-----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, kmiWuseJ9gv8dR476Kq1NJKCa78211QDtZ1WnHI3Z3fP8ilRVjRw2ptoxEJ7GD8s mVr6F7DENcfxz0AXIEMAtQ== 0000855433-94-000002.txt : 19940525 0000855433-94-000002.hdr.sgml : 19940525 ACCESSION NUMBER: 0000855433-94-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BHC COMMUNICATIONS INC CENTRAL INDEX KEY: 0000855433 STANDARD INDUSTRIAL CLASSIFICATION: 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: 94527822 BUSINESS ADDRESS: STREET 1: 767 FIFTH AVE 46TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2124210200 10-Q 1 LIVE FOR BHC COMMUNICATIONS, INC. 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 March 31, 1994 ---------------------------------- 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 April 30, 1994 there were 6,925,815 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) -------------------------------------
March 31, December 31, 1994 1993 ------------ ------------ (UNAUDITED) ASSETS - - ------ CURRENT ASSETS: Cash and cash equivalents $ 183,247 $ 35,371 Marketable (substantially all U.S. Government) securities 1,275,007 1,471,158 Accounts receivable, net 70,495 85,376 Film contract and prepaid broadcast rights 92,035 98,882 Prepaid expenses and other current assets 57,436 54,518 ------------ ------------ Total current assets 1,678,220 1,745,305 ------------ ------------ FILM CONTRACT AND PREPAID BROADCAST RIGHTS, less current portion 82,611 87,197 ------------ ------------ PROPERTY AND EQUIPMENT, net 51,922 52,035 ------------ ------------ INTANGIBLE ASSETS 340,065 342,395 ------------ ------------ OTHER ASSETS 12,974 14,606 ------------ ------------ $ 2,165,792 $ 2,241,538 ============ ============ LIABILITIES AND SHAREHOLDERS' INVESTMENT - - ---------------------------------------- CURRENT LIABILITIES: Film contracts payable within one year $ 98,276 $ 112,798 Accounts payable and accrued expenses 63,724 81,834 Income taxes payable 73,701 69,340 ----------- ------------ Total current liabilities 235,701 263,972 ----------- ------------ FILM CONTRACTS PAYABLE AFTER ONE YEAR 85,727 95,699 ----------- ------------ OTHER LIABILITIES 16,061 15,563 ----------- ------------ MINORITY INTEREST 88,968 87,483 ----------- ------------ SHAREHOLDERS' INVESTMENT: Class A common stock - par value $.01 per share; authorized 200,000,000 shares; outstanding 7,723,418 shares 77 77 Class B common stock - par value $.01 per share; authorized 200,000,000 shares; outstanding 18,000,000 shares 180 180 Capital surplus 98,013 98,182 Retained earnings 1,700,200 1,686,532 Treasury stock, at cost (48,386) (6,150) Reduction to reflect marketable securities at fair value (10,749) - ------------ ------------ 1,739,335 1,778,821 ------------ ------------ $ 2,165,792 $ 2,241,538 ============ ============ The accompanying notes to condensed consolidated financial statements are an integral part of these balance sheets.
BHC COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share data) (UNAUDITED) -------------------------------------------
Three Months Ended March 31, -------------------- 1994 1993 --------- --------- OPERATING REVENUES $ 95,968 $ 89,581 --------- --------- OPERATING EXPENSES: Television expenses 52,077 55,688 Selling, general and administrative 28,757 25,097 --------- --------- 80,834 80,785 --------- --------- Operating income 15,134 8,796 --------- --------- OTHER INCOME: Interest and other income 13,448 7,756 Income associated with Time Warner Inc. securities - 108,413 --------- --------- 13,448 116,169 --------- --------- Income before income taxes and minority interest 28,582 124,965 INCOME TAX PROVISION 12,000 43,000 --------- --------- Income before minority interest 16,582 81,965 MINORITY INTEREST (2,914) (6,047) --------- --------- Net income $ 13,668 $ 75,918 ========= ========= AVERAGE OUTSTANDING COMMON SHARES 25,251 25,997 ========= ========= NET INCOME PER SHARE $ .54 $ 2.92 ========= ========= 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) -----------------------------------------------
Three Months Ended March 31, ------------------------- 1994 1993 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,668 $ 75,918 Adjustments to reconcile net income to net cash provided from operating activities: Film contract payments (36,893) (36,071) Film contract amortization 25,107 23,824 Depreciation and other amortization 5,125 5,129 Loss (gain) on disposition of marketable securities 602 (93,741) Minority interest 2,914 6,047 Other (644) 225 Changes in assets and liabilities: Accounts receivable 14,881 11,934 Other assets 3,326 (2,048) Accounts payable and other liabilities (5,308) 1,033 Income taxes 7,312 38,290 ----------- ----------- Net cash provided from operating activities 30,090 30,540 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Dispositions (purchases) of marketable securities, net 170,334 (56,576) Capital expenditures, net (2,696) (1,054) Other (18) - ----------- ----------- Net cash provided from (used in) investing activities 167,620 (57,630) ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock (49,463) (7,743) Dividend - (51,893) Capital transactions of subsidiary (371) (6,759) ----------- ----------- Net cash used in financing activities (49,834) (66,395) ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 147,876 (93,485) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 35,371 172,882 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 183,247 $ 79,397 =========== =========== 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 (72% at March 31, 1994) subsidiary of Chris-Craft Industries, Inc., operates eight television stations, three wholly owned and five owned by United Television, Inc., 54% owned by BHC at March 31, 1994. 