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| TVL > SEC Filings for TVL > Form 8-K on 4-Oct-2012 | All Recent SEC Filings |
4-Oct-2012
Regulation FD Disclosure, Financial Statements and Exhibits
On October 4, 2012, LIN TV Corp. ("LIN TV") issued a press release entitled "LIN TV Announces $290 Million Senior Notes Offering by LIN Television Corporation." A copy of this press release has been furnished with this Current Report on Form 8-K as Exhibit 99.1. LIN TV Corp. is furnishing the other information in this Form 8-K together with such press release.
The information in this Form 8-K (including Exhibit 99.1) shall not be deemed "filed" under the Securities Exchange Act of 1934 (the "Exchange Act") nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act except as expressly set forth by specific reference in such a filing.
Offering of Senior Notes
Unless otherwise indicated or the context otherwise requires, the terms "LIN Television," the "Company," "we," "us" or "our" refer to LIN Television Corporation and its consolidated subsidiaries and include after giving effect to the acquisition (the "Acquisition"), the assets of 13 network-affiliates (the "Acquired Stations") from NVT Networks, LLC, NVT License Company, LLC and their respective subsidiaries (collectively, "New Vision Television" or "NVT"), but other than as specifically referred to or as described and reflected in certain consolidated financial data included in this Form 8-K, not giving effect to our agreement to provide certain services to five separately owned network-affiliates (together with the Acquired Stations, the "Acquired or Serviced Stations") currently serviced by NVT pursuant to sharing arrangements with Vaughan Acquisition LLC ("Vaughan"), a third-party licensee, upon the closing of the Acquisition (the "Vaughan Transaction"), and, unless the context indicates otherwise, do not refer to our parent company, LIN TV.
On October 4, 2012, LIN Television intends to commence a private offering to eligible purchasers, subject to market conditions and other factors, of $290 million principal amount Senior Notes due 2021 (the "notes"). The net proceeds from the sale of the notes and cash on hand and/or revolving borrowings under our senior secured credit facility will be used to finance the Acquisition and to pay related fees and expenses.
Market and industry data and forecasts used in this Form 8-K are estimates and have been obtained from a combination of our own internal company surveys, independent industry publications and reports by professional organizations, including Nielsen Media Research, Inc. ("Nielsen"), comScore, Inc. ("comScore") and SNL Kagan, a division of SNL Financial LC ("SNL Kagan"). Although we believe these third-party sources and the related estimates to be reliable, we have not independently verified the data obtained from these sources and these sources have neither reviewed nor approved the data included in this Form 8-K. Accordingly, we cannot assure you of the accuracy or completeness of the data.
The notes have not been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States except with an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This Current Report does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering, solicitation or sale would be unlawful.
Set forth below is certain information regarding the Acquisition and other related transactions disclosed in connection with the offering:
On May 4, 2012, we entered into a definitive agreement, as amended (the "Purchase Agreement") to acquire certain broadcast and other related assets for 13 network-affiliates (including 10 that are affiliated with ABC, CBS, FOX or NBC (the "Big 4")) owned by NVT in eight U.S. markets for $334.9 million, subject to post-closing adjustments, and the assumption of approximately $12.2 million of finance lease obligations. Pursuant to the terms of the acquisition agreement, we made a $33.5 million deposit into an escrow account using cash on hand, funded in part by $29.5 million of proceeds from the recent sales of WUPW-TV (our standalone FOX affiliate in Toledo, OH) and WWHO-TV (our standalone CW affiliate in Columbus, OH). This deposit will be applied to the payment of the purchase price at closing. We intend to fund the remaining purchase price of $301.4 million due at closing with the net proceeds of the offering of the notes, together with cash on hand and/or from revolving borrowings under our senior secured credit facility.
We also agreed to provide certain services to five separately owned network-affiliates (the "Vaughan Acquired Stations") which include three that are affiliated with ABC or FOX. The Vaughan Acquired Stations are currently owned by PBC Broadcasting, LLC ("PBC") and operated by PBC with certain services from NVT. The Acquisition and the Vaughan Transaction are conditioned upon the consummation of the other. Under the services arrangements with Vaughan, we will provide sales, administrative and technical services, supporting the business and operation of the Vaughan Acquired Stations in exchange for commissions and fees that will provide us the benefit of certain returns from the business of the Vaughan Acquired Stations. In addition, we may, at our option (subject to regulatory approval) purchase assets of Vaughan relating to the Vaughan Acquired Stations in accordance with the terms of the option agreements among us, Vaughan and the licensees of the applicable Vaughan Acquired Stations. We expect that Vaughan will be considered a variable interest entity (a "VIE"), of which we are the primary beneficiary, and that we will consolidate the assets, liabilities, and results of operations of Vaughan and its consolidated subsidiaries.
The foregoing transactions described above are collectively referred to herein as the "Transactions."
