<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 31, 1995 Commission File No. 19324
Boston Celtics Limited Partnership
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(Exact name of registrant as specified in its charter)
Delaware 04-2936516
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
151 Merrimac Street, Boston, MA 02114
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(Address of principal executive offices) (Zip code)
(617) 523-6050
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(Registrant's telephone number including area code)
Indicate by checkmark whether the registrant (1) has filed reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of Units outstanding as of December 31, 1995 was 5,641,278 of
Limited Partnership Interest.
<PAGE> 2
Part I - Financial Information
Item I - Financial Statements
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, June 30,
1995 1995 (1)
------------ ----------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 14,516,521 $ 22,692,586
Marketable securities 50,287,698 45,132,667
Other short term investments 79,248,448 67,558,465
Accounts receivable (less allowance for
doubtful accounts - $10,000 in December
and in June) 1,415,784 3,213,175
Note receivable 4,444,444
Deferred game costs 2,669,538
Prepaid expenses 259,655 402,954
Other current assets and deferred charges 5,200,000
-----------------------------
TOTAL CURRENT ASSETS 148,397,644 148,644,291
PROPERTY AND EQUIPMENT, net of depreciation
of $454,563 in December and $385,575 in June 1,213,809 846,418
NATIONAL BASKETBALL ASSOCIATION FRANCHISE,
net of amortization of $1,928,000 in December
and $1,850,880 in June 4,241,581 4,318,701
OTHER INTANGIBLE ASSETS, net of amortization of
$31,389 in December and $26,158 in June 919,171 924,376
NET ASSETS OF OPERATIONS TO BE DISCONTINUED 26,303,044
OTHER ASSETS 1,883,533 3,028,318
-----------------------------
$156,655,738 $184,065,148
=============================
<PAGE> 3
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 16,241,809 $ 11,927,676
Distribution payable 9,697,083
Deferred game revenues 16,303,002 6,645,562
Ticket refunds payable 120,908 120,908
Federal and state income taxes payable 3,313,158 5,163,158
Long-term debt - current portion 14,365,096
Notes payable to bank 80,000,000
Deferred compensation - current portion 4,785,247 4,927,999
-----------------------------
TOTAL CURRENT LIABILITIES 55,129,220 118,482,386
DEFERRED REVENUES - noncurrent portion 1,440,612 1,440,612
DEFERRED FEDERAL AND STATE INCOME TAXES 21,000,000 6,000,000
LONG-TERM DEBT - noncurrent portion 50,000,000 50,000,000
DEFERRED COMPENSATION - noncurrent portion 12,364,351 14,850,057
OTHER NON-CURRENT LIABILITIES 4,793,125 4,023,750
MINORITY INTEREST IN BCBLP 4,988,790
PARTNERS' CAPITAL (DEFICIT)
Boston Celtics Limited Partnership -
General Partner 274,575 (160,255)
Limited Partners 11,051,434 (15,690,191)
-----------------------------
11,326,009 (15,850,446)
Celtics Limited Partnership - General Partner (37,806) (105,194)
Boston Celtics Communications Limited Partnership
- General Partner 640,227 96,791
Boston Celtics Broadcasting Limited Partnership
- Limited Partner 138,402
-----------------------------
TOTAL PARTNERS' CAPITAL (DEFICIT) 11,928,430 (15,720,447)
-----------------------------
$156,655,738 $184,065,148
=============================
<F1> Restated to classify assets and liabilities of Boston Celtics
Broadcasting Limited Partnership as net assets of operations to be
discontinued.
</TABLE>
See notes to consolidated financial statements.
