash equivalents at beginning of year 8,471,613 4,569,526 4,848,314
Cash and cash equivalents at end of year $912,044 $8,471,613 $4,569,526
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes, net of refunds $158,251 $53,898 $72,906
Interest $1,816,150 $16,054 $10,193
Chapter 11 items:
Interest received - $357,000 -
Professional and administrative expenses paid 26,085 $505,144 -
* Eliminated in consolidation
/TABLE
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
1993, 1992 and 1991
Balance at
Beginning Additions Sale of Balance at
Classification of Period at Cost Retirements Business Fresh Start End of Period
For the year ended
December 31, 1993:
Land $2,328,000 $0 $0 $0 $0 $2,328,000
Buildings $3,439,000 $29,209 $0 $0 $0 $3,468,209
Broadcasting equipment 7,315,000 405,940 0 0 0 7,720,940
Outdoor fixtures 756,417 44,903 0 0 0 801,320
Leasehold improvements 229,000 783 0 0 0 229,783
Furniture and fixtures 541,000 79,509 (639) 0 0 619,870
Transportation equipment 341,000 91,814 0 0 0 432,814
Total 1993 $14,949,417 $652,158 ($639) $0 $0 $15,600,936
For the year ended
December 31, 1992:
Land $3,937,711 $0 $0 $0 ($1,609,711) $2,328,000
Buildings $3,509,639 $69,115 $0 $0 ($139,754) $3,439,000
Broadcasting equipment 14,872,325 231,232 (619,029) 0 (7,169,528) 7,315,000
Publishing equipment 1,912,419 225,121 (1,426,011) (711,529) 0 0
Outdoor fixtures 1,828,466 19,233 (13,154) 0 (1,078,128) 756,417
Leasehold improvements 1,102,557 5,184 (26,605) (760,800) (91,336) 229,000
Furniture and fixtures 2,852,239 177,840 (771,906) (659,002) (1,058,171) 541,000
Transportation equipment 790,103 174,410 (183,874) 0 (439,639) 341,000
Total 1992 $30,805,459 $902,135 ($3,040,579) ($2,131,331) ($11,586,267) $14,949,417
For the year ended
December 31, 1991:
Land $3,937,711 $0 $0 $0 $0 $3,937,711
Buildings $3,501,458 $8,181 $0 $0 $0 $3,509,639
Broadcasting equipment 14,709,001 246,240 (82,916) 0 0 14,872,325
Publishing equipment 1,889,641 22,778 0 0 0 1,912,419
Outdoor fixtures 1,810,928 21,924 (4,386) 0 0 1,828,466
Leasehold improvements 1,117,069 0 (14,512) 0 0 1,102,557
Furniture and fixtures 2,607,913 250,826 (6,500) 0 0 2,852,239
Transportation equipment 741,297 115,413 (66,607) 0 0 790,103
Total 1991 $30,315,018 $665,362 ($174,921) $0 $0 $30,805,459
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION of PROPERTY, PLANT AND EQUIPMENT
1993, 1992 and 1991
Balance at
Beginning Depreciation Sale of Balance at
Classification of Period Expense Retirements Business Fresh Start End of Period
For the year ended
December 31, 1993:
Buildings $0 $327,451 $0 $0 $0 $327,451
Broadcasting equipment 0 1,036,932 0 0 0 1,036,932
Outdoor fixtures 0 126,070 0 0 0 126,070
Leasehold improvements 0 69,529 0 0 0 69,529
Furniture and fixtures 0 142,676 0 0 0 142,676
Transportation equipment 0 170,107 0 0 0 170,107
Total 1993 $0 $1,872,765 $0 $0 $0 $1,872,765
For the year ended
December 31, 1992:
Buildings $2,468,980 $403,740 $0 $0 ($2,872,720) $0
Broadcasting equipment 8,051,152 1,319,268 (284,477) 0 (9,085,943) 0
Publishing equipment 1,487,764 155,323 (1,425,242) (324,003) 106,158 0
Outdoor fixtures 950,211 217,217 (9,647) 0 (1,157,781) 0
Leasehold improvements 797,102 109,880 (26,605) (638,336) (242,041) 0
Furniture and fixtures 1,863,753 362,328 (770,430) (474,011) (981,640) 0
Transportation equipment 619,187 79,567 (162,154) 0 (536,600) 0
Total 1992 $16,238,149 $2,647,323 ($2,678,555) ($1,436,350) ($14,770,567) $0
For the year ended
