-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, rId0V1yWvPFs4DVYtZpeBdD3+LGNset3YaJQkIsOeGJRqGoN5EtQpceEUUlqZIs2 PkKJGvyAOIKGQJjTOfX2dw== 0000855433-95-000005.txt : 19950728 0000855433-95-000005.hdr.sgml : 19950728 ACCESSION NUMBER: 0000855433-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950727 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: BHC COMMUNICATIONS INC CENTRAL INDEX KEY: 0000855433 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 592104168 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10342 FILM NUMBER: 95556472 BUSINESS ADDRESS: STREET 1: 767 FIFTH AVE 46TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2124210200 10-Q 1 BHC LIVE [NOTIFY] 74741,1326 [RETURN-COPY] E-MAIL SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 ---------------------------------- OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-10342 ------------------------------- BHC COMMUNICATIONS, INC. ------------------------ (Exact name of Registrant as specified in its charter) Delaware 59-2104168 - ------------------------------ -------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 767 Fifth Avenue, New York, New York 10153 - ------------------------------------ ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (212) 421-0200 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No -------- -------- As of June 30, 1995 there were 6,449,905 shares of the issuer's Class A Common Stock outstanding and 18,000,000 shares of the issuer's Class B Common Stock outstanding. PART I -- FINANCIAL INFORMATION BHC COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of dollars) -------------------------------------
June 30, December 31, 1995 1994 ------------ ------------ (UNAUDITED) ASSETS - ------ CURRENT ASSETS: Cash and cash equivalents $ 114,267 $ 222,201 Marketable securities(substantially all U.S. Government securities) 1,363,379 1,274,244 Accounts receivable, net 92,788 96,681 Film contract and prepaid broadcast rights 69,454 89,245 Prepaid expenses and other current assets 30,122 46,976 ------------ ------------ Total current assets 1,670,010 1,729,347 ------------ ------------ FILM CONTRACT AND PREPAID BROADCAST RIGHTS, less current portion 49,424 59,228 ------------ ------------ PROPERTY AND EQUIPMENT, net 46,967 49,015 ------------ ------------ INTANGIBLE ASSETS 328,413 333,074 ------------ ------------ OTHER ASSETS 38,804 17,799 ------------ ------------ $ 2,133,618 $ 2,188,463 ============ ============ LIABILITIES AND SHAREHOLDERS' INVESTMENT - ---------------------------------------- CURRENT LIABILITIES: Film contracts payable within one year $ 70,813 $ 81,696 Accounts payable and other liabilities 57,732 70,834 Income taxes payable 51,133 55,782 ----------- ------------ Total current liabilities 179,678 208,312 ----------- ------------ FILM CONTRACTS PAYABLE AFTER ONE YEAR 78,857 89,048 ----------- ------------ OTHER LIABILITIES 5,560 5,655 ----------- ------------ MINORITY INTEREST 95,429 95,564 ----------- ------------ SHAREHOLDERS' INVESTMENT: Class A common stock - par value $.01 per share; authorized 200,000,000 shares; outstanding 6,877,518 shares 69 69 Class B common stock - par value $.01 per share; authorized 200,000,000 shares; outstanding 18,000,000 shares 180 180 Capital surplus 24,845 29,611 Retained earnings 1,766,449 1,779,409 Treasury stock, at cost (21,200) (6,254) Adjustment to reflect marketable securities at market value 3,751 (13,131) ------------ ------------ 1,774,094 1,789,884 ------------ ------------ $ 2,133,618 $ 2,188,463 ============ ============ The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
BHC COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share data) (UNAUDITED) -------------------------------------------
Three Months Six Months Ended June 30, Ended June 30, -------------------- -------------------- 1995 1994 1995 1994 --------- --------- --------- --------- OPERATING REVENUES $ 120,953 $ 119,832 $ 225,428 $ 215,800 --------- --------- --------- --------- OPERATING EXPENSES: Television expenses 52,547 58,885 103,619 110,962 Selling, general and administrative 29,218 26,300 58,516 55,057 --------- --------- --------- --------- 81,765 85,185 162,135 166,019 --------- --------- --------- --------- Operating income 39,188 34,647 63,293 49,781 --------- --------- --------- --------- OTHER INCOME (EXPENSE): Interest and other income 18,739 14,859 39,336 28,307 Equity in United Paramount Network loss (28,709) - (67,112) - --------- --------- --------- --------- (9,970) 14,859 (27,776) 28,307 --------- --------- --------- --------- Income before income taxes and minority interest 29,218 49,506 35,517 78,088 INCOME TAX PROVISION 13,000 20,800 15,600 32,800 --------- --------- --------- --------- Income before minority interest 16,218 28,706 19,917 45,288 MINORITY INTEREST (4,964) (4,015) (8,273) (6,929) --------- --------- --------- --------- Net income $ 11,254 $ 24,691 $ 11,644 $ 38,359 ========= ========= ========= ========= AVERAGE OUTSTANDING COMMON SHARES 24,578 25,014 24,631 25,132 ========= ========= ========= ========= NET INCOME PER SHARE $ .46 $ .99 $ .47 $ 1.53 ========= ========= ========= ========= The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
