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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 June 30, 1996
-------------
/ / 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 S. Rodeo Drive, Fourth Floor, Beverly Hills, CA 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 August 13, 1996, there were 9,456,438 shares of the
registrant's common stock outstanding.
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<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands)
<CAPTION>
June 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 22,569 $ 16,888
Marketable securities 162,455 174,478
Accrued interest receivable 1,436 2,147
Accounts receivable, net 37,120 38,934
Film contract rights 16,544 27,343
Deferred tax benefit 4,221 3,679
Prepaid expenses and other
current assets 2,857 1,773
----------- -----------
Total current assets 247,202 265,242
----------- -----------
Marketable Securities, noncurrent 35,297 29,538
----------- -----------
Other Investments 2,663 -
----------- -----------
Film Contract Rights, noncurrent 3,921 7,943
----------- -----------
Property and Equipment, net 14,793 15,425
----------- -----------
Intangible Assets, net 12,070 12,374
----------- -----------
Other Assets 662 465
----------- -----------
$ 316,608 $ 330,987
=========== ===========
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LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
Current Liabilities:
Film contracts payable $ 22,218 $ 25,617
Accounts payable 3,184 3,199
Accrued expenses 14,721 19,477
Income taxes payable 12,769 8,885
----------- -----------
Total current liabilities 52,892 57,178
----------- -----------
Film Contracts Payable after One Year 18,877 25,489
----------- -----------
Other Liabilities 7,346 7,851
----------- -----------
Shareholders' Investment:
Preferred stock $1.00 par value - -
Common stock $.10 par value 969 961
Additional paid-in capital 3,560 133
Retained earnings 248,329 232,839
Treasury stock, at cost (20,914) -
Increase to reflect marketable
securities at fair value 5,549 6,536
----------- -----------
237,493 240,469
----------- -----------
$ 316,608 $ 330,987
=========== ===========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these balance sheets.
</TABLE>
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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 Six Months
Ended June 30, Ended June 30,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Revenues $ 45,816 $ 42,113 $ 86,050 $ 79,045
-------- -------- -------- --------
Expenses:
Operating 15,170 14,382 30,876 29,043
Selling, general and
administrative 13,470 11,490 26,653 22,902
-------- -------- -------- --------
28,640 25,872 57,529 51,945
-------- -------- -------- --------
Operating income 17,176 16,241 28,521 27,100
Interest and Other Income 2,498 2,323 4,969 4,890
-------- -------- -------- --------
Income before income taxes 19,674 18,564 33,490 31,990
Income Tax Provision (7,800) (7,250) (13,250) (12,950)
-------- -------- -------- --------
Net income $ 11,874 $ 11,314 $ 20,240 $ 19,040
======== ======== ======== ========
Net Income per Share $ 1.25 $ 1.15 $ 2.12 $ 1.93
======== ======== ======== ========
Average Outstanding Common Shares 9,465 9,821 9,534 9,860
======== ======== ======== ========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
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<TABLE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
<CAPTION>
Six Months
Ended June 30,
-------------------
1996 1995
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 20,240 $ 19,040
Adjustment to reconcile net income to net
cash provided from operating activities:
Film contract payments (12,524) (11,777)
Film contract amortization 13,964 11,479
Depreciation and other amortization 2,223 2,328
Gain on dispositions of marketable securities (99) (47)
Changes in assets and liabilities:
Accounts receivable 1,814 2,625
Prepaid and other assets 2,800 1,581
Accounts payable and accrued expenses (4,771) (1,364)
Income taxes payable 3,884 (67)
-------- --------
Net cash provided from
operating activities 27,531 23,798
-------- --------
Cash Flows from Investing Activities:
Sales of marketable securities 128,479 13,990
Purchases of marketable securities (124,150) (38,200)
Purchases of other investments (2,663) -
Capital expenditures (1,287) (1,132)
-------- --------
Net cash provided from (used in)
investing activities 379 (25,342)
-------- --------
Cash Flows from Financing Activities:
Dividends paid (4,750) (4,911)
Proceeds from exercise of stock options 3,435 1,064
Purchases of treasury stock (20,914) (13,951)
-------- --------
Net cash used in financing activities (22,229) (17,798)
-------- --------
Net Increase (Decrease) in Cash and Cash Equivalents 5,681 (19,342)
Cash and Cash Equivalents at Beginning of Period 16,888 44,494
-------- --------
Cash and Cash Equivalents at End of Period $ 22,569 $ 25,152
======== ========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
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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 (58.3% at June 30,
1996) subsidiary of BHC Communications, Inc. (BHC), 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 this interim period are not necessarily
indicative of results to be expected for the full fiscal year,
due to seasonal factors, among others. Certain amounts for
1995 have been reclassified to conform with the 1996 presentation.
