1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
-------------------
For the fiscal year ended Commission file number
June 30, 1995 19324
------------------------- ----------------------
Boston Celtics Limited Partnership
----------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-2936516
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
151 Merrimac Street, Boston, Massachusetts 02114
------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
(617) 523-6050
----------------------------------------------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Name of each Exchange
Title of each class on which registered
--------------------------------- ---------------------
Units Representing Assignments of New York Stock
Beneficial Ownership of Limited Exchange
Partnership Interests
Securities registered pursuant to Section 12(g) of the Act:
None
----------------
(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 [ ]
2
BOSTON CELTICS LIMITED PARTNERSHIP
1995 FORM 10-K ANNUAL REPORT
INDEX
PART I
Page
Items 1 and 2. Business and Properties................................. 4
Item 3. Legal Proceedings....................................... 12
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters..................................... 13
Item 6. Selected Financial Data................................. 14
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 18
Item 8. Financial Statements and Supplementary Data............. 21
PART III
Item 10. Directors and Executive Officers of the Registrant...... 22
Item 11. Executive Compensation.................................. 27
Item 12. Security Ownership of Beneficial Owners and Management.. 31
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K............................................. 33
Signatures.............................................................. 72
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 [ ].
3
The aggregate market value of the 2,809,343 Units held by non-affiliates of
the Registrant as of September 20, 1995 was approximately $74,447,590, based
on the closing price of the Units on the New York Stock Exchange on that date
of $26.50 per Unit. For the purpose of this calculation, the two
stockholders of the General Partner of the Partnership, who are also
directors and officers of the General Partner and directors and officers of
the General Partner and Unitholders of the Partnership, are treated as
affiliates. No other officers, directors, employees or Unitholders are
treated as affiliates for this purposes.
As of September 20, 1995, there were 5,641,278 Units outstanding.
4
PART I
------
Items 1 and 2. Business and Properties
---------------------------------------
General
Boston Celtics Limited Partnership (the "Boston Celtics", "BCLP" or
the "Partnership") a Delaware limited partnership, through Celtics Limited
Partnership ("CLP"), its 99% owned limited partnership, owns and operates
the Boston Celtics professional basketball team of the National Basketball
Association, and through BCCLP Holding Corporation ("Holdings") and Celtics
Investments Incorporated ("CII"), wholly-owned subsidiaries of BCLP and
Holdings' wholly-owned subsidiary Celtics Capital Corporation ("CCC") (which
holds investments) and Holdings' 99% owned limited partnership Boston Celtics
Communications Limited Partnership ("BCCLP") and its 99% owned limited
partnership Boston Celtics Broadcasting Limited Partnership ("BCBLP") owns
and operates Television Station WFXT - Channel 25 ("WFXT") and until its
sale on June 30, 1994 owned and operated Radio Station WEEI - 590 AM both of
Boston, Massachusetts. The General Partner of BCLP is Celtics, Inc. ("CI");
the General Partner of CLP is Boston Celtics Corporation ("BCC"); the
General Partner of BCCLP is Celtics Communications, Inc. ("CCI"); and the
General Partner of BCBLP is BCCLP The General Partners of BCLP, CLP and
BCCLP are Delaware corporations whose sole stockholders are Don Gaston,
Paul Dupee, Paul Gaston (son of Don Gaston ) and an affiliate. Alan Cohen's
interest in the general partners was acquired by Paul Gaston and an affiliate
on August 30, 1995. The interest of Alan Cohen in Celtics, Inc. was acquired
by Walcott Partners L.P. and his interests in Boston Celtics Corporation and
Celtics Communications, Inc. were acquired by Paul E. Gaston on August 30,
1995. See Note Q of Notes to Consolidated Financial Statements for a
description of these redemptions.
The previously reported agreement between BCLP and Fox Television,
Inc. ("FTS") pursuant to which FTS acquired BCBLP was closed on July 7, 1995
when FTS exercised its option (acquired for $15,000,000) for the acquisition
of a 26% interest in BCBLP, converted $10,000,000 of convertible debt for an
additional 25% interest in BCBLP and purchased the remaining 49% interest in
BCBLP for $80,000,000 cash.
Basketball Operations
The Partnership, through CLP, owns and operates the Boston Celtics
professional basketball team the "Boston Celtics" of the National Basketball
Association (the "NBA").
5
The following table shows the performance of the Boston Celtics during
the past 15 basketball seasons:
<TABLE>
<CAPTION>
Regular
Season
Regular Place of
Season Finish in
Season Record Division Play-Off Results
------ ------- --------- ----------------
<C> <C> <S> <S>
1994-95....... 35-47 Third Lost in First Round of
Conference Playoffs
1993-94....... 32-50 Fifth --
1992-93....... 48-34 Second Lost in First Round of
Conference Playoffs
1991-92....... 51-31 First Lost in Conference Semifinals
1990-91....... 56-26 First Lost in Conference Semifinals
1989-90....... 52-30 Second Lost in First Round of
Conference Playoffs
1988-89....... 42-40 Third Lost in First Round of
Conference Playoffs
1987-88....... 57-25 First Lost in Conference Finals
1986-87....... 59-23 First Lost in Championship Finals
1985-86....... 67-15 First NBA Champions
1984-85....... 63-19 First Lost in Championship Finals
1983-84....... 62-20 First NBA Champions
1982-83....... 56-26 Second Lost in Conference Semifinals
1981-82....... 63-19 First Lost in Conference Finals
1980-81....... 62-20 First NBA Champions
</TABLE>
6
Sources of Revenues.
The Boston Celtics derive their revenues principally from the sale of
tickets to home games and the licensing of television, cable network and
radio rights. The following table shows the contribution to revenues of the
basketball operations from these sources and from miscellaneous other
sources for each of the last three fiscal years:
<TABLE>
<CAPTION>
Contribution to Revenues
(in thousands)
------------------------------------------------------------------------
Television, Cable
Ticket Sales and Radio
Year -------------------- ---------------------
ended Regular Regular Total
June 30, Season(1) Playoffs Season(2) Playoffs Other Sources Revenues
-------- --------- -------- --------- -------- ------------- --------
<C> <C> <C> <C> <C> <C> <C>
1995....... $22,037 $1,518 $20,956 $ 395 $7,419 $52,325
1994....... 20,239 -- 19,168 -- 5,176 44,583
1993....... 20,197 1,353 21,862 550 3,597 47,559
<FN>
___________________
<F1> Includes proceeds from exhibition games.
<F2> Includes the Boston Celtics' share of revenues under the NBA national
television contracts.
</FN>
</TABLE>
Ticket Sales.
The Boston Celtics play an equal number of home
games and away games during the 82-game NBA regular season. In
addition, the Boston Celtics play eight exhibition games prior to the
commencement of the regular season. Under the NBA Constitution and
By-laws, the Boston Celtics receive all revenues from the sale of
tickets to regular season home games (subject to the NBA gate
assessment) and no revenue from the sale of tickets to regular season
away games. Generally, the Boston Celtics retain all revenues from
the sale of tickets to home exhibition games played in Boston and
Hartford (less appearance fees paid to the visiting team), and
generally receive appearance fees for exhibition games played
elsewhere.
7
The seating capacity of the Boston Garden is 14,890. The policy
of the Boston Celtics has been, during the last several years, to
limit the number of season tickets so that some tickets are available
on a per game basis. During the last five seasons, the Boston Celtics
have sold an average of 12,700 season tickets. See "Basketball
Facilities" elsewhere herein for a discussion of the Partnership's
commitment to move from the Boston Garden to the FleetCenter, which
will have a seating capacity slightly in excess of 18,400 spectators,
is located on a site adjacent to the Boston Garden and is scheduled to
be opened on September 30, 1995.
Television, Cable and Radio Broadcasting.
The Partnership and the NBA license the television and radio
broadcast rights to Celtics basketball games. The NBA, as agent for its
members, licenses the national and international broadcast of the games
under agreements with NBC Sports, a division of the National Broadcasting
Company, (the "NBC agreement"), Turner Network Television, Inc., an
affiliate of Turner Broadcasting, (the "TNT agreement"). Each of the NBA
member teams shares equally in these license fees. In addition, the
Partnership licenses the local over the air rights to broadcast away
games under an agreement (subsequently assigned to New World
Communications) with Gillett Communications of Boston, Inc., licensee
of Television Station WSBK - Channel 38 (the "WSBK agreement") and
licenses the cable rights to broadcast home games to Sportschannel New
England Limited Partnership (the "Sportschannel agreement"). The
Partnership licenses the rights to broadcast all games on radio under
an agreement with American Radio Systems, Inc., licensee of Radio
Station WEEI - 850AM (the "ARS agreement"). The NBC agreement, the
TNT and the WSBK agreements extend through the 1997-98 season. The
Sportschannel agreement extends through the 1998-99 season, with a
right to an additional extension by Sportschannel through the 2000-01
season. The ARS agreement extends through the 1999-2000 season.
