-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N7kbkhbo6o0M+bRTSMSgyvmODYbizQfbBb3hQIpJD97FWP2owXMDo99gpfT9azkG WD+Xsk5roP+s1Ujn/U58xA== 0000855433-98-000002.txt : 19980813 0000855433-98-000002.hdr.sgml : 19980813 ACCESSION NUMBER: 0000855433-98-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980812 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: SEC FILE NUMBER: 001-10342 FILM NUMBER: 98683562 BUSINESS ADDRESS: STREET 1: 767 FIFTH AVE 46TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10153 BUSINESS PHONE: 2124210200 MAIL ADDRESS: STREET 1: 767 FIFTH AVE STREET 2: 46TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10153 10-Q 1 Page 1 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, 1998 ---------------------------------- 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 July 31, 1998 there were 4,515,405 shares of the issuer's Class A Common Stock outstanding and 18,000,000 shares of the issuer's Class B Common Stock outstanding. Page 2 PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS BHC COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of dollars) (UNAUDITED) -------------------------------------
June 30, December 31, 1998 1997 ------------ ------------ ASSETS - ------ CURRENT ASSETS: Cash and cash equivalents $ 203,963 $ 282,504 Marketable securities (substantially all U.S. Government securities) 1,158,501 1,204,776 Accounts receivable, net 87,952 86,198 Film contract rights 52,189 95,859 Prepaid expenses and other current assets 40,288 44,533 ------------ ------------ Total current assets 1,542,893 1,713,870 ------------ ------------ INVESTMENTS 70,343 47,594 ------------ ------------ FILM CONTRACT RIGHTS, less current portion 20,073 26,118 ------------ ------------ PROPERTY AND EQUIPMENT, net 46,939 45,180 ------------ ------------ INTANGIBLE ASSETS 376,002 303,827 ------------ ------------ OTHER ASSETS 6,555 5,899 ------------ ------------ $ 2,062,805 $ 2,142,488 ============ ============ The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
Page 3 BHC COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of dollars) (UNAUDITED) -------------------------------------
June 30, December 31, 1998 1997 ------------ ------------ LIABILITIES AND SHAREHOLDERS' INVESTMENT - ---------------------------------------- CURRENT LIABILITIES: Film contracts payable within one year $ 77,929 $ 98,033 Accounts payable and accrued expenses 72,457 87,768 Income taxes payable 43,389 28,129 ----------- ------------ Total current liabilities 193,775 213,930 ----------- ------------ FILM CONTRACTS PAYABLE AFTER ONE YEAR 50,888 70,934 ----------- ------------ OTHER LIABILITIES 15,272 17,197 ----------- ------------ MINORITY INTEREST 129,805 115,473 ----------- ------------ SHAREHOLDERS' INVESTMENT: Class A common stock - par value $.01 per share; authorized 200,000,000 shares; outstanding 5,026,108 shares 50 50 Class B common stock - par value $.01 per share; authorized 200,000,000 shares; outstanding 18,000,000 shares 180 180 Retained earnings 1,719,161 1,723,402 Treasury stock, at cost (62,539) (6,627) Increase to reflect marketable securities at fair value 16,213 7,949 ------------ ------------ 1,673,065 1,724,954 ------------ ------------ $ 2,062,805 $ 2,142,488 ============ ============ The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
Page 4 BHC COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands of dollars except per share data) (UNAUDITED) -----------------------------------------------
Three Months Six Months Ended June 30, Ended June 30, -------------------- -------------------- 1998 1997 1998 1997 --------- --------- --------- --------- OPERATING REVENUES $ 120,500 $ 118,835 $ 220,075 $ 219,953 --------- --------- --------- --------- OPERATING EXPENSES: Television expenses 52,185 51,853 103,324 102,824 Selling, general and administrative 33,946 33,401 68,995 66,056 --------- --------- --------- --------- 86,131 85,254 172,319 168,880 --------- --------- --------- --------- Operating income 34,369 33,581 47,756 51,073 --------- --------- --------- --------- OTHER INCOME (EXPENSE): Interest and other income 18,742 20,632 38,796 40,640 Equity in United Paramount Network loss (22,471) (16,404) (42,381) (34,302) Gain on change of ownership in United Paramount Network - - - 152,224 --------- --------- --------- --------- (3,729) 4,228 (3,585) 158,562 --------- --------- --------- --------- Income before income taxes and minority interest 30,640 37,809 44,171 209,635 INCOME TAX PROVISION 11,100 15,200 16,000 83,900 --------- --------- --------- --------- Income before minority interest 19,540 22,609 28,171 125,735 MINORITY INTEREST (4,943) (5,191) (7,576) (8,827) --------- --------- --------- --------- Net income $ 14,597 $ 17,418 $ 20,595 $ 116,908 ========= ========= ========= ========= Earnings per share: Basic $ .65 $ .74 $ .91 $ 4.97 ========= ========= ========= ========= Diluted $ .64 $ .74 $ .90 $ 4.96 ========= ========= ========= =========
The accompanying notes to condensed consolidated financial statements are an integral part of these statements. Page 5 BHC COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of dollars) (UNAUDITED) -----------------------------------------------
