LIN TV Corp. (“LIN”; NYSE: TVL), a local multimedia company,
announced today that it has entered into and closed a transaction
agreement with Comcast Corporation (“Comcast”), affiliates of
NBCUniversal Media, LLC (“NBC”), General Electric Company (“GE”)
and General Electric Capital Corporation (“GECC”) pursuant to which
a wholly-owned subsidiary of LIN exited its joint venture with NBC
and LIN was released from its guaranty of the $815.5 million note
payable by this joint venture to GECC (the “Note”). In exchange, a
wholly-owned subsidiary of LIN made a $100 million capital
contribution to the joint venture (which was used to pay down the
Note to $715.5 million), NBC purchased the Note from GECC for $602
million and GECC canceled the remaining Note balance of $113.5
million (the “Comcast / GE Transaction”).
As a result of the Comcast / GE Transaction, LIN will recognize
a taxable gain of $715.5 million. We estimate that approximately
$142 million of this gain will be characterized as ordinary income
and the remaining gain of $573 million as capital gains. LIN
intends to use its federal net operating loss carryforwards
(“NOLs”) (as of December 31, 2012, we have approximately $269
million of federal NOLs) to shelter the ordinary income. In order
to offset, in whole or in part, the tax liability related to such
capital gains, concurrently with the closing of the Comcast / GE
Transaction, LIN entered into an agreement and plan of merger with
a newly formed, wholly-owned limited liability company subsidiary
(“LIN Media LLC”). Subject to LIN stockholder approval and pursuant
to the merger agreement, LIN will be merged with and into LIN Media
LLC with LIN Media LLC continuing as the surviving entity (the “LLC
Conversion”).
The LLC Conversion will have the effect of converting LIN’s form
of organization from a corporation to a limited liability company
structure with such conversion treated as a tax liquidation of LIN
for federal and state income tax purposes. The LLC Conversion is
expected to allow LIN to realize a built-in-capital-loss between
its tax basis in the stock of its subsidiary, LIN Television
Corporation, and the fair market value of this stock at the closing
date of this transaction and use such capital loss to offset, in
whole or in part, the capital gains recognized in the Comcast / GE
Transaction.
Funding for the $100 million capital contribution to the NBC JV
and transaction fees and expenses of approximately $7 million was
provided by a combination of cash on hand, borrowings under LIN
Television Corporation’s revolving credit facility and a new
incremental term loan under its existing senior secured credit
facility. This incremental facility is a five-year, $60 million
term loan, priced at LIBOR+300bps, with a 1% LIBOR floor.
Commenting on the Comcast / GE Transaction, LIN’s President and
Chief Executive Officer Vincent L. Sadusky said: “We are very
excited about this transaction because it is the first step in
resolving once and for all the NBC JV guarantee and tax overhangs
that have in recent years limited our strategic options and have
kept some investors on the sidelines. We plan to move as rapidly as
practical to execute the merger that will cause the LLC Conversion
and expect to close this transaction within the next four to six
months.”
LLC Conversion Transaction
Overview
The LLC Conversion will be effectuated by merging LIN into LIN
Media LLC, whereby upon completion of the merger LIN Media LLC will
be the surviving entity. We expect to be able to complete this
transaction within the next four to six months, depending largely
on how long it takes to complete the SEC review of the necessary
registration statement and proxy materials and the time it takes to
solicit and complete the formal vote and approval of our
shareholders along with other customary closing conditions. Based
on this plan, shares of LIN (classes A, B and C) will convert into
like shares representing limited liability company interests of LIN
Media LLC on a one to one basis with substantially equivalent
interests and privileges (e.g., class A to class A).
The LLC Conversion is expected to generate sufficient capital
losses to fully offset the capital gains recognized in the Comcast
/ GE Transaction if LIN’s stock price at the closing of the LLC
Conversion is less than or equal to approximately $10.75 per share.
At closing prices greater than this amount up to approximately
$12.20 per share, LIN is expected to consume its remaining NOLs to
fully offset the recognized capital gains. For each added $1.00 per
share that LIN’s stock price exceeds $12.20 at closing, we expect
to incur cash income taxes of approximately $19 million. For
example, if LIN’s stock price at the closing of the LLC Conversion
was $14.20 per share, we would expect to incur cash taxes of
approximately $38 million to satisfy the federal and state income
tax liability related to the unsheltered portion of the recognized
capital gains.