2. MARKETABLE SECURITIES:
Marketable securities include the following (in thousands):
Fair
Value Cost
-------- --------
Current Assets:
June 30, 1996
U.S. Government securities $154,360 $154,076
Global government bond fund 9,531 10,000
-------- --------
$163,891 $164,076
======== ========
December 31, 1995:
U.S. Government securities $166,617 $164,701
Global government bond fund 10,008 10,000
-------- --------
$176,625 $174,701
======== ========
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Noncurrent Assets:
June 30, 1996
BHC Class A common stock $ 22,141 $ 11,325
Other marketable equity
securities 13,156 13,231
-------- --------
$ 35,297 $ 24,556
======== ========
December 31, 1995:
BHC Class A common stock $ 21,404 $ 11,325
Other marketable equity
securities 8,134 6,836
-------- --------
$ 29,538 $ 18,161
======== ========
The following table provides certain additional
information related to UTV's marketable securities as
of and for the six months ended June 30, 1996 (in thousands):
Debt Equity
Securities Securities
---------- ----------
Maturing within two years $ 140,051 $ -
Maturing in two to three years 12,873 -
Gross unrealized holding gains 45 11,675
Gross unrealized holding losses 1,666 934
Sales proceeds 127,626 853
Realized gains 264 36
Realized losses 201 -
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 six months ended June 30,
1996 and 1995 totaled $9,366,000 and $13,017,000, 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 $59,725,000 at June 30,
1996. UTV has a remaining commitment to invest over time up
to $37,337,000 in a management buyout limited partnership.
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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 $1,440,000 in the first
six months of 1996, while payments exceeded amortization by
$298,000 in the first six months of 1995) 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 six months of 1996, 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 six months of
1996 totaled $27,531,000, while cash and marketable securities
decreased $583,000 to $220,321,000 at June 30, 1996. UTV has
a remaining commitment to invest over time up to $37,337,000
in a management buyout limited partnership.
Working capital decreased $13,754,000 during the first six
months of 1996 to $194,310,000 at June 30, 1996, primarily
reflecting cash used to acquire treasury shares, the payment
in April of a dividend of $.50 per share, and purchases of
noncurrent marketable securities and other noncurrent
investments. Working capital at June 30, 1996 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.
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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
$59,725,000 at June 30, 1996. 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 June 30, 1996, 959,749
shares were authorized for purchase. Since January 1, 1994,
through June 30, 1996, 872,090 shares were purchased for an
aggregate cost of $61,265,000, of which 232,500 shares were
purchased during the first six months of 1996 for an aggregate
cost of $20,914,000.
UTV's commitments for capital expenditures at June 30,
1996 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 expenditures
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. Second quarter net
income totaled $11,874,000, a 5% increase over last year's
second quarter net income of $11,314,000. Reflecting a
reduction in average common shares outstanding, earnings
per share rose 9% to $1.25 in 1996 from $1.15 in 1995.
Consolidated net revenue for the quarter increased 9% to
a record $45,816,000, from $42,113,000 in 1995. A significant
portion of the increase resulted from commission income
generated by UTV's national sales subsidiary, which began
operations in the third quarter of 1995. Excluding
commission revenue, net revenues of UTV's television station
group rose 3% to record levels. After an 11% increase in
operating expenses, operating income totaled a record
$17,176,000, a 6% increase from last year's $16,241,000.
The increase in operating expenses was attributable primarily
to a 7% increase in programming costs and sales expenses
associated with the new sales subsidiary.
Interest and other income for the quarter increased
slightly to $2,498,000, from $2,323,000 in 1995.
Net income for the first six months of 1996 increased
6% to $20,240,000, from last year's net income of $19,040,000.
Reflecting a reduction in average common shares outstanding,
earnings per share rose 10% to $2.12 in 1996, from $1.93
last year.
Consolidated net revenues for the six month period rose
9% to $86,050,000, from $79,045,000 in 1995. Excluding
commission revenues, net revenues of the television station
group rose 3%. After an 11% increase in operating expenses,
operating income totaled $28,521,000, a 5% increase from last
year's $27,100,000. The increase in operating expenses was
attributable primarily to an 8% increase in programming costs
and sales expenses associated with the new sales subsidiary.
Interest and other income for the six month period
increased slightly to $4,969,000, from $4,890,000 last year.
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UNITED TELEVISION, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
UTV held its annual meeting of stockholders on April 25, 1996.
At the meeting, the following were elected directors, by
the number of votes set forth opposite their respective names:
Broker
For Withheld Non-votes
--------- -------- ---------
Abraham A. Ribicoff 8,773,150 15,395 - 0 -
John C. Siegel 8,776,931 11,614 - 0 -
Evan C Thompson 8,775,134 13,411 - 0 -
At the meeting, the selection of Price Waterhouse LLP as UTV's
auditors for the current year was ratified by the following vote:
Broker
For Against Abstain Non-votes
--------- ------- ------- ---------
8,781,125 2,026 5,394 - 0 -
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) See Exhibit Index.
(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: August 14, 1996 By: /s/ Garth S. Lindsey
--------------- --------------------
Garth S. Lindsey
Executive Vice President
and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
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EXHIBIT INDEX
Incorporated by
Reference to: Exhibit No. Exhibit
- ------------- ----------- -------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM 10Q DATED
JUNE 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 22,569
<SECURITIES> 162,455
<RECEIVABLES> 37,120
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 247,202
<PP&E> 64,923
<DEPRECIATION> 50,130
<TOTAL-ASSETS> 316,608
<CURRENT-LIABILITIES> 52,892
<BONDS> 0
<COMMON> 969
0
0
<OTHER-SE> 236,524
<TOTAL-LIABILITY-AND-EQUITY> 316,608
<SALES> 86,050
<TOTAL-REVENUES> 86,050
<CGS> 57,529
<TOTAL-COSTS> 57,529
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 33,490
<INCOME-TAX> 13,250
<INCOME-CONTINUING> 20,240
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,240
<EPS-PRIMARY> 2.12
<EPS-DILUTED> 2.12
</TABLE>
