SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
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/ / 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 0-9786
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UNITED TELEVISION, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 41-0778377
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8501 Wilshire Blvd., Suite 340, Beverly Hills, CA 90211
- -------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(310) 854-0426
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year, if
changed since last report)
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 May 10, 1994, there were 10,117,906 shares of the
registrant's common stock outstanding.
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION>
March 31, December 31,
1994 1993
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 17,442 $ 11,952
Marketable securities 163,096 159,291
Accounts receivable, net 23,228 30,816
Film contract rights 18,181 19,993
Deferred tax benefit 4,911 4,659
Prepaid expenses and other
current assets 3,405 4,633
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Total current assets 230,263 231,344
-------- --------
Marketable Securities, noncurrent 13,442 12,912
-------- --------
Film Contract Rights, noncurrent 9,837 10,327
-------- --------
Property, Plant and Equipment, net 17,632 17,258
-------- --------
Intangible Assets, net 13,441 13,593
-------- --------
Other Assets 479 471
-------- --------
$285,094 $285,905
======== ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
Current Liabilities:
Film contracts payable $ 26,752 $ 31,484
Accounts payable 1,985 2,522
Accrued expenses 12,127 13,151
Income taxes payable 13,050 11,372
-------- --------
Total current liabilities 53,914 58,529
-------- --------
Film Contracts Payable after One Year 20,158 22,748
-------- --------
Other Liabilities 2,257 1,867
-------- --------
Shareholders' Investment:
Preferred stock $1.00 par value - -
Common stock $.10 par value 1,016 1,015
Additional paid-in-capital 599 133
Retained earnings 207,988 201,613
Treasury stock, at cost (838) -
-------- --------
208,765 202,761
-------- --------
$285,094 $285,905
======== ========
<FN>
The accompanying notes to condensed consolidated financial
statements are an integral part of these balance sheets.
</TABLE>
<PAGE>
<TABLE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited-in thousands except per share data)
<CAPTION>
For the Three Months
Ended March 31,
---------------------
1994 1993
-------- --------
<S> <C> <C>
Net Revenues $ 32,107 $ 28,098
-------- --------
Expenses:
Operating 13,721 15,804
Selling, general and administrative 8,994 8,333
-------- --------
22,715 24,137
-------- --------
Operating income 9,392 3,961
-------- --------
Other Income:
Income associated with interests in
Time Warner Inc. - 16,005
Other dividend and interest
income, net 1,458 1,151
-------- --------
1,458 17,156
-------- --------
Income before income taxes 10,850 21,117
Income Tax Provision (4,475) (7,950)
-------- --------
Net income $ 6,375 $ 13,167
======== ========
Net Income per Share $ .63 $ 1.28
======== ========
Average Outstanding Common Shares 10,148 10,264
======== ========
<FN>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
<CAPTION>
For the Three Months
Ended March 31,
---------------------
1994 1993
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 6,375 $ 13,167
Adjustment to reconcile net income
to net cash provided from operating
activities:
Film contract payments (10,978) (10,217)
Film contract amortization 6,149 8,085
Depreciation and other amortization 1,183 1,298
Loss (gain) on disposition of
marketable securities 230 (14,185)
Changes in assets and liabilities:
Accounts receivable 7,588 4,914
Prepaid and other assets 1,029 30
Accounts payable and
accrued expenses (1,561) (538)
Income taxes payable 1,816 5,536
--------- ---------
Net cash provided from
operating activities 11,831 8,090
--------- ---------
Cash Flows from Investing Activities:
Purchase of marketable securities,
net (4,565) (8,308)
Capital expenditures (1,405) (354)
-------- --------
Net cash used in investing
activities (5,970) (8,662)
-------- --------
Cash Flows from Financing Activities:
Proceeds from exercise of employee
stock options 467 73
Purchase of treasury stock (838) (6,832)
-------- --------
Net cash used in financing
activities (371) (6,759)
-------- --------
Net Increase (Decrease) in Cash and
Cash Equivalents 5,490 (7,331)
Cash and Cash Equivalents at
Beginning of Period 11,952 16,871
-------- --------
Cash and Cash Equivalents at
End of Period $ 17,442 $ 9,540
======== ========
<FN>
The accompanying notes to condensed consolidated financial
statements are an integral part of these statements.
</TABLE>
<PAGE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION:
The accompanying condensed consolidated financial
statements include the accounts of UTV and its subsidiaries
after elimination of all significant intercompany accounts
and transactions. UTV is a majority owned (54.3% at March
31, 1994) subsidiary of BHC Communications, Inc., a majority
owned subsidiary of Chris-Craft Industries, Inc.
The financial information included herein has been
prepared by UTV, 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,
UTV 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 UTV's latest
annual report on Form 10-K. The information furnished
reflects all adjustments (consisting only of normal
recurring adjustments) which are, in the opinion of
management, necessary to a fair statement of the results for
the interim periods. Certain amounts for 1993 have been
reclassified to conform to the 1994 presentation. The
results for these interim periods are not necessarily
indicative of results to be expected for the full fiscal
year, due to seasonal factors, among others.