If the LLC Conversion closes at a stock price of less than or
equal to approximately $10.75 per share, we expect to be able to
preserve approximately $119 million of NOLs and we project that LIN
Media LLC would first become a full cash tax payer (based on
taxable income generated from operations) by the end of 2015. If
our stock price exceeds approximately $12.20 per share at closing,
we project that LIN Media LLC will first become a full cash tax
payer (based on taxable income generated from operations) before
the end of 2013.
Stockholder Implications
From the perspective of our stockholders, the LLC Conversion
will be a taxable event. We expect that stockholders will recognize
a gain or possibly a loss at the closing date of the LLC Conversion
as if they sold their LIN shares at the stock price used to
effectuate the transaction. In the registration statement and proxy
materials that we will file in connection with the LLC Conversion,
we will urge each of our stockholders to consult their tax advisor
regarding the tax consequences that the merger will have on them.
We believe that these consequences may cause some of our
stockholders to sell a portion of their LIN shares to cover their
expected income tax liability.
Subsequent to the closing of the LLC Conversion, LIN Media LLC
will be treated as a partnership for purposes of federal and state
income taxes and, as a result, it will provide its shareholders
with an annual Schedule K-1 (IRS Form 1065). As LIN Media LLC, like
LIN, will merely be a holding company with the stock of LIN
Television Corporation as its only asset, this Schedule K-1 will
reflect no activity unless LIN Television Corporation makes a
distribution to or has other activity with LIN Media LLC.
Accounting Implications
LIN will accrue for the Comcast / GE Transaction as of December
31, 2012 to reflect the financial settlement of the related
guarantee obligation that existed at this balance sheet date. LIN
will also account for the related income tax implications of this
transaction, which will result in the recognition of a current
federal and state income tax liability of approximately $164
million as of December 31, 2012. As detailed in the accompanying
pro forma accounting analysis, this income tax liability is
expected to be reversed upon the completion of the LLC Conversion,
assuming LIN’s stock price at that time is less than or equal to
approximately $10.75 per share.
NBC Long-Term Affiliation
Agreement
LIN also entered into an agreement with NBC for the renewal of
the affiliation agreements for all 7 television stations plus
satellites LIN owns that are currently affiliated with NBC. The new
agreements went into effect January 1, 2013 and expire January 1,
2017.
Conference Call
On February 13, 2013, at 10:30 AM Eastern Time, LIN will discuss
the transactions on a conference call. To participate in the call,
please dial (888) 503-8169 for U.S. callers and (719) 325-2144 for
international callers. The call-in pass code is 4479577. It is
recommended that participants dial-in 10 minutes before the start
of the call to ensure access. A replay of the call will be
available through February 27, 2013 by dialing (888) 203-1112 and
entering the same pass code as above. The conference call will also
be webcast simultaneously from LIN Media's web site,
www.linmedia.com, and can be accessed there through a link on the
home page (under Latest LIN Media News) or on the Investor
Relations page (under Events).
Advisers
Deutsche Bank Securities Inc. is acting as financial adviser to
LIN, and Weil, Gotshal & Manges LLP is acting as LIN’s legal
adviser.
About LIN
LIN is a local multimedia company that operates or services 43
television stations and seven digital channels in 23 U.S. markets,
along with a diverse portfolio of web sites, apps and mobile
products that make it more convenient to access its unique and
relevant content on multiple screens.
LIN’s highly-rated television stations deliver important local
news and community stories along with top-rated sports and
entertainment programming to 10.5% of U.S. television homes. LIN’s
digital media operations focus on emerging media and interactive
technologies that deliver performance-driven digital marketing
solutions to some of the nation’s most respected agencies and
brands. LIN is traded on the NYSE under the symbol “TVL”.