Generally, these agreements provide for the broadcast of a
specified number of games (pre-season, regular season and playoff
games) at specified rights fees, which in some cases increase over the
term of the contract and in some cases provide for revenue sharing,
per game. The national agreements provide that the licensee identify
the games which it wishes to broadcast and the local rights agreements
provide for the pre-emption of games broadcast under the national
license agreements.
None of these agreements accounted for as much as 10%,
respectively, of the Partnerships total revenues for the year ended
June 30, 1995.
8
Other Sources.
Other sources of revenues for the basketball operations include
promotional and novelty revenues including royalties from NBA Properties,
Inc. NBA Properties, Inc. ("NBA Properties") is a corporation organized
in 1967 to which each NBA member has assigned the exclusive rights to the
merchandising of its team name, insignia and other similar properties to
the extent such rights were not previously assigned to others prior to
the formation of NBA Properties. NBA Properties pays royalties to each
NBA team in consideration of the receipt of such rights. This assignment is
subject to the Boston Celtics' right to use their insignia and symbols
in connection with the promotion of the team in their home territory
and retail sales in their home arena. NBA Properties licenses other
companies to manufacture and sell official NBA items such as sneakers,
basketballs, warm-up jackets and sweatshirts, as well as certain non-
sports items.
Basketball Team
Players.
In general, the rules of the NBA permit each team to maintain an
active roster of 12 basketball players during each regular season and up
to 20 players in the off-season. The By-laws of the NBA require each
member team to enter into a uniform player contract with each of its
players. The following table sets forth certain information concerning
the players under contract with the Boston Celtics as of September 22, 1995:
<TABLE>
<CAPTION>
Last
Years Season
in Under
Name Position NBA Contract
---- -------- ----- --------
<S> <S> <C> <C>
Dee Brown . . . . . . Guard 5 1999-00
Sherman Douglas . . . Guard 6 1997-98
Pervis Ellison. . . . Center 6 1999-00
Rick Fox. . . . . . . Forward 4 1999-00
Greg Minor. . . . . . Forward 1 2003-04
Eric Montross . . . . Center 1 2004-05
Dino Radja. . . . . . Forward 3 1999-00
Dana Barros . . . . . Guard 6 2000-01
</TABLE>
Coaches.
The head coach of the Boston Celtics, M.L. Carr, was appointed to
that position following the 1994-95 season. Mr. Carr has also been the
Executive Vice President of Basketball Operations of the Boston Celtics
since June 1994 and a player from 1979-1985. Mr. Carr is under contract
with the Boston Celtics through the end of the 1998-99 season.
9
Don Casey is an assistant coach of the Boston Celtics. Prior to
his appointment to this position in 1990, Mr. Casey served as interim
head coach and an assistant coach of the Los Angeles Clippers, an NBA
team, and an assistant coach of the Chicago Bulls, an NBA team.
Previously, Mr. Casey was the head coach of Temple University men's
basketball team. Mr. Casey is under contract with the Boston Celtics
through the end of the 1997-98 season.
Dennis Johnson is also an assistant coach of the Boston Celtics.
Mr. Johnson was a scout for the Boston Celtics during the 1992-93
season and played for the Boston Celtics for the last 7 years of a 14
year NBA career. Mr. Johnson is under contract through the end of the
1997-98 season.
John Kuester is also an assistant coach of the Boston Celtics.
Mr. Kuester was the video coordinator/scout for the Boston Celtics for
the past five seasons. Mr. Kuester is under contract with the Boston
Celtics through the end of the 1996-97 season.
Under its contracts with its head coach (including former head
coach, Chris Ford) and assistant coaches, the Boston Celtics made
total compensation payments totalling $1,060,000 during the 1994-95
season. During the 1995-96 season, the Boston Celtics are required to
make salary payments to its coaches totalling $1,775,000.
Collective Bargaining Agreement.
The NBA and the NBA Players' Association ratified a collective
bargaining agreement (the "Collective Bargaining Agreement") on
September 15, 1995. The previous Collective Bargaining Agreement expired
on June 23, 1994. The Collective Bargaining Agreement provides for maximum
and minimum total team salaries to be paid to players. Both maximum and
minimum team salaries are determined based on estimates prior to the start
of each season. The maximum team salary (the "Salary Cap") for each team
for a particular season, subject to certain exceptions, is the greater
of a predetermined dollar amount or 48.04% of the projected
Basketball-Related Income (as defined in the Collective Bargaining
Agreement) of all NBA teams, divided by the number of NBA teams.
There are various exceptions to the Salary Cap limitations,
including exceptions relating to a team's replacing or re-signing its
own veteran free agent players, replacing injured players, and signing
rookies up to 120% of the rookie salary scale amount. These
exceptions permit teams to have aggregate player compensation
exceeding the specified Salary Cap. For example, subject to certain
limitations, a team could re-sign any of its veteran free agents at
any salary (effective with the 1997-98 season the increase is limited
to an amount double the player's then current salary or the league
average salary, whichever is higher), and could sign a new player to
replace an injured player at a salary equal to up to 50% of the salary
of such injured player, even if such new salaries caused the team to
exceed the Salary Cap. The salary cap for the 1995-96 season has been
set at $23 million and as of September 20, 1995, the Boston Celtics'
total team compensation is beneath the salary cap.
10
The minimum team salary is designed to result in payments by NBA
teams of total player salaries and benefits for a given season
aggregating at least 75% of the Salary Cap each season. There is
also a provision for minimum individual player salaries.
Since the adoption of the Salary Cap limitations under a
predecessor collective bargaining agreement, there have been various
disputes among NBA members and between the NBA and its members and the
Players' Association relating to the interpretation and application of
the limitations in specific situations. Such disputes are resolved by
an arbitrator or by a court-appointed special master whose decision is
subject to judicial review.
The Collective Bargaining Agreement also governs the rights of
veteran free agents, teams' rights of first refusal with respect to
veteran free agents, certain aspects of uniform player contracts,
player pension and other benefits, the NBA draft of college players
and other matters affecting the players.
Basketball Facilities
The Boston Celtics played most of their home games in the Boston
Garden (the "Boston Garden"), a 14,890 seating capacity indoor sports
arena located in downtown Boston. The Boston Garden is owned by New
Boston Garden Corporation ("NBGC"), which is unaffiliated with the
Boston Celtics, and was made available to the Boston Celtics under a
License and Lease Agreement which ended at the conclusion of the
1994-95 season.
On April 4, 1990, the Boston Celtics entered into a
License/Lease Agreement and an Office Lease Agreement (collectively,
the "Lease Agreement") with NBGC. The Lease Agreement was amended in
certain respects and restated as of April 14, 1993. NBGC has
developed a new building and sports entertainment facility which has a
seating capacity in excess of 18,400 spectators in Boston (the
"FleetCenter") to replace the Boston Garden. The FleetCenter, which
is located on a site adjacent to the Boston Garden, is substantially
completed and scheduled to open on September 30, 1995.
Under the terms of the Lease Agreement, NBGC has granted to the
Boston Celtics a license to use the basketball facilities at the
FleetCenter and will provide to the Celtics approximately 11,000
square feet of office space. NBGC will generally be responsible for
maintaining the FleetCenter and providing administrative personnel
such as ushers, ticket takers, police and security personnel,
announcers, scorers and statisticians. At the Boston Celtics'
request, NBGC will be responsible for making all box office ticket
sales and remitting the proceeds to the Boston Celtics. In general,
NBGC will receive only premium fee revenues generated from preferred
seating and executive boxes in the FleetCenter. Under the terms of
the Lease Agreement, the Boston Celtics will not share in revenue from
food and beverage concessions at the FleetCenter, but may sell
programs at each game subject to the payment of a commission to NBGC's
concessionaires and NBGC will also be licensed by the Boston Celtics
to sell merchandise bearing the Boston Celtics' name, trademark and/or
logo, subject to prior approval by, and payment of a commission to,
the Boston Celtics.
11
The Lease Agreement provides that it will commence on the day
that the FleetCenter is substantially completed and operational and
extend for 10 full basketball seasons. NBGC may, at its option,
extend the term of the Lease Agreement for five additional basketball
seasons (the "Extended Term"), provided NBGC notifies the Boston
Celtics during a specified period following the fifth anniversary of
the commencement of the term of the Lease Agreement of its intention
to exercise its option and subject to the NBGC making certain
payments, based on its revenues, to the Boston Celtics during the
Extended Term.
