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 PERIOD ENDED MARCH 31, 1998
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 0-22662
UNITED VIDEO SATELLITE GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 73-1290412
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7140 SOUTH LEWIS AVENUE
TULSA, OKLAHOMA 74136-5422
(Address of principal executive offices) (Zip code)
(918) 488-4000
(Registrant's telephone number, including area code)
Indicate by check 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 periods
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
--- ---
Number of shares outstanding of each of the registrant's classes of
common stock as of May 8, 1998:
TITLE OF CLASS NUMBER OF SHARES
Class A Common Stock $.01 Par Value 24,288,594
Class B Common Stock $.01 Par Value 12,373,294
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED VIDEO SATELLITE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In thousands, except per share amounts)
March 31, December 31,
1998 1997
---- ----
ASSETS
Current assets:
Cash and cash equivalents $ 58,493 $ 30,752
Marketable securities, at fair value 110,252 112,334
Accounts receivable, net of allowance
for doubtful accounts 55,423 55,611
Prepaid expenses and other 9,350 9,842
Deferred tax asset 2,135 2,123
-------- --------
Total current assets 235,653 210,662
Property, plant and equipment, at cost,
net of accumulated depreciation and
amortization 47,906 50,992
Goodwill, net of accumulated amortization 87,988 29,157
Other assets, net of accumulated
amortization 4,267 3,641
-------- --------
Total assets $375,814 $294,452
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,406 $ 5,894
Accrued liabilities 60,345 50,385
Note payable and current portion of
capital lease obligations and
long-term debt 8,989 10,957
-------- --------
72,740 67,236
Customer prepayments 124,201 91,266
-------- --------
Total current liabilities 196,941 158,502
Deferred compensation 871 871
Deferred tax liability 8,454 2,737
Capital lease obligations and
long-term debt 16,291 17,207
Minority interest 3,112 3,141
Stockholders' equity
Class A common stock, $.01 par value 242 244
Treasury stock (Class A), at cost (114) (114)
Class B common stock, $.01 par value 124 124
Additional paid-in capital 33,375 39,226
Accumulated other comprehensive
earnings, net of tax 406 (13)
Retained earnings 134,747 115,833
-------- --------
168,780 155,300
Minority interest deficit in Superstar/
Netlink Group LLC (18,635) (43,306)
-------- --------
Total stockholders' equity 150,145 111,994
-------- --------
Total liabilities and stockholders' equity $375,814 $294,452
======== ========
See accompanying notes.
2
<PAGE>
UNITED VIDEO SATELLITE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In thousands, except per share amounts)
Three Months Ended
March 31,
1998 1997
---- ----
Revenues:
Satellite services $121,626 $107,025
Advertising sales 9,127 6,272
Systems integration services 9,564 9,579
-------- -------
140,317 122,876
Operating expenses:
Programming and delivery 76,994 64,428
Selling, general and administrative 37,946 36,472
Depreciation and amortization 7,028 4,556
-------- -------
121,968 105,456
-------- -------
Operating income 18,349 17,420
Other income, net 15,760 497
-------- -------
Income before income taxes and
minority interest 34,109 17,917
Provision for income taxes (11,378) (5,413)
Minority interest in earnings (3,817) (3,097)
-------- -------
Net income $ 18,914 $ 9,407
======== =======
Net income per share:
Basic $ 0.51 $ 0.26
Diluted $ 0.51 $ 0.26
See accompanying notes.
3
<PAGE>
UNITED VIDEO SATELLITE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(In thousands)
Three Months Ended
March 31,
1998 1997
---- ----
Operating activities:
Net income $ 18,914 $ 9,407
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on issuance of equity by
subsidiary (14,700) --
Depreciation and amortization 7,028 4,556
Minority interest in earnings 3,817 3,097
Non-cash compensation expense 660 72
Deferred income taxes 5,460 35
Amortization of bond premiums 504 257
Other 149 (29)
Changes in operating assets and
liabilities, net of the effect
of acquisitions:
Accounts receivable 6,453 6,840
Prepaid expenses and other (475) (1,374)
Accounts payable (2,534) (1,947)
Accrued liabilities 3,805 6,504
Customer prepayments 11,457 (1,584)
Other -- (310)
------- -------
Net cash provided by operating activities 40,538 25,524
Investing activities:
Capital expenditures (1,229) (1,665)
Purchases of marketable securities (63,757) (16,429)
Maturities of marketable securities 65,999 7,744
Other (678) 57
------- -------
Net cash provided by (used in)
investing activities 335 (10,293)
Financing activities:
Repayment of capital lease obligations
and long-term debt (2,884) (3,253)
Issuance of stock 188 1,950
Repurchase of stock (6,743) (2,078)
Distributions to minority interests (3,704) (7,000)
Other 11 469
------- -------
Net cash used in financing activities (13,132) (9,912)
------- -------
Net increase in cash and cash equivalents 27,741 5,319
Cash and cash equivalents at beginning of
period 30,752 42,796
------- -------
Cash and cash equivalents at end of period $58,493 $48,115
======= =======
Supplemental disclosures of cash
flow information:
Interest paid $ 450 $ 566
Income taxes paid $ 225 $ 1,581
See accompanying notes.
4
<PAGE>
UNITED VIDEO SATELLITE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1998
1. Basis of Presentation
United Video Satellite Group, Inc. ("UVSG" or the "Company"), a
majority-controlled subsidiary of Tele-Communications, Inc. ("TCI"),
provides satellite-delivered video, audio, data and program promotion
services to cable television systems, direct-to-home satellite dish
users, radio stations and private network users primarily throughout
North America, and software development and system integration services
to commercial entities, the federal government and defense related
agencies in locations throughout the United States. The majority of
the Company's operating income is earned through the sale of home
satellite dish services and satellite distribution of video and program
promotion services.
