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 September 30, 1994
-------------------
/ / 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
-----------------------------
UNITED TELEVISION, INC.
-----------------------
(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
---------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(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 November 10, 1994, there were 9,967,738 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>
September 30, December 31,
1994 1993
-------
- - - ------ ------------
(Unaudited)
<S> <C>
<C>
ASSETS
- - - ------
Current Assets:
Cash and cash equivalents $
13,723 $ 11,952
Marketable securities
166,469 159,291
Accounts receivable, net
25,477 30,816
Film contract rights
23,528 19,993
Deferred tax benefit
4,111 4,659
Prepaid expenses and other
current assets
3,454 4,633
------
- - - -- --------
Total current assets
236,762 231,344
------
- - - -- --------
Marketable Securities, noncurrent
14,976 12,912
------
- - - -- --------
Film Contract Rights, noncurrent
10,080 10,327
------
- - - -- --------
Property, Plant and Equipment, net
16,752 17,258
------
- - - -- --------
Intangible Assets, net
13,136 13,593
------
- - - -- --------
Other Assets
541 471
------
- - - -- --------
$292,247 $285,905
======== ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- - - ----------------------------------------
Current Liabilities:
Film contracts payable $
23,942 $ 31,484
Accounts payable
1,985 2,522
Accrued expenses
15,992 13,151
Income taxes payable
8,268 11,372
------
- - - -- --------
Total current liabilities
50,187 58,529
------
- - - -- --------
Film Contracts Payable after One Year
22,853 22,748
------
- - - -- --------
Other Liabilities
2,257 1,867
------
- - - -- --------
Shareholders' Investment:
Preferred stock $1.00 par value -
- - - -
Common stock $.10 par value
1,017 1,015
Additional paid-in capital
875 133
Retained earnings
224,282 201,613
Treasury stock, at cost
(9,224) -
------
- - - -- --------
216,950 202,761
------
- - - -- --------
$292,247 $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>
Three Months
Nine Months
Ended September 30,
Ended September 30,
-------------------
- - - -------------------
1994 1993
1994 1993
-------- -------
- - - -------- -------
<S> <C> <C>
<C> <C>
Net Revenues $ 34,426 $ 28,950
$104,306 $91,575
-------- --------
- - - -------- -------
Expenses:
Operating 15,016 11,705
43,347 43,553
Selling, general and administrative 9,036 7,482
28,183 24,085
-------- --------
- - - -------- -------
24,052 19,187
71,530 67,638
-------- --------
- - - -------- -------
Operating income 10,374 9,763
32,776 23,937
-------- --------
- - - -------- -------
Other Income:
Income associated with interests
in Time Warner Inc. - 1,176
- - - - 30,568
Other dividend and interest income,
net 1,830 1,239
5,018 3,933
-------- --------
- - - -------- -------
1,830 2,415
5,018 34,501
-------- --------
- - - -------- -------
Income before income taxes 12,204 12,178
37,794 58,438
Income Tax Provision (4,725) (4,925)
(15,125) (23,650)
-------- --------
- - - -------- -------
Net income $ 7,479 $ 7,253
$ 22,669 $34,788
======== ========
======== =======
Net Income per Share $ 0.75 $ 0.72
$ 2.25 $ 3.42
======== ========
======== =======
Average Outstanding Common Shares 9,993 10,109
10,087 10,166
======== ========
======== =======
<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>
Nine Months
Ended September 30,
- - - -------------------
1994 1993
- - - -------- --------
<S>
<C> <C>
Cash Flows from Operating Activities:
Net income
$ 22,669 $ 34,788
Adjustments to reconcile net income
to net cash provided from operating
activities:
Film contract payments
(26,463) (30,281)
Film contract amortization
18,290 21,927
Depreciation and other amortization
3,601 3,811
Loss (gain) on disposition of
marketable securities
230 (26,617)
Changes in assets and liabilities:
Accounts receivable
5,339 3,655
Prepaid and other assets
(1,443) (3,405)
Accounts payable and
accrued expenses
2,304 1,349
Income taxes payable
(2,166) (123)
- - - -------- --------
Net cash provided from
operating activities
22,361 5,104
- - - -------- --------
Cash Flows from Investing Activities:
Purchase of marketable securities,
net
(9,472) (3,787)
Capital expenditures
(2,638) (1,965)
- - - -------- --------
Net cash used in investing
activities
(12,110) (5,752)
- - - -------- --------
Cash Flows from Financing Activities:
Proceeds from exercise of employee
stock options
744 912
Purchase of treasury stock
(9,224) (10,196)
- - - -------- --------
Net cash used in financing
activities
(8,480) (9,284)
- - - -------- --------
Net Increase (Decrease) in Cash and
Cash Equivalents
1,771 (9,932)
Cash and Cash Equivalents at
Beginning of Period
11,952 16,871
- - - -------- --------
Cash and Cash Equivalents at
End of Period
$ 13,723 $ 6,939
======== ========
<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 (55.2% at
September 30, 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. UTV classifies its marketable
securities as available-for-sale.