During the years ended June 30, 1995, 1994, and 1993, the Boston
Celtics made annual arena rental payments aggregating approximately
$1,206,000, $1,203,000, and $1,265,000, respectively, for use of the
Boston Garden and the Hartford Civic Center for exhibition, regular
season and playoff home games (1995 and 1993). The Boston Celtics also
lease approximately 14,600 square feet of space at 151 Merrimac
Street, Boston, Massachusetts. This facility houses the Boston
Celtics administrative offices. The term of this lease extends
through December 2005, with an option to extend for one five year
renewal period. Under the provisions of the Arena Lease Agreement
with NBGC, the Boston Celtics are reimbursed for the cost of 10,000
square feet of office space during the 10 year term of the Arena Lease
Agreement.
Competition
The Boston Celtics are the only professional basketball team in
the Boston area. However, the Boston Celtics compete for spectator
interest with all forms of professional and amateur sports conducted
in and near Boston. During parts of the basketball season the Boston
Celtics experience competition from professional hockey (the Boston
Bruins), professional football (the New England Patriots), and
professional baseball (the Boston Red Sox). In addition, the colleges
and universities in the Boston area, as well as public and private
schools, offer a full schedule of athletic events throughout the year.
The Boston Celtics also compete for attendance with the wide range of
other entertainment and recreational activities available in New
England.
The Boston Celtics also compete with other United States and
foreign basketball teams, professional and otherwise, for available
players.
12
Insurance
The Boston Celtics maintain accidental death and dismemberment,
disability and life insurance policies on most of its key players.
These disability policies cover injuries which result in permanent and
total disability, as well as temporary disability on injuries which
cause less severe damage, but loss of player services for more than
half a playing season. These policies would generally reimburse the
Partnership for a substantial percentage of the payments which it
would be required to make to such player under his contract. The
waiting period for reimbursement under most temporary disability
policies is 41 games. This Key Man Disability Insurance Plan is
maintained by the NBA through a Master Policy Program, and
underwritten by a leading national insurance company.
The Boston Celtics participate in a workers' compensation policy
and a high limit comprehensive general liability and umbrella policy
maintained by the NBA. Included under that plan is protection for
team sports participant's liability covering claims which may result
from, among other things, certain injuries which may be incurred
during player contests or exhibitions sponsored by the Team.
The NBA has established a Disaster Plan which permits a team
suffering an air or similar disaster to draft players from the other
NBA teams subject to specified procedures. The NBA maintains an
insurance policy that provides compensation to the team suffering the
disaster, as well as those teams whose players are selected in such
special draft.
Broadcast Operations
As described under Items 1 and 2 Business and Properties -
General, FTS acquired BCBLP on July 7, 1995. Accordingly, all of the
Broadcast operations of the Partnership have been disposed of and the
Communications line of business has been designated a Discontinued
Operation. Accordingly, the Statement of Income has been restated to
account for such operations as Discontinued Operations for all periods
presented.
Employees
In addition to the players and coaches, see "Basketball
Operations -- Basketball Team," as of September 20, 1995, the Boston
Celtics have 41 full-time employees engaged in operating, marketing,
advertising and administrative activities.
Item 3. Legal Proceedings
--------------------------
As a member of the NBA, the Partnership is a defendant along
with the other members in various lawsuits incidental to the NBA's
basketball operations. The Partnership will generally be liable,
jointly and severally, with all other members of the NBA for the costs
of defending such lawsuits and any liabilities of the NBA which might
result from such lawsuits.
13
PART II
-------
Item 5. Market for Registrant's Common Equity and Related
------------------------------------------------------------
Stockholder Matters
-------------------
The Partnership's Units are listed on the New York Stock
Exchange and traded under the symbol "BOS". The following table sets
forth, for the periods, indicated, the high and low sales prices per
Unit on the New York Stock Exchange and cash distributions per Unit to
Unitholders for the years ended June 30, 1995 and June 30, 1994,
respectively.
<TABLE>
<CAPTION>
Year Ended June 30, 1995
----------------------------------
Sales Price Cash
----------------- Distribution
Period High Low Declared
------ ---- --- ------------
<S> <C> <C> <C>
First Quarter $21 7/8 $19 3/4
Second Quarter 24 1/8 20 3/8 $1.50
Third Quarter 21 7/8 20 3/4
Fourth Quarter 21 1/2 19 3/4 1.50
-----
$3.00
=====
<CAPTION>
Year Ended June 30, 1994
----------------------------------
Sales Price Cash
----------------- Distribution
Period High Low Declared
------ ---- --- ------------
<S> <C> <C> <C>
First Quarter $21 $18
Second Quarter 21 5/8 17 7/8 $1.25
Third Quarter 21 18 1/2
Fourth Quarter 22 18 3/4
-----
$1.25
=====
</TABLE>
As of September 20, 1995, the approximate number of registered
unitholders of the Partnership's Units was 66,056.
14
Item 6 - Selected Financial Data
--------------------------------
Boston Celtics Limited Partnership and subsidiaries consolidated -
(000's omitted, except for per unit data)
<TABLE>
<CAPTION>
Year Ended June 30
---------------------------------
1995 1994 1993
---------------------------------
<S> <C> <C> <C>
Revenues $ 52,325 $ 44,583 $47,559
Costs and expenses 51,810 38,178 36,278
Interest expense, net (2,567) (1,665) (982)
Net revenue from league expansion 7,114
Net proceeds from life insurance 5,592
Net realized and unrealized gains
(losses) from marketable securities 110 (3,595) 79
-------- -------- -------
Income from continuing operations
before income taxes 5,172 6,737 10,378
Provision for (benefit from)
income taxes (345) (600)
-------- -------- -------
Income from continuing operations 5,517 7,337 10,378
Income (loss) from discontinued
operations 10,639 2,145 (5,150)
Gain on disposal of discontinued
operations 14,284
-------- -------- -------
Net income $ 16,156 $ 23,766 $ 5,228
======== ======== =======
Income from continuing operations
applicable to Limited Partners $ 5,396 $ 7,124 $10,214
Net income applicable to Limited
Partners $ 15,545 $ 23,126 $ 5,157
Per unit:
Income from continuing opeartions
per unit $0.84 $1.11 $1.59
Net income per unit $2.43 $3.61 $0.80
Distributions to BCLP unitholders:
Cash $1.50 $1.25 $1.25
Declared $1.50
Cash distributions to Boston
Celtics Communications Limited
Partners (the purchase price
of BCCLP units) $2.40
15
<CAPTION>
Balance Sheet Data: June 30
---------------------------------
1995 1994 1993
---------------------------------
<S> <C> <C> <C>
Current assets $186,101 $ 79,492 $50,976
Current liabilities 126,010 23,289 18,809
Total assets 210,655 102,933 73,347
Program broadcast rights payable -
noncurrent portion 9,062 8,566 3,434
Deferred revenue 1,440
Deferred federal and state income
taxes - noncurrent portion 6,000 2,900
Notes payable - noncurrent portion 60,000 60,000 69,560
Deferred compensation - noncurrent
portion 14,850 18,248 9,760
Other noncurrent liabilities 4,024 850
Minority interest in Boston Celtics
Broadcasting Limited Partnership 4,989 1,909
Partners' capital (deficit) (15,720) (12,829) (28,126)
</TABLE>
16
Item 6 - Selected Financial Data (Continued)
--------------------------------------------
Boston Celtics Limited Partnership and subsidiaries consolidated -
(000's omitted, except for per unit data)
<TABLE>
<CAPTION>
Year Ended June 30
--------------------
1992 1991
--------------------
<S> <C> <C>
Revenues $45,652 $40,790
Costs and expenses 37,797 29,499
Interest expense, net (135) (318)
Net revenue from league expansion
Net proceeds from life insurance
Net realized and unrealized gains
(losses) from marketable securities
------- -------
Income from continuing operations
before income taxes 7,720 10,973
Provision for (benefit from)
income taxes
------- -------
Income from continuing operations 7,720 10,973
Income (loss) from discontinued
operations (6,642) (9,034)
Gain on disposal of discontinued
operations
------- -------
Net income $ 1,078 $ 1,939
======= =======
Income from continuing operations
applicable to Limited Partners 7,643 10,863
Net income applicable to Limited
Partners 1,149 2,064
Per unit:
Income from continuing opeartions
per unit $1.19 $1.69
Net income per unit $0.18 $0.32
Distributions to BCLP unitholders:
Cash $2.25 $1.40
Declared
Cash distributions to Boston
Celtics Communications Limited
Partners (the purchase price
of BCCLP units)
17
<CAPTION>
Balance Sheet Data: June 30
--------------------
1992 1991
--------------------
<S> <C> <C>
Current assets $29,819 $33,363
Current liabilities 21,722 22,610
Total assets 56,058 63,083
Program broadcast rights payable -
noncurrent portion 5,683 7,895
Deferred revenue 20
Deferred federal and state income
taxes - noncurrent portion
Notes payable - noncurrent portion 30,810 25,710
Deferred compensation - noncurrent
portion 8,828 4,286
Other noncurrent liabilities
Minority interest in Boston Celtics
Broadcasting Limited Partnership
Partners' capital (deficit) (10,985) (2,562)
</TABLE>
18
Item 7. Management's Discussion and Analysis of Financial Condition
----------------------------------------------------------------------
and Results of Operations
-------------------------
General
Consolidated Income from Continuing Operations of Boston
Celtics Limited Partnership and its Subsidiaries for the year ended
June 30, 1995 was $5,517,000 or $0.84 per unit on revenues of
$52,325,000 and Consolidated Net Income was $16,156,000 or $2.43
per unit compared with Consolidated Income from Continuing
Operations of $7,337,000 or $1.11 per unit on revenues of
$44,583,000 and Consolidated Net Income of $23,766,000 or $3.61 per
unit during the year ended June 30, 1994.