The accompanying interim financial statements are unaudited but,
in the opinion of management, reflect all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation of the
consolidated financial position of the Company and its results of
operations and cash flows for such periods. Operating results for any
interim period are not necessarily indicative of the results that may
be expected for the full year. Certain amounts in the 1997 financial
statements have been reclassified to conform with the 1998
presentation.
Effective January 1, 1998, the Company adopted the provisions of
Statement of Financial Accounting Standards ("Statement") No. 130,
Reporting Comprehensive Income. The Company has reclassified its prior
period condensed consolidated balance sheet to conform to the
requirements of Statement 130. Statement 130 requires that all items
which are components of comprehensive earnings or losses be reported in
a financial statement in the period in which they are recognized. The
Company has included unrealized holding gains and losses for available-
for-sale securities that are recorded directly in stockholders' equity
in other comprehensive earnings. Pursuant to Statement 130, these
items are reflected, net of related tax effects, as components of
comprehensive earnings and are included in accumulated other
comprehensive earnings in the Company's condensed consolidated balance
sheets. Comprehensive income for the three months ended March 31, 1998
and 1997 is $19.3 million and $9.4 million, respectively.
The condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997.
2. Contingencies
On October 8, 1993, the Company received correspondence from
attorneys representing StarSight Telecast, Inc. ("StarSight"), now a
wholly owned subsidiary of Gemstar International Group Limited
("Gemstar"), bringing to the Company's attention the existence of three
patents and various patent applications containing claims relating to
certain functions performed by interactive television program
scheduling services, alleging that the Company is or may be infringing
StarSight issued patents, including U.S. Patent No. 4,706,121 and then-
pending Reexamination Certificate B1 4,706,121 (collectively, the "121
Patent"), and claims of its pending patent applications, and
threatening the Company with enforcement litigation. On October 19,
1993, the Company filed an action in the U.S. District Court for the
Northern District of Oklahoma seeking a Declaratory Judgment to the
effect that the services offered by the Company do not infringe the
three United States patents issued to StarSight, including the 121
Patent. On October 22, 1993, StarSight filed a separate action in the
United States District Court for the Northern District of California,
alleging that certain of the Company's interactive services infringe
the 121 Patent. This action was dismissed by StarSight on May 25,
1994. On July 16, 1994, the Company filed an Amended Complaint seeking
Declaratory Judgment that it did not infringe the three StarSight
patents listed in the original complaint as well as five other patents
licensed to StarSight. On July 19, 1994, StarSight refiled its
infringement claim against the Company as a counter-claim to the
Company's Amended Complaint. On February 15, 1995, the Company filed an
Amended and Supplemental Complaint which averred that the 121 Patent is
invalid and not infringed, that the 121 Patent is unenforceable because
of StarSight's inequitable conduct in obtaining the patent and its
misuse of the patent, and that StarSight violated the antitrust laws.
The Company also sought a Declaratory Judgment that the five other
patents licensed to StarSight are not infringed by the Company. In
December 1995, StarSight moved to amend its complaint to assert
infringement of two additional patents. The Court subsequently granted
StarSight's motion, but stayed all proceedings as to those two patents.
The trial commenced on May 8, 1996 with respect to the validity,
infringement and inequitable conduct issues relative to the 121 Patent.
The trial is currently in adjournment. Discovery and trial of all
other issues has been stayed. In January 1998, the Company and Gemstar
announced the formation of a joint venture, which transaction included
the settlement of the Company's litigation with StarSight. The
deadline set for satisfaction of certain closing conditions in the
joint venture agreement passed without satisfaction of those
conditions; however, the Company and Gemstar continue to have
discussions. Accordingly, the litigation has not yet been dismissed.
The trial is scheduled to resume on July 6, 1998. There can be no
assurance that this litigation will be resolved without material
adverse effect on the business prospects of the Company's Prevue
Interactive subsidiary and the future financial position or results of
operations of the Company.
5
<PAGE>
The State of Illinois (the "State") has asserted that certain
uplinking services performed by the Company at its Chicago teleport are
subject to the State's Telecommunications Excise Tax Act. The State
contends that the Company should have collected approximately $1.5
million in excise taxes from its customers during the period August
1985 through June 1994 and remitted such receipts to the State. In
addition to that amount, Illinois has assessed penalties and interest
of approximately $900,000. The Company, after consulting with outside
counsel, strongly disagrees with the State's position. No provision
has been made in the Company's financial statements for this
contingency, nor has the Company collected from its customers and
remitted their tax (which would aggregate approximately $300,000
annually) for periods subsequent to June 1994. However, pursuant to
the State's Protest Money Act which stops further accrual of interest
during the appeals process, the Company has paid into the Illinois
Court $2.4 million, which represents the amount of the State's claim
applicable to the period August 1985 through June 1994. Also pursuant
to the State's Protest Money Act, the Company filed a Verified
Complaint for Injunctive and Other Relief in the Cook County Chancery
Court on February 28, 1995, and an Amended Verified Complaint on
October 6, 1995. The Company filed a motion for summary judgment on
August 29, 1996, asking the Court for summary disposition of the case.
Pursuant to this motion, the Company received a partial refund of
$123,000 on February 10, 1997. The remaining issues raised by the
motion are still pending. If the Company's motion is not granted, it
is anticipated that a trial date may be scheduled. While the Company
believes that this matter will not have a material adverse effect on
its business, financial position or results of operations, the ultimate
resolution, which may occur within one year, could result in a loss of
up to $3.8 million.
On June 2, 1997, a lawsuit was filed in the federal district court
for the district of Connecticut against the Company by one of its mass
marketers who claims, among other matters, additional amounts owed in
connection with its past and current business relationship with the
Company. Discussions to resolve these matters are on going. On June
11, 1997, the court denied the marketer's motion for a temporary
restraining order, and on October 10, 1997, denied the marketer's
motion for a preliminary injunction. The marketer initially appealed
the latter ruling to the United States Court of Appeals for the Second
Circuit, but, thereafter, voluntarily withdrew and dismissed the appeal
with prejudice on March 3, 1998. The Company has evaluated these
claims and believes them to be without merit. The Company believes
that this matter will not have a material adverse effect on its
financial position or results of operations.