BHC COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of dollars) (UNAUDITED) -----------------------------------------------
Six Months Ended June 30, ------------------------ 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 11,644 $ 38,359 Adjustments to reconcile net income to net cash provided from operating activities: Film contract payments (45,323) (66,453) Film contract amortization 40,778 48,249 Depreciation and other amortization 9,968 10,257 Equity in United Paramount Network loss 67,112 - Minority interest 8,273 6,929 Other 4,479 (309) Changes in assets and liabilities: Accounts receivable 3,893 (5,389) Other assets (3,818) (2,490) Accounts payable and other liabilities (1,402) 1,336 Income taxes (2,787) 12,691 ----------- ----------- Net cash provided from operating activities 92,817 43,180 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Dispositions (purchases) of marketable securities, net (59,609) 163,869 Investment in and advances to United Paramount Network (83,445) - Capital expenditures (3,259) (4,060) Other (16) (37) ----------- ----------- Net cash provided from (used in) investing activities (146,329) 159,772 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividend (24,504) - Purchases of treasury stock (14,874) (57,219) Capital transactions of subsidiary (15,044) (1,978) ----------- ----------- Net cash used in financing activities (54,422) (59,197) ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (107,934) 143,755 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 222,201 35,371 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 114,267 $ 179,126 =========== =========== The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
BHC COMMUNICATIONS, INC. ------------------------ NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ----------------------------------------------------- 1. PRINCIPLES OF CONSOLIDATION: The accompanying condensed consolidated financial statements include the accounts of BHC Communications, Inc. and its subsidiaries. BHC, a majority owned (73% at June 30, 1995) subsidiary of Chris-Craft Industries, Inc., operates eight television stations, three wholly owned and five owned by United Television, Inc., 56% owned by BHC at June 30, 1995. The interest of UTV shareholders other than BHC in the operating results and net assets of UTV is set forth as minority interest in the accompanying condensed consolidated statements of income and condensed consolidated balance sheets, respectively. Intercompany accounts and transactions have been eliminated. The financial information included herein has been prepared by BHC, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. However, BHC believes that the disclosures herein are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in BHC's latest annual report on Form 10-K. The information furnished reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods. Certain amounts for 1994 have been reclassified to conform to the 1995 presentation. The results for these interim periods are not necessarily indicative of results to be expected for the full year, due to seasonal factors, among others. 2. MARKETABLE SECURITIES: In accordance with Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities", BHC classifies its marketable securities as available-for-sale. At June 30, 1995, BHC's marketable securities, which consisted substantially of U.S. Government securities, had a carrying value of $1,358,316,000 and a fair value of $1,363,379,000. The difference of $5,063,000 ($3,751,000 net of income taxes and minority interest) is reflected as an adjustment to shareholders' investment in the accompanying condensed consolidated balance sheet. Of the investments in U.S. Government securities, 80% mature within one year, 92% within two years and all within five years. At December 31, 1994, BHC's marketable securities, which consisted substantially of U.S. Government securities, had a carrying value of $1,299,322,000 and a fair value of $1,274,244,000. The difference of $25,078,000 ($13,131,000 net of income taxes and minority interest) is reflected as an adjustment to shareholders' investment in the accompanying condensed consolidated balance sheet. 