The Partnership reported Consolidated Income from
Continuing Operations for the three months ended June 30, 1995 of
$4,403,000 or $0.67 per unit on revenues of $9,404,000 and
Consolidated Net Income of $7,602,000 or $1.15 per unit compared
with Consolidated Income from Continuing Operations of $42,000 or
$0.01 per unit on revenues of $8,491,000 and Consolidated Net
Income of $3,858,000 or $0.58 per unit for the three months ended
June 30, 1994.
The previously reported agreement between the Partnership and
Fox Television, Inc. (FTS) pursuant to which FTS acquired Boston
Celtics Broadcasting Limited Partnership (BCBLP), which owned and
operated television station WFXT, was closed on July 7, 1995.
Accordingly, the income statement has been restated for all periods
presented to report the results of operations of television station
WFXT and radio station WEEI, sold on June 30, 1994, as discontinued
operations. Gains from the sale to FTS of an option to acquire a
26% interest in BCBLP ($14,640,000) and the sale of radio station
WEEI ($2,794,000) are included in discontinued operations in 1994,
net of applicable income taxes ($3,150,000). The remaining gain
from the sale of BCBLP to FTS (estimated to be $40,000,000, net of
related income taxes of $20,000,000) will be included in income
from discontinued operations in July 1995 when realized.
Income from continuing operations for the year ended June 30,
1995 includes league expansion revenue ($7,114,000), increased
player compensation ($8,965,000) and increased net interest expense
($1,000,000). Income from continuing operations for the year ended
June 30, 1994 includes net insurance proceeds ($5,592,000) and net
losses from marketable securities ($3,596,000).
The Boston Celtics derive revenues principally from the sale
of tickets to home games and the licensing of television, cable
network and radio rights. A large portion of the Boston Celtics'
annual revenues and operating expense is determinable at the
commencement of each basketball season based on season ticket sales
and the Boston Celtics' multi-year contracts with its players and
broadcast organizations.
19
The operations and financial results of the Boston Celtics
are seasonal. On a cash flow basis, the Boston Celtics receive a
substantial portion of their receipts from the advance sale of
season tickets during the months of July through October, prior to
the commencement of the NBA regular season. Cash receipts from
playoff ticket sales are received in March of any year for which
the team qualifies for league playoffs. Most of the Boston
Celtics' operating expenses are incurred and paid during the
regular season, which extends from early November through late
April.
For financial reporting purposes the Boston Celtics recognize
revenues and expenses on a game-by-game basis. Because the NBA
regular season begins in November, the first quarter which ends on
September 30th, will generally include limited or no revenue and
will reflect a loss attributable to general and administrative
expenses incurred in the quarter. Based on the present NBA game
schedule, the Partnership will generally recognize approximately
one-third of its annual regular season revenue in the second
quarter, approximately one-half of such revenue in the third
quarter and the remainder in the fourth quarter, and it will
recognize its playoff revenue, if any, in the fourth quarter.
Results of Operations
The following discussion compares results of continuing
operations of the Partnership and its subsidiaries for the year
ended June 30, 1995 compared with the year ended June 30, 1994 and
for the year ended June 30, 1994 compared with the year ended June
30, 1993.
Revenues from regular season ticket sales increased by
$1,798,000 or 9% in fiscal 1995 compared to 1994 and by less than
1% in fiscal 1994 compared to 1993. The increase in 1995 resulted
primarily from an increase in ticket prices. Ticket prices were
not increased in the year ended June 30, 1994.
Regular season television and radio rights fees revenues
increased by $1,788,000 or 9% in fiscal 1995 compared to 1994 and
decreased by $2,693,000 or 12% in fiscal 1994 compared to 1993. The
increase in fiscal 1995 compared to 1994 is primarily the result of
increases in the NBA's national broadcasting contracts. The
decrease in fiscal 1994 compared to fiscal 1993 is primarily the
result of reductions in revenues from local television broadcast
rights fees.
Other, principally promotional advertising revenues increased
by $2,242,000 or 43% in fiscal 1995 compared to 1994 and by
$1,579,000 or 44% in fiscal 1994 compared to 1993. The increases
in fiscal 1995 and 1994 are principally due to increased revenues
from promotional activities ($1,721,000 in 1995 and $535,000 in
1994) and increased proceeds received from NBA properties from the
licensing of novelty type products ($554,000 in 1995 and $1,053,000
in 1994).
20
The Boston Celtics played two home playoff games in fiscal
1995 which resulted in $1,913,481 of revenue. There were no
playoff games played by the Boston Celtics in the 1993-94 season,
accordingly, there were no playoff revenues or expenses in fiscal
1994. Playoff revenues vary from year to year depending on the
number of home games played and the availability of such games for
local television broadcast, and playoff expenses vary depending on
the number of games played.
Team expenses increased by $8,735,000 or 39% in fiscal 1995
compared to fiscal 1994 primarily as a result of increased player
compensation ($8,965,000). Team expenses decreased by $2,274,000
or 9% in fiscal 1994 compared to fiscal 1993 primarily as a result
of decreases in player compensation ($1,487,000). In addition,
costs were reduced in fiscal year 1994 compared with 1993 as a
result of a reduction in air travel costs ($450,000) and
termination of the funding requirement for the NBA Pre-Pension
player plan ($375,000) in fiscal 1994.
Game expenses, primarily arena rental payments and the NBA
assessment on gate receipts, increased by $119,000 or 4% in fiscal
1995 compared to 1994 primarily as a result of increased NBA
assessments ($111,000) due to the increase in ticket revenues in
fiscal 1995. Game expenses decreased by $207,000 or 7% in fiscal
1994 compared to fiscal 1993 primarily from reductions in
exhibition game expenses ($134,000).
Basketball playoff expense was $696,000 in fiscal 1995,
primarily expenses related to the two home games played. There
were no playoff games played in fiscal 1994. The playoff expense
for fiscal 1993 was $609,000 related to the two home playoff games
played in that season.
General and administrative expenses increased $2,781,698 or
25% in fiscal 1995 compared to 1994 and $4,729,000 or 72% in fiscal
1994 compared to 1993. The increase in fiscal 1995 is primarily
attributable to increased option expense ($2,324,000) and increased
administrative salaries ($584,000). The increase in fiscal 1994
was primarily attributable to increased management fees
($1,276,000), incentive bonuses and stock option expense
($3,150,000), and increased salaries as a result of additional
staffing ($1,817,000). Additionally, 1994 expenses do not include
charges similar to the merger costs ($1,282,000) included in fiscal
1993.
Selling and promotional expenses increased $1,296,000 or 93%
in fiscal 1995 compared to 1994 and increased $243,000 or 21% in
fiscal 1994 compared to 1993. The increase in fiscal 1995 compared
to 1994 is primarily attributable to increased promotional and
sponsorship costs ($740,000) and increased salary costs ($476,000).
The increase in fiscal 1994 compared with 1993 was primarily
attributable to increased promotional costs of the basketball
operation.
21
Total depreciation and amortization increased $3,000 or 4% in
fiscal 1995 compared to 1994 and $12,000 or 18% in fiscal 1994
compared to 1993. The increases in 1995 and 1994 are primarily
attributable to additional depreciation related to additions to
property and equipment at the basketball operation.
Interest expense increased $5,061,000 or 126% in fiscal 1995
compared to 1994 and $2,246,000 or 127% in fiscal 1994 compared to
1993. The increase in fiscal 1995 and 1994 is primarily
attributable to increased borrowings ($4,658,000 in 1995 and
$2,246,000 in 1994). In addition, the 1995 increase included the
effect of an increase in interest rates ($359,000).