The Company is also a party to certain other claims, actions and
proceedings incidental to its business, none of which is expected to
have a material adverse effect on the business, financial position or
results of operations of the Company.
6
<PAGE>
3. Turner Vision Transaction
Effective February 1, 1998, Turner Vision, Inc. ("Turner Vision")
contributed its retail C-band home satellite dish business' assets,
obligations and operations to Superstar/Netlink Group LLC ("SNG") in
return for an approximate 20% interest in SNG, reducing the Company's
and Liberty Media Corporation's ("Liberty's") ownership interest in SNG
to approximately 40% each. The Company continues to manage SNG and
SNG's operating results continue to be consolidated with those of the
Company. Liberty is wholly owned by TCI.
The contribution was accounted for as a purchase of Turner
Vision's business by SNG. Assets contributed by Turner Vision to SNG
totaled $5.4 million and consisted primarily of $3.9 million of cash
and $1.5 million of accounts receivable. These assets were subject to
liabilities of $27.7 million, consisting primarily of $21.5 million of
customer prepayments and $6.2 million of accounts payable and accrued
liabilities. The purchase price of Turner Vision's business exceeded
the fair value of the underlying assets acquired by approximately $61.2
million, which amount was assigned to goodwill and is being amortized
over five years. As a result of the transaction, the Company recognized
a gain of $14.7 million which is included in "Other Income".
The following pro forma financial information reflects the
Company's results of operations for the three months ended March 31,
1998 and 1997 as though the retail operations of Turner Vision had been
acquired as of January 1, 1997, excluding the gain recognized by the
Company as a result of the transaction:
1998 1997
---- ----
Pro forma:
Revenues $148,072 $145,020
Net income 9,117 7,667
Net income per share:
Basic $ 0.25 $ 0.21
Diluted $ 0.24 $ 0.21
7
<PAGE>
4. Earnings Per Share
The following information reconciles the number of shares used to
compute basic earnings per share to those used to compute diluted
earnings per share (in thousands, except per share amounts):
1998 1997
-------------------- --------------------
Per Share Per Share
Amount Amount
--------- ---------
Net income $18,914 $ 9,407
======= =======
Weighted average
number of shares
of common stock
outstanding 36,743 $0.51 36,409 $0.26
===== =====
Effect of dilutive
securities -
stock options 535 439
------- -------
Weighted average
number of shares
of common stock
and dilutive
potential common
shares 37,278 $0.51 36,848 $0.26
======= ===== ======= =====
5. Other Matters
On January 21, 1998, the Company and Gemstar announced plans to
form Interactive Prevue Guide, Inc. ("IPG"), a joint venture whose
focus was to be the marketing of a portfolio of intellectual property,
technology and data services for interactive program guides to multi-
channel video service providers. The deadline set for satisfaction of
certain closing conditions in the joint venture agreement passed
without satisfaction of those conditions; however, the Company and
Gemstar continue to have discussions. While the Company is hopeful
that some business relationship beneficial to the Company will result
from these discussions, there can be no assurances that any
relationship will result.
On February 17, 1998, the Company announced plans to acquire
Liberty's approximate 40% interest in SNG as part of a transaction
subject to, among other things, stockholder approval. The transaction,
which also includes Liberty's business that distributes to cable
television systems and other multi-channel video distributors, four
network affiliates, one public broadcast station and one independent
television station, collectively known as Denver 6, and certain other
programming interests will be effected on a tax-free basis by UVSG
issuing 6,375,000 shares of Class B Common Stock (the "Liberty
Transaction"). The closing price of the Company's Class A Common Stock
on the date the parties to the transaction agreed in principle to the
described terms was $33 per share.
On February 18, 1998, the Company announced plans for a two-for-
one split of the Company's Class A Common Stock and Class B Common
Stock to be effected in the form of a stock dividend of one additional
share of Class A Common Stock for each share of Class A Common Stock
outstanding and one additional share of Class B Common Stock for each
share of Class B Common Stock outstanding. The stock split is
contingent on stockholder approval to increase the number of authorized
shares of Class A Common Stock and Class B Common Stock.
On April 23, 1998, the Company, Liberty and Turner Vision
announced an agreement in principle with Primestar, Inc. ("Primestar")
for the sale of SNG to Primestar for approximately $480 million based
on the delivery of 1.2 million C-band subscribers at the close of the
transaction (the "Primestar Transaction"). The consideration is to be
in the form of approximately $430 million in new convertible preferred
stock of Primestar with the remainder in assumed liabilities. The
preferred stock will be convertible into approximately 44.8 million
shares of Primestar Class A Common Stock, bear a 6% cumulative
dividend, payable in cash or shares of Primestar common stock, assuming
such common stock is registered for resale, have a 12 year life and be
redeemable in whole or part, at the election of Primestar, after four
years. Consummation of the agreement is subject to certain conditions
including receipt of applicable regulatory approvals. No assurance can
be given that such transaction will be consummated or consummated on
the terms described. As a result of this transaction, the Company and
Liberty have agreed to restructure their transaction to permit the
Primestar Transaction to close before the entire Liberty Transaction
closes. In such event, the Company would acquire the Primestar
preferred stock received by Liberty in the Primestar Transaction in
lieu of Liberty's approximate 40% interest in SNG as announced in the
Liberty Transaction. In the event the Primestar Transaction does not
occur, the Liberty Transaction is to proceed as previously announced.
On May 12, 1998, the Justice Department filed a complaint in U.S.
