<PAGE>
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, 1995
------------------
/ / 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 1-8411
-----------------------------
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.)
132 South Rodeo Drive - Fourth Floor
Beverly Hills, California 90212
- -------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(310) 281-4844
--------------
(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 8, 1995, there were 9,589,103 shares of the
registrant's common stock outstanding.
Page 1
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<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,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 51,874 $ 44,494
Marketable securities 140,770 137,549
Accrued interest receivable 612 2,005
Accounts receivable, net 30,129 36,021
Film contract rights 31,660 21,555
Deferred tax benefit 2,991 3,393
Prepaid expenses and other
current assets 2,782 1,760
-------- --------
Total current assets 260,818 246,777
-------- --------
Marketable Securities, noncurrent 29,358 20,099
-------- --------
Film Contract Rights, noncurrent 13,693 8,506
-------- --------
Property and Equipment, net 15,878 16,703
-------- --------
Intangible Assets, net 12,527 12,984
-------- --------
Other Assets 522 607
-------- --------
$332,796 $305,676
======== ========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
Current Liabilities:
Film contracts payable $ 27,899 $ 21,535
Accounts payable 2,757 3,256
Accrued expenses 21,635 15,728
Income taxes payable 9,566 12,753
-------- --------
Total current liabilities 61,857 53,272
-------- --------
Film Contracts Payable after One Year 28,672 23,153
-------- --------
Other Liabilities 6,979 1,330
-------- --------
Shareholders' Investment:
Preferred stock $1.00 par value - -
Common stock $.10 par value 1,002 998
Additional paid-in capital 1,319 133
Retained earnings 248,644 228,181
Treasury stock, at cost (21,257) -
Adjustment to reflect marketable
securities at fair value 5,580 (1,391)
-------- --------
235,288 227,921
-------- --------
$332,796 $305,676
======== ========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these balance sheets.
</TABLE>
Page 2
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<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,
------------------- -------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Revenues $ 39,075 $ 34,426 $118,120 $104,306
-------- -------- -------- --------
Expenses:
Operating 15,240 15,016 44,283 43,347
Selling, general and administrative 15,502 9,036 38,404 28,183
-------- -------- -------- --------
30,742 24,052 82,687 71,530
-------- -------- -------- --------
Operating income 8,333 10,374 35,433 32,776
Interest and Other Income 2,276 1,830 7,166 5,018
-------- -------- -------- --------
Income before income taxes 10,609 12,204 42,599 37,794
Income Tax Provision (4,275) (4,725) (17,225) (15,125)
-------- -------- -------- --------
Net income $ 6,334 $ 7,479 $ 25,374 $ 22,669
======== ======== ======== ========
Net Income per Share $ 0.65 $ 0.75 $ 2.59 $ 2.25
======== ======== ======== ========
Average Outstanding Common Shares 9,708 9,993 9,809 10,087
======== ======== ======== ========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
Page 3
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<TABLE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
<CAPTION>
Nine Months
Ended September 30,
-------------------
1995 1994
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 25,374 $ 22,669
Adjustments to reconcile net income
to net cash provided from operating
activities:
Film contract payments (17,905) (26,463)
Film contract amortization 18,411 18,290
Depreciation and other amortization 3,511 3,601
(Gain) loss on dispositions of
marketable securities (124) 230
Changes in assets and liabilities:
Accounts receivable 5,892 5,339
Prepaid and other assets (3,459) (1,443)
Accounts payable and
other liabilities 6,767 2,304
Income taxes payable (3,129) (2,166)
-------- --------
Net cash provided from
operating activities 35,338 22,361
-------- --------
Cash Flows from Investing Activities:
Purchases of marketable securities, net (751) (9,472)
Capital expenditures (2,229) (2,638)
-------- --------
Net cash used in investing
activities (2,980) (12,110)
-------- --------
Cash Flows from Financing Activities:
Dividends paid (4,911) -
Proceeds from exercise of employee
stock options 1,190 744
Purchases of treasury stock (21,257) (9,224)
-------- --------
Net cash used in financing
activities (24,978) (8,480)
-------- --------
Net Increase in Cash and
Cash Equivalents 7,380 1,771
Cash and Cash Equivalents at
Beginning of Period 44,494 11,952
-------- --------
Cash and Cash Equivalents at
End of Period $ 51,874 $ 13,723
======== ========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
Page 4
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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 (56.8% at
September 30, 1995) 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. 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.
Page 5
2. MARKETABLE SECURITIES:
<TABLE>
Marketable securities include the following (in thousands):
<CAPTION>
Fair
Value Cost
-------- --------
<S> <C> <C>
Current Assets:
September 30, 1995
U.S. Government securities $130,551 $131,326
Global government bond fund 10,831 10,974
-------- --------
$141,382 $142,300
======== ========
December 31, 1994:
U.S. Government securities $129,464 $134,131
Global government bond fund 10,090 10,883
-------- --------
$139,554 $145,014
======== ========
Long-term Assets:
September 30, 1995
BHC Class A common stock $ 20,555 $ 11,325
Other marketable equity
securities 8,803 7,243
-------- --------
$ 29,358 $ 18,568
======== ========
December 31, 1994:
BHC Class A common stock $ 16,648 $ 11,325
Other marketable equity
securities 3,451 3,650
-------- --------
$ 20,099 $ 14,975
======== ========
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The following table provides certain additional
information related to UTV's marketable securities as
of and for the nine months ended September 30, 1995
(in thousands):
<CAPTION>
Debt Equity
Securities Securities
---------- ----------
<S> <C> <C>
Maturing within two years $117,438 $ -
Maturing in two to four years 12,501 -
Gross unrealized holding gains 289 10,790
Gross unrealized holding losses 1,675 143
Sales proceeds 13,128 1,434
Realized gains - 124
Realized losses - -
<FN>
For purposes of computing realized gains and
losses, cost was determined using the specific
identification method.
