<PAGE>
================================================================================
UNITED STATES
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 March 31, 2000
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: 0-27000
HEARST-ARGYLE TELEVISION, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 74-2717523
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
888 SEVENTH AVENUE (212) 887-6800
NEW YORK, NY 10106 (Registrant's telephone number,
(Address of principal executive offices) including area code)
-----------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve 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 May 10, 2000, the Registrant had 92,791,090 shares of common stock
outstanding. Consisting of 51,492,442 shares of Series A Common Stock,
41,298,648 shares of Series B Common Stock.
================================================================================
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Index
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
Part I Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of December 31, 1999 and March 31, 2000 (unaudited)..... 1
Condensed Consolidated Statements of Income for the Three Months Ended
March 31, 1999 and 2000 (unaudited).............................................................. 3
Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 1999 and 2000 (unaudited).............................................................. 4
Notes to Condensed Consolidated Financial Statements............................................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............ 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk....................................... 11
Part II Other Information
Item 6. Exhibits and reports on Form 8-K................................................................. 11
Signatures ................................................................................................. 12
</TABLE>
<PAGE>
Part I Financial Information
Item 1. Financial Statements
------- --------------------
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, 1999 March 31, 2000
(Unaudited)
--------------------------------------------
(In thousands)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 5,632 $ 5,981
Accounts receivable, net 159,395 135,289
Program and barter rights 56,393 37,611
Deferred income taxes 3,905 3,905
Related party receivable - 47
Other 11,809 8,095
---------- ----------
Total current assets 237,134 190,928
---------- ----------
Property, plant and equipment, net 342,664 344,957
---------- ----------
Intangible assets, net 3,230,842 3,209,510
---------- ----------
Other assets:
Deferred acquisition and financing costs, net 30,836 29,592
Investments 29,938 62,115
Program and barter rights, noncurrent 5,072 3,928
Other 36,741 36,821
---------- ----------
Total other assets 102,587 132,456
---------- ----------
Total assets $3,913,227 $3,877,851
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
1
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Balance Sheets (Continued)
<TABLE>
<CAPTION>
December 31, 1999 March 31, 2000
(Unaudited)
--------------------------------------------
(In thousands)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 16,289 $ 15,736
Accrued liabilities 39,649 51,138
Program and barter rights payable 56,715 38,262
Related party payable 9,343 -
Other 1,669 943
---------- ----------
Total current liabilities 123,665 106,079
---------- ----------
Program and barter rights payable, noncurrent 5,386 4,026
Long-term debt 1,563,596 1,542,596
Deferred income taxes 787,358 787,535
Other liabilities 16,431 15,833
---------- ----------
Total noncurrent liabilities 2,372,771 2,349,990
---------- ----------
Stockholders' equity:
Series A preferred stock 1 1
Series B preferred stock 1 1
Series A common stock 535 535
Series B common stock 413 413
Additional paid-in capital 1,271,666 1,272,457
Retained earnings 202,285 206,485
Treasury stock, at cost (58,110) (58,110)
---------- ----------
Total stockholders' equity 1,416,791 1,421,782
---------- ----------
Total liabilities and stockholders' equity $3,913,227 $3,877,851
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 2000
-------------------------------------
(In thousands, except per share data)
<S> <C> <C>
Total revenues $113,424 $169,930
Station operating expenses 55,902 81,073