2. NEW ACCOUNTING STANDARD:
Effective January 1, 1994, UTV adopted Statement of
Financial Accounting Standards (SFAS) No. 115 "Accounting
for Certain Investments in Debt and Equity Securities". In
accordance with SFAS No. 115, prior period financial
statements have not been restated to reflect the change in
accounting principle. At March 31, 1994, UTV has classified
its marketable securities as available-for-sale.
UTV's debt securities at March 31, 1994 consisted
entirely of U.S. Government securities. The following table
provides certain information related to UTV's marketable
securities as of and for the quarter ended March 31, 1994
(in thousands):
Debt Equity
Securities Securities
---------- ----------
Carrying value $152,550 $23,988
Aggregate fair value 149,389 28,428
Maturing within two years 78,590 -
Maturing in two to five years 70,799 -
Gross unrealized holding gains - 5,351
Gross unrealized holding losses 3,659 911
Sales proceeds 80,454 -
Realized gains 76 -
Realized losses 306 -
For purposes of computing realized gains and losses,
cost was determined using the specific identification
method.
3. SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes for the first quarter of
1994 and 1993 totaled $2,659,000 and $2,414,000,
respectively.
4. COMMITMENTS:
The aggregate amount payable by UTV under contracts for
programming not currently available for telecasting and,
accordingly, not included in film contracts payable and the
related contract rights in the accompanying Condensed
Consolidated Balance Sheet, totaled $26,811,000 at March 31,
1994.
<PAGE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations.
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Liquidity and Capital Resources
- -------------------------------
UTV's operating cash flow is generated primarily by its
television broadcasting operations and generally parallels
the earnings of UTV's television stations, adjusted to
reflect the difference between film contract payments and
film contract amortization. The relationship between such
payments and amortization varies greatly between periods
(payments exceeded amortization by $4,829,000 in the first
quarter of 1994 and by $2,132,000 in the first quarter of
1993) and is dependent upon the mix of programs aired and
payment terms of the stations' contracts. UTV's television
stations generated substantial cash flow in the first
quarter of 1994 and are expected to do the same for the full
year. With its considerable cash and marketable securities
balances, UTV continues to be well positioned to deal with
the uncertainties and opportunities presented by current
business conditions.
UTV's cash flow is augmented by interest and dividend
income associated with its cash and marketable securities.
UTV's cash flow from operations for the first quarter of
1994 totaled $11,831,000, and cash and marketable securities
increased $9,825,000 to $193,980,000 at March 31, 1994.
Working capital increased $3,534,000 during the first
quarter of 1994 to $176,349,000 at March 31, 1994, primarily
reflecting cash flow from operations. Working capital at
March 31, 1994 remains substantially in excess of UTV's
normal operating requirements.
UTV is engaged in an ongoing review of business
opportunities in media, entertainment, communications and
other industries. UTV currently has no outstanding debt and
believes it is capable of raising significant additional
capital to augment its already substantial liquid assets, if
desired, to fund any resulting expansion.
UTV regularly makes current commitments for programming
that will not be available for telecasting until future
dates and had commitments for payments for such programming
totaling $26,811,000 at March 31, 1994 and $28,497,000 at
December 31, 1993. UTV expects to continue to satisfy these
commitments with funds provided from operations.
UTV's Board of Directors has from time to time
authorized the purchase of UTV's common shares. At March
31, 1994, 811,839 shares were authorized for purchase.
Since January 1, 1992, through March 31, 1994, 549,686
shares were purchased for an aggregate cost of $16,635,000,
of which 20,000 shares were purchased during the first
quarter of 1994 for an aggregate cost of $838,000.
UTV's commitments for capital expenditures at March 31,
1994 were not material in relation to UTV's financial
position. Funds for capital expenditures have generally
been provided from operations. UTV expects that future
capital expenditure requirements for its present business
will be funded from operations or current cash balances.
UTV has no present requirement for additional capital.
Results of Operations
- ---------------------
UTV's primary source of revenue is the sale to
advertisers of time on its five television stations. First
quarter net income totaled $6,375,000, or $.63 per share, a
105% increase from last year's net income, before income
associated with interests in Time Warner Inc., of
$3,112,000, or $.30 per share. Last year's net income,
including Time Warner income, totaled $13,167,000, or $1.28
per share.
The substantial increase in net income before Time
Warner related income reflects a strong increase in revenues
as well as a reduction in operating expenses. Net revenue
for the quarter increased 14% to $32,107,000, from
$28,098,000 in 1993. The increase is primarily attributable
to continuing strong demand for television advertising time.
After a 6% decrease in operating expenses, primarily
resulting from a favorable industry-wide resolution of a
disputed music license fee arrangement, operating income
totaled a record $9,392,000, a 137% increase from last
year's $3,961,000.
Other dividend and interest income for the quarter
increased to $1,458,000, from $1,151,000 in 1993, reflecting
higher cash balances.
The first quarter effective tax rate increased to 41.2%
from 37.6% for last year's quarter. The increase in the
effective tax rate reflects a substantial reduction in the
amount of dividend income, which is not fully taxable,
included in pretax income, as well as an increase in the
Federal tax rate.
<PAGE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
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(a) None.
(b) No report on Form 8-K was filed during the quarter
for which this report is being 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.
UNITED TELEVISION, INC.
(Registrant)
Date: May 11, 1994 By: /s/ Garth S. Lindsey
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Garth S. Lindsey
Executive Vice President
and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
10QASCA