Six Months Ended June 30, ------------------------ 1998 1997 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 20,595 $ 116,908 Adjustments to reconcile net income to net cash provided from operating activities: Film contract payments (50,642) (47,734) Film contract amortization 41,455 46,523 Prepaid broadcast rights - 17,051 Depreciation and other amortization 10,707 9,565 Equity in United Paramount Network loss 42,381 34,302 Gain on change of ownership in United Paramount Network - (152,224) Minority interest 7,576 8,827 Other (1,233) 975 Changes in assets and liabilities: Accounts receivable (1,754) 1,338 Other assets (1,444) (4,670) Accounts payable and other liabilities 3,600 (3,391) Income taxes 7,031 38,742 ----------- ----------- Net cash provided from operating activities 78,272 66,212 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Station acquisition (includes $77,712 of intangibles) (80,280) - Distribution from United Paramount Network - 116,261 Disposition (purchase) of marketable securities, net 61,143 (47,744) Investment in United Paramount Network (44,250) (2,850) Other investments (21,770) (3,159) Capital expenditures, net (4,358) (4,306) Other (15) (30) ----------- ----------- Net cash (used in) provided from investing activities (89,530) 58,172 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Payment of special dividend (22,738) (23,599) Purchases of treasury stock (38,860) (43,924) Capital transactions of subsidiary (5,685) (1,852) ----------- ----------- Net cash used in financing activities (67,283) (69,375) ----------- ----------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (78,541) 55,009 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 282,504 146,751 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 203,963 $ 201,760 =========== =========== The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
Page 6 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 (79.9% at June 30, 1998) subsidiary of Chris- Craft Industries, Inc., operates nine television stations, three wholly owned and six owned by United Television, Inc. (UTV), 58.6% owned by BHC at June 30, 1998. The interest of UTV shareholders other than BHC in the net income 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 for a fair statement of the results for the interim periods. 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. Certain prior year amounts have been restated to conform with the 1998 presentation. 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, 1998, BHC's marketable securities, which consisted substantially of U.S. Government securities, had a cost of $1,131,658,000 and a fair value of $1,158,501,000. The difference of $26,843,000 ($16,213,000, net of income taxes and minority interest) is reflected as an increase to shareholders' investment in the accompanying condensed consolidated balance sheet. Of the investments in U.S. Government securities, 100% mature within one year. At December 31, 1997, BHC's marketable securities, which consisted substantially of U.S. Government securities, had a cost of Page 7 $1,191,173,000 and a fair value of $1,204,776,000. The difference of $13,603,000 ($7,949,000, net of income taxes and minority interest) is reflected as an increase to shareholders' investment in the accompanying condensed consolidated balance sheet. 3. UNITED PARAMOUNT NETWORK: In July 1994, BHC, along with Viacom Inc.'s Paramount Television Group, formed the United Paramount Network, a fifth broadcast television network which premiered in January 1995. BHC owned 100% of UPN from its inception through January 15, 1997, when Viacom completed the exercise of its option to acquire a 50% interest in UPN. The purchase price included $155 million in cash (an amount equal to one- half of BHC's aggregate cash contributions to UPN through the exercise date, plus interest), additional cash available for ongoing UPN expenditures, as well as a non-cash contribution of UPN development costs previously incurred by Viacom. UPN distributed $116,261,000 to BHC pursuant to the option exercise, and BHC recorded a net pretax gain on the exercise of $152,224,000 in the first quarter of 1997. BHC and Viacom now share equally in UPN funding requirements and in UPN losses. UPN has been organized as a partnership, and BHC accounts for its partnership interest under the equity method. The carrying value of such interest totalled $2,981,000 at June 30, 1998 and $1,112,000 at December 31, 1997, and is included in Investments in the accompanying condensed consolidated balance sheets. UPN is still in its early development and is expected to continue to incur significant start-up losses and to require significant funding for the next several years. However, BHC believes that the funds from the Viacom option exercise will substantially offset its aggregate UPN funding for 1997 and 1998. UPN's condensed statements of operations are as follows (in thousands): Three Months Six Months Ended June 30, Ended June 30, ------------------- ------------------- 1998 1997 1998 1997 --------- --------- --------- --------- Operating revenues* $ 26,593 $ 17,228 $ 47,796 $ 32,909 Operating expenses* 71,987 50,449 133,357 97,965 --------- --------- --------- --------- Operating loss (45,394) (33,221) (85,561) (65,056) Other income, net 451 412 798 1,114 --------- --------- --------- --------- Net loss $ (44,943)$ (32,809) $ (84,763)$ (63,942) ========= ========= ========= ========= * With respect to certain of its programming, through August 31, 1997 UPN derived no revenue and incurred no programming expense. 