SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 5, 1996
Capital Cities/ABC, Inc.
(Exact name of registrant as specified in its charter)
New York 1-4278 14-1284013
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
77 West 66th Street, New York, N.Y. 10023
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 456-7777
Not Applicable
(Former name or former address, if changed since last report)
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Item 1. Change of Control of the Registrant.
On February 9, 1996, pursuant to an Amended and
Restated Agreement and Plan of Reorganization (the
"Reorganization Agreement") dated as of July 31, 1995, by and
between The Walt Disney Company ("Disney") and Capital
Cities/ABC, Inc. (the "registrant"), a wholly owned subsidiary of
Disney merged with and into the registrant, with the registrant
as the surviving corporation and a wholly owned subsidiary of
Disney (the "Merger"). Upon consummation of the Merger, each
outstanding share of Common Stock, par value $.10 per share (the
"Common Stock"), of the registrant (other than shares properly
dissenting from the Merger) was converted into the right to
receive, at the holder's election, (i) one share of common stock
of the holding company which will hold the common stock of the
registrant and Disney following the transaction ("New Disney")
plus $65 in cash (a "Standard Election") or (ii) subject to
proration, one share of New Disney common stock plus a number of
shares of New Disney common stock equal to a fraction, the
numerator of which is $65 and the denominator of which is the
Disney Common Stock Price (a "Stock Election"), or (iii) subject
to proration, cash in an amount equal to $65 plus the Disney
Common Stock Price (a "Cash Election") (collectively, the "Merger
Consideration"). If a holder does not make a valid Standard
Election or Stock Election, the holder will be deemed to have
made a Cash Election. "Disney Common Stock Price" means an amount
equal to the average of the closing sales prices of Disney common
stock on each of the ten consecutive trading days immediately
preceding the second trading day prior to the effective date of
the transactions contemplated by the Reorganization Agreement.
The transfer agent for the Common Stock has been instructed by
the registrant to close the stock transfer books for the Common
Stock, and trading of Common Stock on the New York Stock Exchange
and the Pacific Stock Exchange is to cease at the close of
business of such exchanges on the date hereof.
Harris Trust Company of New York has been retained by
Disney to serve as the Exchange Agent. Letters of Transmittal,
together with election forms and instructions relating thereto,
are expected to be provided promptly to the registrant's
shareholders so that such shareholders may receive the Merger
Consideration.
A copy of the press release, dated February 9, 1996,
issued by the registrant relating to the consummation of the
Merger is attached hereto as Exhibit 99.1.
Item 5. Other Events.
On February 5, 1996, the registrant announced its
earnings for the fourth quarter and year ending December 31,
1995.
A copy of the press release, dated February 5, 1996,
issued by the registrant announcing its earnings for the fourth
quarter and year ending December 31, 1995 is attached hereto as
Exhibit 99.2.
Item 7. Financial Statements and Exhibits.
(c) The following exhibits are filed with this report:
99.1. Press release of the registrant relating to the
consummation of the Merger on February 9, 1996.
99.2. Press release of the registrant announcing its
earnings for the fourth quarter and year ending December 31,
1995.
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SIGNATURES
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 hereunto duly authorized.
Capital Cities/ABC, Inc.
By: /s/ Ronald J. Doerfler
-----------------------
Name: Ronald J. Doerfler
Title: Senior Vice President
and Chief Financial Officer
Dated: February 9, 1996
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EXHIBIT INDEX
Exhibit Number Description
99.1 Press Release of the registrant
issued February 9, 1996.
99.2 Press Release of the registrant
issued February 5, 1996.
<PAGE>
Exhibit 99.1
Capital Cities/ABC, Inc.
77 West 66th Street
New York, NY 10023
PRESS RELEASE (FOR IMMEDIATE RELEASE)
THE WALT DISNEY COMPANY COMPLETES ACQUISITION OF CAPITAL CITIES/ABC, INC.