District Court seeking to block the sale of an orbital slot to
Primestar suitable for direct broadcast satellite ("DBS"). The Company
is evaluating this event and its impacts on Primestar and the
previously announced Primestar Transaction.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General
The Company operates five businesses: program promotion and guide
services (Prevue Networks), home satellite and business services
(Superstar), satellite distribution of video services (UVTV), software
development and systems integration services (SSDS) and satellite
transmission services for private networks (SpaceCom).
The following table sets forth certain unaudited financial
information for the Company and each of the businesses operated by it
during the three months ended March 31, 1998 and 1997.
Three Months Ended March 31,
1998 1997
------------------------------
Amount % Amount %
------ --- ------ ---
(in thousands)
Revenues:
Prevue Networks $ 17,467 12% $ 13,984 11%
Superstar (1) 99,710 71 86,233 70
UVTV 10,966 8 10,669 9
SSDS 9,564 7 10,097 8
SpaceCom 4,454 3 4,087 3
Other/Eliminations (1,844) (1) (2,194) (1)
-------- --- ------- ---
Total $140,317 100% $122,876 100%
======== === ======== ===
EBITDA (2):
Prevue Networks $ 4,225 17% $ 5,236 24%
Superstar (1) 12,607 50 10,251 47
UVTV 7,533 30 7,366 33
SSDS 644 2 (1,115) (5)
SpaceCom 1,365 5 854 4
Other/Eliminations (997) (4) (616) (3)
-------- --- ------- ---
Total $ 25,377 100% $ 21,976 100%
======== === ======== ===
Operating income:
Prevue Networks $ 1,793 10% $ 3,173 18%
Superstar (1) 9,786 53 9,448 54
UVTV 6,945 38 6,770 39
SSDS (196) (1) (1,836) (11)
SpaceCom 1,020 5 481 3
Other/Eliminations (999) (5) (616) (3)
-------- --- ------- ---
Total $ 18,349 100% $ 17,420 100%
======== === ======== ===
Consolidated depreciation
and amortization $ 7,028 $ 4,556
Consolidated capital
expenditures $ 1,229 $ 1,665
Net cash provided by
operating activities $ 40,538 $ 25,524
(1) The amounts shown in the above tables for Superstar represent
Superstar's revenues, EBITDA and operating income included in the
Company's consolidated results of operations. Beginning February
1, 1998, these operating results include the retail operations of
Turner Vision.
(2) EBITDA represents operating income, plus depreciation and
amortization. Financial analysts generally consider EBITDA to be
an appropriate measure of performance in the industries in which
the Company operates. EBITDA does not take into account
substantial costs of doing business, such as income taxes and
interest expense, and should not be considered as a substitute for
net income, cash flow or any other generally accepted accounting
principles measure of performance, liquidity or financial
position.
9
<PAGE>
Results of Operations
Consolidated
Revenues for the three months ended March 31, 1998 were $140.3
million, an increase of $17.4 million, or 14%, over the same period in
1997. The increase in revenues for the quarter was primarily due to
$15.2 million of additional revenues attributable to Turner Vision's
retail C-band operations which were combined with those of Superstar's
retail C-band operations effective February 1, 1998 and increased
service fee and advertising revenues by Prevue Networks. These
increases were offset by a $3.1 million reduction in revenues as a
result of the termination of Superstar's service agent agreements with
program suppliers in the DBS market.
Operating expenses, excluding depreciation and amortization, were
$114.9 million for the three months ended March 31, 1998, an increase
of $14.0 million, or 14%, when compared to $100.9 million for the same
period in 1997. Operating expenses, excluding depreciation and
amortization, increased primarily due to increased operating costs of
$14.0 million attributable to Turner Vision, costs incurred to develop
and launch the new look of Prevue Channel and increased personnel costs
primarily attributable to the growth in Prevue Networks which were
partially offset by a $2.9 million decrease in operating expenses of
Superstar primarily as a result of the termination of Superstar's
service agent agreements with program suppliers in the DBS market.
Depreciation and amortization during the first quarter of 1998 was
$7.0 million, an increase of $2.5 million, or 54%, over the same period
in 1997. The increase in depreciation and amortization in 1998 was
primarily a result of amortization of goodwill resulting from the
acquisition of Turner Vision coupled with the acquisition of equipment
to support the various Prevue products.
Other income (expense) for the three months ended March 31, 1998
totaled $15.8 million compared to $497,000 for the same period in 1997.
Included in other income during 1998 is $14.7 million of gain
associated with the acquisition of Turner Vision (See Note 3 of Notes
to Condensed Consolidated Financial Statements).
The Company's effective tax rate, computed as the provision for
income taxes divided by income before income taxes and minority
interest, less that portion of minority interest in earnings
attributable to entities not subject to income taxes, was 37.5% for the
three-month period ended March 31, 1998, relatively unchanged from
37.4% for the same period in 1997.
Minority interest in earnings for the quarter ended March 31, 1998
of $3.8 million represents that portion of earnings attributable to the
minority ownership in SNG, SSDS and Sneak Prevue LLC.
10
<PAGE>
Prevue Networks
The following table sets forth certain financial information for
Prevue Networks for the three months ended March 31, 1998 and 1997:
Three Months Ended March 31,
1998 1997
---- ----
(in thousands)
Revenues $17,467 $13,984
Operating expenses, before
depreciation and amortization 13,242 8,748
------- -------
EBITDA 4,225 5,236
Depreciation and amortization 2,432 2,063
------- -------
Operating income $ 1,793 $ 3,173
======= =======
EBITDA margin percentage 24% 37%
Operating margin percentage 10% 23%
Prevue Networks' revenues for the three months ended March 31,
1998 were $17.5 million, an increase of $3.5 million, or 25%, over the
same period in 1997. The increase in revenues was largely attributable
to advertising revenues, which grew $2.9 million, or 46%, over the
first quarter of 1997 due to higher rates, and increased service fee
revenues attributable to Prevue Channel, which increased $553,000, or
10%, for the quarter when compared to the same period in 1997. Sneak
Prevue revenues were relatively unchanged during the first quarter of
1998 compared to the same quarter in 1997. Prevue Channel subscriber
counts increased by 2.1 million, or 5%, to 47.7 million as of March 31,
1998 compared to those as of March 31, 1997. Sneak Prevue subscribers
increased by 300,000, or 1%, to 35.1 million during the same period.