The Partnership had interest income of $6,508,000 and
$2,347,000 in fiscal 1995 and 1994, respectively. Interest income
increased $4,160,000 or 177% in fiscal 1995 compared to 1994 and
$1,563,000 or 199% in fiscal 1994 compared to 1993. The increases
are attributable to interest earned on the short-term investment of
larger amounts of available funds.
Liquidity and Capital Resources
At June 30, 1995 the Partnership had approximately
$39,563,000 of cash and cash equivalents, $45,133,000 of marketable
securities and $67,558,000 of other short-term investments. In
addition to these amounts, sources of funds available to the
Partnership include funds generated by operations, capital
contributions from partners and proceeds of $79,200,000 from the
sale of BCBLP to FTS, Inc. on July 7, 1995. These resources will
be used to repay commercial bank borrowings and notes related to
redeemed partnership units (see Note Q of Notes to Consolidated
Financial Statements) and for general partnership purposes, working
capital needs or for possible acquisitions. The Partnership is not
engaged in any negotiations relating to and has not made any
commitments in connection with any such possible acquisitions.
During the year ended June 30, 1995, a cash distribution of
$1.50 per Unit was paid to the Unitholders of BCLP and an
additional distribution of $1.50 per unit was declared on June 26,
1995 to unitholders of record on June 30, 1995 payable July 21,
1995. Future distributions will be determined by the General
Partner based among other things on available resources and the
needs of the Partnership. Management believes that its cash, cash
equivalents and marketable securities together with cash from
operations will provide adequate cash for the Partnership and its
subsidiaries to meet their cash requirements through June 30, 1996.
Item 8. Financial Statements and Supplementary Data
------------------------------------------------------
See Item 14.
22
PART III
--------
Item 10. Directors and Executive Officers of the Registrant
-------------------------------------------------------------
General Partner
The general partner of the Partnership is Celtics, Inc., a
Delaware corporation organized in 1986 (the "General Partner")
which is wholly owned by Walcott Partners, L.P., a Gaston family
partnership, and Paul R. Dupee, Jr. The Partnership's activities
are managed and controlled by the General Partner.
The General Partner of CLP is Boston Celtics Corporation (the
"Basketball General Partner"). Don F. Gaston, Paul E. Gaston and
Paul R. Dupee, Jr. are the sole stockholders of the Basketball
General Partner. CLP's activities are managed and controlled by
the Basketball General Partner.
The general partner of BCCLP and BCBLP is Celtics
Communications, Inc. (the "General Partner of the Broadcast
Operations"). Paul E. Gaston, Don F. Gaston (Paul Gaston's
father), and Paul R. Dupee, Jr. are the sole stockholders of the
General Partner of the Broadcast Operations. The Broadcast
Operations' activities are managed and controlled by the General
Partner of the Broadcast Operations.
The interest of Alan Cohen in Celtics, Inc. was acquired by
Walcott Partners L.P. and his interests in Boston Celtics
Corporation and Celtics Communications, Inc. were acquired by Paul
E. Gaston on August 30, 1995. See Note Q of Notes to Consolidated
Financial Statements for a description of these redemptions.
Management fee obligations of $2,333,974, $2,873,942, and
$1,481,444 applicable to Celtics, Inc., general partner of the
Partnership, Boston Celtics Corporation, general partner of CLP,
and Celtics Communications, Inc., general partner of BCCLP and
BCBLP were charged to operations during the years ended June 30,
1995, 1994, and 1993, respectively. Boston Celtics Corporation
receives a management fee of $750,000 per annum subject to annual
increases based on annual cash flows from basketball operations
after June 30, 1989. Celtics Communications, Inc. receives
management fees from BCCLP and BCBLP based on a percentage of
sales. The rates of these fees were 1% through December 31, 1992
and 2% thereafter.
In accordance with the partnerships' partnership agreements,
each item of income, gain, loss and deduction is allocated and
distributions are made to the partners and Unitholders in
accordance with their respective percentage interests.
23
Directors and Executive Officers
The following table sets forth, for each of the directors and
executive officers of the General Partner, and certain officers of
the Basketball Subsidiary Partnership and the Communications Group
Subsidiary Partnerships, his principal occupation, age and business
experience during the past five years. All of the directors and
officers are U.S. citizens and the business address of each is c/o
Boston Celtics Limited Partnership, 151 Merrimac Street, Boston,
Massachusetts 02114.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <S>
Paul E. Gaston............. 38 Chairman of the Board
Paul R. Dupee, Jr.......... 52 Vice-Chairman of the Board
Stephen C. Schram.......... 38 Director and President
Thomas M. Bartlett, Jr..... 69 Executive Vice President,
Chief Financial Officer,
Treasurer and Director
Richard G. Pond............ 35 Vice President, Controller and
Secretary
Don F. Gaston.............. 61 Director
Paula B. Gaston............ 61 Director
John H.M. Leithead......... 37 Director
John B. Marsh, III......... 37 Director
Arnold "Red" Auerbach...... 78 President of the Basketball
Subsidiary Partnership
Michael L. "ML" Carr....... 43 Executive Vice President of
Basketball Operations of the
the Basketball Subsidiary
Partnership
David R. Gavitt............ 57 Vice Chairman of the Basketball
Subsidiary Partnership
Jan Volk................... 48 Executive Vice President and
General Manager of the Basketball
Subsidiary Partnership
Stuart Layne............... 41 Executive Vice President of
Marketing and Sales of the
Basketball Subsidiary Partnership
Gerald R. Walsh............ 50 President of the Communications
Group Subsidiary Partnerships
</TABLE>
24
The General Partner has an Audit Committee composed of Mr.
Leithead and Mr. Marsh, independent directors and Mr. Paul Gaston.
The independent directors will be reimbursed for their expenses,
and will receive directors' fees equal to $1,000 per month and $2,500
per meeting attended with respect to their services as directors of
the General Partner. Messrs. Leithead and Marsh received $14,500 each
in directors' fees in fiscal 1995. Directors are named by the stockholders
of the general partner and serve until their successors are named. The
General Partner's officers are appointed by, and serve at the
discretion of, the Board of Directors.
Mr. Paul E. Gaston succeeded his father, Don F. Gaston, as
Chairman of the Board of the CLP General Partner in September 1993.
He became Chairman of the Board of the General Partner of the
Partnership in December 1992 and had been a Director since
September 1992. Upon its formation in November 1992, he became
Managing Director of Walcott Limited Partnership, a Gaston family
partnership whose investments include limited partnership interests
in the Partnership and shares in Celtics, Inc., the General Partner
of the Partnership. From inception in 1990 to June 1992 he was
Co-chairman and since June 1992 has been Chairman of the Board of
Directors of Celtics Communications, Inc., the general partner of
Boston Celtics Communications Limited Partnership. Mr. Paul E.
Gaston is the son of Don F. and Paula B. Gaston.
Mr. Dupee became Vice-Chairman of the Board of Directors of
Boston Celtics Incorporated in September 1983 and has served as a
Director of the BCCLP General Partner since its inception in 1990.
Mr. Dupee was Chairman of the Board of London Investment Trust,
PLC, a large international futures and options brokering and
clearinghouse from 1987 to January 1988. Mr. Dupee was President
of Providence Capitol, Ltd. from 1982 until its liquidation in
December 1986. Prior thereto, he was associated with Gulf &
Western Industries, Inc., most recently as a Vice President and
President of its Providence Capitol Division. Since 1986, Mr.
Dupee has been a private investor.
Mr. Schram was named President and became a Director of the
General Partner of the Partnership in December 1992. He became
President and Director of the BCCLP General Partner in August 1992.
From 1984 to 1991, Mr. Schram was a Vice President of the Fixed
Income Securities Division of Morgan Stanley & Co.
Mr. Bartlett was named Executive Vice President and became a
Director of the General Partner of the Partnership in December
1992. He has been a financial consultant, primarily to BCLP and to
the Principal BCLP Holders, since January 1986 and has served as a
Director of BCCLP General Partner since its inception in 1990. From
October 1972 to December 1985, he was associated with Gulf &
Western Industries, Inc., a diversified manufacturing, services and
entertainment company, most recently as a Vice President. Prior to
October 1972, he was a senior audit manager with the international
accounting firm of Price Waterhouse.
25
Mr. Pond was named Vice President, Controller and Secretary
of the General Partner of the Partnership in December 1992. He has
been employed by BCLP since July 1992. From July 1981 to June
1992, he was with the international accounting firm of Ernst &
Young, most recently as a senior audit manager.
