<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
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 0-2700
HEARST-ARGYLE TELEVISION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 74-2717523
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
888 Seventh Avenue 10106
New York, NY (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (212) 887-6800
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Series A Common Stock, par value $.01 per share
(Title of Class)
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
------
The aggregate market value of the Registrant's voting stock held by
nonaffiliates on March 6, 1998, based on the closing price for the
Registrant's Series A Common Stock on such date as reported on the Nasdaq
National Market, was approximately $405,000,000.
Shares of Common Stock outstanding at March 6, 1998: 53,839,252 shares
(consisting of 12,540,604 shares of Series A Common Stock and 41,298,648
shares of Series B Common Stock).
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Company's Proxy
Statement relating to the 1998 Annual Meeting of Stockholders are incorporated
by reference into Part III (Items 10, 11, 12 and 13), and Item 4 of the
Company's Current Reports on Form 8-K filed with the Commission on October 17,
1997 and October 20, 1997, is incorporated into Part II (Item 9).
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
This amendment No. 2 to Form 10-K amends and revises Part II: Item 6 of the
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 of
Hearst-Argyle Television, Inc. initially filed on March 31, 1998 (and amended on
December 16, 1998) with the Securities and Exchange Commission. Unless otherwise
indicated, capitalized terms used herein shall have the respective meanings
given such terms in the Form 10-K .
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<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
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The selected financial data should be read in conjunction with the
historical and pro forma financial statements and notes thereto included
elsewhere herein and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations." As discussed herein and in the notes to
the accompanying consolidated financial statements, on August 29, 1997,
effective September 1, 1997 for accounting purposes, The Hearst Corporation
("Hearst") contributed its television broadcast group and related broadcast
operations, Hearst Broadcast Group, to Argyle Television, Inc. ("Argyle") and
merged the wholly-owned subsidiary of Hearst with and into Argyle, with Argyle
as the surviving corporation (renamed Hearst-Argyle, Inc.) (the "Hearst
Transaction"). The merger was accounted for as a purchase of Argyle by Hearst in
a reverse acquisition. The presentation of the historical consolidated financial
statements prior to September 1, 1997, has been revised to reflect the
consolidated financial statements of the Hearst Broadcast Group, the accounting
acquiror. The pro forma consolidated financial data for the year ended December
31, 1997 has been prepared as if the Gannett Swap and the Hearst Transaction had
been completed at the beginning of the year presented. Such pro forma data is
not necessarily indicative of the actual results that would have occurred nor of
results that may occur.
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Hearst-Argyle Television, Inc.
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<TABLE>
<CAPTION>
Years Ended December 31, Pro Forma
(In thousands, except per share data) (In thousands)
1993 1994 1995 1996 1997(a) 1997(b)
<S> <C> <C> <C> <C> <C> <C>
Statement of operations data:
Total revenues $224,067 $259,459 $ 279,340 $283,971 $333,661 $387,782
Station operating expenses 103,880 106,281 117,535 121,501 142,096 168,443
Amortization of program rights 37,087 40,266 38,619 40,297 40,129 42,978
Depreciation and amortization 26,008 23,071 22,134 16,971 22,924 36,240
------ ------ ------ ------ ------ ------
Station operating income 57,092 89,841 101,052 105,202 128,512 140,121
Corporate expenses 5,924 8,007 7,857 7,658 9,527 11,000
------ ------ ------ ------ ------ ------
Operating income 51,168 81,834 93,195 97,544 118,985 129,121
Interest expense, net 22,773 22,678 22,218 21,235 32,484 38,377
------ ------ ------ ------ ------ ------
Income from continuing
operations before income taxes
and extraordinary item 28,395 59,156 70,977 76,309 86,501 90,744
Income taxes 17,123 25,265 30,182 31,907 35,363 37,732
------ ------ ------ ------ ------ ------
Income from continuing operations
before extraordinary item 11,272 33,891 40,795 44,402 51,138 53,012
Extraordinary item(c) (16,212)
------ ------ ------ ------ ------ ------
Net income 11,272 33,891 40,795 44,402 34,926 53,012
Less preferred stock dividends(d) - - - (711) (1,422)
------ ------ ------ ------ ------ ------
Income applicable to common
stockholders $11,272 $33,891 $40,795 $44,402 $34,215 $51,590
======= ======= ======= ======= ======= =======
Earnings per common share - basic:
Income from continuing
operations before extraordinary
item $0.27 $0.82 $0.99 $1.08 $1.13 $0.96
======= ======= ======= ======= ======= =======
Income applicable to
common stockholders $0.27 $0.82 $0.99 $1.08 $0.77 $0.96
======= ======= ======= ======= ======= =======
Number of shares used in
the calculation(k) 41,299 41,299 41,299 41,299 44,632 53,828
======= ======= ======= ======= ======= =======
Earnings per common share - diluted:
Income from continuing
operations before extraordinary
item $0.27 $0.82 $0.99 $1.08 $1.13 $0.96
======= ======= ======= ======= ======= =======
Income applicable to
common stockholders $0.27 $0.82 $0.99 $1.08 $0.77 $0.96
======= ======= ======= ======= ======= =======
Number of shares used in the
calculation(k) 41,299 41,299 41,299 41,299 44,674 53,873
======= ======= ======= ======= ======= =======
</TABLE>
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<PAGE>
Hearst-Argyle Television, Inc.