Operating expenses, excluding depreciation and amortization,
increased by $4.5 million, or 51%, during the first quarter of 1998
when compared to the same period in 1997. The increase in operating
expenses, before depreciation and amortization, was due primarily to
additional employees added to accommodate Prevue's growth coupled with
approximately $2.3 million of costs incurred to develop and launch the
new look of Prevue Channel.
Depreciation and amortization during the first quarter of 1998 was
$2.4 million, an increase of $369,000, or 18%, over the same period in
1997. The increase in depreciation and amortization was a result of
the acquisition of additional customer control units and video
production equipment necessary to support the various Prevue products.
11
<PAGE>
Superstar
The following table sets forth certain financial information for
Superstar for the three months ended March 31, 1998 and 1997:
Three Months Ended March 31,
1998 1997
---- ----
(in thousands)
Revenues $99,710 $86,233
Operating expenses, before
depreciation and amortization 87,103 75,982
------- -------
EBITDA 12,607 10,251
Depreciation and amortization 2,821 803
------- -------
Operating income $ 9,786 $ 9,448
======= =======
EBITDA margin percentage 13% 12%
Operating margin percentage 10% 11%
Revenues generated by Superstar for the three months ended March
31, 1998 were $99.7 million, an increase of $13.5 million, or 16%, over
the same period in 1997. Revenue increased for the three month period
due to $15.2 million of revenues attributable to Turner Vision's retail
C-band operations which were acquired by SNG effective February 1, 1998
and increased C-band rates partially offset by a $3.1 million decrease
in revenue as a result of the termination of Superstar's service agent
agreements with program suppliers in the DBS market. Retail subscribers
purchasing programming from SNG as of March 31, 1998 totaled
approximately 1.2 million, an increase of 286,000 during the quarter
and an increase of 259,000 during the prior twelve months. The increase
in retail subscribers during the last twelve months includes
approximately 310,000 subscribers acquired from Turner Vision on
February 1, 1998. Excluding the impact of Turner Vision, retail
subscribers purchasing programming from SNG decreased 3% and 6% for the
three-month and twelve-month periods ending March 31, 1998,
respectively. During the quarter ended March 31, 1998, the C-band
industry declined 3%, decreasing by 55,000 subscribers, and for the
twelve month period ended March 31, 1998, the industry decreased by
166,000 subscribers, or 7%.
Operating expenses, excluding depreciation and amortization, were
$87.1 million in the first quarter of 1998, an increase of $11.1
million, or 15%, compared to the same period in 1997. The increase in
operating expenses, before depreciation and amortization, in the first
quarter of 1998 as compared to the previous year's results was due
primarily to expenses attributable to Turner Vision of $14.0 million,
which were partially offset by a $2.9 million decrease in operating
expenses resulting primarily from the termination of Superstar's
service agent agreements with program suppliers in the DBS market.
Depreciation and amortization for the first three months of 1998
was $2.8 million, an increase of $2.0 million, or 251%, compared to the
same period in 1997. The increase in depreciation and amortization in
1998 was primarily a result of amortization of goodwill resulting from
the acquisition of Turner Vision.
On February 17, 1998, the Company announced plans to acquire
Liberty's approximate 40% interest in SNG as part of a transaction
subject to, among other things, stockholder approval. The transaction,
which also includes the acquisition by the Company of Liberty's
business that distributes to cable television systems and other multi-
channel video distributors four network affiliates, one public
broadcast station and one independent television station, collectively
known as Denver 6, and certain other programming interests will be
effected on a tax-free basis by UVSG issuing 6,375,000 shares of Class
B Common Stock. The closing price of the Company's Class A Common
Stock on the date the parties to the transaction agreed in principle to
the described terms was $33 per share.
On April 23, 1998, the Company, Liberty and Turner Vision
announced an agreement in principle with Primestar for the sale of SNG
to Primestar for approximately $480 million based on the delivery of
1.2 million C-band subscribers at the close of the transaction. The
consideration is to be in the form of approximately $430 million in new
convertible preferred stock of Primestar with the remainder in assumed
liabilities. Consummation of the agreement is subject to certain
conditions including receipt of applicable regulatory approvals. No
assurance can be given that such transaction will be consummated or
consummated on the terms described. As a result of this transaction,
the Company and Liberty have agreed to restructure their transaction to
permit the Primestar Transaction to close before the entire Liberty
Transaction closes. In such event, the Company would acquire the
Primestar preferred stock received by Liberty in the Primestar
Transaction in lieu of Liberty's approximate 40% interest in SNG as
announced in the Liberty Transaction. In the event the Primestar
Transaction does not occur, the Liberty Transaction is to proceed as
previously announced. On May 12, 1998, the Justice Department filed a
complaint in U.S. District Court seeking to block the sale of an
orbital slot to Primestar suitable for DBS. The Company is evaluating
this event and its impacts on Primestar and the previously announced
Primestar Transaction.
12
<PAGE>
UVTV
The following table sets forth certain financial information for
UVTV for the three months ended March 31, 1998:
Three Months Ended March 31,
1998 1997
---- ----
(in thousands)
Revenues $10,966 $10,669
Operating expenses, before
depreciation and amortization 3,433 3,303
------- -------
EBITDA 7,533 7,366
Depreciation and amortization 588 596
------- -------
Operating income $ 6,945 $ 6,770
======= =======
EBITDA margin percentage 69% 69%
Operating margin percentage 63% 63%
UVTV's revenues for the first three months of 1998 were $11.0
million, an increase of $297,000, or 3%, from the same period in 1997.