4. SHAREHOLDERS' INVESTMENT: As of June 30, 1998, there were outstanding 18,000,000 shares of Class B common stock, all held by Chris-Craft, and 4,515,405 shares of Page 8 Class A common stock, after reflecting as treasury stock 510,703 Class A common shares purchased by BHC during 1998, including 226,503 shares from UTV. At June 30, 1998, 189,297 shares of Class A common stock remain authorized for purchase. In January 1998, 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 $22.7 million, was paid in February 1998. Capital transactions of subsidiary, as set forth in the accompanying condensed consolidated statements of cash flows, reflect purchases by UTV of its common shares totalling $7,010,000 and $2,430,000 in the first six months of 1998 and 1997, respectively, and proceeds to UTV of $3,259,000 and $2,511,000 in the first six months of 1998 and 1997, respectively, from the exercise of stock options. 5. COMPREHENSIVE INCOME: Effective January 1, 1998, BHC adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income." Other comprehensive income (loss) includes only unrealized gains and losses on marketable securities classified as available-for-sale (see Note 2), net of a reclassification adjustment for gains included in net income. Comprehensive income is as follows (in thousands): Three Months Six Months Ended June 30, Ended June 30, -------------------- -------------------- 1998 1997 1998 1997 --------- --------- --------- --------- Net income $ 14,597 $ 17,418 $ 20,595 $ 116,908 Other comprehensive income (loss), net of taxes and minority interest (921) 4,399 8,264 752 --------- --------- --------- --------- Comprehensive income $ 13,676 $ 21,817 $ 28,859 $ 117,660 ========= ========= ========= ========= 6. COMMITMENTS: Commitments of BHC's television stations for film contracts entered into but not available for broadcasting at June 30, 1998 aggregated approximately $292.9 million, including $95.4 million applicable to UTV. BHC also has a remaining commitment to invest over time up to $24.8 million, of which $14.8 million is to be invested in management buyout limited partnerships, including $11.0 million applicable to UTV. BHC expects to make significant expenditures developing UPN. See Note 3. In 1997, UTV signed a definitive agreement to purchase the assets of UHF television station WRBW in Orlando, Florida, for approximately $60 million and possible future consideration. The acquisition is subject to FCC approval and other conditions in the agreement. Page 9 7. EARNINGS PER SHARE: Computations of earnings per share are as follows (in thousands of dollars except per share amounts): Three Months Six Months Ended June 30, Ended June 30, --------------------- ---------------------- 1998 1997 1998 1997 ---------- ---------- ---------- ----------- BASIC: - ------ Weighted average common shares outstanding 22,626,901 23,399,380 22,713,218 23,529,461 ========== ========== ========== =========== Net income $ 14,597 $ 17,418 $ 20,595 $ 116,908 ========== ========== ========== =========== Basic earnings per share $ .65 $ .74 $ .91 $ 4.97 ========== ========== ========== =========== DILUTED: - -------- Weighted average common shares outstanding 22,626,901 23,399,380 22,713,218 23,529,461 ========== ========== ========== =========== Net income $ 14,597 $ 17,418 $ 20,595 $ 116,908 Dilution of UTV net income from UTV stock options (32) (43) (50) (86) ---------- ---------- ---------- ----------- $ 14,565 $ 17,375 $ 20,545 $ 116,822 ========== ========== ========== =========== Diluted earnings per share $ .64 $ .74 $ .90 $ 4.96 ========== ========== ========== =========== Page 10 BHC COMMUNICATIONS, INC. ------------------------ ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -------------------------------------------- OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ------------------------------------------------ Liquidity and Capital Resources - ------------------------------- BHC's financial position is strong and highly liquid. Cash and marketable securities totalled $1.36 billion at June 30, 1998, and BHC has no debt outstanding. BHC has expended significant funds developing United Paramount Network since UPN's inception in 1994, but cash flow provided from BHC's operating activities has exceeded such BHC funding of UPN. BHC's operating cash flow is generated primarily by its core television station group. Broadcast cash flow reflects station operating income plus depreciation and film contract amortization less film contract payments. The relationship between film contract