<PAGE> 4
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Statements of Income (Loss)
Unaudited
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
--------------------------- ---------------------------
December 31, December 31, December 31, December 31,
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Basketball regular season -
Ticket sales $11,670,000 $ 7,378,000 $11,670,000 $ 7,378,000
Television and radio broadcast rights fees 7,185,000 6,889,000 7,185,000 6,889,000
Other, principally promotional advertising 2,760,000 2,660,000 2,760,000 2,660,000
--------------------------------------------------------
21,615,000 16,927,000 21,615,000 16,927,000
--------------------------------------------------------
Costs and expenses:
Basketball regular season -
Team 8,543,000 10,507,000 8,543,000 10,507,000
Game 787,000 838,000 787,000 838,000
General and administrative 6,100,273 6,518,628 3,194,223 3,726,048
Selling and promotional 1,119,786 1,161,706 784,264 760,717
Depreciation 75,025 49,587 40,085 9,385
Amortization of NBA franchise and other intangible assets 82,352 82,352 41,176 41,176
--------------------------------------------------------
16,707,436 19,157,273 13,389,748 15,882,326
--------------------------------------------------------
4,907,564 (2,230,273) 8,225,252 1,044,674
Interest expense, including for the six month periods
$492,796 in 1995 and $581,209 in 1994 related to deferred
deferred compensation obligations (2,721,108) (3,828,980) (1,349,298) (2,797,349)
Interest income 4,171,676 2,536,742 2,101,917 1,886,069
Net realized and unrealized gains (losses) on disposition
of assets and investments 182,506 (426,873) 20,910 (289,032)
--------------------------------------------------------
Income (Loss) from continuing operations before income taxes 6,540,638 (3,949,384) 8,998,781 (155,638)
Provision for income taxes 900,000 121,232 350,000 187,676
--------------------------------------------------------
Income (Loss) from continuing operations 5,640,638 (4,070,616) 8,648,781 (343,314)
Discontinued operations:
Income (loss) from discontinued operations (less applicable
income taxes of $30,000 in 1995 and $3,128,768 in 1994) 82,806 6,606,145 30,000 4,994,435
Gain from disposal of discontinued operations (less
applicable income taxes of $17,770,000 in 1995) 38,330,907 (830,000)
--------------------------------------------------------
Net income (loss) 44,054,351 2,535,529 7,848,781 4,651,121
Net income applicable to interests of General Partners 1,046,032 195,943 141,549 186,423
--------------------------------------------------------
Net income (loss) applicable to interests of Limited Partners $43,008,319 $ 2,339,586 $ 7,707,232 $ 4,464,698
========================================================
<PAGE> 5
Per unit:
Income (Loss) from continuing operations $0.91 ($0.63) $1.46 ($0.05)
Net income (loss) $7.05 $0.37 $1.33 $0.70
Average units outstanding throughout the period 6,164,879 6,464,366 5,866,396 6,464,366
</TABLE>
See notes to consolidated financial statements.
<PAGE> 6
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Statements of Cash Flows
Unaudited
<TABLE>
<CAPTION>
For the Six Months Ended
December 31, December 31,
1995 1994 (1)
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts:
Basketball regular season receipts:
Ticket sales $25,546,047 $ 21,339,304
Television and radio broadcast rights fees 4,713,336 4,613,409
Other, principally promotional advertising 2,546,837 2,008,907
Basketball playoff receipts 327,373
-----------------------------
33,133,593 27,961,620
Costs and expenses:
Basketball regular season expenditures:
Team expenses 12,107,732 13,549,141
Game expenses 1,028,156 1,032,955
General and administrative expenses 8,310,497 7,921,215
Selling and promotional expenses 1,192,953 1,141,381
-----------------------------
22,639,338 23,644,692
-----------------------------
10,494,255 4,316,928
Interest expense (1,690,008) (2,331,646)
Interest income 4,154,761 1,601,311
Ticket refunds paid (4,306)
Proceeds from league expansion 4,490,673
Payment of income taxes (350,000) (2,797,622)
Payment of deferred compensation (3,373,785) (1,814,934)
-----------------------------
NET CASH FLOWS FROM CONTINUING OPERATIONS 13,725,896 (1,030,269)
NET CASH FLOWS FROM DISCONTINUED OPERATIONS 33,205 9,023,860
-----------------------------
NET CASH FLOWS FROM OPERATING ACTIVITIES 13,759,101 7,993,591
CASH FLOWS (USED BY) FROM INVESTING ACTIVITIES
Purchases of:
Marketable securities (28,458,903) (17,935,793)
Short term investments (37,600,000) (132,000,000)
Proceeds from sales of:
Marketable securities 23,643,373 10,035,313
Short term investments 25,750,000 57,000,000
Proceeds from the sale of BCBLP 79,200,000
Cash portion of net assets of Boston Celtics Broadcasting
Limited Partnership sold (1,602,071)
Capital expenditures (410,084) (393,501)
