<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-----------------
FORM 10-Q
[x]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 2, 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 1-4278
CAPITAL CITIES/ABC, INC.
(Exact name of registrant as specified in its charter)
NEW YORK 14-1284013
(State of incorporation) (I.R.S. Employer
Identification No.)
77 WEST 66TH STREET, NEW YORK, NEW YORK 10023
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code (212) 456-7777
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
--- -----
The number of shares outstanding of the issuer's common stock as of July 31,
1995: 153,855,874 shares, excluding 30,079,086 treasury shares.
<PAGE>
PART I FINANCIAL INFORMATION
CAPITAL CITIES/ABC, INC.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------- -----------------------
July 2, July 3, July 2, July 3,
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net revenues $1,648,689 $1,538,092 $3,255,504 $2,943,041
---------- ---------- ---------- ----------
Costs and expenses
Direct operating expenses 930,558 857,361 1,882,150 1,721,810
Selling, general and
administrative 321,483 295,047 647,731 580,036
Depreciation 28,419 27,558 56,441 53,493
Amortization of intangible
assets 16,056 15,800 32,115 31,614
---------- ---------- ---------- ----------
1,296,516 1,195,766 2,618,437 2,386,953
---------- ---------- ---------- ----------
Operating income 352,173 342,326 637,067 556,088
Other income (expense)
Interest expense (14,555) (13,406) (29,048) (26,437)
Interest income 17,970 3,406 32,659 7,365
Other, net 14,996 2,962 9,065 3,753
---------- ---------- ---------- ----------
18,411 (7,038) 12,676 (15,319)
---------- ---------- ---------- ----------
Income before income taxes 370,584 335,288 649,743 540,769
Income taxes 161,700 145,800 283,100 235,200
---------- ---------- ---------- ----------
Net income $ 208,884 $ 189,488 $ 366,643 $ 305,569
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Net income per share $1.36 $1.23 $2.38 $1.99
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Dividends per common share $0.05 $0.05 $0.10 $0.055
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Average shares outstanding 154,030 154,030 154,045 153,745
(000's) ---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
-2-
<PAGE>
CAPITAL CITIES/ABC, INC.
CONSOLIDATED BALANCE SHEET
(Thousands of Dollars)
<TABLE>
<CAPTION>
July 2, December 31,
1995 1994
----------- ------------
(Unaudited) (Audited)
<S> <C> <C>
Assets
Current assets
Cash and short-term cash investments $1,169,282 $ 781,371
Short-term investments 284,244 238,029
Accounts and notes receivable, net 885,330 1,056,280
Program licenses and rights 371,151 440,443
Other current assets 218,249 200,064
---------- ----------
Total current assets 2,928,256 2,716,187
---------- ----------
Property, plant and equipment, at cost 2,154,257 2,122,494
Less accumulated depreciation (867,889) (831,838)
---------- ----------
Property, plant and equipment, net 1,286,368 1,290,656
---------- ----------
Intangible assets, net 1,995,163 1,999,305
Program licenses and rights, noncurrent 194,629 195,563
Investment in unconsolidated equity
affiliates 336,289 334,460
Other assets 256,654 232,041
---------- ----------
$6,997,359 $6,768,212
---------- ----------
---------- ----------
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 126,105 $ 163,566
Accrued compensation 96,401 131,370
Accrued expenses and other current
liabilities 304,723 273,254
Program licenses and rights 238,997 281,923
Taxes on income 160,574 189,267
Long-term debt due within one year 3,336 4,176
---------- ----------
Total current liabilities 930,136 1,043,556
Deferred compensation 231,102 188,492
Deferred income taxes 230,775 247,532
Program licenses and rights, noncurrent 48,073 39,259
Other liabilities 234,414 233,987
Long-term debt due after one year 609,598 610,666
---------- ----------
Total liabilities 2,284,098 2,363,492
---------- ----------
Minority interest 109,381 116,163
---------- ----------
Stockholders' equity
Preferred stock, no par value - -
Common stock, $0.10 par value
(300,000,000 shares authorized) 18,394 18,394
Additional paid-in capital 1,047,225 1,036,068
Unrealized net gains on investments 58,566 57,008
Retained earnings 5,099,871 4,748,624
---------- ----------
6,224,056 5,860,094
Less common stock in treasury, at cost (1,620,176) (1,571,537)
---------- ----------