</TABLE>
3. SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes for the nine months ended
September 30, 1995 and 1994 totaled $20,354,000 and
$17,291,000, 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 $27,830,000 at September
30, 1995. UTV has a commitment to invest over time up to
$40,000,000 in a management buyout limited partnership.
Page 7
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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
(amortization exceeded payments by $506,000 in the first
nine months of 1995 while payments exceeded amortization by
$8,173,000 in the first nine months of 1994) 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
1995 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 pursue new
opportunities and deal effectively with uncertainties that
may arise in the television broadcasting industry or
economic environment.
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
1995 totaled $35,338,000, and cash and marketable securities
increased $19,860,000 during the period to $222,002,000 at
September 30, 1995. UTV has a commitment to invest over
time up to $40,000,000 in a management buyout limited
partnership.
Working capital increased $5,456,000 during the first
nine months of 1995 to $198,961,000 at September 30, 1995,
primarily reflecting cash flow from operations reduced by
cash expended to acquire treasury shares and in April to pay
UTV's first dividend of $.50 per share. Working capital at
September 30, 1995 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
Page 8
capital to augment its already substantial liquid assets, if
desired, to fund any resulting expansion. In July 1995,
UTV formed a national television sales representative
organization, which initially has been appointed the
exclusive national sales representative for the eight UTV
and BHC stations. Funds to establish and operate this new
entity are being provided from operations.
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
$27,830,000 at September 30, 1995 and $45,416,000 at
December 31, 1994. 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, 1995, 1,297,249 shares were authorized for
purchase. Since January 1, 1993 through September 30, 1995,
886,776 shares were purchased for an aggregate cost of
$51,104,000, of which 328,168 shares were purchased during
the first nine months of 1995 for an aggregate cost
of $21,257,000.
UTV's commitments for capital expenditures at September
30, 1995 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. The
television station group achieved record third quarter
operating earnings. However, after one-time costs of
approximately $3,700,000 associated with the start-up of
UTV's national sales representative subsidiary, which
began operations during the quarter, third quarter net
income totaled $6,334,000, or $.65 per share, a 15% decrease
from last year's third quarter net income of $7,479,000, or
$.75 per share.
Television station net revenues rose 8% for the
quarter. Consolidated net revenues rose 14% to a record
$39,075,000, from $34,426,000 last year, after giving effect
to the sales representative subsidiary. The increase in
station revenues is primarily attributable to strong demand
for television advertising time, resulting in higher per
Page 9
unit rates. While television station operating earnings
increased 5% in the third quarter, the one-time costs of
$3,700,000 resulted in a decline in operating income to
$8,333,000, from last year's $10,374,000.
Interest and other income for the quarter increased to
$2,276,000, from $1,830,000 in 1994, reflecting higher cash
balances invested at greater yields.
Net income for the first nine months of 1995 increased
12% to $25,374,000, or $2.59 per share, from last year's
net income of $22,669,000, or $2.25 per share.
The improvement in 1995 nine months net income
also reflects a strong increase in revenues. Net revenues
for the period rose 13% to $118,120,000, from $104,306,000
last year (11% excluding the new subsidiary). The increase
in television station net revenues is primarily attributable
to increased demand for television advertising. Television
station operating earnings for the period increased 16% and
operating income for the period was $35,433,000, an 8%
increase, after $3,700,000 of one-time costs, from last
year's $32,776,000.
Despite the significant increase in net revenues
realized at the television stations during the first nine
months of 1995, UTV currently expects fourth quarter net
revenues from its television stations to be less than in
last year's. UTV believes that broadcast television
stations in general are experiencing a reduction in the level
of business for the fourth quarter.
Interest and other income for the nine month period
increased to $7,166,000, from $5,018,000 last year.
Page 10
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UNITED TELEVISION, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
- --------------------------------------------
(a) Exhibit 27 - Financial Data Schedule.
(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 13, 1995 By: /s/ GARTH S. LINDSEY
----------------- ------------------------
Garth S. Lindsey
Executive Vice President
and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
Page 11
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED
FROM 10-Q DATED SEPTEMBER 30, 1995 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-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 51,874
<SECURITIES> 140,770
<RECEIVABLES> 30,129
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 260,818
<PP&E> 63,694
<DEPRECIATION> 47,816
<TOTAL-ASSETS> 332,796
<CURRENT-LIABILITIES> 61,857
<BONDS> 0
<COMMON> 1,002
0
0
<OTHER-SE> 234,286
<TOTAL-LIABILITY-AND-EQUITY> 332,796
<SALES> 118,120
<TOTAL-REVENUES> 118,120
<CGS> 82,687
<TOTAL-COSTS> 82,687
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 42,599
<INCOME-TAX> 17,225
<INCOME-CONTINUING> 25,374
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,374
<EPS-PRIMARY> 2.59
<EPS-DILUTED> 2.59
</TABLE>
