[NOTIFY] 74741,1326
[RETURN-COPY] E-MAIL
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 1995
----------------------------------
OR
/ / 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: 1-10342
-------------------------------
BHC COMMUNICATIONS, INC.
------------------------
(Exact name of Registrant as specified in its charter)
Delaware 59-2104168
- ------------------------------ --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
767 Fifth Avenue, New York, New York 10153
- ------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 421-0200
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 June 30, 1995 there were 6,449,905 shares of the issuer's
Class A Common Stock outstanding and 18,000,000 shares of the
issuer's Class B Common Stock outstanding.
<PAGE>
<TABLE>
PART I -- FINANCIAL INFORMATION
BHC COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars)
-------------------------------------
<CAPTION>
June 30, December 31,
1995 1994
------------ ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 114,267 $ 222,201
Marketable securities(substantially
all U.S. Government securities) 1,363,379 1,274,244
Accounts receivable, net 92,788 96,681
Film contract and prepaid broadcast rights 69,454 89,245
Prepaid expenses and other current assets 30,122 46,976
------------ ------------
Total current assets 1,670,010 1,729,347
------------ ------------
FILM CONTRACT AND PREPAID BROADCAST RIGHTS,
less current portion 49,424 59,228
------------ ------------
PROPERTY AND EQUIPMENT, net 46,967 49,015
------------ ------------
INTANGIBLE ASSETS 328,413 333,074
------------ ------------
OTHER ASSETS 38,804 17,799
------------ ------------
$ 2,133,618 $ 2,188,463
============ ============
<PAGE>
LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
CURRENT LIABILITIES:
Film contracts payable within one year $ 70,813 $ 81,696
Accounts payable and other liabilities 57,732 70,834
Income taxes payable 51,133 55,782
----------- ------------
Total current liabilities 179,678 208,312
----------- ------------
FILM CONTRACTS PAYABLE AFTER ONE YEAR 78,857 89,048
----------- ------------
OTHER LIABILITIES 5,560 5,655
----------- ------------
MINORITY INTEREST 95,429 95,564
----------- ------------
SHAREHOLDERS' INVESTMENT:
Class A common stock - par value $.01 per share;
authorized 200,000,000 shares; outstanding
6,877,518 shares 69 69
Class B common stock - par value $.01 per share;
authorized 200,000,000 shares; outstanding
18,000,000 shares 180 180
Capital surplus 24,845 29,611
Retained earnings 1,766,449 1,779,409
Treasury stock, at cost (21,200) (6,254)
Adjustment to reflect marketable
securities at market value 3,751 (13,131)
------------ ------------
1,774,094 1,789,884
------------ ------------
$ 2,133,618 $ 2,188,463
============ ============
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
BHC COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(UNAUDITED)
-------------------------------------------
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
-------------------- --------------------
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 120,953 $ 119,832 $ 225,428 $ 215,800
--------- --------- --------- ---------
OPERATING EXPENSES:
Television expenses 52,547 58,885 103,619 110,962
Selling, general and administrative 29,218 26,300 58,516 55,057
--------- --------- --------- ---------
81,765 85,185 162,135 166,019
--------- --------- --------- ---------
Operating income 39,188 34,647 63,293 49,781
--------- --------- --------- ---------
OTHER INCOME (EXPENSE):
Interest and other income 18,739 14,859 39,336 28,307
Equity in United Paramount Network loss (28,709) - (67,112) -
--------- --------- --------- ---------
(9,970) 14,859 (27,776) 28,307
--------- --------- --------- ---------
Income before income taxes
and minority interest 29,218 49,506 35,517 78,088
INCOME TAX PROVISION 13,000 20,800 15,600 32,800
--------- --------- --------- ---------
Income before minority interest 16,218 28,706 19,917 45,288
MINORITY INTEREST (4,964) (4,015) (8,273) (6,929)
--------- --------- --------- ---------
Net income $ 11,254 $ 24,691 $ 11,644 $ 38,359
========= ========= ========= =========
AVERAGE OUTSTANDING COMMON SHARES 24,578 25,014 24,631 25,132
========= ========= ========= =========