The increase in revenues is primarily the result of increased C-band
license fees to recover the expense of copyright fees which increased
on January 1, 1998. UVTV/WGN subscribers increased 6.3 million, or
18%, from March 1997 to March 1998, primarily due to the impact from
new cable and DBS system launches and existing subscriber growth. The
revenue impact of this subscriber growth was offset by a decline in per
subscriber rates due to MSO consolidations and the mix of the
subscriber base migrating toward cable and DBS, which have lower rates,
and away from C-band, which has higher rates.
Operating expenses, excluding depreciation and amortization, were
$3.4 million during the first quarter of 1998, an increase of $130,000,
or 4%, from those during the first quarter of 1997. The increase in
operating expenses during 1998 results primarily from increased
copyright fees discussed above.
Depreciation and amortization in the first quarter of 1998 was
$588,000, relatively unchanged compared to the same period in 1997.
13
<PAGE>
SSDS
SSDS' revenues for the first quarter of 1998 were $9.6 million, a
decrease of $533,000, or 5%, compared to the first quarter of 1997.
The decrease in revenues during 1998 compared to those of 1997 is
primarily due to the completion of certain major projects during the
first quarter of 1998 which caused a decrease in billable hours.
Operating expenses, before depreciation and amortization,
decreased during the first quarter of 1998 by $2.3 million, or 20%,
from the same period in 1997 to $8.9 million. The decrease in
operating expenses during the first quarter was primarily due to lower
headcount and project costs, which were caused by the completion of
certain major projects during the first quarter of 1998.
Depreciation and amortization expense during the three months
ended March 31, 1998 increased by $119,000, or 17%, over the same
period in 1997. The increase in 1998 was the result of ongoing
infrastructure equipment upgrades and new equipment to support the
employees. Included in depreciation and amortization expense in both
periods is approximately $503,000 of amortization of goodwill resulting
from the Company's acquisition of SSDS in July 1995.
SpaceCom
SpaceCom's revenues for the three months ended March 31, 1998 were
$4.5 million, an increase of $367,000, or 9%, over the same period in
1997. The increase in revenues was attributable principally to
increased demand for SpaceCom's satellite hardware. SpaceCom's
transponders had an average occupancy, based on potential revenue, of
69% as of March 31, 1998, unchanged when compared to the same period in
1997.
Operating expenses, excluding depreciation and amortization, were
$3.1 million during the first quarter of 1998, a decrease of $144,000,
or 4%, compared to the same period in 1997. The decrease in operating
expenses, before depreciation and amortization, resulted primarily from
decreased personnel costs and transmission expenses.
Depreciation and amortization in the first quarter of 1998 was
$345,000, a decrease of $28,000, or 8%, compared to the same period in
1997.
14
<PAGE>
Liquidity and Capital Resources
Cash provided by operations continues to be the Company's primary
source of funds to finance operating needs and capital expenditures.
During the first three months of 1998, net cash flows from operating
activities were $40.5 million ($36.8 million after distributions to
minority interests), reflecting the continued growth of the Company's
after-tax earnings. This cash, plus existing cash resources and net
proceeds of $2.2 million from the sale of marketable securities, were
used to fund the Company's debt payments by SSDS of $2.0 million,
repurchase of common stock of $6.7 million, capital expenditures of
$1.2 million and the reduction in the Company's capitalized lease
obligations of $851,000 during the three-month period.
At March 31, 1998, the Company's cash, cash equivalents and
marketable securities aggregated $168.7 million, an increase of $25.7
million over that as of December 31, 1997. The above total includes
$19.5 million of cash and cash equivalents held by SNG, in which the
Company has an approximate 40% ownership interest. The Company has
invested the majority of its cash available for current operations in
investment grade municipal governmental obligations. As of March 31,
1998, approximately $88.6 million of such securities had maturities
greater than 90 days and were classified as available-for-sale
marketable securities along with investments made in certain equity
securities. The Company's policy pertaining to the temporary investment
of cash available for operations currently prohibits investments in
fixed rate securities with maturities in excess of eighteen months from
the date of investment.
SSDS has a revolving credit facility with a bank which provides
for borrowings up to the lesser of 80% of billed trade receivables of
SSDS outstanding less than 90 days, subject to certain conditions, or
$7.5 million. Borrowings under this credit facility, which expires
June 30, 1998, bear interest at the bank's stated prime rate plus a
margin. SSDS was not in compliance with certain financial covenants
contained in the credit agreement as of December 31, 1997 and has
received waivers from the bank for such matters. Management believes
SSDS may have to renegotiate certain financial covenant ratios to
remain in compliance with the terms of the credit facility.
Outstanding borrowings under the credit facility as of March 31, 1998
were $5.5 million.
The Company collects annually, in advance, a majority of its SNG
subscription fees and certain of its UVTV superstation and Prevue
Networks' revenues. As of March 31, 1998, the unearned portion of all
prepayments totaled $124.2 million, of which approximately $108.3
million, or 87%, was attributable to SNG. SNG generally offers a refund
of unearned prepayments at the customer's option if service is
discontinued for any reason. In the case of UVTV and Prevue Networks,
the Company's liability is limited to a refund of unearned prepayments
in the event that the Company is unable to provide service. No
material refunds have been paid to date.
15
<PAGE>
Under the terms of the capital leases for two satellite
transponders placed in service by UVTV and Prevue Networks in 1992, the
Company was obligated for net minimum lease payments through
approximately 2004 aggregating $19.4 million as of March 31, 1998, a
reduction of $851,000, or 4%, from the obligation existing at the prior
year's end. The Company expects to further reduce the lease obligation
during the next twelve months by approximately $3.6 million. The
Company also leases various other satellite transponders accounted for
as operating leases. These operating leases accounted for
approximately $1.5 million in operating expenses, net of sublease
revenue, during the three months ended March 31, 1998.