payments and related amortization may vary greatly between periods (payments exceeded amortization by $9.2 million in the first six months of 1998 and by $1.2 million in the corresponding 1997 period), and is dependent upon the mix of programs aired and payment terms of the stations' contracts. Reflecting such amounts, broadcast cash flow in the first six months of 1998 declined 15%, while station earnings declined only 3%, as explained below. Although broadcast cash flow is often used in the broadcast television industry as an ancillary measure, it is not synonymous with operating cash flow computed in accordance with generally accepted accounting principles, and should not be considered alone or as a substitute for measures of performance computed in accordance with generally accepted accounting principles. BHC's cash flow additionally reflects earnings associated with its cash and marketable securities, which balances declined to $1.36 billion at June 30, 1998, from $1.49 billion at December 31, 1997. Such decline primarily reflects the $80.3 million television station acquisition, described below, as well as treasury stock purchases and the payment of a special dividend. Operating cash flow for the first six months of 1998 rose to $78.3 million from $66.2 million, despite the decline in broadcast cash flow, primarily because the 1997 amount includes income tax payments related to the UPN distribution described below (the distribution is reported as a cash flow from investing activities). A special cash dividend of $1.00 per share, aggregating $22.7 million, was paid in February 1998. A similar $1.00 per share special dividend, aggregating $23.6 million, was paid by BHC in February 1997. BHC plans to consider annually the payment of a special dividend. Since April 1990, BHC's Board of Directors has authorized the purchase of up to 7,081,087 Class A common shares. Through June 30, 1998, 6,891,790 shares were purchased, including 226,503 shares from UTV, for a total cost of $516.1 million, including $62.5 million in 1998. From 1993 through June 30, 1998, UTV purchased 1,454,376 of its common Page 11 shares at an aggregate cost of $94.1 million, of which $7.0 million was expended in the first six months of 1998, and, at June 30, 1998, 729,649 UTV shares remained authorized for purchase. In January 1998, UTV purchased the assets of UHF television station WHSW, Channel 24, in Baltimore, Maryland for $80.3 million in cash. The station's call letters were changed to WUTB and the station became a UPN affiliate. UTV has signed a definitive agreement to purchase the assets of WRBW in Orlando, Florida, for approximately $60 million and possible future consideration. UTV expects to use a portion of available cash and marketable securities balances to complete this transaction, which is subject to Federal Communications Commission approval, as well as satisfaction of certain conditions. BHC intends to further expand its operations in the media, entertainment and communications industries and to explore business opportunities in other industries. BHC 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, along with Viacom Inc.'s Paramount Television Group, formed UPN, a fifth broadcast television network which premiered in January 1995. BHC owned 100% of UPN from its inception through January 15, 1997, when Viacom completed the exercise of its option to acquire a 50% interest in UPN. The purchase price included $155 million in cash (an amount equal to one-half of BHC's aggregate cash contributions to UPN through the exercise date, plus interest), additional cash available for ongoing UPN expenditures, as well as a non-cash contribution of UPN development costs previously incurred by Viacom. UPN distributed $116.3 million to BHC following the closing and BHC recorded a net pretax gain of $152.2 million on the transaction in the first quarter of 1997. BHC and Viacom now share equally in UPN losses and funding requirements. UPN, still in its early development, incurred start-up losses of $170.2 million in 1997, $146.3 million in 1996 and $129.3 million in 1995, and is expected for the next several years to continue to incur substantial start-up losses and to require significant funding. BHC funding of UPN totalled $44.3 million in the first six months of 1998. BHC's television stations make commitments for programming that will not be available for telecasting until future dates. At June 30, 1998, commitments for such programming totalled approximately $292.9 million, including $95.4 million applicable to UTV. BHC also has a remaining commitment to invest over time up to $24.8 million, of which $14.8 million is to be invested in management buyout limited partnerships, including $11.0 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, 1998 (including any related to UPN) were not material. BHC currently expects that during 1998 some of its stations will begin converting to digital television. This conversion will require the purchase of digital transmitting equipment to telecast over newly assigned frequencies. This conversion is expected to take place over a