Amortization of program rights 12,827 15,019
Depreciation and amortization 16,269 31,508
-------- --------
Station operating income 28,426 42,330
Corporate general and administrative expenses 4,017 4,035
-------- --------
Operating income 24,409 38,295
Interest expense, net 19,216 28,966
Equity in loss of affiliate - 907
-------- --------
Income before income taxes 5,193 8,422
Income taxes 2,364 3,866
-------- --------
Net income 2,829 4,556
Less preferred stock dividends (356) (356)
-------- --------
Income applicable to common stockholders $ 2,473 $ 4,200
======== ========
Income per common share - basic: $0.04 $0.05
======== ========
Number of common shares used in the calculation 57,419 92,768
======== ========
Income per common share - diluted: $0.04 $0.05
======== ========
Number of common shares used in the calculation 57,528 92,790
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 2000
---------------------------------
(In thousands)
<S> <C> <C>
Operating Activities
Net income $ 2,829 $ 4,556
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of intangible assets 10,307 21,683
Amortization of program rights 12,827 15,019
Program payments (12,551) (14,905)
Depreciation 5,962 9,825
Equity in loss of affiliate - 907
Amortization of deferred financing costs 641 862
Provision for doubtful accounts 220 478
Fair value adjustments of interest rate protection agreements (321) -
Changes in operating assets and liabilities, net 25,058 26,434
----------- ---------
Net cash provided by operating activities 44,972 64,859
----------- ---------
Investing Activities
Acquisition of Pulitzer Broadcasting Company (710,225) -
Acquisition of Kelly Broadcasting Co. and Kelleproductions, Inc. (527,977) -
Investment in Consumer Financial Network, Inc. - (25,000)
Investment in Geocast Network Systems, Inc. - (8,000)
Other investing activities - (89)
Purchases of property, plant, and equipment:
Maintenance (4,266) (8,403)
Special projects/buildings/towers (4,234) (1,630)
Digital (2,085) (823)
----------- ---------
Net cash used in investing activities (1,248,787) (43,945)
----------- ---------
Financing Activities
New Credit Facilities:
Proceeds from issuance of long-term debt - 101,000
Repayment of long-term debt - (122,000)
Revolving Credit Facility:
Proceeds from issuance of long-term debt 912,000 -
Repayment of long-term debt (187,000) -
Issuance of Private Placement Debt 110,000 -
Financing costs and other (2,262) -
Dividends paid on preferred stock (356) (356)
Series A Common Stock repurchases (3,519) -
Proceeds from employee stock purchase plan - 691
Exercise of stock options 504 100
----------- ---------
Net cash provided by (used in) financing activities 829,367 (20,565)
----------- ---------
(Decrease) increase in cash and cash equivalents (374,448) 349
Cash and cash equivalents at beginning of period 380,980 5,632
----------- ---------
Cash and cash equivalents at end of period $ 6,532 $ 5,981
=========== =========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Condensed Consolidated Statements of Cash Flows (continued)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 2000
---------------------------------
(In thousands)
<S> <C> <C>
Supplemental Cash Flow Information:
Businesses acquired in purchase transactions:
Pulitzer Merger
Fair market value of assets acquired $2,325,740
Fair market value of liabilities assumed (648,680)
Issuance of Series A Common Stock (966,835)
----------
Net cash paid for acquisition $ 710,225
==========
Kelly Transaction
Fair market value of assets acquired $ 546,300
Fair market value of liabilities assumed (18,323)
----------
Net cash paid for acquisition $ 527,977
==========
Non-cash investing activity:
Acquisition of Channel 58, Inc. $ 891
=======
Cash paid during the period for interest $ 8,940 $18,926
========== =======
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
March 31, 2000
1. Summary of Accounting Policies
General
The condensed consolidated financial statements include the accounts of Hearst-
Argyle Television, Inc. (the "Company") and its wholly-owned subsidiaries. All
significant intercompany accounts have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements do not
include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the three-month period ended March 31,
1999 and 2000 are not necessarily indicative of the results that may be expected
for a full year.