3. SHAREHOLDERS' INVESTMENT: As of June 30, 1995, there were outstanding 18,000,000 shares of Class B common stock, all held by Chris-Craft, and 6,548,887 shares of Class A common stock, after reflecting as treasury stock BHC's pro rata interest in its Class A common shares held by UTV and 201,110 Class A common shares purchased by BHC during 1995. At June 30, 1995, purchases of an additional 769,213 shares of Class A common stock were authorized. In February 1995, BHC's Board of Directors declared a special cash dividend of $1.00 per share on BHC's Class A and Class B common stock. The dividend, totalling $24.5 million, was paid in April 1995. BHC has no plan to pay dividends on a regular basis. 4. COMMITMENTS: Commitments of BHC's television stations for film contracts entered into but not available for broadcasting at June 30, 1995 aggregated approximately $180.2 million, including $46.1 million applicable to UTV. In July 1994, BHC and Viacom Inc.'s Paramount Television Group formed the United Paramount Network, a fifth broadcast television network which premiered January 1995. BHC currently owns 100% of UPN, and Paramount has an option exercisable through January 15, 1997 to acquire an interest in UPN equal to that of BHC. The option price is equivalent to approximately one-half of BHC's aggregate cash contributions to UPN through the exercise date, plus interest; payment may be deferred through the option expiration date. The cost of developing UPN will be significant, and BHC has agreed to make minimum UPN expenditures of at least $150,000,000 through 1996. Network expenditures and related operating losses are expected to significantly exceed such amount for that period, and to remain substantial thereafter. BHC COMMUNICATIONS, INC. ------------------------ MANAGEMENT'S DISCUSSION AND ANALYSIS ------------------------------------ OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------ Liquidity and Capital Resources - ------------------------------- BHC's core operating cash flow is generated primarily by its television broadcasting business. Television broadcasting cash flow generally parallels the earnings of BHC's television stations, adjusted to reflect (i) the difference between film contract payments and related film contract amortization and (ii) the effect of significant prepayments for other broadcast rights. The relationship between film contract payments and related amortization may vary greatly between periods (payments exceeded amortization by $4.5 million and $18.2 million, respectively, in the first six months of 1995 and 1994), and is dependent upon the mix of programs aired and payment terms of the stations' contracts. Station earnings rose 16% in the first six months of 1995, and station cash flow increased 45% from the corresponding 1994 amount. BHC's cash flow additionally reflects earnings associated with its cash and marketable securities. Cash and marketable securities totalled $1.48 billion at June 30, 1995 and $1.50 billion at December 31, 1994. First six months operating cash flow of $92.8 million was offset by United Paramount Network funding of $83.4 million, treasury stock purchases by BHC and UTV totalling $28.8 million and payment of the 1995 special dividend set forth below. Special cash dividends of $2.00 per share, totalling $51.9 million, and $1.00 per share, totalling $24.5 million, were paid on BHC's Class A and Class B common stock, in January 1993 and April 1995, respectively. BHC has no plan to pay dividends on a regular basis. Since April 1990, BHC's Board of Directors has authorized the purchase of up to 5,500,000 Class A common shares. Through June 30, 1995, 4,730,787 shares were purchased for a total cost of $280.1 million, including $14.9 million applicable to shares purchased in the first six months of 1995. BHC intends to expand its operations in the media, entertainment and communications industries and to explore business opportunities in other industries. BHC currently has no outstanding debt, and believes it is capable of raising significant additional capital to augment its already substantial financial resources, if desired, to fund such additional expansion. In July 1994, BHC and Viacom Inc.'s Paramount