Total stockholders' equity 4,603,880 4,288,557
---------- ----------
$6,997,359 $6,768,212
---------- ----------
---------- ----------
</TABLE>
-3-
<PAGE>
CAPITAL CITIES/ABC, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Thousands of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
--------------------
July 2, July 3,
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities
Net income $ 366,643 $ 305,569
Adjustments to reconcile net income to net cash
Noncash and nonoperating items
Depreciation 56,441 53,493
Amortization of intangible assets 32,115 31,614
Increase in deferred liabilities 24,774 4,949
Other noncash and nonoperating items, net 24,007 16,267
Changes in operating assets and liabilities,
net of effects of acquisitions and dispositions
Decrease in program assets and liabilities, net 36,114 10,334
Decrease in accounts receivable 170,588 35,360
(Decrease) increase in accounts payable,
accrued expenses and other current liabilities (69,419) 17,027
(Increase) in other operating assets, net (18,897) (14,456)
---------- ---------
Net cash provided by operating activities 622,366 460,157
---------- ---------
Cash flows from investing activities
Capital expenditures (57,934) (60,380)
Acquisitions of operating companies and
equity investments (48,630) (208,490)
Purchases of short-term investments (562,251) (267,063)
Sales and maturities of short-term investments 516,119 203,060
Proceeds from dispositions of operating companies 39,323 -
Proceeds from dispositions of real estate - 22,000
Other investing activities, net (66,296) (46,642)
---------- ---------
Net cash used in investing activities (179,669) (357,515)
---------- ---------
Cash flows from financing activities
Reduction of long-term debt (1,908) (5,549)
Common stock purchased for treasury (78,124) (27,444)
Common stock issued under Employee Stock Plans 40,642 29,795
Dividends (15,396) (8,469)
---------- ---------
Net cash used in financing activities (54,786) (11,667)
---------- ---------
Net increase in cash and short-term
cash investments 387,911 90,975
Cash and short-term cash investments
Beginning of period 781,371 264,283
---------- ---------
End of period $1,169,282 $ 355,258
---------- ---------
---------- ---------
</TABLE>
* * * * * * *
Cash and short-term cash investments at July 2, 1995 and July 3, 1994 excludes
$284,244,000 and $236,589,000, respectively, of highly liquid U.S. Government
instruments with original maturities in excess of three months, to conform to
the definition of a cash investment prescribed by the Financial Accounting
Standards Board.
-4-
<PAGE>
CAPITAL CITIES/ABC, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited)
Six Months Ended July 2, 1995
(Thousands of Dollars)
<TABLE>
<CAPTION>
Unreal-
Additional ized net
Common paid-in gains on Retained Treasury
stock capital investments earnings stock Total
------- --------- ----------- -------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
Balance at December
31, 1994 $18,394 $1,036,068 $57,008 $4,748,624 $(1,571,537) $4,288,557
Net income for
six months - - - 366,643 - 366,643
704,489 shares issued
under Employee
Stock Purchase Plan - 11,166 - - 29,328 40,494
3,858 shares issued
from exercise of
employee stock
options - (9) - - 157 148
910,270 shares
purchased for
treasury - - - - (78,124) (78,124)
Dividends - - - (15,396) - (15,396)
Change in
unrealized net
gains, net of
income taxes of
$1,079 - - 1,558 - - 1,558
------- ---------- ------- ---------- ----------- ----------
Balance at July 2,
1995 $18,394 $1,047,225 $58,566 $5,099,871 $(1,620,176) $4,603,880
------- ---------- ------- ---------- ----------- ----------
------- ---------- ------- ---------- ----------- ----------
</TABLE>
5
<PAGE>
CAPITAL CITIES/ABC, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) The results presented in the financial statements are unaudited, but
in the opinion of management contain all adjustments (consisting only
of normal recurring adjustments) necessary for a fair presentation of
the results of operations.
(2) Subsequent event
On July 3, 1995, the Company announced it would merge with The Walt
Disney Company. Under terms of the agreement, the Company's
shareholders will have the right to receive one share of Disney common
stock and $65.00 in cash for each of their shares. The transaction,
which is subject to regulatory review and approval of the shareholders
of each company, is expected to be completed during 1996.