Capital expenditures during the three months ended March 31, 1998
of $1.2 million were principally attributable to the purchase of
control units provided to the Company's cable television customers and
to data processing equipment and furniture, fixtures and facilities
used by the Company.
SNG makes monthly distributions to its members of all cash in
excess of reasonable cash reserves established for anticipated working
capital requirements and capital expenditures. During the three months
ended March 31, 1998, cash distributions to minority interests in SNG
aggregated $3.7 million.
The Company believes, except as discussed above for SSDS, which
will be required to renew or replace its existing credit facility in
June 1998, that currently available cash and cash equivalents,
marketable securities and cash flow generated from operations will
provide the resources necessary to meet its working capital and related
financing needs for the foreseeable future and to pursue opportunities
to expand its businesses. However, should the Company require
financial resources in excess of those currently available, it will
likely look to both debt and equity as a source of funds.
The Board of Directors has authorized the Company to repurchase
from time to time up to an aggregate of 1,000,000 shares of the
Company's Class A Common Stock using existing cash resources. During
the first quarter of 1998, the Company repurchased 188,000 shares of
stock for a total of $6.7 million. To date, the Company has
repurchased approximately 312,000 shares under the program.
The Company continues to explore opportunities to expand the
market share of its existing businesses, develop new products and
acquire interests in new businesses.
16
<PAGE>
Other Matters
In 1997, the Company began the process of identifying, evaluating
and implementing changes to its computer programs necessary to address
the year 2000 issue. This issue affects computer systems that have
time-sensitive programs that may not properly recognize the year 2000
and could result in system failures or miscalculations. The Company
has completed a preliminary assessment of the impact of year 2000 and
is currently addressing its internal year 2000 issues with
modifications to existing programs and conversions to new programs.
None of the system modifications are considered by management to be
significant and for those systems being replaced, the Company had
already planned on replacing the system to improve operational
efficiencies and the ability to analyze information. The total cost of
converting all internal systems to achieve year 2000 compliance has not
been completely quantified, but it is not expected to be a material
cost to the Company. An evaluation of the impacts of year 2000 on the
computer systems of vendors upon which the Company places reliance is
in process with a goal of completion during 1998.
In June 1997, the FASB issued Statement No. 131, "Disclosures
about Segments of an Enterprise and Related Information". Statement
No. 131 establishes standards for the way that public business
enterprises report information about operating segments in annual
financial statements and requires that those enterprises report
selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for
related disclosures about products and services, geographic areas and
major customers. Statement No. 131 is effective for financial
statements for fiscal years beginning after December 15, 1997.
Financial statement disclosures for prior periods are required to be
restated. The Company plans to adopt Statement No. 131 for the year
ended December 31, 1998. The adoption of Statement No. 131 will have
no impact on the Company's consolidated results of operations,
financial position or cash flows.
Cautionary Statement
This report contains "forward looking statements" within the
meaning of the federal securities laws, including the Company's
intentions to form IPG and settle the StarSight litigation, the
Company's plans to acquire certain assets and operations from Liberty,
the Company's plans to sell certain assets and operations to Primestar,
the Company's plans for the development of interactive and information
services, the sufficiency of existing and available transponder
capacity, the availability of resources to fund operations and capital
expenditures, the Company's pursuit of certain business activities and
other statements of expectations, beliefs, plans and similar
expressions concerning matters that are not historical facts. These
statements are subject to risks and uncertainties that could cause
results to differ materially from those expressed in the statements.
Important factors that could cause such differences include, but are
not limited to, changes in the regulation of the cable television
industry and home satellite dish industry adverse to the Company's
services, loss of the cable compulsory license provided by federal law,
the willingness of cable television systems to acquire and install new
equipment that will allow the Company to effectively market its
interactive technology, increased price and service competition within
the industry, the Company's ability to keep pace with technological
developments, the willingness and ability of third parties to
consummate transactions and the Company's dependence upon intellectual
property rights, including the Company's ability to defend itself
against claims by others asserting infringement of their intellectual
property.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
17
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The trial governing the Company's litigation with StarSight
is scheduled to resume on July 6, 1998. See Note 2 of Notes
to Condensed Consolidated Financial Statements.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
27.1 Financial Data Schedule - Quarter ended March 31,
1998
27.2 Restated Financial Data Schedule - Twelve months
ended December 31, 1996
27.3 Restated Financial Data Schedule - Quarter ended
March 31, 1997
27.4 Restated Financial Data Schedule - Six months
ended June 30, 1997
27.5 Restated Financial Data Schedule - Nine months
ended September 30, 1997
b) Reports on Form 8-K
No reports on Form 8-K were filed during the first
quarter of 1998.
18
<PAGE>
SIGNATURES
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 Video Satellite Group, Inc.
(Registrant)
Date: May 15, 1998 By: /s/ Peter C. Boylan III
-------------------------------
Peter C. Boylan III
President and
Chief Operating Officer
19
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME INCLUDED IN
THE QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1998 OF UNITED
VIDEO SATELLITE GROUP, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000913061
<NAME> UNITED VIDEO SATELLITE GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 58,493
<SECURITIES> 110,252
<RECEIVABLES> 57,536
<ALLOWANCES> 2,113
<INVENTORY> 0
<CURRENT-ASSETS> 235,653
<PP&E> 117,827
<DEPRECIATION> 69,921
<TOTAL-ASSETS> 375,814
<CURRENT-LIABILITIES> 196,941
<BONDS> 0
0
0
<COMMON> 366
<OTHER-SE> 149,779
<TOTAL-LIABILITY-AND-EQUITY> 375,814
<SALES> 0
<TOTAL-REVENUES> 140,317
<CGS> 0
<TOTAL-COSTS> 84,022
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 34,109
<INCOME-TAX> 11,378
<INCOME-CONTINUING> 18,914
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,914
<EPS-PRIMARY> 0.51
<EPS-DILUTED> 0.51
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE - THIS RESTATED SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND THE
CONSOLIDATED STATEMENT OF INCOME INCLUDED IN THE ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1996 OF UNITED VIDEO SATELLITE GROUP, INC.