Forward-Looking
Statements
This press release includes statements that constitute
"forward-looking statements," including statements regarding our
future plans and operations. Forward-looking statements inherently
involve risks and uncertainties that could cause our actual results
to differ materially from the forward-looking statements. Factors
that could contribute to such differences include, but are not
limited to, the risks outlined in the press release and other risks
detailed in our periodic reports filed with the Securities and
Exchange Commission. Reports may be accessed online at www.sec.gov
or www.linmedia.com. By making these forward-looking statements, we
undertake no obligation to update these statements for revisions or
changes after the date of this press release.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE
SEC
This communication is not a solicitation of a proxy from any
security holder of LIN. The merger will be submitted to LIN’s
stockholders for their consideration, and in connection with such
consideration, LIN and LIN Media LLC (“LIN Media LLC”) expect to
file with the Securities and Exchange Commission (“SEC”) a
definitive proxy statement/prospectus to be used to solicit LIN
stockholder approval of the merger, as well as other relevant
documents concerning the proposed merger, as part of a registration
statement related to class A common shares of LIN Media LLC.
Security holders are urged to read the proxy
statement/prospectus, registration statement and any other relevant
documents when they become available because they will contain
important information about LIN, LIN Media LLC and the
merger, including its terms and anticipated effect and risks to be
considered by LIN’s stockholders in connection with the merger.
The proxy statement/prospectus and other documents relating to the
merger (when they are available) can be obtained free of charge
from the SEC’s website at www.sec.gov. The documents (when they are
available) can also be obtained free of charge from LIN on its
website (www.linmedia.com) or upon written request to LIN TV Corp.,
Attention: Secretary, One West Exchange Street, Suite 5A,
Providence, Rhode Island 02903, or by calling (401) 454-2880.
Information on LIN’s website does not constitute a part of this
press release.
PARTICIPANTS IN THE SOLICITATION
In addition, LIN and its officers and directors may be deemed to
be participants in the solicitation of proxies from LIN
stockholders with respect to the merger. A description of any
interests that LIN’s officers and directors may have in the merger
will be available in the proxy statement/prospectus when it becomes
available. Information concerning LIN’s directors and executive
officers is set forth in LIN’s proxy statement for its 2012 annual
meeting of stockholders, which was filed with the SEC on April 12,
2012 and its Annual Report on Form 10-K, which was filed with the
SEC on March 15, 2012. These documents are available free of charge
at the SEC’s web site at www.sec.gov or by going to the investor
relations page on LIN’s website at www.linmedia.com.
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
Statements in this document regarding the merger of LIN and LIN
Media LLC, the expected timetable for completing the proposed
merger, future financial and operating effects and benefits of the
proposed merger, financial condition, results of operations and
business and any other statements about LIN or LIN Media LLC
managements’ future expectations, beliefs, goals, plans or
prospects constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995 and
as defined in Section 27A of the Securities Act and Section 21E of
the Exchange Act. These statements are subject to risks and
uncertainties and are based on the beliefs and assumptions of LIN’s
management, based on information currently available to our
management. Forward-looking statements can be identified by the use
of the future tense or other forward-looking words such as
“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,”
“should,” “may,” “will,” “objective,” “projection,” “forecast,”
“management believes,” “continue,” “strategy,” “position” or the
negative of those terms or other variations of them or by
comparable terminology. All of these forward-looking statements are
based on estimates and assumptions made by LIN’s management, which,
although it believes them to be reasonable, are inherently
uncertain. Therefore, you should not place undue reliance upon such
estimates or statements. LIN cannot assure you that any of such
estimates or statements will be realized and actual results may
differ materially from those contemplated by such forward-looking
statements. There are a number of important factors that could
cause actual results or events to differ materially from those
indicated by such forward looking statements.
Factors that could cause actual results to differ materially
from those expressed or implied by the forward-looking statements
include, but are not limited to, those described in LIN’s Annual
Report on Form 10-K for the year ended December 31, 2011 and its
most recent quarterly reports filed with the SEC, and the
following:
- the ability to consummate the
merger;
- the satisfaction of other conditions to
consummation of the merger;
- the potential adverse effect on our
liquidity if the merger is not consummated;
- the ability to realize anticipated
benefits of the merger;
- the potential impact of the
announcement of the merger or consummation of the merger, including
a potential impact to the value of LIN’s common stock and results
of operations;
- business, regulatory, legal or tax
decisions;
- changes in tax laws and policies;
- economic conditions, including adverse
changes in the national and local economies in which our stations
operate and volatility and disruption of the capital and credit
markets;
- increased competition, including from
newer forms of entertainment and entertainment media, changes in
distribution methods or changes in the popularity or availability
of programming;
- adverse state or federal legislation or
regulation or adverse determinations by regulators, including
adverse changes in, or interpretations of, the exceptions to the
Federal Communications Commission duopoly rule and the allocation
of broadcast spectrum;
- declines in the domestic advertising
market;
- further consolidation of national and
local advertisers;
- global or local events that could
disrupt television broadcasting; and
- changes in television viewing patterns,
ratings and commercial viewing measurement.