Other receipts (expenditures) 260,754 (976,337)
-----------------------------
NET CASH (USED BY) FROM INVESTING ACTIVITIES 60,783,069 (84,270,318)
-----------------------------
NET CASH FLOWS (USED BY) FROM OPERATING AND INVESTING ACTIVITIES 74,542,170 (76,276,727)
</TABLE>
<PAGE> 7
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
Unaudited
<TABLE>
<CAPTION>
For the Six Months Ended
-----------------------------
December 31, December 31,
1995 1994 (1)
------------ ------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank borrowings 85,000,000
Payment of bank borrowings (80,000,000) (5,000,000)
Purchase of Boston Celtics Limited Partnership units (1,941,450)
Purchase of interest in Boston Celtics Communications
Limited Partnership from Celtics Communications Inc. (792,000)
Cash distributions:
To Fox Television Stations, Inc. from Boston
Celtics Broadcasting Limited Partnership (7,950,131)
To limited partners of Boston Celtics Limited Partnership (9,697,083) (9,697,083)
To General Partners
----------------------------
NET CASH FLOWS (USED BY) FROM FINANCING ACTIVITIES (99,588,664) 69,510,917
----------------------------
NET INCREASE (DECREASE) IN CASH (25,046,494) (6,765,810)
Cash and cash equivalents at beginning of period 39,563,015 38,093,082
----------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $14,516,521 $31,327,272
============================
Non-cash investing and financing activities:
Conversion of convertible subordinated note payable
for 25% interest in Boston Celtics Broadcasting
Limited Partnership $10,000,000
Notes payable for acquisition of Boston Celtics
Limited Partnership units $14,365,096
Net non-cash assets of Boston Celtics Broadcasting
Limited Partnership sold $ 9,517,608
<F1> Restated to classify cash flows from operating activities of Boston
Celtics Broadcasting Limited Partnership as net cash flows from
discontinued operations.
</TABLE>
See notes to consolidated financial statements.
<PAGE> 8
Notes to Consolidated Financial Statements
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BOSTON CELTICS LIMITED PARTNERSHIP AND SUBSIDIARIES
- ------------------------------------------------------------------------------
Note 1 - The unaudited consolidated financial statements include the
accounts of Boston Celtics Limited Partnership ("BCLP") and its 99%
limited partnership interests and wholly-owned subsidiaries which own and
operate the Boston Celtics professional basketball team of the National
Basketball Association, hold investments and owned and operated Radio
Station WEEI - 590 AM until its sale on June 30, 1994 and Television
Station WFXT - Channel 25 of Boston, Massachusetts until its sale on
July 7, 1995. All intercompany transactions are eliminated in consolidation.
Note 2 - The unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial statements and with instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation have been included therein. Operating
results for interim periods are not indicative of the results that may be
expected for the full year. Such financial statements should be read in
conjunction with the consolidated financial statements and footnotes
thereto of Boston Celtics Limited Partnership and Subsidiaries included in
the annual report on Form 10-K for the year ended June 30, 1995 and the
Form 10-Q for the quarter ended September 30, 1995.
Note 3 - Revenues and costs applicable to the regular season are
recognized in income proportionately over the 82 games played in the
regular season. The excess of revenue received or costs incurred over
amounts recognized in income are included in Deferred Game Costs or
Deferred Game Revenues on the Balance Sheet.
<PAGE> 9
Management's Discussion and Analysis of Financial
Condition and Results of Operations
- ------------------------------------------------------------------------------
BOSTON CELTICS LIMITED PARTNERSHIP AND SUBSIDIARIES
- ------------------------------------------------------------------------------
General
The Partnership had consolidated net income of $44,054,000 or $7.05
per unit on revenues of $21,615,000 in the six months ended December 31,
1995 compared with consolidated net income of $2,536,000 or $.37 per unit
on revenues of $16,927,000 in the six months ended December 31, 1994. The
Partnership had a consolidated net income of $7,849,000 or $1.33 per unit
on revenues of $21,615,000 in the three months ended December 31, 1995
compared with consolidated net income of $4,651,000 or $.70 per unit on
revenues of $16,927,000 in the three months ended December 31, 1994. The
Partnership had consolidated cash flows from operating activities of
$13,759,000 in the six months ended December 31, 1995 compared with
consolidated cash flows from operating activities of $7,994,000 in the six
months ended December 31, 1994.
