-----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, tMw5tPWh3wRfgMxKixfKCYfKk0woQOximMP5De6BGQ4xV3pcv2ImUqGlCXUGL9cP q9Zk2LoqiodshDShVkP0vA== 0000855433-95-000003.txt : 19950517 0000855433-95-000003.hdr.sgml : 19950516 ACCESSION NUMBER: 0000855433-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 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: 95538071 BUSINESS ADDRESS: STREET 1: 767 FIFTH AVE 46TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2124210200 10-Q 1 BHC LIVE 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, 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 April 30, 1995 there were 6,503,855 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, 1995 1994 ------------ ------------ (UNAUDITED) ASSETS - ------ CURRENT ASSETS: Cash and cash equivalents $ 157,103 $ 222,201 Marketable securities(substantially all U.S. Government securities) 1,344,611 1,274,244 Accounts receivable, net 75,438 96,681 Film contract and prepaid broadcast rights 82,709 89,245 Prepaid expenses and other current assets 43,336 46,976 ------------ ------------ Total current assets 1,703,197 1,729,347 ------------ ------------ FILM CONTRACT AND PREPAID BROADCAST RIGHTS, less current portion 53,309 59,228 ------------ ------------ PROPERTY AND EQUIPMENT, net 47,345 49,015 ------------ ------------ INTANGIBLE ASSETS 330,743 333,074 ------------ ------------ OTHER ASSETS 18,023 17,799 ------------ ------------ $ 2,152,617 $ 2,188,463 ============ ============ LIABILITIES AND SHAREHOLDERS' INVESTMENT - ---------------------------------------- CURRENT LIABILITIES: Film contracts payable within one year $ 75,932 $ 81,696 Accounts payable and other liabilities 86,196 70,834 Income taxes payable 51,042 55,782 ----------- ------------ Total current liabilities 213,170 208,312 ----------- ------------ FILM CONTRACTS PAYABLE AFTER ONE YEAR 82,185 89,048 ----------- ------------ OTHER LIABILITIES 5,665 5,655 ----------- ------------ MINORITY INTEREST 91,767 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 26,310 29,611 Retained earnings 1,755,195 1,779,409 Treasury stock, at cost (17,245) (6,254) Reduction to reflect marketable securities at market value (4,679) (13,131) ------------ ------------ 1,759,830 1,789,884 ------------ ------------ $ 2,152,617 $ 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 Ended March 31, -------------------- 1995 1994 --------- --------- OPERATING REVENUES $ 104,475 $ 95,968 --------- --------- OPERATING EXPENSES: Television expenses 51,072 52,077 Selling, general and administrative 29,298 28,757 --------- --------- 80,370 80,834 --------- --------- Operating income 24,105 15,134 --------- --------- OTHER INCOME (EXPENSE): Interest and other income 20,597 13,448 Equity in United Paramount Network loss (38,403) - --------- --------- (17,806) 13,448 --------- --------- Income before income taxes and minority interest 6,299 28,582 INCOME TAX PROVISION 2,600 12,000 --------- --------- Income before minority interest 3,699 16,582 MINORITY INTEREST (3,309) (2,914) --------- --------- Net income $ 390 $ 13,668 ========= ========= AVERAGE OUTSTANDING COMMON SHARES 24,683 25,251 ========= ========= NET INCOME PER SHARE $ .02 $ .54 ========= ========= 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, ------------------------ 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 390 $ 13,668 Adjustments to reconcile net income to net cash provided from operating activities: Film contract payments (23,520) (36,893) Film contract amortization 17,612 25,107 Depreciation and other amortization 5,027 5,125 Equity in United Paramount Network loss 38,403 - Minority interest 3,309 2,914 Other 206 (42) Changes in assets and liabilities: Accounts receivable 21,243 14,881 Other assets 1,852 3,326 Accounts payable and other liabilities (4,416) (5,308) Income taxes (3,803) 7,312 ----------- ----------- Net cash provided from operating activities 56,303 30,090 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Dispositions (purchases) of marketable securities, net (61,831) 170,334 Investment in and advances to United Paramount Network (38,028) - Capital expenditures (1,026) (2,696) Other (11) (18) ----------- ----------- Net cash provided from (used in) investing activities (100,896) 167,620 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Purchases of treasury stock (11,143) (49,463) Capital transactions of subsidiary (9,362) (371) ----------- ----------- Net cash used in financing activities (20,505) (49,834) ----------- ----------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (65,098) 147,876 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 