Set forth below is certain information with respect to expected results of Transactions disclosed in connection with the offering:
Following the consummation of the Transactions:
† We will own, operate or service 50 network-affiliates in 23 U.S. markets;
† we will increase our market diversification, add six duopoly markets and add network-affiliates that are ranked #1 or #2 in five out of eight markets;
† we expect our added scale will allow us to maintain leverage in working with networks, pay-TV operators and other vendors;
† we will add only limited additional corporate overhead;
† on a pro forma basis, we would have generated $558.2 million in net revenues and $179.7 million in Adjusted EBITDA for the twelve months ended June 30, 2012; and
† on a pro forma basis, we expect our total leverage at year end to be about 3.5 times.
Set forth below is certain information with respect to our expected new portfolio of stations disclosed in connection with the offering:
The following table sets forth information about the Acquired or Serviced Stations that we will own, operate or service upon the completion of the Transactions:
DMA FCC license
Market Rank(1) Station Affiliation(s) Status(2) expiration
Portland, OR 22 KOIN-TV(3) CBS 2/1/2015
Birmingham, AL 39 WIAT-TV CBS 4/1/2013
Wichita, KS 67 KSNW-TV(3) NBC 6/1/2014
KSNG-TV-D2 TEL 6/1/2014
Honolulu, HI 71 KHON-TV(3) FOX 2/1/2015
KHON-TV-D2 CW 2/1/2015
Savannah, GA 92 WJCL-TV ABC 4/1/2013
WTGS-TV FOX SSA/JSA 12/1/2012
Youngstown, OH 110 WKBN-TV CBS 10/1/2013
WYFX-LD FOX 10/1/2013
WYTV-DT ABC SSA/JSA 10/1/2013
WYTV-DT-D2 MNTV SSA/JSA 10/1/2013
Topeka, KS 136 KSNT-TV(3) NBC 6/1/2014
KTMJ-CD FOX 6/1/2014
KTKA-TV ABC SSA/JSA 6/1/2014
KTKA-TV-D2 CW SSA/JSA 6/1/2014
Mason City, IA 153 KIMT-TV CBS 2/1/2014
KIMT-TV-D2 MNTV 2/1/2014
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(2) We own and operate all of our network-affiliates except for those noted
(i) as "SSA" which indicates stations to which we provide technical,
engineering, promotional, administrative and other operational support services
under a shared services agreement and (ii) as "JSA" which indicates stations to
which we provide advertising sales services under a joint sales agreement.
(3) KOIN-TV and KSNT-TV each includes a group of low-power stations. KHON-TV includes two satellite stations, KHAW-TV and KAII-TV. KSNW-TV includes KSNC(TV), KSNG(TV) and KSNK(TV) as satellite stations and KSNL-LD as a translator. We own or will own, operate or service all of these satellite stations and low-power stations, which broadcast either identical programming as the primary station or programming specific to such channel.
Set forth below is certain information with respect to our corporate structure and joint venture disclosed in connection with the offering:
The following chart provides an overview of our corporate structure, including our investment in the NBCUniversal Media, LLC joint venture. All amounts shown are as of June 30, 2012, on a pro forma basis after giving effect to the Transactions.
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Set forth below is certain information with respect to certain of our risk factors disclosed in connection with the offering:
We have a substantial amount of indebtedness, which could adversely affect our financial position and prevent us from fulfilling our obligations under the notes.
We currently have, and following the offering of the notes will continue to have, a substantial amount of indebtedness. As of June 30, 2012, on a pro forma basis giving effect to the Transactions, we would have had total debt of approximately $922.9 million reflected on our consolidated balance sheet, consisting of $290 million of notes offered, $200 million outstanding of our 2018 Senior Notes (the "2018 Senior Notes"), $415.3 million of borrowings under our senior secured credit facility, $12.2 million of assumed finance lease obligations formerly of New Vision Television, and $5.4 million of other debt, and we would have had $40.4 million of revolving borrowing capacity remaining under our senior secured credit facility. Subject to the limitations in our senior secured credit facility and the indentures governing our 2018 Senior Notes and the notes offered, we may also incur significant additional indebtedness in the future. Our substantial indebtedness may:
† make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on the notes and our other indebtedness;
† limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions or other general business purposes;
† limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general business purposes;
† require us to use a substantial portion of our cash flow from operations to make debt service payments;
† limit our flexibility to plan for, or react to, changes in our business and industry;
† place us at a competitive disadvantage compared to our less leveraged competitors; and
† increase our vulnerability to the impact of adverse economic and industry conditions.
Further, our borrowings under our senior secured credit facility are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.
Despite our current level of indebtedness, we may still be able to incur substantial additional indebtedness in the future, which could increase the risks described above.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of our senior secured credit facility and the indenture governing our 2018 Senior Notes limit, and the terms of the indenture . . .
(d) Exhibits
See Exhibit Index attached hereto.
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