New York, NY, February 9, 1996--Capital Cities/ABC, Inc.
(NYSE:CCB) today announced the completion of the acquisition of
Capital Cities/ABC, Inc. and the merger of Capital Cities/ABC,
Inc. with a wholly owned subsidiary of The Walt Disney Company
(NYSE:DIS), to be called Capital Cities/ABC, Inc.
Capital Cities/ABC, Inc. is now a wholly owned
subsidiary of Disney.
Each outstanding share of Capital Cities/ABC, Inc.
Common Stock (par value of $.10 per share) was converted in the
merger into the right to receive, at the holder's election, one
share of Disney common stock and $65 in cash or, subject to
proration, an equivalent amount of cash or stock.
Harris Trust Company of New York has been retained by
Disney to serve as Exchange Agent. Letters of Transmittal,
together with election forms and instructions for their use, are
expected to be provided promptly to Capital Cities/ABC, Inc.
shareholders so that they may receive the merger consideration.
The Walt Disney Company is headquartered in Burbank,
California. Capital Cities/ABC, Inc. will maintain its
headquarters in New York, NY.
<PAGE>
EXHIBIT 99.2
[Letterhead of]
CAPITAL CITIES/ABC, INC.
February 5, 1996
FOR IMMEDIATE RELEASE
CAPITAL CITIES/ABC REPORTS EARNINGS FOR THE FOURTH QUARTER AND YEAR ENDING
DECEMBER 31, 1995
Capital Cities/ABC, Inc. earnings for the fourth quarter and year
ending December 31, 1995 were announced today by Thomas S. Murphy,
Chairman of the Board and Chief Executive Officer. Excluding costs
incurred in connection with the pending merger with The Walt Disney
Company, consolidated net income per share was $1.76 in the fourth
quarter of 1995, compared with $1.56 in 1994, an increase of 13%.
Consolidated net income for the fourth quarter of 1995 was
$234,956,000 (including the merger costs), compared with
$240,570,000 reported for the same period of 1994. Including the
merger costs, net income per share for the fourth quarter of 1995
was $1.53 compared with the $1.56 reported in the prior year's
quarter. Merger costs consisted principally of long-term incentive
compensation expense resulting from the merger-related increase in
the Company's share price, as well as from costs for legal, printing
and other similar expenses.
Net revenues for the fourth quarter of 1995 were $2,056,526,000, an
increase of 4% over 1994, with broadcasting operations also up 4%.
Net revenues for the ABC Television Network increased slightly.
Television station net revenues, excluding political advertising,
decreased slightly reflecting soft advertising demand. ESPN
continued to report significant revenue gains, while the radio
operations increased slightly. Publishing revenues, excluding the
effect of dispositions and start-ups, increased 8%, with the
newspaper operations reporting higher gains than the specialized
publications.
Operating income (including merger costs) for the fourth quarter of
1995 was $366,203,000, compared with $439,620,000 reported in 1994.
Excluding merger-related costs, operating income for the Company
declined 4%. Broadcasting operating income, excluding merger costs,
decreased 3% from 1994. Operating income for ABC Television Network
decreased moderately. Television stations operating income was down
significantly, reflecting the absence of substantial prior year
political revenue as well as the soft marketplace. Operating income
at ESPN and the radio operations increased very significantly in the
fourth quarter of 1995. Publishing earnings, excluding the effect of
merger costs, dispositions and start-ups, decreased 2%.
Substantially higher newsprint expense at the newspapers was the
primary factor in the decline.
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Other income, net for the fourth quarter of 1995 increased
$69,479,000 from the prior year's comparable quarter, principally
due to a gain on the sale of a non-operating investment and from a
favorable settlement of prior years' income taxes.
Excluding costs incurred in connection with the pending merger with
The Walt Disney Company, consolidated net income per share for the
full year of 1995 was $5.11 compared with $4.42 in 1994, an increase
of 16%. Consolidated net income for the full year of 1995 was
$728,636,000 (including merger costs) compared with $679,814,000
reported for the same period of 1994. Including merger costs, net
income per share for 1995 was $4.73 compared with the $4.42 reported
in 1994.