Mr. Don F. Gaston has served as a Director of the General
Partner's of BCLP and CLP since his resignation as Chairman of the
Board of BCLP in December 1992 and CLP in September 1993. He was
succeeded in each of these positions by his son, Paul E. Gaston.
He became Chairman of the Board of Directors of Boston Celtics
Incorporated in September 1983 when he, together with Messrs. Cohen
and Dupee, acquired the Boston Celtics Franchise. He has served as
a Director of the BCCLP General Partner since its inception in
1990. Mr. Gaston was Chairman of the Board of Providence Capitol,
Ltd. from July 1982 until its liquidation in December 1986. From
1962 to June 1982, he was associated with Gulf & Western
Industries, Inc. in various capacities, including Executive Vice
President, director and member of the Executive Committee. Mr.
Gaston is the husband and father respectively, of Paula B. Gaston
and Paul E. Gaston.
Mrs. Paula B. Gaston became a Director of the General Partner
of BCLP in September 1992 and a Director of the General Partner of
CLP in October 1992. She is a private investor and is the wife of
Mr. Don F. Gaston and the mother of Paul E. Gaston.
Mr. Leithead became a Director of the BCLP General Partner in
October 1992. Mr. Leithead worked for International Business
Machines Corporation as an executive in the National Marketing
Division from 1979 to 1985. From 1985 to 1993, he was an executive
of R.R. Donnelley & Sons Company. Since September 1993 he has been
employed as an executive at Arandell Schmidt.
Mr. Marsh became a director in September 1992. From 1985 to
1988 Mr. Marsh was a Vice President in the international arbritage
department of Merrill Lynch Pierce Fenner and Smith. From 1988 to
1991 he was a Vice President at Duetsche Bank Capital Corporation
where he headed an international arbritage securities trading
group. Since 1991 he has been Chief Executive Officer and
President of Saicor Ltd., an investment banking firm specializing
in emerging markets.
Mr. Auerbach has been President of the Boston Celtics
basketball operations since 1981. From 1950 to 1966, Mr. Auerbach
was head coach of the Boston Celtics and, during that period, the
Boston Celtics won the NBA championship 11 times. Mr. Auerbach was
General Manager of Boston Celtics Incorporated, or its
predecessors, from 1966 to 1983. Mr. Auerbach has been inducted
into the Basketball Hall of Fame.
26
Mr. Carr was named Executive Vice President of Basketball
Operations of the Basketball subsidiary Partnership on June 16,
1994 and coach of the Boston Celtics in June 1995. Since 1987 he
has owned and operated various businesses. In 1992 he was named
Executive Director of Community Affairs for the Boston Celtics.
Mr. Carr played professional basketball from 1973 to 1985. From
1979 through 1985 he played for the Boston Celtics.
Mr. Gavitt became Vice Chairman of the Basketball Subsidiary
Partnership on September 21, 1994. He was Senior Executive Vice
President and Chief Operating Officer of the Boston Celtics
basketball operations from June 1990 to September 1994. Prior to
that time, he was Commissioner of the Big East Conference, a
collegiate sports conference, since its inception in 1979. Mr.
Gavitt is a past president of USA Basketball.
Mr. Volk has been associated with the Boston Celtics
basketball operations since 1971 and has been Executive Vice
President and General Manager since 1984. He was Assistant General
Manager from 1981 to 1984 and General Counsel from 1974 to 1984.
From 1971 to 1974, Mr. Volk was Director of Sales.
Mr. Layne has been with the Boston Celtics basketball
operations since March 1994. He was named Executive Vice President
of Marketing and Sales in May 1995. From March 1994 to May 1995
Mr. Layne was Vice President of Planning and Special Events. Prior
to joining the Boston Celtics, Mr. Layne was with the Seattle
Mariners professional baseball team as its Vice President of
Marketing for four years, and he previously worked in broadcasting
with CBS and Emmis Broadcasting for eleven years.
Mr. Walsh has been President of the Boston Celtics broadcast
operations since it acquired Television Station WFXT - Channel 25
and Radio Station WEEI - 590 AM in May 1990. From September 1989
to May 1990, he was General Manager of WFXT, Inc., the prior owner
of the television station. From 1983 until August 1989, Mr. Walsh
was the President and General Manager of WLVI-TV, Channel 56 in
Boston.
27
Item 11. Executive Compensation
---------------------------------
The following Summary Compensation Table sets forth the
compensation of each of the Chief Executive Officer and the four
most highly compensated executive officers of the Partnership whose
annual salary and bonus, if any, exceeded $100,000 for services in
all capacities to the Partnership during the last three fiscal
years.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
Long Term
Annual Compensation
Fiscal Compensation Awards -
Year -------------------------------- ------------
Ended Salary Bonus Other Options/SARs
Name and Principal Position June 30, ($) ($) ($) (Units)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Paul E. Gaston 1995 400,000 828,112 - -
Chief Executive Officer 1994 400,000 1,149,000 - 250,000
and Chairman of the Board 1993 - - - -
Stephen C. Schram 1995 400,000 828,112 - -
Director and President 1994 400,000 1,149,000 - 250,000
1993 - - - -
Thomas M. Bartlett, Jr. 1995 300,000 150,000 - -
Executive Vice President, 1994 250,000 125,000 - 30,000
Chief Financial Officer 1993 200,000 - - -
and Treasurer
Arnold "Red" Auerbach 1995 250,000 100,000 - -
President of the Basketball 1994 250,000 - - -
Subsidiary Partnership 1993 250,000 - - -
M.L. Carr 1995 500,000 - - -
Executive Vice President of 1994 40,000 - - -
Basketball Operations 1993 40,000 - - -
David R. Gavitt (1) 1995 600,000 80,000(2)
Senior Executive Vice President 1994 600,000 133,000(2)
and Chief Operating Officer of 1993 600,000 100,000(2)
the Basketball Subsidiary
Partnership
Gerald R. Walsh 1995 453,000 -
President of the Communications 1994 375,000 -
Group Subsidiary Partnership 1993 337,500 -
28
<FN>
___________________
<F1> In addition, in 1995 a consulting fee of $175,000 was paid to
Craigville Associates and in 1994 a consulting fee of $200,000
was paid to DRG Corporation, entities of which Mr. Gavitt is
President.
<F2> Includes $44,000, $64,000 and $70,000 related to an apartment
furnished to Mr. Gavitt in the years ended June 30, 1995, 1994
and 1993, respectively.
</FN>
</TABLE>
29
Aggregated Option Exercises and Option Values
---------------------------------------------
<TABLE>
<CAPTION>
Paul E. Stephen C. Thomas M.
Gaston Schram Bartlett, Jr.
------- ---------- -------------
<S> <C> <C> <C>
Shares acquired on
exercise (num) none none none
Number of unexercised options
at year end (num) (1):
Exercisable 150,000 150,000 30,000
Unexercisable 100,000 100,000 none
Value of unexercised in
the money options at year
end ($) (2):
Exercisable 1,387,500 1,387,500 277,500
Unexercisable 925,000 925,000 none
<FN>
--------------------
<F1> Options for 500,000 units become exercisable in installments as
follows:
</FN>
</TABLE>
<TABLE>
<CAPTION>
Aggregate Amount of
Period Option Exercisable
---------------------------------------------------------------
<C> <C>
June 30, 1994 - June 29, 1995 1%
June 30, 1995 - June 29, 1996 60%
June 30, 1996 - June 29, 1997 80%
June 30, 1997 - December 31, 2003 100%
<FN>
Options for the remaining 30,000 units became exercisable June 30, 1994.
<F2> Represents the difference between the market price on June 30, 1995
and the exercise price on that date.
</FN>
</TABLE>
30
Employment and Consulting Agreements
The Partnership
In August 1993, the Board of Directors of the General Partner
of BCLP approved compensation arrangements and incentive plans for
Paul E. Gaston, Chairman of the Board and Stephen C. Schram,
President, respectively, of the Partnership. Mr. Gaston and Mr.
Schram shall each be employed on an at will basis, with
compensation at the rate of $400,000 per annum. The incentive
plan, which is subject to annual review, provides that each of Mr.
Gaston and Mr. Schram shall receive annual incentive payments,
commencing with the fiscal year ending June 30, 1994, of 5% of the
amount by which Consolidated Net Income before taxes on income of
BCLP for the related fiscal year exceeds $8,000,000, payable not
later than 10 days after the issuance of audited financial
statements of BCLP. During the years ended June 30, 1995 and 1994,
incentive bonuses amounted to $828,000 and $749,000, respectively,
each.
The Basketball Operations
Under an agreement dated as of March 13, 1981, as amended,
Red Auerbach has been retained to serve as a consultant to the
Boston Celtics for the remainder of his life. For such services,
Mr. Auerbach will receive compensation totalling $250,000 per year
for his lifetime. In fiscal 1995, Mr. Auerbach received a bonus
payment of $100,000. Upon Mr. Auerbach's death, his wife shall be
entitled to receive for the balance of her life monthly payments
equal to those that would have otherwise been paid to Mr. Auerbach.