Debt securities held by UTV at September 30, 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 nine months
ended September 30, 1994 (in thousands):
Debt Equity
Securities Securities
---------- ----------
Carrying value $155,762 $25,683
Aggregate fair value 150,844 31,819
Maturing within two years 98,155 -
Maturing in two to five years 52,689 -
Gross unrealized holding gains - 6,939
Gross unrealized holding losses 5,419 803
Sales proceeds 80,224 -
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 nine months ended
September 30, 1994 and 1993 totaled $17,291,000 and
$23,773,000, 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 $38,442,000 at September
30, 1994.
<PAGE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations.
-----------------------------------
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 may vary greatly between periods
(payments exceeded amortization by $8,173,000 and $8,354,000
in the first nine months of 1994 and 1993, respectively) 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 nine months 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 nine months of
1994 totaled $22,361,000, and cash and marketable securities
increased $11,013,000 during the period to $195,168,000 at
September 30, 1994.
Working capital increased $13,760,000 during the first
nine months of 1994 to $186,575,000 at September 30, 1994,
primarily reflecting cash flow from operations. Working
capital at September 30, 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 commitments for programming that
will not be available for telecasting until future dates and
had commitments for payments for such programming totaling
$38,442,000 at September 30, 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
September 30, 1994, 638,417 shares were authorized for
purchase. Since January 1, 1992, through September 30,
1994, 723,108 shares were purchased for an aggregate cost of
$25,021,000, of which 193,422 shares were purchased during
the first nine months of 1994 for an aggregate cost of
$9,224,000.
UTV's commitments for capital expenditures at September
30, 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. Third
quarter net income totaled $7,479,000, or $.75 per share,
compared to $7,253,000, or $.72 per share, in last year's
third quarter. Excluding after tax income associated with
UTV's former holdings of Time Warner Inc. securities, 1993
third quarter net income was $6,552,000, or $.65 per share.
The 14% increase in income excluding Time Warner amounts
primarily reflects an increase in operating income.
Continued strong demand for television advertising
resulted in a 19% increase in revenues, to $34,426,000 from
last year's $28,950,000. Operating income rose 6% to a
third quarter record $10,374,000, from $9,763,000 last year,
despite a 25% increase in expenses. The expense increase
reflects a 36% increase in program related expenses
(primarily expense associated with new program development)
and a new $438,000 management fee expense paid BHC.
Other dividend and interest income for the quarter
increased to $1,830,000, from $1,239,000 in 1993, primarily
reflecting increased holdings of marketable securities.
Net income for the first nine months of 1994 was
$22,669,000, or $2.25 per share, compared to $34,788,000, or
$3.42 per share, last year. Excluding after tax income
associated with UTV's former holdings of Time Warner
securities, 1994 nine month net income increased 41% from
$16,045,000, or $1.58 per share, last year.
The significant improvement in 1994 nine months
earnings from operations also reflects a strong increase in
revenues. Net revenues for the period increased 14% to
$104,306,000, from $91,575,000 last year. The revenue
increase is primarily attributable to increased demand for
television advertising. Operating income for the period was
$32,776,000, a 37% increase from last year's $23,937,000.
Other dividend and interest income for the nine month
period increased to $5,018,000, from $3,933,000 last year.
UNITED TELEVISION, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
- - - -------------------------------------------
(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: November 10, 1994 By:
/s/ Garth S. Lindsey
------------------ -
- - - --------------------
Garth S. Lindsey
Executive Vice President
and
Chief Financial
Officer (Principal
Financial and Accounting
Officer)
10Q9a
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED
FROM 10Q DATED SEPTEMBER 30, 1994 AND IS
QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 13,723
<SECURITIES> 166,469
<RECEIVABLES> 25,477
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 236,762
<PP&E> 62,268
<DEPRECIATION> 45,516
<TOTAL-ASSETS> 292,247
<CURRENT-LIABILITIES> 50,187
<BONDS> 0
<COMMON> 1,017
0
0
<OTHER-SE> 215,933
<TOTAL-LIABILITY-AND-EQUITY> 292,247
<SALES> 104,306
<TOTAL-REVENUES> 104,306
<CGS> 71,530
<TOTAL-COSTS> 71,530
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 37,794
<INCOME-TAX> 15,125
<INCOME-CONTINUING> 22,669
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,669
<EPS-PRIMARY> 2.25
<EPS-DILUTED> 2.25
</TABLE>