December 31, 1991:
Buildings $2,070,719 $398,261 $0 $0 $0 $2,468,980
Broadcasting equipment 6,812,240 1,265,060 (26,148) 0 0 8,051,152
Publishing equipment 1,170,938 316,826 0 0 0 1,487,764
Outdoor fixtures 796,101 154,271 (161) 0 0 950,211
Leasehold improvements 680,580 116,522 0 0 0 797,102
Furniture and fixtures 1,495,297 368,456 0 0 0 1,863,753
Transportation equipment 626,909 58,886 (66,608) 0 0 619,187
Total 1991 $13,652,784 $2,678,282 ($92,917) $0 $0 $16,238,149
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
DECEMBER 1993, 1992 AND 1991
Balance at Additions Balance at
Beginning Charged to End of
Description of Period Expenses Deductions (a) Period
For the year ended
December 31, 1993:
Allowance for
doubtful accounts $565,351 $263,909 ($341,684) $487,576
For the year ended
December 31, 1992:
Allowance for
doubtful accounts $612,438 $513,908 ($560,995)(b) $565,351
For the year ended
December 31, 1991:
Allowance for
doubtful accounts $418,283 $780,039 ($585,884) $612,438
(a) Amounts written off as uncollectible and payments.
(b) $85,000 relates to the partial sale of companies in 1992.
/TABLE
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
Year Ended December 31
Reorganized
Company Predecessor Company
Classification 1993 1992 1991
Maintenance and repairs $331,325 $569,556 $556,317
Royalties $404,205 $324,763 $374,936
Advertising $656,275 $3,379,941 $2,768,538
Securities and Exchange Commission
Washington, D.C. 20549
Price Communications Corporation
Commission File No. 1-8309
Annual Report on Form 10-K
for the year ended December 31, 1993
Exhibits
Item 14(a)(3).
EXHIBIT INDEX
Item 14(a)(3)
Price Communications Corporation
Annual Report on Form 10-K for the year ended
December 31, 1993
Page
(3)(a)
Restated Certificate of Incorporation of the
Registrant as filed with the Secretary of
State of the State of New York on
December 29, 1992, incorporated by reference
to Exhibit 3(a) to Registrant's Form 10-K
for the year ended December 31, 1992.
(b)
Restated Bylaws of the Registrant.
(4)(a)
Indenture dated as of December 30, 1992
between the Registrant and IBJ Schroder Bank
& Trust Company, as trustee, relating to the
Company's 5% Senior Secured Notes due 1999
(the "Indenture"), incorporated by reference
to Exhibit 4(a) to Registrant's Form 10-K
for the year ended December 31, 1992.
(b)
Pledge, Intercreditor and Collateral Agency
Agreement dated as of December 30, 1992,
among the Registrant, IBJ Schroder Bank &
Trust Company, as Trustee under the
Indenture, and IBJ Schroder Bank & Trust
Company, as Collateral Agent, incorporated
by reference to Exhibit 4(b) to Registrant's
Form 10-K for the year ended December 31,
1992.
(10)(a)
The Registrant's 1992 Long Term Incentive
Plan, incorporated by reference to Exhibit
10(a) to Registrant's Form 10-K for the year
ended December 31, 1992.
(b)
Amended and Restated Employment Agreement
dated as of May 8, 1992 between The New York
Law Publishing Company and Robert Price,
incorporated by reference to Exhibit 10(b)
to Registrant's Form 10-K for the year ended
December 31, 1992.
(c) Employment Agreement with Robert Price,
dated May 8, 1992, incorporated by reference
to Exhibit 10(c) to Registrant's Form 10-K
for the year ended December 31, 1992.
(d)
Agreement dated May 8, 1992 between the
Registrant and Robert Price with respect to
PriCellular Corporation, incorporated by
reference to Exhibit 10(d) to Registrant's
Form 10-K for the year ended December 31,
1992.