Many of these factors are beyond our control. Forward-looking
statements contained herein speak only as of the date hereof. LIN
disclaims any intention or obligation to update any forward looking
statements unless required by law, and it undertakes no obligation
to publicly release the result of any revisions to these
forward-looking statements, to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma Condensed Consolidated Balance Sheet of
LIN TV Corp. is presented as if the Comcast / GE Transaction and
the LLC Conversion had occurred on September 30, 2012. The
unaudited pro forma Condensed Consolidated Statement of Operations
is presented as if the Comcast / GE Transaction and the LLC
Conversion had occurred on January 1, 2012. The historical
Condensed Consolidated Balance Sheet and Condensed Consolidated
Statement of Operations information has been adjusted to give pro
forma effect to events that are (i) directly attributable to the
Comcast / GE Transaction and the LLC Conversion, and (ii) factually
supportable. The notes to the unaudited pro forma Condensed
Consolidated Balance Sheet and Condensed Consolidated Statement of
Operations describe the pro forma amounts and adjustments presented
below.
The unaudited pro forma Condensed Consolidated Balance Sheet and
Condensed Consolidated Statement of Operations is not necessarily
indicative of the actual results of the Comcast / GE Transaction
and the LLC Conversion. The unaudited pro forma Condensed
Consolidated Balance Sheet and Condensed Consolidated Statement of
Operations does not give effect to the potential impact of current
financial conditions, market conditions, regulatory matters or any
anticipated approvals associated with the transactions.
The unaudited pro forma Condensed Consolidated Balance Sheet and
Condensed Consolidated Statement of Operations presented below is
for illustrative purposes only and is not intended to nor does it
include the necessary requirements under the Securities and
Exchange Commission Article 11 of Regulation S-X.
LIN TV Corp. Unaudited Pro
Forma Condensed Consolidated Balance Sheet as of September
30, 2012 (dollars in millions)
LIN TV
Corp.Historical
Comcast / GE
Transaction(Transaction 1)
Pro Forma Transaction
1Only
LLC
Conversion(Transaction 2)
LIN TV Corp. Pro
Forma(Transactions 1 & 2)
Cash and cash equivalents $ 32.8 $ (14.7 ) a $ 18.1 $ (6.0 )
e $ 12.1 Deferred long-term income taxes - 20.2 f 20.2 All Other
831.6 1.0 832.6
832.6 Total assets $ 864.4 $ (13.7 ) $ 850.7
$ 14.2 $ 865.0 Accrued expenses $ 52.7
$ (6.0 ) b $ 46.7 $ 46.7 Income taxes payable - 164.4 c 164.4 $
(164.4 ) f - Other 24.3 24.3
24.3 Current liabilities 77.0
158.4 235.4 (164.4 ) 71.0
Long-term debt 573.4 86.3 d 659.7 - 659.7 Deferred income
taxes 199.6 (170.0 ) c 29.7 (29.7 ) f - Other 49.4
49.4 49.4 Total
liabilities 899.4 74.7 974.1
(194.0 ) 780.1 Redeemable
noncontrolling interest 3.3 3.3 3.3 Accumulated deficit
(1,106.3 ) (88.4 ) (1,194.8 ) 208.3 f (986.5 ) Other 1,068.1
1,068.1 1,068.1
Stockholders' deficit (38.3 ) (88.4 ) (126.7 )
208.3 81.6
Total liabilities,
redeemablenoncontrolling interest and deficit
$ 864.4 $ (13.7 ) $ 850.7 $ 14.2 $ 865.0
a Assumed use of cash on hand to fund a portion of
the $100 million capital contribution to the NBC JV. b Reversal of
the pre-existing accrued NBC JV shortfall funding obligation as a
result of LIN being released from its guarantee of the GECC Note. c
Recognition of a $164 million current income taxes payable related
to recognized capital gains that are unsheltered "prior to" the
completion of the LLC Conversion. The pro forma unsheltered gain as
of September 30, 2012 is reduced in part by LIN's existing NOLs at
December 31, 2012. d Issuance of long term debt to fund a portion
of the $100 million NBC JV capital contribution and the related
financing fees:
i. $60.0 million
incremental term loan.