-6-
<PAGE>
CAPITAL CITIES/ABC, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
A summary of the Company's operations by business segment for the second quarter
and six month periods is as follows (in thousands of dollars):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------- --------------------
July 2, July 3, July 2, July 3,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Broadcasting
Net revenues $1,355,337 $1,257,116 $2,685,141 $2,402,065
---------- ---------- ---------- ----------
Direct operating costs 1,021,138 938,045 2,071,988 1,873,991
Amortization of
intangible assets 12,200 11,776 24,292 23,524
---------- ---------- ---------- ----------
Costs and expenses 1,033,338 949,821 2,096,280 1,897,515
---------- ---------- ---------- ----------
Income from operations $ 321,999 $ 307,295 $ 588,861 $ 504,550
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Publishing
Net revenues $ 293,352 $ 280,976 $ 570,363 $ 540,976
---------- ---------- ---------- ----------
Direct operating costs 246,853 233,546 489,292 461,812
Amortization of
intangible assets 3,856 4,024 7,823 8,090
---------- ---------- ---------- ----------
Costs and expenses 250,709 237,570 497,115 469,902
---------- ---------- ---------- ----------
Income from operations $ 42,643 $ 43,406 $ 73,248 $ 71,074
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Consolidated
Net revenues $1,648,689 $1,538,092 $3,255,504 $2,943,041
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Income from operations $ 364,642 $ 350,701 $ 662,109 $ 575,624
General corporate
expense (12,469) (8,375) (25,042) (19,536)
---------- ---------- ---------- ----------
Operating income $ 352,173 $ 342,326 $ 637,067 $ 556,088
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
Second Quarter 1995 Compared with Second Quarter 1994
Results of Operations
Consolidated net revenues for the second quarter of 1995 were
$1,648,689,000, up 7% from the $1,538,092,000 reported in 1994. Broadcasting net
revenues for the second quarter of 1995 were $1,355,337,000, compared with
$1,257,116,000 in 1994, an 8% increase. Net revenues for the ABC Television
Network, the television stations and the radio operations increased moderately,
while ESPN continued to report significant gains. Publishing Group revenues,
excluding the effect of dispositions and start-ups, increased 8%, with the
newspaper operations reporting stronger gains than the specialized publications.
-7-
<PAGE>
Total costs and expenses for the second quarter of 1995 were
$1,296,516,000, compared with $1,195,766,000 reported in 1994, an 8% increase.
Broadcasting costs in the second quarter of 1995 increased 9% from 1994. Costs
and expenses for the ABC Television Network increased slightly, primarily due to
higher affiliate compensation, programming and general and administrative
expenses. Television station expenses rose significantly in the second quarter
of 1995 due mainly to the absence of a one-time credit recorded in 1994 to
reflect the resolution of a long-standing music license fee dispute. Excluding
the effect of this 1994 adjustment, television station expenses rose moderately,
primarily due to increased syndicated programming expense. ESPN expenses
increased significantly in the second quarter of 1995 as a result of higher
programming, production, selling and general and administrative costs. Costs at
the Company's radio operations rose slightly, mainly due to higher selling and
general and administrative expenses and the inclusion of recently acquired
stations. Publishing Group costs, excluding the effect of dispositions and
start-ups, increased 10% from 1994, due to substantially higher newsprint
expense and modestly higher advertising and general and administrative expenses.
Operating income for the second quarter of 1995 was $352,173,000, compared
with $342,326,000 reported in 1994, an increase of 3%. Broadcasting operating
income rose 5% from 1994. Operating income for the ABC Television Network
increased significantly, reflecting stronger advertiser demand and modest
operating expense increases. Operating income at the television stations
declined slightly from the second quarter of 1994, due primarily to the effect
of the previously described 1994 music license fee adjustment. Excluding the
effect of this 1994 nonrecurring reduction in expense, operating income for the
television stations rose moderately. ESPN and the radio operations also reported
moderate earnings growth. Publishing earnings, excluding the effect of
dispositions and start-ups, decreased 4%. Substantially higher newsprint
expense at the newspapers were partially offset by a moderate increase in
earnings at the specialized publications.
Net interest income (interest income less interest expense) for the second
quarter of 1995 increased $13,415,000 from 1994. Interest income was $14,564,000
higher in the second quarter of 1995 due to a greater level of invested cash at
higher interest rates. Interest expense increased $1,149,000, primarily as a
result of higher interest expense on outstanding commercial paper. Interest of
$953,000 and $730,000 was capitalized in the second quarter of 1995 and 1994,
respectively.
Other income, net increased $12,034,000 in the second quarter of 1995,
primarily due to the recording of a nonrecurring gain on the sale of the
Company's New England newspaper operations.