Television Group formed the United Paramount Network, a fifth broadcast television network which premiered January 1995. BHC currently owns 100% of UPN, and Paramount has an option through January 15, 1997 to acquire an interest in UPN equal to that of BHC. The option price is equivalent to approximately one-half of BHC's aggregate cash contributions to UPN through the exercise date, plus interest; payment may be deferred through the option expiration date. BHC expenditures related to UPN totalled $83.4 million in the first six months of 1995. The cost of developing UPN will be significant, and BHC has agreed to make minimum UPN expenditures of at least $150 million through 1996. UPN expenditures and related operating losses are expected to significantly exceed such amount for that period, and to remain substantial thereafter. BHC's television stations make commitments for programming that will not be available for telecasting until future dates. At June 30, 1995, commitments for such programming totalled approximately $180.2 million, including $46.1 million applicable to UTV. BHC capital expenditures generally have not been material in relation to its financial position, and the related capital expenditure commitments at June 30, 1995 (including any related to UPN) were not material. BHC expects that its expenditures for UPN, future film contract commitments and capital requirements for its present business will be satisfied primarily from operations, marketable securities or cash balances. Results of Operations - --------------------- BHC 1995 second quarter operating results reflect record station earnings and a substantial increase in interest income. However, UPN start-up losses resulted in a decline in net income, to $11,254,000, or $.46 per share, compared to $24,691,000, or $.99 per share, in last year's period. Excluding UPN, net income increased 17%, to $28,863,000, or $1.18 per share. BHC achieved substantial increases in station earnings and interest income for the first six months of 1995. However, due to UPN start-up losses, BHC net income for the period declined to $11,644,000, or $.47 per share, from $38,359,000, or $1.53 per share, last year. Excluding UPN, BHC net income for the six months increased 35%, to $51,911,000, or $2.11 per share. Television station earnings increased 7% in the second quarter to $45,683,000 from $42,863,000 last year, as operating revenues rose less than 1% and programming expenses declined 8%. The moderate increase in revenues reflects varying demand for television advertising in our local markets, as well as disappointing major league baseball telecasts. Station earnings for the first six months of 1995 increased 16%, to $78,386,000 from $67,501,000, reflecting a 4% increase in operating revenues and a 7% decline in programming expenses. After program development expenses, goodwill amortization and corporate office expenses of BHC and UTV, operating income rose 13% in the second quarter, to $39,188,000 from $34,647,000, and 27% in the six month period, to $63,293,000 from $49,781,000. UPN's pretax losses of $28,709,000 in the second quarter and $67,112,000 in the six month period are reflected in BHC's financial statements under the equity method. UPN is in its infancy, and will incur substantial start-up losses for several years. Interest and other income increased to $18,739,000 from $14,859,000 in the second quarter, and to $39,336,000 from $28,307,000 in the six month period, primarily reflecting higher interest rates on BHC's substantial money market holdings. BHC COMMUNICATIONS, INC. ------------------------ PART II. OTHER INFORMATION -------------------------- Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) The following exhibits are filed herewith: Exhibit No. Description ----------- ----------- 27 Financial Data Schedule (b) No report on Form 8-K was filed during the quarter for which this report is filed. SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BHC COMMUNICATIONS, INC. ------------------------ (Registrant) By: /s/ JOELEN K. MERKEL ----------------------------- Joelen K. Merkel Vice President and Treasurer (Principal Accounting Officer) Date: July 27, 1995 EXHIBIT INDEX Incorporated by Reference to: Exhibit No. Exhibit - ------------- ----------- ------- 27 Financial Data Schedule EX-27 2 BHC-FDS
5 1000 6-MOS DEC-31-1995 JUN-30-1995 114267 1363379 99476 6688 0 1670010 128950 81983 2133618 179678 0 0 0 249 1773845 2133618 0 225428 0 162135 0 0 0 35517 15600 11644 0 0 0 11644 .47 0
-----END PRIVACY-ENHANCED MESSAGE-----