222,201 35,371 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 157,103 $ 183,247 =========== =========== 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 March 31, 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 March 31, 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 March 31, 1995, BHC's marketable securities, which consisted substantially of U.S. Government securities, had a carrying value of $1,354,370,000 and a fair value of $1,344,611,000. The difference of $9,759,000 ($4,679,000 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, 73% mature within one year, 90% 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 a reduction of shareholders' investment in the accompanying condensed consolidated balance sheet. 3. SHAREHOLDERS' INVESTMENT: As of March 31, 1995, there were outstanding 18,000,000 shares of Class B common stock, all held by Chris-Craft, and 6,603,290 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 147,160 Class A common shares purchased by BHC during 1995. At March 31, 1995, purchases of an additional 823,163 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 $24.7 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 March 31, 1995 aggregated approximately $187.8 million, including $49.9 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 $5.9 million and $11.8 million, respectively, in the 1995 and 1994 first quarters), and is dependent upon the mix of programs aired and payment terms of the stations' contracts. Station earnings rose strongly in the 1995 first quarter, and station cash flow was nearly double the corresponding 1994 amount. BHC's cash flow additionally reflects earnings associated with its cash and marketable securities. Cash and marketable securities totalled $1.5 billion at March 31, 1995 and December 31, 1994. First quarter operating cash flow of $56.3 million was offset by United Paramount Network funding of $38 million and treasury stock purchases by BHC and UTV totalling $21 million. 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. In February 1995, the Board of Directors declared a special cash dividend of $1.00 per share on BHC's Class A and Class B common stock, totalling $24.7 million, which was paid in April 1995. 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 March 31, 1995, 4,676,837 shares were purchased for a total cost of $276.1 million, including $10.9 million applicable to shares purchased in the first three 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 $38 million in the first quarter 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 March 31, 1995, commitments for such programming totalled approximately $187.8 million, including $49.9 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 December 31, 1994 (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's core television station group achieved record first quarter earnings. However, as expected, UPN start-up losses significantly impacted BHC's first quarter operating results. Net income declined to $390,000, or $.02 per share, from $13,668,000, or $.54 per share, in last year's period. Excluding the UPN loss, BHC first quarter income increased 69% to $23,048,000, or $.93 per share. Station operating revenues rose 9%, to a first quarter record $104,475,000 from $95,968,000 last year. Station earnings, further bolstered by a 6% reduction in programming expense, rose 33%, surpassing the corresponding prior period amount for the twelfth consecutive quarter. An increase in program development expense was offset by a decrease in the management fee paid Chris-Craft, and operating income increased 59% to a first quarter record $24,105,000 from last year's $15,134,000. UPN's first quarter pre-tax loss of $38,403,000 is reflected in BHC's financial statements under the equity method. UPN is still in its infancy, and will incur substantial start-up losses for the next several years. First quarter interest and other income increased to $20,597,000 from $13,448,000, primarily reflecting higher interest rates on BHC's substantial money market holdings. BHC COMMUNICATIONS, INC. ------------------------ PART II. OTHER INFORMATION AND SIGNATURE ---------------------------------------- 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: May 12, 1995 EXHIBIT INDEX Incorporated by Reference to: Exhibit No. Exhibit - ------------- ----------- ------- 27 Financial Data Schedule EX-27 2 BHC FDS
5 1000 3-MOS DEC-31-1995 MAR-31-1995 157103 1344611 82183 6745 0 1703197 127398 80053 2152617 213170 0 0 0 249 1759581 2152617 0 104475 0 80370 0 0 0 6299 2600 390 0 0 0 390 .02 0
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