The Company's income tax provision for the second quarter of 1995 has been
computed by applying the estimated 1995 annual effective income tax rate of
43.6% to income before taxes. For the full year 1994, the effective tax rate was
also 43.6%.
Consolidated net income for the second quarter of 1995 was $208,884,000
compared with $189,488,000 reported for the same period of 1994. Earnings per
share for the second quarter of 1995 were $1.36, an increase of 11% from the
$1.23 reported in last year's comparable quarter. Average shares outstanding for
the second quarter of 1995 and 1994 were 154,030,000.
-8-
<PAGE>
First Half of 1995 Compared with First Half of 1994
Results of Operations
Consolidated net revenues for the first half of 1995 were $3,255,504,000,
up 11% from the $2,943,041,000 reported in 1994. Broadcasting net revenues for
the first half of 1995 were $2,685,141,000, compared with $2,402,065,000 in
1994, a 12% increase. The ABC Television Network reported a significant increase
in net revenues for the first half of 1995. This gain was due to greater
advertiser demand and the broadcast of Super Bowl XXIX in 1995, and in part to
the absence of the Winter Olympics, which were broadcast on another network in
1994. Television station net revenues rose moderately in the first half of 1995
for reasons consistent with those for the ABC Television Network. ESPN continued
to report significant revenue increases, while radio revenues increased
moderately as a result of greater advertiser demand and recent radio station
acquisitions. Publishing Group revenues, excluding the effect of dispositions
and start-ups, increased 7%, with the newspaper operations reporting stronger
gains than the specialized publications.
Total costs and expenses for the first half of 1995 were $2,618,437,000,
compared with $2,386,953,000 reported in 1994, a 10% increase. Broadcasting
costs in the first half of 1995 also increased 10% from 1994. Costs and expenses
for the ABC Television Network increased moderately, primarily due to higher
programming, affiliate compensation, production and general and administrative
expenses. Programming at the Network included higher expenses due to the
telecast of the 1995 Super Bowl and Pro Bowl in 1995 versus the final 1993 NFL
regular season game and Wildcard playoff games in 1994. Television station
expenses rose significantly in the first half of 1995 due primarily to the
absence of a one-time credit recorded in 1994 to reflect the resolution of a
long-standing music license fee dispute. Excluding the effect of this 1994
adjustment, television station expenses rose moderately, primarily due to
increased syndicated programming, news and general and administrative expenses.
ESPN expenses increased significantly in the first half of 1995 as a result of
increased programming, production, selling and general and administrative costs.
Costs at the Company's radio operations increased slightly, mainly due to higher
selling and general and administrative expenses and the inclusion of recently
acquired stations. Publishing Group costs, excluding the effect of dispositions
and start-ups, increased 8% from 1994, due to substantially higher newsprint
expense and modestly higher advertising, circulation and general and
administrative expenses.
Operating income for the first half of 1995 was $637,067,000, compared
with $556,088,000 reported in 1994, an increase of 15%. Broadcasting operating
income rose 17% from 1994. The ABC Television Network reported a significant
increase in operating income. Operating income at the television stations
increased moderately compared with the first half of 1994, due primarily to the
previously described 1994 music license fee adjustment. Excluding the effect of
this 1994 reduction in expense, operating income for the television stations
rose significantly. ESPN and the radio operations also reported significant
earnings gains. Publishing earnings, excluding the effect of dispositions and
start-ups, was comparable with 1994. Substantially higher newsprint expense
produced a slight decline in earnings in the newspaper group. This decline was
offset by a significant increase in earnings at the specialized publications.
-9-
<PAGE>
Net interest income (interest income less interest expense) for the first
half of 1995 increased $22,683,000 from 1994. Interest income was $25,294,000
higher in the first half of 1995 due to a greater level of invested cash at
higher interest rates. Interest expense increased $2,611,000, primarily as a
result of a reduction of capitalized interest and higher interest expense on
miscellaneous debt. Interest of $1,851,000 and $2,603,000 was capitalized in the
first half of 1995 and 1994, respectively.
Other income, net increased $5,312,000 in the first half of 1995,
primarily due to the recording of a nonrecurring gain on the sale of the
Company's New England newspaper operations, partially offset by a higher
provision to record ESPN's minority interest.
The Company's income tax provision for the first half of 1995 has been
computed by applying the estimated 1995 annual effective income tax rate of
43.6% to income before taxes. For the full year 1994, the effective tax rate was
also 43.6%.