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 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 1993 have been reclassified to conform to 1994 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. NEW ACCOUNTING STANDARD: Effective January 1, 1994, BHC adopted Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities." In accordance with SFAS No. 115, prior period financial statements have not been restated to reflect the change in accounting principle. At January 1, 1994, BHC classified its marketable securities as available-for-sale. At March 31, 1994, BHC's marketable securities, which consisted substantially of U.S. Government securities, had a carrying value of $1,293,979,000 and a fair value of $1,275,007,000. The difference of $18,972,000 ($10,749,000 net of income taxes and minority interest) is reflected as a reduction of shareholders' investment in the accompanying condensed consolidated balance sheet. Of the investments in U.S. Government securities, 56% mature within one year, 76% mature within two years and all within five years. 3. SHAREHOLDERS' INVESTMENT: As of March 31, 1994, there were outstanding 18,000,000 shares of Class B common stock, all held by Chris-Craft, and 7,065,427 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 535,000 Class A common shares purchased by BHC during 1994. At March 31, 1994, purchases of an additional 1,281,223 shares of Class A common stock were authorized. 4. COMMITMENTS: Commitments of BHC's television stations for film contracts entered into but not available for broadcasting at March 31, 1994 aggregated approximately $103.1 million, including $26.8 million applicable to UTV. 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 $11.8 million and $12.2 million, respectively, in the 1994 and 1993 first quarters), and is dependent upon the mix of programs aired and payment terms of the stations' contracts. Station earnings rose strongly in the 1994 first quarter, and station cash flow accordingly increased 236%. BHC's cash flow additionally reflects earnings associated with its cash and marketable securities. Prior to their disposition in 1993, substantial dividend income was realized on BHC's large holdings of Time Warner Inc. convertible preferred shares. Proceeds from the Time Warner dispositions were placed mostly in money market instruments, primarily U.S. Government obligations, having significantly lower yields than the securities disposed. Total cash and marketable securities declined slightly to $1.46 billion at March 31, 1994 from $1.51 billion at December 31, 1993, despite first quarter operating cash flow of $30.1 million. Such decline primarily reflects the expenditure of $49.5 million for treasury stock purchases, and a $19 million reduction in the carrying value of marketable securities to reflect their fair value. A special cash dividend of $2.00 per share on BHC's Class A and Class B common stock, totalling $51.9 million, was paid in January 1993. This is the only dividend paid by BHC since it became a public company in January 1990, and BHC has no current plan to pay future cash dividends. Since April 1990, BHC's Board of Directors has authorized the purchase of up to 5,500,000 Class A common shares. Through March 31, 1994, 4,218,777 shares have been purchased for a total cost of $241.7 million, including $42.3 million applicable to shares purchased in the first quarter of 1994. 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 cash balances, if desired, to fund such additional expansion. BHC's television stations make commitments for programming that will not be available for telecasting until future dates. At March 31, 1994, commitments for such programming totalled approximately $103.1 million, including $26.8 million applicable to UTV. BHC capital expenditures generally have not been material in relation to its financial position, and the related commitments at March 31, 1994 were not material. BHC expects that future film contract commitments and capital expenditure requirements for its present business will be satisfied primarily from operations or from current cash balances. Results of Operations - - --------------------- BHC 1994 first quarter net income totalled $13,668,000, or $.54 per share, compared to $75,918,000, or $2.92 per share, in last year's first quarter. Excluding after tax income associated with BHC's former holdings of Time Warner securities, 1993 first quarter net income was $8,770,000, or $.34 per share. The 56% increase in income excluding Time Warner amounts primarily reflects substantial increases in television station earnings and interest income. BHC's core television broadcasting business achieved record first quarter operating revenues and earnings. Relatively strong demand for television advertising produced a 7% increase in operating revenues, to $95,968,000 from last year's $89,581,000. That increase, together with the favorable resolution of a disputed music license arrangement, resulted in a 76% increase in station earnings. After a $3,750,000 increase in management fee expense (reflecting a $3,000,000 increase, to $8,000,000 from $5,000,000, effective as of January 1, 1993 in the annual fee paid Chris-Craft), operating income rose 72%, to $15,134,000 from $8,796,000. First quarter interest and other income increased to $13,448,000 from $7,756,000 in 1993, primarily due to the placement of Time Warner proceeds in money market instruments. BHC's effective income tax rate rose to 42% from 34% in the 1993 first quarter, as 1993's pretax income included significant dividend income which is not subject to full federal income tax. BHC COMMUNICATIONS, INC. ------------------------ PART II. OTHER INFORMATION AND SIGNATURE ---------------------------------------- Item 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) None. (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: May 13, 1994 -----END PRIVACY-ENHANCED MESSAGE-----