2. Acquisitions and Investments
On March 18, 1999, the Company acquired the nine television and five radio
stations ("Pulitzer Broadcasting Company") of Pulitzer Publishing Company
("Pulitzer") and a 3.5% interest in the Arizona Diamondbacks in a merger
transaction (the "Pulitzer Merger"). In connection with the transaction, the
Company issued 37.1 million shares of Series A Common Stock (quoted market value
of $26.0625 on March 18, 1999) to Pulitzer shareholders (the "Pulitzer
Issuance") and assumed $700 million in debt, which was repaid on the acquisition
date using the Company's Revolving Credit Facility (the "Financing"), and paid
$5 million for the interest in the Arizona Diamondbacks. In addition, the
transaction was subject to an adjustment, which guaranteed the Company $41
million in working capital. The Pulitzer Merger was accounted for under the
purchase method of accounting and, accordingly, the purchase price (including
acquisition costs) of approximately $1.7 billion has been allocated to the
acquired assets and liabilities based upon their fair market values. The excess
of the purchase price and acquisition costs over the fair market value of the
tangible assets acquired less the liabilities assumed was allocated to FCC
licenses.
On January 31, 2000, the Company exercised its fixed-price option to acquire the
outstanding stock of Channel 58, Inc. (the licensee for KQCA-TV in Sacramento,
California) (the "KQCA Acquisition"). The Company was previously programming and
selling airtime of KQCA-TV under a Time Brokerage Agreement, which was acquired
as part of the acquisition of Kelly Broadcasting Co. on January 5, 1999. The
KQCA Acquisition was accounted for under the purchase method of accounting and,
accordingly, the purchase price (including acquisition costs) of approximately
$891,000 has been allocated to the acquired assets and liabilities based upon
their fair market values. The excess of the purchase price and acquisition
costs over the fair market value of the tangible assets acquired less the
liabilities assumed was allocated to FCC license.
The unaudited pro forma results of operations include (i) the historical results
of the Company's 22 owned television stations (which excludes KQCA), five owned
radio stations, (ii) fees from the three television and two radio stations
managed by the Company (see Note 4), and (iii) the time brokerage agreement for
KQCA from January 1, 1999 to January 31, 2000 and the results of KQCA, after its
acquisition by the Company, from February 1 to March 31, 2000, adjusted to
reflect the Pulitzer Merger, the Pulitzer Issuance, the Financing and the
issuance of 3.7 million shares of Series A Common Stock to The Hearst
Corporation ("Hearst") for $100 million, as if the acquisition, the related
financing and the equity issuances had occurred as of January 1, 1999, as
follows:
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 2000
-------------------------------------
(unaudited)
(In thousands, except per share data)
<S> <C> <C>
Total revenues $158,052 $169,930
Net income (loss) $ (405) $ 4,556
Income (loss) applicable to common stockholders $ (761) $ 4,200
Income (loss) per common share - basic and diluted $ (0.01) $ 0.05
Pro forma number of shares used in calculations - basic 92,844 92,768
- diluted 92,844 92,790
</TABLE>
6
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
March 31, 2000
2. Acquisitions and Investments (continued)
The above unaudited pro forma results are presented in response to applicable
accounting rules relating to business acquisitions and are not necessarily
indicative of the actual results that would be achieved had each of the stations
been acquired at the beginning of the periods presented, nor are they indicative
of future results of operations.
On January 5, 1999, effective January 1, 1999, for accounting purposes, the
Company acquired through a merger transaction all of the partnership interests
in Kelly Broadcasting Co., in exchange for approximately $520.4 million in cash,
including a working capital adjustment of $0.4 million. As a result of this
transaction, the Company acquired television broadcast station KCRA-TV,
Sacramento, California and the programming rights under an existing Time
Brokerage Agreement, with respect to KQCA-TV, Sacramento, California. In
addition, the Company acquired substantially all of the assets and certain of
the liabilities of Kelleproductions, Inc., for approximately $10 million in
cash. The merger and acquisition are collectively referred to as the "Kelly
Transaction". The Kelly Transaction was accounted for under the purchase method
of accounting and, accordingly, the purchase price and related acquisition costs
of approximately $1.1 million have been allocated to the acquired assets and
liabilities based upon their fair market values. The excess of the purchase
price and acquisition costs over the fair market value of the tangible assets
acquired less the liabilities assumed was allocated to FCC licenses and
goodwill.