The Boston Celtics derive revenues principally from the sale of
tickets to home games and the licensing of television, cable network and
radio rights. A large portion of the Boston Celtics' annual revenues and
operating expenses are determinable at the commencement of each basketball
season based on season ticket sales and the Boston Celtics' multi-year
contracts with its players and broadcast organizations.
For financial reporting purposes the Boston Celtics recognize
revenues and expenses on a game-by-game basis. Because the NBA regular
season begins in November, the first quarter which ends on September 30th
will generally include limited or no revenue and will reflect a loss
attributable to general and administrative expenses incurred in the
quarter. Based on the present NBA game schedule, the Partnership will
generally recognize approximately one-third of its annual regular season
revenue in the second quarter, approximately one-half of such revenue in
the third quarter and the remainder in the fourth quarter, and it will
recognize all of its playoff revenue in the fourth quarter.
Results of Operations
The following discussion compares results of operations of the
Partnership and its subsidiaries for the six month and three month periods
ended December 31, 1995 with the six month and three month periods ended
December 31, 1994.
The Boston Celtics recognize revenues and direct expenses for the
basketball operations ratably over the regular season games played.
<PAGE> 10
Revenues increased $4,688,000 or 28% in the six month and three
month periods ended December 31, 1995 compared to the same periods in 1994
primarily as a result of increased ticket revenues ($4,292,000). The
increase in ticket revenues is primarily a result of the move to the new
FleetCenter arena in 1995, which has an increased seating capacity of
approximately 4,200 seats as compared to the Boston Garden.
Costs and expenses decreased $2,450,000 or 13% in the six month
period ended December 31, 1995 and $2,493,000 or 16% in the three month
period ended December 31, 1995 compared to the same periods in 1994. The
decrease is primarily attributable to a net reduction in player
compensation ($2,584,000).
Interest expense decreased $1,108,000 or 29% in the six months ended
December 31, 1995 and $1,448,000 or 52% in the three month period ended
December 31, 1995 compared to the same periods in 1994. The decrease is
primarily a result of the repayment of $80,000,000 of bank borrowings,
which had been outstanding since September 1994, in July 1995 (resulting
in reductions of $1,597,000 in the six month period and $1,694,000 in the
three month period) partially offset by interest on the notes payable
related to the redemption of BCLP units (resulting in increases of
$467,000 in the six month period and $281,000 in the three month period).
Interest income increased $1,635,000 or 64% in the six month period
ended December 31, 1995 and $216,000 or 11% in the three month period
ended December 31, 1995 compared to the same periods in 1994. The
increases are attributable to interest earned on the short-term investment
of larger amounts of available funds.
Liquidity and Capital Resources
At December 31, 1995 the Partnership had approximately $15,000,000
of available cash, $50,000,000 of marketable securities and $79,000,000 of
other short term investments. In addition to these amounts, sources of
funds for the partnerships include funds generated by operations and
capital contributions from partners. These resources will be used to
repay commercial bank borrowings and long term debt related to redeemed
partnership units and for general partnership purposes, working capital
needs or for possible acquisitions. The Partnership is not engaged in any
negotiations relating to and has not made any commitments in connection
with any such possible acquisitions. Management believes that its cash,
cash equivalents and marketable securities together with cash from
operations will provide adequate cash for the Partnership and its
subsidiaries to meet their cash requirements through December 31, 1996.
During the six months ended December 31, 1995, a cash distribution
of $1.50 per unit was paid to unitholders of Boston Celtics Limited
Partnership on July 21, 1995 (declared June 26, 1995 to unitholders of
record on June 30, 1995). Future distributions will be determined by the
General Partner based among other things on available resources and the
needs of the Partnership.