(e)
Amended and Restated Stock Purchase
Agreement dated as of May 8, 1992 among the
Registrant, Price Publishing Corporation,
Alexandra Publishing Corporation, The New
York Law Publishing Company and Apollo
Investment Fund, L.P., incorporated by
reference to Exhibit 10(e) to Registrant's
Form 10-K for the year ended December 31,
1992.
(f)
Amended and Restated Shareholders Agreement
dated as of May 8, 1992 among the
Registrant, Apollo Investment Fund, L.P.,
Price Publishing Corporation, Alexandra
Publishing Corporation, and The New York Law
Publishing Company, incorporated by
reference to Exhibit 10(f) to Registrant's
Form 10-K for the year ended December 31,
1992.
(g)
Registration Rights Undertaking,
incorporated by reference to Exhibit 10(g)
to Registrant's Form 10-K for the year ended
December 31, 1992.
(h)
Warrant Agreement dated April 12, 1990
between Price Communications Corporation and
Warner Communications Investors, Inc.,
incorporated by reference to Exhibit (4) to
Registrant's Form 8-K filed to report an
event of April 12, 1990.
(i)
Form of Amendment to Time Warner Warrant,
incorporated by reference to Exhibit 10(i)
to Registrant's Form 10-K for the year ended
December 31, 1992.
(j)
Stock Purchase Agreement, dated as of
April 27, 1987, among Registrant, Republic
Broadcasting Corporation and Fairfield
Broadcasting, Inc., as amended July 16,
1987, incorporated by reference to Annex I
to Registrant's Definitive Proxy Statement
dated July 27, 1987.
(k)
Notes and Stock Purchase Agreement between
and among Fairfield Broadcasting, Inc.,
Price Communications Corporation and
Republic Broadcasting Corporation dated as
of September 30, 1987, as amended,
incorporated by reference to Exhibit 10(a)
to Registration Statement on Form S-1 (File
No. 33-30318).
(l)
Stockholders' Agreement among Fairfield
Broadcasting, Inc., Price Communications
Corporation, Citicorp Venture Capital Ltd.,
Osborn Communications Corporation and
Prudential-Bache Interfunding Inc., dated as
of September 30, 1987, incorporated by
reference to Exhibit 10(b) to Registration
Statement on Form S-1 (File No. 33-30318).
(m)
Asset Purchase Agreement by and among NTG,
Inc., Price Communications Corporation and
Western Michigan Broadcasting Corporation,
Rhode Island Broadcasting Corporation,
Magnolia Broadcasting Corporation and
Keystone Broadcasting Corporation, dated as
of June 28, 1989, incorporated by reference
to Exhibit 10(c) to Registration Statement
on Form S-1 (File No. 33-30318).
(n)
Stock Purchase Agreement between NTG
Holdings, Inc. and Price Communications
Corporation, dated as of June 28, 1989,
incorporated by reference to Exhibit 10(d)
to Registration Statement on Form S-1 (File
No. 33-30318).
(o)
Network Affiliation Agreement, dated
September 10, 1982, between National
Broadcasting Company, Inc. and Tri-State
Broadcasting Corporation, as amended
(KSNF-TV), incorporated by reference to
Exhibit 10(v) to Registration Statement on
Form S-1 (File No. 33-30318).
(p)
Network Affiliation Agreement, dated
April 22, 1989, between National
Broadcasting Company, Inc. and Continental
Broadcasting Corporation (KJAC-TV),
incorporated by reference to Exhibit 10(w)
to Registration Statement on Form S-1 (File
No. 33-30318).
(q)
Network Affiliation Agreement, dated
January 1, 1981, between National
Broadcasting Company, Inc. and Clay
Broadcasting Corporation of Texas, as
amended (KFDX-TV), incorporated by reference
to Exhibit 10(x) to Registration Statement
on Form S-1 (File No. 33-30318).