Mr. Auerbach shall advise the Boston Celtics with respect to, among
other things, the team's selections in the NBA college draft,
evaluation of college and professional players and the performance
of the team and the players for as long as he is physically able to
perform such services.
Under an agreement dated June 19, 1995, Michael L. (ML) Carr
agreed to serve as Coach of the Boston Celtics and Executive Vice
President of Basketball Operations of the Basketball Subsidiary
through June 30, 1999 at an annual salary of $1,000,000.
Under an agreement dated June 1, 1990, as amended September
21, 1994, David R. Gavitt agreed to serve as Vice-Chairman of the
Basketball Subsidiary through May 31, 1998. In return for Mr.
Gavitt's services, he will receive an annual salary at the rate of
$300,000 through June 1997, $200,000 through June 1998, $100,000
through June 2000 and $50,000 through June 2001.
Under the terms of an agreement effective as of July 1, 1995,
Mr. Volk agreed to serve as General Manager of the Boston Celtics
basketball operations through June 30, 1995 at a salary of $375,000
in fiscal 1996, rising to $425,000 in fiscal 1998.
31
Item 12. Security Ownership of Certain Beneficial Owners and Management
-------------------------------------------------------------------------
The following table sets forth certain information regarding
the Partnership's Units beneficially owned on September 20, 1995 by
(i) each person who is known by the Partnership to beneficially own
more than five percent (5%) of the outstanding Units, by (ii) each
director of the General Partner, by (iii) each executive named in
the Summary Compensation Table and by (iv) all directors and
officers of the General Partner as a group. All information with
respect to beneficial ownership has been furnished by the
respective Unitholders to the Partnership.
<TABLE>
<CAPTION>
Percent of
5% Unitholders, Number of Outstanding
Directors and Officers Units Units(1)
---------------------- --------- -----------
<S> <C> <C>
Don F. Gaston and Paula B. Gaston 743,885(2) 13.2%
33 East 63rd Street
New York, New York 10021
Paul R. Dupee, Jr. 780,000(4) 13.8
10 Wilton Row
London, England
Alan N. Cohen 0(5) --
560 Lexington Avenue
New York, New York 10022
Paul E. Gaston 1,458,050(3) 23.2
33 East 63rd Street
New York, New York 10021
Stephen C. Schram 150,000(6) --
33 East 63rd Street
New York, New York 10022
Thomas M. Bartlett, Jr. 30,000(6) --
151 Merrimac Street
Boston, Massachusetts 02114
Arnold "Red" Auerbach 5,000 --
151 Merrimac Street
Boston, Massachusetts 02114
Jan Volk 2,500 --
151 Merrimac Street
Boston, Massachusetts 02114
David R. Murphey, III 465,700 8.3
Murphey Capital, Inc.
P.O. Box 18065
Tampa, Florida 33681-8065
32
All directors and officers
as a group (9 persons) 2,831,935 50.2
<FN>
___________________
<F1> Percent of Outstanding Units for a particular Unitholder will
be greater than such Unitholder's percentage interest in the
Partnership, due to the 1% interest in the Partnership held by
the General Partner.
<F2> Includes 320,000 Units held by Brookwood Investments Limited
Partnership, a partnership owned by Don F. and Paula B. Gaston
of which Don F. Gaston is the General Partner.
<F3> Includes 1,300,000 Units held by Walcott Partners L. P., a
Gaston family partnership and 150,000 units issuable upon
exercise of options which are currently exercisable or become
exercisable within a 60 day period after September 20, 1995 .
The General Partner of Walcott Partners L. P. is Draycott,
Inc. wholly owned by Paul E. Gaston who is the only officer
and director. For the purpose of this table, Mr. Paul E.
Gaston is deemed to be the beneficial owner of these Units.
<F4> Includes 320,000 Units held by Westbury Partners L. P., a
partnership in which Paul R. Dupee Jr. is the 99% General
Partner.
<F5> On August 30, 1995 the Partnership redeemed Mr. Cohen's units
and those of his children. See Note Q of Notes to
Consolidated Financial Statements for a description of these
redemptions.
<F6> Represents units issuable upon exercise of options which are
currently exercisable or become exercisable within a 60 day
period after September 20, 1995.
</FN>
</TABLE>
Unless otherwise indicated, all parties have both exclusive
voting and investing power.
33
PART IV
-------
Item 14. Financial Statements and Exhibits
(a) The following documents are filed as part of this report:
1. Financial Statements:
The financial statements listed in the accompanying List of Financial
Statements and Financial Statement Schedules are filed as part of this report.
2. Exhibits:
The Exhibits listed below are filed as part of this report.
(3) (a) -- Certificate of Limited Partnership of Boston Celtics
Limited Partnership, as amended(1)
(b) -- Agreement of Limited Partnership of Boston Celtics
Limited Partnership(1)
(c) -- Certificate of Incorporation of Celtics, Inc.(1)
(d) -- By-laws of Celtics, Inc.(1)
(e) -- First Amendment to Amended and Restated Agreement of
Limited Partnership(7)
(4) (a) -- Form of Certificate of Limited Partnership Interest(1)
(b) -- Form of Unit Certificate(1)
(c) -- Form of Eligibility Certification(1)
(10) (a) -- Form of Transfer Agent Agreement by and among Boston
Celtics Limited Partnership, The First National Bank
of Boston, N.A., Celtics, Inc. and BC ALP, Inc.(1)
(b) -- Joint Venture Agreement by and among NBA member
organizations(1)
(c) -- Constitution and By-laws of the National Basketball
Association(1)
(d) -- Agreement dated December 20, 1985 between CBS Sports, a
division of CBS, Inc., and the NBA (confidential
treatment previously granted)(1)
(e) -- Agreement dated June 18, 1984, as amended on April 9,
1986, between Turner Broadcasting System, Inc. and the
NBA (confidential treatment previously granted)(1)
(f) -- Amendment dated January 19, 1988 to Agreement dated June
18, 1984, as amended on April 9, 1986, between Turner
Broadcasting System Inc. and the NBA (confidential
treatment previously granted)(2)
34
(g) -- Telecast Rights Agreement, dated April 3, 1984, among
Boston Celtics Incorporated, Gannett Massachusetts
Broadcasting, Inc. and Gannett Co., Inc. (confidential
treatment previously granted)(1)
(h) -- Agreement, dated as of October 1, 1987, between
Sportschannel New England Limited Partnership and
Boston Celtics Limited Partnership (confidential
treatment previously granted)(2)
(i) -- Radio Broadcasting Rights Agreement dated October 27,
1986, between Boston Celtics Incorporated, Helen
Broadcasting Partnership Limited Partnership and Papa
Gino's of America, Inc. (confidential treatment
previously granted)(1)
(j) -- License and Lease Agreement, dated July 1, 1983, between
New Boston Garden Corporation and Boston Celtics
Incorporated (confidential treatment previously
granted)(1)
(k) -- Amendment to License and Lease Agreement dated July 1,
1983 between New Boston Garden Corporation and Boston
Celtics Incorporated(3)
(l) -- Promotional Agreement, dated as of July 1987, between
Boston Celtics Limited Partnership and The Hartford
Civic Center and Coliseum Authority (confidential
treatment previously granted)(2)
(m) -- Agreement, dated May 13, 1981, as amended, between Arnold
Auerbach and Boston Celtics Incorporated(1)
(n) -- Agreement, dated December 8, 1983, as amended, between
Jan Volk and Boston Celtics Incorporated(1)
(o) -- Form of Revolving Credit Agreement, dated as of November
24, 1986, between Boston Celtics Limited Partnership
and the First National Bank of Boston(1)
(p) -- Collective bargaining agreement, dated as of November 1,
1988, between the NBA and the National Basketball
Players Association(4)
(q) -- Asset Purchase Agreement among Boston Celtics
Broadcasting Limited Partnership, Celtics
Communications, Inc. and WFXT, Inc. dated as of
November 21, 1989, including exhibits thereto, as
amended(5)
(r) -- Asset Purchase Agreement by and among Boston Celtics
Acquisitions Limited Partnership, Celtics
Communications, Inc., The Helen Broadcasting Company
Limited Partnership and The Helen Broadcasting Corp.
dated as of October 30, 1989, including exhibits
thereto and letter agreement dated May 11, 1990(5)
35
(s) -- Facility One Revolving Credit Note made by Boston Celtics
Acquisitions Limited Partnership and Boston Celtics
Limited Partnership in favor of Shawmut Bank, N.A.