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<TABLE>
<CAPTION>
The Company
Years Ended December 31, Pro Forma
1993 1994 1995 1996 1997(a) 1997(b)
<S> <C> <C> <C> <C> <C> <C>
Other data:
Broadcast cash flow(e) $82,626 $113,999 $123,038 $117,947 $150,972 $175,834
Broadcast cash flow margin(f) 36.9% 43.9% 44.0% 41.5% 45.2% 45.3%
Operating cash flow(g) $79,147 $108,749 $117,087 $109,457 $141,445 $164,834
Operating cash flow margin(h) 35.3% 41.9% 41.9% 38.5% 42.4% 42.5%
After-tax cash flow(i) $37,280 $56,962 $62,929 $61,373 $74,062 $ 89,252
Cash flow provided by operating
activities N/A $44,460 $61,185 $65,801 $67,689 (l)
Cash flow used in investing
activities N/A $(8,430) $(8,621) $(7,764) $(131,973) (l)
Cash flow provided by (used in)
financing activities N/A $(33,584) $(52,020) $(58,145) $74,161 (l)
Capital expenditures $4,879 $8,430 $8,621 $7,764 $21,897 N/A
Program payments $37,561 $39,179 $38,767 $44,523 $40,593 $ 43,505
Balance sheet data (at year end):
Cash and cash equivalents N/A $2,446 $2,990 $2,882 $12,759 $12,759
Total assets N/A $387,984 $385,406 $366,956 $1,044,109 $1,044,109
Total debt (including current portion) N/A N/A N/A N/A $490,000 $500,000
Divisional/Stockholders' equity(j) N/A $283,988 $272,762 $259,020 $326,654 $326,654
</TABLE>
See footnotes on the following page.
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<PAGE>
Notes To Selected Financial Data
(a) The Hearst Transaction was consummated on August 29, 1997. The
selected financial data includes results from (i) WCVB, WTAE, WBAL,
WISN, KMBC and WDTN for the entire period presented; (ii) WAPT, KITV,
KHBS/KHOG, WLWT, KOCO and the Company's share of the 1996 Joint
Marketing and Programming Agreement relating to the television
station WNAC, with the owner of another television station in the
same market (the "Clear Channel Venture") from September 1 through
December 31, 1997; and, (iii) management fees derived by the Company
from WWWB, WPBF, KCWE and WBAL-AM and WIYY-FM (the "Managed
Stations") from September 1 through December 31, 1997.
(b) Includes the results of operations of Argyle, Hearst Broadcast Group
and the management fee derived by the Company from the Managed
Stations, on a combined pro forma basis as if the Hearst Transaction
and the definitive agreement with Gannett Co., Inc. to swap Argyle's
WZZM and WGRZ for Gannett's WLWT and KOCO (the "Gannett Swap") had
occurred at the beginning of the period presented.
(c) Represents the write-offs of unamortized financing costs and premiums
paid upon early extinguishment of debt for Hearst-Argyle.
(d) Gives effect to dividends on the Preferred Stock issued in connection
with the acquisition of KHBS/KHOG.
(e) Broadcast cash flow is defined as station operating income, plus
depreciation and amortization and write down of intangible assets,
plus amortization of program rights, minus program payments. The
Company has included broadcast cash flow data because management
utilizes and believes that such data are commonly used as a measure
of performance among companies in the broadcast industry. Broadcast
cash flow is also frequently used by investors, analysts, valuation
firms and lenders as one of the important determinants of underlying
asset value. Broadcast cash flow should not be considered in
isolation or as an alternative to operating income (as determined in
accordance with generally accepted accounting principles) as an
indicator of the entity's operating performance, or to cash flow from
operating activities (as determined in accordance with generally
accepted accounting principles) as a measure of liquidity. This
measure is believed to be, but may not be, comparable to similarly
titled measures used by other companies.