Consolidated net income for the first half of 1995 was $366,643,000,
compared with $305,569,000 reported for the same period of 1994. Earnings per
share for the first half of 1995 were $2.38, an increase of 20% from the $1.99
reported in last year's comparable period. Average shares outstanding for the
first half of 1995 were 154,045,000 compared with 153,745,000 in 1994.
Liquidity and Capital Resources
Net Cash Provided By Operating Activities
For the first half of 1995, net cash provided by operating activities was
$622,366,000, an increase of $162,209,000 from the $460,157,000 reported in
1994. The increase was primarily attributable to higher 1995 net income,
increases in deferred liabilities and positive changes in other working capital
items.
Net Cash Used In Investing Activities
For the first half of 1995, net cash used in investing activities was
$179,669,000, a decrease of $177,846,000 from the $357,515,000 used in the prior
year. Reduced acquisition activity accounted for most of the decreased use of
cash for investing activities. In addition, a smaller increase in net short-term
investments also contributed to the decline in net cash used in investing
activities.
Net Cash Used In Financing Activities
For the first half of 1995, net cash used in financing activities was
$54,786,000, an increase of $43,119,000 from the $11,667,000 used in 1994. The
increase was primarily attributable to greater common stock repurchases and
higher cash dividends paid.
At July 2, 1995, cash and short-term cash investments were
$1,169,282,000, an increase of $387,911,000 from December 31, 1994. However,
after the inclusion of short-term investments, the balance at July 2, 1995
aggregated $1,453,526,000, an increase of $434,126,000 from $1,019,400,000 at
December 31, 1994. The Company's policy is very conservative with respect to
investment of its cash. At July 2, 1995, substantially all of the Company's cash
was invested in highly liquid
-10-
<PAGE>
United States Government securities with a weighted average life to maturity of
29 days. The Financial Accounting Standards Board requirements arbitrarily
define cash equivalents as those investments with original maturities at the
date of purchase of three months or less. At July 2, 1995, $284,244,000 of the
Company's investments did not meet the definition of a cash equivalent and are
therefore classified in the consolidated financial statements as short-term
investments. The Company believes that this distinction is not meaningful with
respect to the statement of its cash and cash equivalents position.
Interest paid during the first half of 1995 and 1994 was $30,660,000 and
$28,942,000, respectively. Income taxes paid, net of refunds received, during
the first half of 1995 and 1994 was $338,478,000 and $230,987,000, respectively.
Interest-bearing debt at July 2, 1995 and December 31, 1994 was as
follows (000's omitted):
<TABLE>
<CAPTION>
July 2, December 31,
1995 1994
---- ----
<S> <C> <C>
Commercial paper supported by
bank revolving credit agreement $100,000 $100,000
8 7/8% notes due 2000 250,000 250,000
8 3/4% debentures due 2021 250,000 250,000
Other long-term debt 12,934 14,842
-------- --------
$612,934 $614,842
-------- --------
-------- --------
</TABLE>
A subsidiary of the Company has issued commercial paper, $100,000,000 of
which is outstanding at July 2, 1995, at a weighted average interest rate of
5.9%. The commercial paper is supported by a $1,000,000,000 bank revolving
credit agreement terminating on June 30, 1999, unless otherwise extended. The
amount of commercial paper outstanding at July 2, 1995 is classified as
long-term, since the Company intends to renew or replace with long-term
borrowings all, or substantially all, of the commercial paper. However, the
amount of commercial paper outstanding in 1995 is expected to fluctuate and may
be reduced from time to time.
The Company has unconditionally guaranteed the commercial paper and any
borrowings which may be made by a subsidiary under the bank revolving credit
agreement.
At July 2, 1995 and December 31, 1994, interest-bearing debt represented
11% and 12%, respectively, of the Company's total capitalization.
Capital expenditures in the first half of 1995 were $57,934,000. The
Company anticipates that 1995 capital expenditures for property, plant and
equipment will be approximately $150,000,000.
As the operator of the ABC Television Network, ESPN and television and
radio stations, the Company expects to continue to enter into programming
commitments to purchase the broadcast rights for various feature film, sports
and other programming. Total commitments to purchase broadcast programming
approximated $4,085,000,000 at July 2, 1995. This amount is substantially
payable over the next five years. The Company plans to fund its operations and
commitments from internally generated funds and, if needed, from the various
external sources of funds which are available.
-11-
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings
Not applicable.