Net revenues for 1995 increased 8% over 1994, with broadcasting
operations up 9%. Net revenues for the ABC Television Network
increased moderately. Television station net revenues increased
slightly, reflecting soft advertising demand in the last half of
1995 and the absence of significant 1994 political advertising. ESPN
continued to report significant gains, while the radio operations
increased moderately. Publishing revenues, excluding the effect of
dispositions and start-ups, increased 7%, with the newspaper
operations reporting higher gains than the specialized publications.
Operating income (including merger costs) for 1995 was
$1,231,156,000, compared with $1,238,811,000 reported in 1994.
Excluding merger-related costs, operating income for the Company
increased 7%, with broadcasting up 8%. Operating income for the ABC
Television Network increased moderately, while the television
stations were down slightly as a result of 1995 marketplace softness
and the absence of 1994 political advertising. Operating income at
ESPN and the radio operations increased significantly in 1995.
Publishing earnings, excluding merger costs and the effect of
dispositions and start-ups, decreased 1% with higher newsprint
expense driving the decline.
During 1995, the Company entered into an agreement to merge with The
Walt Disney Company. The merger has been approved by the
shareholders of each company and by the Department of Justice.
Consummation of the merger will occur following the approval of the
Federal Communications Commission.
Capital Cities/ABC operates the ABC Television Network and ten
television stations, the ABC Radio Networks and 21 radio stations,
and provides programming for cable television. The Company is
engaged in international broadcast/cable services and television
program production and distribution. Also, the Company publishes
daily and weekly newspapers, shopping guides, various specialized
and business periodicals, and books.
Contact: Julie Hoover, Capital Cities/ABC, Inc. (212) 456-6641
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CAPITAL CITIES/ABC, INC.
SUMMARY STATEMENT OF CONSOLIDATED INCOME
(Thousands of Dollars) (Unaudited)
Three Months Ended Twelve Months Ended
------------------------ -----------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1995 1994 1995 1994
-------- -------- -------- --------
Net revenues $2,056,526 $1,974,264 $6,878,558 $6,379,237
Costs and expenses
Direct operating costs 1,585,606 1,490,838 5,374,606 4,967,891
Depreciation 30,185 27,843 115,761 109,128
Amortization of
intangibles 17,227 15,963 65,733 63,407
Merger costs 57,305 -- 91,302 --
1,690,323 1,534,644 5,647,402 5,140,426
Operating income 366,203 439,620 1,231,156 1,238,811
Interest expense (13,121) (14,504) (57,152) (55,070)
Interest income 18,383 8,842 72,294 24,553
Other income, net 64,091 (5,388) 67,038 (2,980)
Income before income taxes 435,556 428,570 1,313,336 1,205,314
Income taxes (200,600) (188,000) (584,700) (525,500)
Net income $ 234,956 $ 240,570 $ 728,636 $ 679,814
Net income per share $ 1.53 $ 1.56 $ 4.73 $ 4.42
Average shares (000's) 153,895 154,040 153,960 153,890
* * * * * * * * * * * * * * *
SUMMARY OF OPERATIONS BY BUSINESS SEGMENT
(Thousands of Dollars) (Unaudited)
Net revenues
Broadcasting $1,759,779 $1,690,524 $5,727,524 $5,277,126
Publishing 296,747 283,740 1,151,034 1,102,111
Total $2,056,526 $1,974,264 $6,878,558 $6,379,237
Operating income
Broadcasting $ 362,808 $ 409,784 $1,164,816 $1,127,198
Publishing 30,295 42,160 139,041 155,018
Income from operations 393,103 451,944 1,303,857 1,282,216
General corporate expense (26,900) (12,324) (72,701) (43,405)
Total $ 366,203 $ 439,620 $1,231,156 $1,238,811