NET INCOME PER SHARE $ .46 $ .99 $ .47 $ 1.53
========= ========= ========= =========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
<TABLE>
BHC COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
(UNAUDITED)
-----------------------------------------------
<CAPTION>
Six Months
Ended June 30,
------------------------
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 11,644 $ 38,359
Adjustments to reconcile net income to net cash
provided from operating activities:
Film contract payments (45,323) (66,453)
Film contract amortization 40,778 48,249
Depreciation and other amortization 9,968 10,257
Equity in United Paramount Network loss 67,112 -
Minority interest 8,273 6,929
Other 4,479 (309)
Changes in assets and liabilities:
Accounts receivable 3,893 (5,389)
Other assets (3,818) (2,490)
Accounts payable and other liabilities (1,402) 1,336
Income taxes (2,787) 12,691
----------- -----------
Net cash provided from operating activities 92,817 43,180
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Dispositions (purchases) of marketable securities, net (59,609) 163,869
Investment in and advances to United Paramount Network (83,445) -
Capital expenditures (3,259) (4,060)
Other (16) (37)
----------- -----------
Net cash provided from (used in)
investing activities (146,329) 159,772
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividend (24,504) -
Purchases of treasury stock (14,874) (57,219)
Capital transactions of subsidiary (15,044) (1,978)
----------- -----------
Net cash used in financing activities (54,422) (59,197)
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (107,934) 143,755
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 222,201 35,371
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 114,267 $ 179,126
=========== ===========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
BHC COMMUNICATIONS, INC.
------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-----------------------------------------------------
1. PRINCIPLES OF CONSOLIDATION:
The accompanying condensed consolidated financial statements
include the accounts of BHC Communications, Inc. and its
subsidiaries. BHC, a majority owned (73% at June 30, 1995)
subsidiary of Chris-Craft Industries, Inc., operates eight
television stations, three wholly owned and five owned by United
Television, Inc., 56% owned by BHC at June 30, 1995. The
interest of UTV shareholders other than BHC in the operating
results and net assets of UTV is set forth as minority interest
in the accompanying condensed consolidated statements of income
and condensed consolidated balance sheets, respectively.
Intercompany accounts and transactions have been eliminated.
The financial information included herein has been prepared
by BHC, 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, BHC 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 BHC'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 1994 have been reclassified to conform to the 1995
presentation. The results for these interim periods are not
necessarily indicative of results to be expected for the full
year, due to seasonal factors, among others.
2. MARKETABLE SECURITIES:
In accordance with Statement of Financial Accounting
Standards (SFAS) No. 115, "Accounting for Certain Investments in
Debt and Equity Securities", BHC classifies its marketable
securities as available-for-sale.
At June 30, 1995, BHC's marketable securities, which
consisted substantially of U.S. Government securities, had a
carrying value of $1,358,316,000 and a fair value of
$1,363,379,000. The difference of $5,063,000 ($3,751,000 net of
income taxes and minority interest) is reflected as an adjustment
to shareholders' investment in the accompanying condensed
consolidated balance sheet. Of the investments in U.S.
Government securities, 80% mature within one year, 92% within two
years and all within five years.
At December 31, 1994, BHC's marketable securities, which
consisted substantially of U.S. Government securities, had a
carrying value of $1,299,322,000 and a fair value of
$1,274,244,000. The difference of $25,078,000 ($13,131,000 net
of income taxes and minority interest) is reflected as an
adjustment to shareholders' investment in the accompanying
condensed consolidated balance sheet.