ii. $26.3 million draw
against existing revolving credit facility.
e Assumed transaction related fees and expenses. f Reflects an
assumed $573.2 million capital loss for tax purposes, generated in
Transaction 2, resulting in a $212.1 million tax benefit. The
benefit from the carryback of these losses is assumed to fully
offset the current income taxes payable that resulted from the
otherwise unsheltered capital gains at the conclusion of
transaction 1 and allows for the re-establishment of $47.7 million
of net deferred tax assets related to NOLs that were previously
assumed to be utilized. This pro forma assumes that LIN's stock
price at the closing of the LLC Conversion is less than or equal to
approximately $10.75 per share. At closing prices greater than this
amount up to approximately $12.20 per share, LIN will need to
consume its remaining NOLs to offset the recognized capital gains
and at a closing price above approximately $12.20 per share, LIN
would begin to incur cash taxes to satisfy the federal and state
income tax liability related to the unsheltered portion of the
recognized capital gains.
LIN TV
Corp. Unaudited Pro Forma Condensed Consolidated Statement
of Operations Nine Months Ended September 30, 2012
(dollars in millions)
LIN TV Corp.Historical
Comcast / GE
Transaction(Transaction 1)
Pro Forma Transaction
1Only
LLC
Conversion(Transaction 2)
LIN TV Corp. Pro
Forma(Transactions 1 & 2)
Net revenues $ 357.3 $ 357.3 $ 357.3
Operating income $ 99.8 $ 99.8 $ 99.8 Other expense (income)
Interest expense, net 28.9 2.6 a 31.5 31.5 Share of loss in equity
investment 4.3 94.0 b 98.3 98.3 All other expense, net 2.3
2.3 6.0 d 8.3
Total other expense (income), net 35.5 96.6 132.1 6.0 138.1
Income before (benefit from)
provision for income taxes 64.3 (96.6 ) (32.3 ) (6.0 ) (38.3 )
(Benefit from) provision for income taxes 24.1 (6.5 )
c 17.6 (214.3 ) e (196.7 ) Income from
continuing operations 40.2 (90.0 ) (49.9 ) 208.3 158.4 Discontinued
operations and noncontrolling interests 10.9
10.9 10.9 Net income attributable to
LIN TV Corp. $ 51.0 $ (90.0 ) $ (39.0 ) $ 208.3 $ 169.3
a Additional interest expense related
to the $60 million incremental term loan and $26.3 million
revolving credit facility draw, at 4% and 3.25% interest,
respectively. b Reflects the recognition of: i. $100 million charge
related to capital contribution to the NBC JV in settlement of the
GECC Note guarantee obligation. ii. $6 million benefit on the
reversal of accrued NBC JV shortfall funding obligation. c Reflects
the recognition of: i. $34.0 million income tax benefit associated
with the $94 million net charge recognized within share of loss on
equity investment. ii. $28.4 million income tax expense associated
with the recognition of incremental capital gain in excess of
amounts previously recognized within deferred income tax
liabilities attributable to Transaction 1. iii $0.9 million of
income tax benefit resulting from incremental interest expense. d
Assumed transaction related fees and expenses of $6 million. e
Reflects the recognition of: i. $573.2 million assumed capital loss
for tax purposes, and $212.1 million of related tax benefits
resulting from Transaction 2. ii. $2.2 million of income tax
benefit related to estimated transaction fees and expenses.
Lin TV (NYSE:TVL)
過去 株価チャート
から 6 2024 まで 7 2024
Lin TV (NYSE:TVL)
過去 株価チャート
から 7 2023 まで 7 2024