On February 25, 2000, the Company invested an additional $8 million of cash for
a total investment of $10 million, in Geocast Network Systems, Inc. ("Geocast")
in return for an additional equity interest in Geocast. Geocast will use a
portion of the Company's stations' digital broadcast spectrum as part of a new
digital network infrastructure to deliver a program service, which includes the
local stations' content and other national content and services, to personal
computer users. As this total investment represents less than a 10% interest in
Geocast, the investment is accounted for using the cost method.
On March 22, 2000, the Company invested $25 million in Consumer Financial
Network, Inc. ("CFN") for an equity interest in CFN. CFN is an online provider
of consumer financial information and services. As this investment represents
less than a 10% interest in CFN, the investment is accounted for using the cost
method.
3. Long-Term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
December 31, March 31,
1999 2000
----------------------------------
(unaudited)
(In thousands)
<S> <C> <C>
New Credit Facilities $ 611,000 $ 590,000
Senior Notes 500,000 500,000
Private Placement Debt 450,000 450,000
Senior Subordinated Notes 2,596 2,596
---------- ----------
Total long-term debt $1,563,596 $1,542,596
========== ==========
</TABLE>
4. Related Party Transactions
The Company recorded revenues of approximately $875,000 and $935,000 relating to
the Management Agreement (whereby the Company provides certain management
services, such as sales, news, programming and financial and accounting
management services, with respect to certain Hearst owned or operated television
and radio stations); and expenses of approximately $765,000 and $892,000
relating to the Services Agreement (whereby Hearst provides the Company certain
administrative services such as accounting, financial, legal, tax, insurance,
data processing and employee benefits), during the three months ended March 31,
1999 and 2000, respectively. The Company believes that the terms of all these
agreements are reasonable to both sides; however, there can be no assurance that
more favorable terms would not be available from third parties.
7
<PAGE>
HEARST-ARGYLE TELEVISION, INC.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
March 31, 2000
5. Subsequent Events
Credit Facilities
The Company's 364-Day Credit Agreement dated April 12, 1999 for $250 million
expired on April 10, 2000. The $1 billion credit facility with The Chase
Manhattan Bank, which has an outstanding balance of $590 million at March 31,
2000, will mature on April 12, 2004.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- ------- -----------------------------------------------------------------------
of Operations
--------------
Results of Operations
On March 18, 1999, the Company acquired the nine television and five radio
stations ("Pulitzer Broadcasting Company") of Pulitzer Publishing Company
("Pulitzer") and a 3.5% interest in the Arizona Diamondbacks in a merger
transaction (the "Pulitzer Merger"). In connection with the Pulitzer Merger,
the Company issued approximately 37.1 million shares of Series A Common Stock to
Pulitzer shareholders (the "Pulitzer Issuance"). Additionally, in connection
with the Pulitzer Merger, the Company drew-down $725 million from the Revolving
Credit Facility (the "Financing"). See Note 2 of the notes to the condensed
consolidated financial statements.
On June 30, 1999, the Company issued approximately 3.7 million shares of the
Company's Series A Common Stock to The Hearst Corporation ("Hearst") for $100
million (the "Hearst Issuance").
On January 31, 2000, the Company exercised its fixed-price option to acquire the
outstanding stock of Channel 58, Inc. (the licensee for KQCA-TV in Sacramento,
California) for $850,000 (the "KQCA Acquisition"). The Company was previously
programming and selling airtime of KQCA-TV under a Time Brokerage Agreement,
which was acquired as part of the acquisition of Kelly Broadcasting Co. on
January 5, 1999.
Results of operations for the three months ended March 31, 2000 include: (i) the
Company's 22 owned television stations (which excludes KQCA), five owned radio
stations and fees from the three television and two radio stations managed by
the Company (see Note 4 of the notes to the condensed consolidated financial
statements) for the entire period; and, (ii) the time-brokerage agreement for
KQCA from January 1 to January 31, 2000 and the results of KQCA, after its
acquisition by the Company, from February 1 to March 31, 2000. Results of
operations for the three months ended March 31, 1999 include: (i) WCVB, WTAE,
WBAL, KMBC, WISN, WLWT, KOCO, KITV, WAPT, KHBS/KHOG, KSBW, WPTZ/WNNE and KCRA,
fees from the stations managed by the Company and the time-brokerage agreement
for KQCA for the entire period; and, (ii) nine television stations and five
radio stations acquired in the Pulitzer Merger from March 19 to March 31, 1999.