(f) Broadcast cash flow margin is broadcast cash flow divided by total
revenues, expressed as a percentage. This measure may not be
comparable to similarly titled measures used by other companies.
(g) Operating cash flow is defined as operating income, plus depreciation
and amortization and write down of intangible assets, plus
amortization of program rights, minus program payments, plus non-cash
compensation expense. The Company has included operating cash flow
data, also known as EBITDA, because management utilizes and believes
that such data are commonly used as a measure of performance among
companies in the broadcast industry. Operating cash flow is also used
by investors, analysts, rating agencies and lenders to measure a
company's ability to service debt. Operating cash flow should not be
considered in isolation or as an alternative to operating income (as
determined in accordance with generally accepted accounting
principles) as an indicator of the entity's operating performance, or
to cash flow from operating activities (as determined in accordance
with generally accepted accounting principles) as a measure of
liquidity. This measure is believed to be, but may not be, comparable
to similarly titled measures used by other companies.
(h) Operating cash flow margin is operating cash flow divided by total
revenues, expressed as a percentage. This measure may not be
comparable to similarly titled measures used by other companies.
(i) After-tax cash flow is defined as income before extraordinary item
plus depreciation and amortization. The Company has included after-
tax cash flow data because management utilizes and believes that such
data are commonly used by investors, analysts, rating agencies and
lenders to measure a company's ability to service debt and as an
alternative determinant of enterprise value. After-tax cash flow
should not be considered in isolation or as an alternative to
operating income (as determined in accordance with generally accepted
accounting principles) as an indicator of the entity's operating
performance, or to cash flow from operating activities (as determined
in accordance with generally accepted accounting principles) as a
measure of liquidity. This measure is believed to be, but may not be,
comparable to similarly titled measures used by other companies.
(j) Divisional equity includes net amounts due to Hearst and affiliates.
Hearst-Argyle has not paid any dividends on its Series A Common Stock
since inception.
(k) The number of shares used in the per share calculation retroactively
reflects approximately 41.3 million shares received by Hearst in the
Hearst Transaction for all periods prior to September 1, 1997.
(l) The cash flow data for operating activities, investing activities and
financing activities is not determinable for pro forma purposes.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HEARST-ARGYLE TELEVISION, INC.
By: /s/ Dean H. Blythe
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Name: Dean H. Blythe
Title: Secretary
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<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the Company
in the capacities indicated on January 15, 1999.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each of the undersigned directors and
officers of Hearst-Argyle Television, Inc. hereby constitutes and appoints Dean
H. Blythe and Harry T. Hawks, or either of them, his or her true and lawful
attorney-in-fact and agent, for him or her and in his or her name, place and
stead, in any and all capacities, with full power to act alone, to sign any and
all amendments to this Report, and to file each such amendment to this Report,
with all exhibits thereto, and any and all other documents in connection
therewith, with the Securities and Exchange Commission, hereby granting unto
said attorney-in-fact and agent full power and authority to do and perform any
and all acts and things requisite and necessary to be done in and about the
premises as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Name Title
- ---- -----
<S> <C>
/s/ Bob Marbut Co-Chief Executive Officer and Chairman of the Board
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Bob Marbut (principal executive officer)
/s/ John G. Conomikes President, Co-Chief Executive Officer and Director
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John G. Conomikes (principal executive officer)
/s/ David J. Barrett Executive Vice President, Chief Operating Officer and
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David J. Barrett Director
/s/ Harry T. Hawks Senior Vice President and Chief Financial Officer
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Harry T. Hawks (principal financial officer)
/s/ Teresa Lopez Vice President and Controller (principal accounting
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Teresa Lopez officer)
/s/ Frank A. Bennack, Jr. Director
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Frank A. Bennack, Jr.
/s/ Victor F. Ganzi Director
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Victor F. Ganzi
/s/ George R. Hearst Director
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George R. Hearst
/s/ William R. Hearst III Director
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William R. Hearst III
/s/ Gilbert C. Maurer Director
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Gilbert C. Maurer
/s/ David Pulver Director
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David Pulver
/s/ Virginia H. Randt Director
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Virginia H. Randt
/s/ Caroline L. Williams Director
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Caroline L. Williams
</TABLE>
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