ITEM 2. Changes in Securities
Not applicable.
ITEM 3. Defaults Upon Senior Securities
Not applicable.
ITEM 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of the Company
was held on May 18, 1995. Proxies were solicited
in connection with such meeting pursuant to
Regulation 14A under the Securities Exchange Act of 1934.
(b) Not applicable.
(c) At the meeting the following matters were voted
upon by the shareholders:
(1) Election of directors:
The following persons were nominated and received the votes
as indicated:
<TABLE>
<CAPTION>
Name For Withheld
----- ---- ---------
<S> <C> <C>
Robert P. Bauman 128,971,907 1,233,429
Nicholas F. Brady 128,952,577 1,252,759
Warren E. Buffett 128,973,255 1,232,081
Daniel B. Burke 128,966,204 1,239,132
Frank T. Cary 128,964,200 1,241,136
John B. Fairchild 128,972,150 1,233,186
Leonard H. Goldenson 128,952,239 1,253,097
Robert A. Iger 128,965,473 1,239,863
Frank S. Jones 128,964,917 1,240,419
Ann Dibble Jordan 128,967,432 1,237,904
John H. Muller, Jr. 128,964,313 1,241,023
Thomas S. Murphy 128,971,678 1,233,658
Wyndham Robertson 128,975,171 1,230,165
M. Cabell Woodward, Jr. 128,973,564 1,231,792
</TABLE>
-12-
<PAGE>
(2) Proposal to ratify the appointment of Ernst & Young LLP as
the Company's independent auditors for 1995:
For Against Abstain
--- -------- -------
128,944,250 1,179,417 81,669
(3) Shareholder proposal to require all directors to own a
minimum of 1,000 shares of Company stock:
For Against Abstain Broker non-vote
--- ------- ------- ---------------
5,339,163 114,918,512 2,172,053 7,775,608
(4) The following shareholder proposals were raised from the
floor of the meeting for shareholder consideration:
(i) Requesting that management permit coverage of
shareholder meetings by non-Company controlled
television cameras:
For Against Abstain
--- ------- -------
1,582 21,686,273 0
(ii) Requesting that ABC News hold regular
"Viewpoint" programs:
For Against Abstain
--- ------- -------
1,582 21,686,273 0
(d) Not applicable.
ITEM 5. Other Information
On August 3, 1995 the Company filed a Form 8-K to report under Item 5,
Other Events, the execution of (i) an Agreement and Plan of
Reorganization dated as of July 31, 1995 between the Company and
The Walt Disney Company ("Disney"), (ii) a Stock Agreement dated that
date among Disney, Berkshire Hathaway Inc. and Thomas S. Murphy and
(iii) a Programming Agreement dated that date between the Company and
Disney, and to report five purported class action suits filed against
the Company, its Board of Directors and, in four such suits, Disney.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None filed during Second Quarter 1995.
-13-
<PAGE>
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.
CAPITAL CITIES/ABC, INC.
------------------------
(Registrant)
RONALD J. DOERFLER
Date: August 8, 1995 /S/ Ronald J. Doerfler
--------------------------
Ronald J. Doerfler
Senior Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CAPITAL
CITIES/ABC, INC. CONSOLIDATED FINANCIAL STATEMENTS FROM FORM 10-Q FOR THE PERIOD
ENDING JULY 2, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUL-02-1995
<CASH> 1,169,282
<SECURITIES> 284,244
<RECEIVABLES> 923,514
<ALLOWANCES> 38,184
<INVENTORY> 30,328
<CURRENT-ASSETS> 2,928,256
<PP&E> 2,154,257
<DEPRECIATION> 867,889
<TOTAL-ASSETS> 6,997,359
<CURRENT-LIABILITIES> 930,136
<BONDS> 609,598
<COMMON> 18,394
0
0
<OTHER-SE> 4,585,486
<TOTAL-LIABILITY-AND-EQUITY> 6,997,359
<SALES> 3,255,504
<TOTAL-REVENUES> 3,255,504
<CGS> 1,874,655
<TOTAL-COSTS> 1,874,655
<OTHER-EXPENSES> 736,287
<LOSS-PROVISION> 7,495
<INTEREST-EXPENSE> 29,048
<INCOME-PRETAX> 649,743
<INCOME-TAX> 283,100
<INCOME-CONTINUING> 366,643
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 366,643
<EPS-PRIMARY> 2.38
<EPS-DILUTED> 0
</TABLE>