The following discussion of results of operations does not include the pro forma
effects of the Pulitzer Merger and the related Pulitzer Issuance and Financing
or the Hearst Issuance.
Three Months Ended March 31, 2000
Compared to Three Months Ended March 31, 1999
Total revenues. Total revenues includes (i) cash and barter advertising
revenues, net of agency and national representatives' commissions, (ii) network
compensation and (iii) other revenues. Total revenues in the three months ended
March 31, 2000 were $169.9 million, as compared to $113.4 million in the three
months ended March 31, 1999, an increase of $56.5 million or 49.8%. The
increase was primarily attributable to (i) the Pulitzer Merger which added $46
million to 2000 total revenues, (ii) an increase in political advertising
revenues of the non-Pulitzer stations of $6.3 million during 2000, and (iii) an
increase in advertising revenues resulting from the carriage of the Superbowl on
the Company's ten owned American Broadcasting Companies (ABC) affiliates.
Station operating expenses. Station operating expenses in the three months
ended March 31, 2000 were $81.1 million, as compared to $55.9 million in the
three months ended March 31, 1999, an increase of $25.2 million or 45.1%. The
increase was primarily attributable to the Pulitzer Merger, which added $24.9
million to station operating expenses during 2000.
Amortization of program rights. Amortization of program rights in the three
months ended March 31, 2000 was $15 million, as compared to $12.8 million in the
three months ended March 31, 1999, an increase of $2.2 million or 17.2%. The
increase was primarily attributable to the Pulitzer Merger.
Depreciation and amortization. Depreciation and amortization of intangible
assets was $31.5 million in the three months ended March 31, 2000, as compared
to $16.3 million in the three months ended March 31, 1999, an increase of $15.2
million or 93.3%. The increase was primarily attributable to the Pulitzer
Merger, which added $14.7 million, to depreciation and amortization of
intangibles during 2000.
Station operating income. Station operating income in the three months ended
March 31, 2000 was $42.3 million, as compared to $28.4 million in the three
months ended March 31, 1999, an increase of $13.9 million or 48.9%. The
increase in station operating income was attributable to the items discussed
above.
9
<PAGE>
Corporate general and administrative expenses. Corporate general and
administrative expenses were $4 million for the three months ended March 31,
2000 and 1999.
Interest expense, net. Interest expense, net was $29 million in the three
months ended March 31, 2000, as compared to $19.2 million in the three months
ended March 31, 1999, an increase of $9.8 million or 51%. This increase in
interest expense was primarily attributable to a larger outstanding debt balance
during the first quarter of 2000 than in the first quarter of 1999, which was
the result of the Financing in connection with the Pulitzer Merger.
Equity in loss of affiliate. The Company recorded an equity loss of affiliate of
$0.9 million in the three months ended March 31, 2000. This loss represents the
Company's equity interest in Internet Broadcasting Systems, Inc. ("IBS").
Income taxes. Income tax expense was $3.9 million in the three months ended
March 31, 2000, as compared to $2.4 million in the three months ended March 31,
1999, an increase of $1.5 million or 62.5%. The effective rate was 45.9% for
the three months ended March 31, 2000 as compared to 45.5% for the three months
ended March 31, 1999. This represents federal and state income taxes as
calculated on the Company's income before income taxes. The increase in the
effective rate relates primarily to the non-tax-deductible goodwill amortization
related to the Pulitzer Merger. Management believes that the Company's
effective rate should decrease as future pre-tax income increases and the effect
of such non-deductible expenses decreases.