3. SHAREHOLDERS' INVESTMENT:
As of June 30, 1995, there were outstanding 18,000,000
shares of Class B common stock, all held by Chris-Craft, and
6,548,887 shares of Class A common stock, after reflecting as
treasury stock BHC's pro rata interest in its Class A common
shares held by UTV and 201,110 Class A common shares purchased by
BHC during 1995. At June 30, 1995, purchases of an additional
769,213 shares of Class A common stock were authorized. In
February 1995, BHC's Board of Directors declared a special cash
dividend of $1.00 per share on BHC's Class A and Class B common
stock. The dividend, totalling $24.5 million, was paid in April
1995. BHC has no plan to pay dividends on a regular basis.
4. COMMITMENTS:
Commitments of BHC's television stations for film contracts
entered into but not available for broadcasting at June 30, 1995
aggregated approximately $180.2 million, including $46.1 million
applicable to UTV.
In July 1994, BHC and Viacom Inc.'s Paramount Television
Group formed the United Paramount Network, a fifth broadcast
television network which premiered January 1995. BHC currently
owns 100% of UPN, and Paramount has an option exercisable through
January 15, 1997 to acquire an interest in UPN equal to that of
BHC. The option price is equivalent to approximately one-half of
BHC's aggregate cash contributions to UPN through the exercise
date, plus interest; payment may be deferred through the option
expiration date. The cost of developing UPN will be significant,
and BHC has agreed to make minimum UPN expenditures of at least
$150,000,000 through 1996. Network expenditures and related
operating losses are expected to significantly exceed such amount
for that period, and to remain substantial thereafter.
<PAGE>
BHC COMMUNICATIONS, INC.
------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
BHC's core operating cash flow is generated primarily by its
television broadcasting business. Television broadcasting cash
flow generally parallels the earnings of BHC's television
stations, adjusted to reflect (i) the difference between film
contract payments and related film contract amortization and (ii)
the effect of significant prepayments for other broadcast rights.
The relationship between film contract payments and related
amortization may vary greatly between periods (payments exceeded
amortization by $4.5 million and $18.2 million, respectively, in
the first six months of 1995 and 1994), and is dependent upon the
mix of programs aired and payment terms of the stations'
contracts. Station earnings rose 16% in the first six months of
1995, and station cash flow increased 45% from the corresponding
1994 amount.
BHC's cash flow additionally reflects earnings associated with
its cash and marketable securities. Cash and marketable
securities totalled $1.48 billion at June 30, 1995 and $1.50
billion at December 31, 1994. First six months operating cash
flow of $92.8 million was offset by United Paramount Network
funding of $83.4 million, treasury stock purchases by BHC and UTV
totalling $28.8 million and payment of the 1995 special dividend
set forth below.
Special cash dividends of $2.00 per share, totalling $51.9
million, and $1.00 per share, totalling $24.5 million, were paid
on BHC's Class A and Class B common stock, in January 1993 and
April 1995, respectively. BHC has no plan to pay dividends on a
regular basis.
Since April 1990, BHC's Board of Directors has authorized the
purchase of up to 5,500,000 Class A common shares. Through June
30, 1995, 4,730,787 shares were purchased for a total cost of
$280.1 million, including $14.9 million applicable to shares
purchased in the first six months of 1995.
BHC intends to expand its operations in the media, entertainment
and communications industries and to explore business
opportunities in other industries. BHC currently has no
outstanding debt, and believes it is capable of raising
significant additional capital to augment its already substantial
financial resources, if desired, to fund such additional
expansion.
In July 1994, BHC and Viacom Inc.'s Paramount Television Group
formed the United Paramount Network, a fifth broadcast television
network which premiered January 1995. BHC currently owns 100% of
UPN, and Paramount has an option through January 15, 1997 to
acquire an interest in UPN equal to that of BHC. The option
price is equivalent to approximately one-half of BHC's aggregate
cash contributions to UPN through the exercise date, plus
interest; payment may be deferred through the option expiration
date. BHC expenditures related to UPN totalled $83.4 million in
the first six months of 1995. The cost of developing UPN will be
significant, and BHC has agreed to make minimum UPN expenditures
of at least $150 million through 1996. UPN expenditures and
related operating losses are expected to significantly exceed
such amount for that period, and to remain substantial
thereafter.