number of years and will proceed as market conditions require. BHC expects that its expenditures for UPN, future film contract commitments and capital requirements for its present business, Page 12 including the cost to convert to digital television, will be satisfied primarily from operations, marketable securities or cash balances. Results of Operations - --------------------- BHC net income in the second quarter of 1998 declined to $14,597,000, or $.65 per share ($.64 per share diluted),compared to net income in last year's period of $17,418,000, or $.74 per share ($.74 per share diluted). A 2% increase in operating income and a reduction in BHC's effective income tax rate were more than offset by an increase in BHC's share of United Paramount Network start-up losses. Net income for the first six months of 1998 also declined, to $20,595,000, or $.91 per share ($.90 per share diluted), from net income in last year's corresponding period of $116,908,000, or $4.97 per share ($4.96 per share diluted), primarily reflecting the 1997 first quarter gain of $152,224,000 recorded on the transaction with Viacom set forth above through which BHC reduced its UPN ownership interest to its current 50% from 100%. Weighted average common shares outstanding declined to 22,627,000 from 23,399,000 in the second quarter, and to 22,713,000 from 23,529,000 in the six month period, reflecting purchases by BHC of its Class A common shares. Second quarter operating income increased 2%, to $34,369,000 from $33,581,000, even though earnings at BHC's core television station group declined slightly, to $40,017,000 from $40,694,000. That small decline was more than offset by a $1.8 million increase in earnings at BHC's production subsidiaries. Station operating revenues increased 1%, to $118,007,000 from $116,501,000, primarily due to WUTB, our recently acquired Baltimore station. Operating income for the first six months of 1998 declined 6%, to $47,756,000 from $51,073,000, primarily reflecting lower station earnings and WUTB goodwill amortization. Station earnings for the period declined 3%, to $60,241,000 from $62,244,000 last year, mainly due to the year to date loss at WUTB. Station operating revenues for the first six months of 1998 were virtually unchanged, $215,631,000 compared to last year's $215,744,000. UPN's loss widened in 1998, due in part to mid-season launch costs. BHC's 50% share of such loss, which is recorded under the equity method of accounting, was $22,471,000 in the second quarter, compared to last year's $16,404,000, and totalled $42,381,000 in the six month period, compared to last year's $34,302,000. Interest and other income, which consists mostly of amounts earned on cash and marketable securities holdings, totalled $18,742,000 in the second quarter, compared to $20,632,000 last year, and totalled $38,796,000 in the six month period, compared to $40,640,000 last year. Page 13 BHC's effective income tax rate declined to 36% in 1998 from 40% in 1997, reflecting the recognition of certain income tax credits. Minority interest reflects the interest of shareholders other than BHC in the net income of UTV, 59% owned by BHC at June 30, 1998 and June 30, 1997. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ------------------------------------------------------------------ Not applicable. Page 14 BHC COMMUNICATIONS, INC. ------------------------ PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders. ---------------------------------------------------- The following matters were submitted to a vote of security holders at the Registrant's annual meeting of stockholders which was held on May 4, 1998. The following were elected directors, each receiving the number of votes set opposite his name: Broker For Withheld Non-votes --- -------- --------- Barry S. Greene 183,878,827 92,661 -0- Morgan L. Miller 183,917,334 54,154 -0- John C. Siegel 183,880,041 91,447 -0- The selection of Price Waterhouse LLP as BHC's auditors for the current year was ratified by the following vote: Broker For Against Abstain Non-votes --- ------- ------- --------- 183,955,853 4,908 10,727 -0- Item 5. Other Information ----------------- The persons named on the form of proxy to be mailed in connection with the solicitation of proxies on behalf of the Registrant's Board of Directors for the Registrant's 1999 annual stockholders meeting will vote in their own discretion on any matter as to which the Registrant shall not have received notice by February 10, 1999. 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. Page 15 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: August 12, 1998 Page 16 EXHIBIT INDEX Incorporated by Reference to: Exhibit No. Exhibit - ------------- ----------- ------- 27 Financial Data Schedule EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 10Q DATED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 1000 6-MOS DEC-31-1998 JUN-30-1998 203963 1158501 92634 4682 0 1542893 148181 101242 2062805 193775 0 0 0 230 1672835 2062805 0 220075 0 172319 0 0 0 44171 16000 20595 0 0 0 20595 .91 .90
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