AND IS QUALIFIED IN ITS ENTIRELY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000913061
<NAME> UNITED VIDEO SATELLITE GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 42,796
<SECURITIES> 58,581
<RECEIVABLES> 48,869 <F1>
<ALLOWANCES> 2,535
<INVENTORY> 0
<CURRENT-ASSETS> 159,837 <F1>
<PP&E> 108,503
<DEPRECIATION> 52,122
<TOTAL-ASSETS> 250,104 <F1>
<CURRENT-LIABILITIES> 159,179 <F1>
<BONDS> 0
0
0
<COMMON> 362
<OTHER-SE> 63,798
<TOTAL-LIABILITY-AND-EQUITY> 250,104 <F1>
<SALES> 0
<TOTAL-REVENUES> 437,168
<CGS> 0
<TOTAL-COSTS> 244,261
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,024
<INCOME-PRETAX> 56,904
<INCOME-TAX> 17,122
<INCOME-CONTINUING> 30,084
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,084
<EPS-PRIMARY> .84 <F2>
<EPS-DILUTED> .82 <F2>
<FN>
<F1>-RECLASSIFICATIONS MADE TO CONFORM TO THE 1997 PRESENTATION.
<F2>-RESTATEMENT REFLECTED HEREIN IS THE RESULT OF ADOPTION OF STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS NO. 128, "EARNINGS PER SHARE".
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE - THIS RESTATED SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND THE
CONSOLIDATED STATEMENT OF INCOME INCLUDED IN THE QUARTERLY REPORT ON FORM
10-Q FOR THE PERIOD ENDED MARCH 31, 1997 OF UNITED VIDEO SATELLITE GROUP,
INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000913061
<NAME> UNITED VIDEO SATELLITE GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 48,115
<SECURITIES> 66,824
<RECEIVABLES> 54,587
<ALLOWANCES> 2,614
<INVENTORY> 0
<CURRENT-ASSETS> 179,823
<PP&E> 109,803
<DEPRECIATION> 55,578
<TOTAL-ASSETS> 267,241
<CURRENT-LIABILITIES> 168,994
<BONDS> 0
0
0
<COMMON> 368
<OTHER-SE> 73,259
<TOTAL-LIABILITY-AND-EQUITY> 267,241
<SALES> 0
<TOTAL-REVENUES> 122,876
<CGS> 0
<TOTAL-COSTS> 68,984
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 17,917
<INCOME-TAX> 5,413
<INCOME-CONTINUING> 9,407
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,407
<EPS-PRIMARY> .26 <F1>
<EPS-DILUTED> .26 <F1>
<FN>
<F1>-RESTATEMENT REFLECTED HEREIN IS THE RESULT OF ADOPTION OF STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS NO. 128, "EARNINGS PER SHARE".
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE - THIS RESTATED SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND THE
CONSOLIDATED STATEMENT OF INCOME INCLUDED IN THE QUARTERLY REPORT ON FORM
10-Q FOR THE PERIOD ENDED JUNE 30, 1997 OF UNITED VIDEO SATELLITE GROUP,
INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000913061
<NAME> UNITED VIDEO SATELLITE GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 31,702
<SECURITIES> 93,499
<RECEIVABLES> 52,198
<ALLOWANCES> 2,675
<INVENTORY> 0
<CURRENT-ASSETS> 190,947
<PP&E> 111,357
<DEPRECIATION> 59,095
<TOTAL-ASSETS> 275,618
<CURRENT-LIABILITIES> 166,066
<BONDS> 0
0
0
<COMMON> 368
<OTHER-SE> 85,161
<TOTAL-LIABILITY-AND-EQUITY> 275,618
<SALES> 0
<TOTAL-REVENUES> 250,977
<CGS> 0
<TOTAL-COSTS> 138,612
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 40,032
<INCOME-TAX> 11,776
<INCOME-CONTINUING> 20,678
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,678
<EPS-PRIMARY> .57 <F1>
<EPS-DILUTED> .56
<FN>
<F1>-RESTATEMENT REFLECTED HEREIN IS THE RESULT OF ADOPTION OF STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS NO. 128, "EARNINGS PER SHARE".
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
RESTATED FINANCIAL DATA SCHEDULE - THIS RESTATED SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND THE
CONSOLIDATED STATEMENT OF INCOME INCLUDED IN THE QUARTERLY REPORT ON FORM
10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1997 OF UNITED VIDEO SATELLITE GROUP,
INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000913061
<NAME> UNITED VIDEO SATELLITE GROUP, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 24,142
<SECURITIES> 113,146
<RECEIVABLES> 50,952
<ALLOWANCES> 2,854
<INVENTORY> 0
<CURRENT-ASSETS> 199,814
<PP&E> 113,837
<DEPRECIATION> 62,789
<TOTAL-ASSETS> 283,473
<CURRENT-LIABILITIES> 162,153
<BONDS> 0
0
0
<COMMON> 368
<OTHER-SE> 98,760
<TOTAL-LIABILITY-AND-EQUITY> 283,473
<SALES> 0
<TOTAL-REVENUES> 376,882
<CGS> 0
<TOTAL-COSTS> 207,420
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 63,860
<INCOME-TAX> 18,983
<INCOME-CONTINUING> 32,580
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,580
<EPS-PRIMARY> .89 <F1>
<EPS-DILUTED> .88
<FN>
<F1>-RESTATEMENT REFLECTED HEREIN IS THE RESULT OF ADOPTION OF STATEMENT OF
FINANCIAL ACCOUNTING STANDARDS NO. 128, "EARNINGS PER SHARE".
</FN>
</TABLE>