BHC's television stations make commitments for programming that
will not be available for telecasting until future dates. At
June 30, 1995, commitments for such programming totalled
approximately $180.2 million, including $46.1 million applicable
to UTV. BHC capital expenditures generally have not been
material in relation to its financial position, and the related
capital expenditure commitments at June 30, 1995 (including any
related to UPN) were not material. BHC expects that its
expenditures for UPN, future film contract commitments and
capital requirements for its present business will be satisfied
primarily from operations, marketable securities or cash
balances.
Results of Operations
- ---------------------
BHC 1995 second quarter operating results reflect record station
earnings and a substantial increase in interest income. However,
UPN start-up losses resulted in a decline in net income, to
$11,254,000, or $.46 per share, compared to $24,691,000, or $.99
per share, in last year's period. Excluding UPN, net income
increased 17%, to $28,863,000, or $1.18 per share.
BHC achieved substantial increases in station earnings and
interest income for the first six months of 1995. However, due
to UPN start-up losses, BHC net income for the period declined to
$11,644,000, or $.47 per share, from $38,359,000, or $1.53 per
share, last year. Excluding UPN, BHC net income for the six
months increased 35%, to $51,911,000, or $2.11 per share.
Television station earnings increased 7% in the second quarter to
$45,683,000 from $42,863,000 last year, as operating revenues
rose less than 1% and programming expenses declined 8%. The
moderate increase in revenues reflects varying demand for
television advertising in our local markets, as well as
disappointing major league baseball telecasts. Station earnings
for the first six months of 1995 increased 16%, to $78,386,000
from $67,501,000, reflecting a 4% increase in operating revenues
and a 7% decline in programming expenses. After program
development expenses, goodwill amortization and corporate office
expenses of BHC and UTV, operating income rose 13% in the second
quarter, to $39,188,000 from $34,647,000, and 27% in the six
month period, to $63,293,000 from $49,781,000.
UPN's pretax losses of $28,709,000 in the second quarter and
$67,112,000 in the six month period are reflected in BHC's
financial statements under the equity method. UPN is in its
infancy, and will incur substantial start-up losses for several
years.
Interest and other income increased to $18,739,000 from
$14,859,000 in the second quarter, and to $39,336,000 from
$28,307,000 in the six month period, primarily reflecting higher
interest rates on BHC's substantial money market holdings.
<PAGE>
BHC COMMUNICATIONS, INC.
------------------------
PART II. OTHER INFORMATION
--------------------------
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) The following exhibits are filed herewith:
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) No report on Form 8-K was filed during the quarter
for which this report is 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.
BHC COMMUNICATIONS, INC.
------------------------
(Registrant)
By: /s/ JOELEN K. MERKEL
-----------------------------
Joelen K. Merkel
Vice President and Treasurer
(Principal Accounting Officer)
Date: July 27, 1995
<PAGE>
EXHIBIT INDEX
Incorporated by
Reference to: Exhibit No. Exhibit
- ------------- ----------- -------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 114267
<SECURITIES> 1363379
<RECEIVABLES> 99476
<ALLOWANCES> 6688
<INVENTORY> 0
<CURRENT-ASSETS> 1670010
<PP&E> 128950
<DEPRECIATION> 81983
<TOTAL-ASSETS> 2133618
<CURRENT-LIABILITIES> 179678
<BONDS> 0
0
0
<COMMON> 249
<OTHER-SE> 1773845
<TOTAL-LIABILITY-AND-EQUITY> 2133618
<SALES> 0
<TOTAL-REVENUES> 225428
<CGS> 0
<TOTAL-COSTS> 162135
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 35517
<INCOME-TAX> 15600
<INCOME-CONTINUING> 11644
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11644
<EPS-PRIMARY> .47
<EPS-DILUTED> 0
</TABLE>