<PAGE> 11
Part II - Other Information
- ------------------------------------------------------------------------------
BOSTON CELTICS LIMITED PARTNERSHIP AND SUBSIDIARIES
- ------------------------------------------------------------------------------
ITEM 6 - Exhibits and Reports on Form 8-K
Exhibits -
Exhibit (11) - Statement Re: Computation of Earnings Per Unit
Reports on Form 8-K -
None.
<PAGE> 12
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
BOSTON CELTICS LIMITED PARTNERSHIP
(Registrant)
By: Celtics, Inc., its General Partner
Dated: February 13, 1996 By: /s Thomas M. Bartlett, Jr.
----------------------------------
Thomas M. Bartlett, Jr.
Executive Vice President
and Chief Financial Officer
<PAGE> 13
Exhibit (11) - Statement Re: Computation of Earnings Per Unit
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
December 31, December 31,
-------------------------- ------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Average units outstanding 5,936,776 6,399,722 5,641,278 6,399,722
Net effect of dilutive stock options-based on the
treasury stock method using average market price 166,454 0 166,454 0
------------------------------------------------------
Average units outstanding 6,103,230 6,399,722 5,807,732 6,399,722
Units equivalent to 1% General Partnership interest
of BCLP 61,649 64,644 58,664 64,644
------------------------------------------------------
Average units outstanding 6,164,879 6,464,366 5,866,396 6,464,366
======================================================
Income (loss) from continuing operations:
Income (Loss) before interests of General Partners $ 5,640,638 ($4,070,616) $8,648,781 ($ 343,314)
Applicable to interests of General Partners of
subsidiary partnerships 48,696 (26,040) 73,698 4,360
------------------------------------------------------
5,591,942 (4,044,576) 8,575,083 (347,674)
Applicable to 1% General Partnership interest of BCLP 55,919 (40,446) 85,751 (3,477)
------------------------------------------------------
Applicable to interests of Limited Partners $ 5,536,023 ($4,004,130) $8,489,332 ($ 344,197)
======================================================
Per Limited Partnership Unit $ 0.91 ($ 0.63) $ 1.46 ($ 0.05)
======================================================
Net Income (Loss):
Net Income (Loss) before interests of General
Partners $44,054,351 $2,535,529 $7,848,781 $4,651,121
Applicable to interests of General Partners of
subsidiary partnerships 611,605 172,311 63,698 141,325
------------------------------------------------------
43,442,746 2,363,218 7,785,083 4,509,796
Applicable to 1% General Partnership interest of BCLP 434,427 23,632 77,851 45,098
------------------------------------------------------
Applicable to interests of Limited Partners $43,008,319 $2,339,586 $7,707,232 $4,464,698
======================================================
Per Limited Partnership Unit $ 7.05 $ 0.37 $ 1.33 $ 0.70
======================================================
</TABLE>
<PAGE> 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMAITON EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF BOSTON CELTICS LIMITED PARTNERSHIP AND ITS
SUBSIDIARIES AS OF DECEMBER 31, 1995 AND THE RELATED CONSOLIDATED STATMENT OF
INCOME FOR THE SIX MONTH PERIOD ENDED DECEMBER 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 14,517
<SECURITIES> 50,288
<RECEIVABLES> 1,426
<ALLOWANCES> 10
<INVENTORY> 0
<CURRENT-ASSETS> 148,398
<PP&E> 1,668
<DEPRECIATION> 455
<TOTAL-ASSETS> 156,656
<CURRENT-LIABILITIES> 55,129
<BONDS> 50,000
0
0
<COMMON> 0
<OTHER-SE> 11,928
<TOTAL-LIABILITY-AND-EQUITY> 156,656
<SALES> 21,615
<TOTAL-REVENUES> 21,615
<CGS> 0
<TOTAL-COSTS> 16,707
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,721
<INCOME-PRETAX> 6,541
<INCOME-TAX> 900
<INCOME-CONTINUING> 5,641
<DISCONTINUED> 38,414
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44,054
<EPS-PRIMARY> 7.05
<EPS-DILUTED> 7.05
</TABLE>