(r)
Stock Purchase Agreement dated March 1, 1990
among Time Warner Inc., Warner
Communications Investors, Inc., Price
Communications Corporation, and PriCellular
Corporation, incorporated by reference to
Exhibit (1) to Registrant's Form 8-K filed
to report events of April 12, 1990.
(s)
Amendment No. 1 to Stock Purchase Agreement
dated April 6, 1990, among Time Warner Inc.,
Warner Communications Investors, Inc., Price
Communications Corporation, and PriCellular
Corporation, incorporated by reference to
Exhibit (2) to Registrant's Form 8-K filed
to report an event of April 12, 1990.
(t)
Stock Option Agreement, dated April 12, 1990
between PriCellular Corporation and Warner
Communications Investors, Inc., incorporated
by reference to Exhibit (3) to Registrant's
Form 8-K filed to report an event of
April 12, 1990.
(u)
Line of Credit Agreement, dated as of
December 21, 1993, among Atlantic
Broadcasting Corporation, Southeast Texas
Broadcasting Corporation, Texoma
Broadcasting Corporation, Tri-State
Broadcasting Corporation, the Lenders
Parties Thereto and the Bank of Montreal.
(v)
Securities Purchase Agreement, dated
December 30, 1993, among Apple Publishing
Corporation, Price Communications
Corporation, Equity-Linked Investors, L.P.
and Equity-Linked Investors-II.
(w)
Agreement dated November 19, 1993, between
Price Communications Corporation, Apple
Publishing Corporation, the Sellers listed
on Exhibit A thereto and W.R. Huff Asset
Management Co., L.P.
(x)
Stock Purchase Agreement, dated as of
October 1, 1993, by and between Price
Communications Cellular, Inc., Price
Communications Corporation and Atlas
Cellular Corporation, incorporated by
reference to Exhibit 10 to Registrant's
Form 8-K filed to report an event of October
1, 1993.
(y)
Form of Indemnification Agreement between
Registrant and its officers and directors.
(11)
Statement regarding computation of per share
earnings (omitted; computation can be
clearly determined from material contained
in the Report).
(22)
Subsidiaries of Registrant
(24.2) Consent of Ernst & Young
Consent of KPMG Peat Marwick
(25)
The powers of attorney to sign amendments to
this Report appear on the signature page.
EXHIBIT 22
Subsidiaries of Price Communications Corporation as of December 31,
1993.
Name of Subsidiary State of Incorporation
Atlantic Broadcasting Corporation Delaware
Republic Broadcasting Corporation New York
Wayne Broadcasting Corporation Indiana
Huntington Broadcasting Corporation Delaware
Federal Broadcasting Corporation New York
Atlas Broadcasting Corporation New York
Eagle Broadcasting Corporation Delaware
Price Outdoor Media Corporation of America Delaware
Price Outdoor Media of Missouri Inc. Delaware
Apple Publishing Corporation Delaware
The Red Bank Register New Jersey
Empire State Broadcasting Corporation Delaware
Eimar Realty Corporation Delaware
Continental Broadcasting Corporation Delaware
Texoma Broadcasting Corporation Texas
Tri-State Broadcasting Corporation Delaware
Southeast Texas Broadcasting Corporation Texas
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the
Securities and Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
PRICE COMMUNICATIONS CORPORATION
By/s/ Robert Price
Robert Price, President
Dated: March 31, 1994
Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated. Each person
whose signature appears below hereby authorizes and appoints Robert Price as
his attorney-in-fact to sign and file in his behalf individually and in each
capacity stated below any and all amendments to this Annual Report.
Dated: March 31, l994 By/s/ Robert Price
Robert Price, Director
and President
(Principal Executive Officer,
Financial Officer and
Accounting Officer)
Dated: March 31, l994 By/s/ George H. Cadgene
George H. Cadgene,
Director
Dated: March 31, 1994 By/s/ Harold A. Christiansen
Harold A. Christiansen,
Director
Dated: March 31, 1994 By/s/ James H. Duncan., Jr.
James H. Duncan Jr.,
Director
Dated: March 31, l994 By/s/ Robert F. Ellsworth
Robert F. Ellsworth,
Director
Dated: March 31, 1994 By/s/ Kim I. Pressman
Kim I. Pressman
Director