Net income. Net income was $4.6 million in the three months ended March 31,
2000, as compared to net income of $2.8 million in the three months ended March
31, 1999, an increase of $1.8 million or 64.3%. This increase in net income was
attributable to the items discussed above.
Broadcast Cash Flow. Broadcast cash flow was $74 million in the three months
ended March 31, 2000, as compared to $45 million in the three months ended March
31, 1999, an increase of $29 million or 64.4%. The increase was primarily
attributable to (i) the Pulitzer Merger, which added $18.6 million to broadcast
cash flow during the 2000 period; (ii) an increase in political advertising
revenues of $6.3 million; and, (iii) an increase in advertising revenues
resulting from the carriage of the Superbowl on the Company's ten owned ABC
affiliates. Broadcast cash flow margin increased to 43.5% for the three months
ended March 31, 2000 from 39.6% for the three months ended March 31, 1999.
Broadcast cash flow is defined as station operating income, plus depreciation
and amortization, plus amortization of program rights, minus program payments.
The Company has included broadcast cash flow data because management 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.
Liquidity and Capital Resources
On February 25, 2000, the Company invested an additional $8 million of cash for
a total investment of $10 million, in Geocast Network Systems, Inc. ("Geocast")
in return for an additional equity interest in Geocast. On March 22, 2000, the
Company invested $25 million in Consumer Financial Network, Inc. ("CFN") for an
equity interest in CFN. See Note 2 of the notes to the condensed consolidated
financial statements. These equity investments were primarily funded through
cash flow from operations and drawdowns from the New Credit Facilities.
Capital expenditures were $52.3 million in 1999 and $10.8 million during the
three months ended March 31, 2000. The Company invested approximately $1.6
million in special projects/towers, approximately $0.8 million in digital
conversion projects at various stations and $8.4 million in maintenance
projects, during the 2000 period. The Company expects to spend approximately
$38.9 million for the year ended December 31, 2000 including approximately (i)
$23.4 million in maintenance projects, (ii) $9.2 million in digital projects,
(iii) $6.3 million in special projects/towers.
The Company anticipates that its primary sources of cash, those being, current
cash balances, operating cash flow and amounts available under the New Credit
Facilities, will be sufficient to finance the operating and working capital
requirements of its stations, the Company's debt service requirements and
anticipated capital expenditures of the Company for both the next 12 months and
the foreseeable future thereafter.
10
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- ------ ----------------------------------------------------------
The Company's Credit Facilities are sensitive to changes in interest rates. As
of March 31, 2000, the Company is not involved in any derivative financial
instruments. However, the Company may consider certain interest-rate risk
strategies in the future.
Part II Other Information
Item 6. Exhibits and reports on Form 8-K
- ------- --------------------------------
(a) Exhibits:
---------
Exhibit No.
- -----------
27.1 Financial Data Schedule.
(b) Reports on Form 8-K:
--------------------
The Company did not file any reports on Form 8-K in the quarter ended March 31,
2000.
11
<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.
Hearst-Argyle Television, Inc.
------------------------------
Registrant
May 12, 2000 By: /s/ Harry T. Hawks
- ------------------------- -----------------------------------------
Date Harry T. Hawks, Executive Vice President and
Chief Financial Officer,
(Principal Financial and Accounting Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2000 AND THE CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAY-31-2000
<CASH> 5,981
<SECURITIES> 0
<RECEIVABLES> 135,289
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 190,928
<PP&E> 344,957
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,877,851
<CURRENT-LIABILITIES> 106,079
<BONDS> 1,542,596
0
2
<COMMON> 948
<OTHER-SE> 1,420,832
<TOTAL-LIABILITY-AND-EQUITY> 3,877,851
<SALES> 0
<TOTAL-REVENUES> 169,930
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 131,635
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,966
<INCOME-PRETAX> 8,422
<INCOME-TAX> 3,866
<INCOME-CONTINUING> 4,556
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,556
<EPS-BASIC> 0.05
<EPS-DILUTED> 0.05
</TABLE>