dated May 11, 1990(5)
(t) -- Facility Two Revolving Credit Note made by Boston Celtics
Acquisitions Limited Partnership and Boston Celtics
Limited Partnership in favor of Shawmut Bank, N.A.
dated May 11, 1990(6)
(u) -- Revolving Credit Note made by Boston Celtics Broadcasting
Limited Partnership and Boston Celtics Limited
Partnership in favor of Shawmut Bank, N.A. dated May
11, 1990(6)
(v) -- Accommodation Fee Agreement between Boston Celtics
Limited Partnership, Boston Celtics Acquisitions
Limited Partnership, Celtics Holdings Corp. and Boston
Celtics Communications Limited Partnership dated as of
May 11, 1990(6)
(w) -- Accommodation Fee Agreement between Boston Celtics
Limited Partnership, Boston Celtics Broadcasting
Limited Partnership, Celtics Sub Corp. and Boston
Celtics Communications Limited Partnership dated as of
May 11, 1990(6)
(x) -- Revolving Credit and Term Loan Agreement among Boston
Celtics Broadcasting Limited Partnership, Celtics Sub
Corp., Boston Celtics Communications Limited
Partnership, Boston Celtics Limited Partnership and
Shawmut Bank, N.A. dated as of May 11, 1990(6)
(y) -- Revolving Credit and Term Loan Agreement among Boston
Celtics Acquisitions Limited Partnership, Celtics
Holdings Corp., Boston Celtics Communications Limited
Partnership, Boston Celtics Limited Partnership and
Shawmut Bank, N.A. dated as of May 11, 1990(6)
(z) -- Agreement dated November 29, 1989 by and between the
National Basketball Association and Turner Network
Television, Inc. (confidential treatment previously
granted)(7)
(aa) -- NBA/NBC Network Television Agreement dated November 9,
1989 by and between the National Basketball
Association and NBC Sports, a division of National
Broadcasting Company, Inc. (confidential treatment
previously granted)(7)
(bb) -- License/Lease Agreement dated April 4, 1990 between
Boston Celtics Limited Partnership and New Boston
Garden Corporation (confidential treatment previously
granted)(7)
36
(cc) -- Office Lease Agreement dated April 4, 1990 between
Boston Celtics Limited Partnership and New Boston
Garden Corporation (confidential treatment previously
granted)(7)
(dd) -- Letter Agreement dated June 1, 1990 between Boston
Celtics Limited Partnership and David R. Gavitt
(confidential treatment previously granted)(7)
(ee) -- Television Broadcasting Rights Agreement between Boston
Celtics Limited Partnership and Boston Celtics
Broadcasting Limited Partnership dated as of July 27,
1990(7)
(ff) -- Extended, Amended and Restated Radio Broadcasting Rights
Agreement among Boston Celtics Limited Partnership and
Boston Celtics Acquisitions Limited Partnership dated
May 11, 1990(7)
(gg) -- Letter Agreement dated April 4, 1990 between the Boston
Celtics Limited Partnership and New Boston Garden
Corporation (confidential treatment requested)(7)
(hh) -- Letter Agreement regarding Demand Promissory Note made
by Boston Celtics Broadcasting Limited Partnership to
Shawmut Bank, N.A. dated February 8, 1991(8)
(ii) -- Demand Promissory Note made by Boston Celtics
Broadcasting Limited Partnership and Boston Celtics
Limited Partnership, dated as of February 11, 1991(8)
(jj) -- Agreement dated October 23, 1990 by and among Boston
Celtics Broadcasting Limited Partnership, Celtics Sub
Corp., Boston Celtics Communications Limited
Partnership and Boston Celtics Limited Partnership
regarding the effectiveness of the Stage II Television
Loan Agreement(9)
(kk) -- Revolving Credit and Term Loan Agreement dated as of
November 1, 1990 by and among Boston Celtics
Broadcasting Limited Partnership, Boston Celtics
Communications Limited Partnership, Boston Celtics
Limited Partnership and Shawmut Bank, N.A.(9)
(ll) -- Revolving Credit Note dated November 1, 1990 made by
Boston Celtics Broadcasting Limited Partnership and
Boston Celtics Limited Partnership in favor of Shawmut
Bank, N.A.(9)
(mm) -- Security Agreement dated November 1, 1990 by and between
Boston Celtics Broadcasting Limited Partnership and
Shawmut Bank, N.A.(9)
(nn) -- Guaranty dated November 1, 1990 executed by Boston
Celtics Communications Limited Partnership in favor of
Shawmut Bank, N.A.(9)
37
(oo) -- Agreement dated October 23, 1990 by and among Boston
Celtics Acquisitions Limited Partnership, Celtics
Holdings Corp., Boston Celtics Communications Limited
Partnership, Boston Celtics Limited Partnership and
Shawmut Bank, N.A. regarding the effectiveness of the
Stage II Radio Loan Agreement(9)
(pp) -- Revolving Credit and Term Loan Agreement dated November
1, 1990 by and among Boston Celtics Communications
Limited Partnership, Boston Celtics Limited
Partnership and Shawmut Bank, N.A.(9)
(qq) -- Facility One Revolving Credit Note dated November 1,
1990 made by Boston Celtics Communications Limited
Partnership and Boston Celtics Limited Partnership in
favor of Shawmut Bank, N.A.(9)
(rr) -- Facility Two Revolving Credit Note dated November 1,
1990 made by Boston Celtics Communications Limited
Partnership and Boston Celtics Limited Partnership in
favor of Shawmut Bank, N.A.(9)
(ss) -- Security Agreement dated November 1, 1990 by and between
Boston Celtics Communications Limited Partnership and
Shawmut Bank, N.A.(9)
(tt) -- Amendment No. 1 to revolving Credit and Term Loan
Agreement (Radio) (Stage Two) among Boston Celtics
Communications Limited Partnership, Boston Celtics
Limited Partnership and Shawmut Bank, N.A. dated as of
April 10, 1991(9)
(uu) -- Stage Two - Radio Facility One (Amended) Revolving
Credit Note made by Boston Celtics Communications
Limited Partnership and Boston Celtics Limited
Partnership in favor of Shawmut Bank, N.A. dated
April 10, 1991(9)
(vv) -- Stage Two - Radio Facility Two (Amended) Revolving
Credit Note made by Boston Celtics Communications
Limited Partnership and Boston Celtics Limited
Partnership in favor of Shawmut Bank, N.A. dated
April 10, 1991(9)
(ww) -- Letter Agreement Relating to Security Agreement between
Boston Celtics Communications Limited Partnership and
Shawmut Bank, N.A. dated April 10, 1991(9)
(xx) -- Amendment No. 1 to revolving Credit and Term Loan
Agreement (Television) (Stage Two) among Boston
Celtics Broadcasting Limited Partnership, Boston
Celtics Communications Limited Partnership, Boston
Celtics Limited Partnership and Shawmut Bank, N.A.
dated as of April 10, 1991(9)
38
(yy) -- Stage Two - Television (Amended) Revolving Credit Note
made by Boston Celtics Broadcasting Limited
Partnership and Boston Celtics Limited Partnership in
favor of Shawmut Bank, N.A. Dated April 10,1991(9)
(zz) -- Letter Agreement Relating to the Communications Limited
Partnership Guaranty between Boston Celtics
Communications Limited Partnership and Shawmut Bank,
N.A. dated April 10, 1991(9)
(aaa) -- Letter Agreement Relating to Security Agreement between
Boston Celtics Broadcasting Limited Partnership and
Shawmut Bank, N.A. dated April 10, 1991(9)
(bbb) -- Intercreditor Agreement among Boston Celtics
Broadcasting Limited Partnership, WFXT, Inc. and
Shawmut Bank, N.A. dated as of April 10, 1991(9)
(ccc) -- Ten-Year Convertible Subordinated Note made by Boston
celtics Broadcasting Limited Partnership in favor of
WFXT, Inc. dated April 10, 1991(9)
(ddd) -- Letter Agreement Regarding Amendments No. 1 and 2 to
Revolving Credit and Term Loan Agreements between
Boston Celtics Communications Limited Partnership and
Shawmut Bank, N.A. dated April 10, 1991(9)
(eee) -- Amendment No. 2 to revolving Credit and Term Loan
Agreement (Radio) (Stage Two) among Boston Celtics
Communications Limited Partnership, Boston Celtics
Limited Partnership and Shawmut Bank, N.A. dated as of
April 10, 1991(9)
(fff) -- Agreement Regarding Deferral of Radio Broadcast Rights
Payments among Boston Celtics Communications Limited
Partnership, Boston Celtics Limited Partnership and
Shawmut Bank, N.A. dated as of April 10, 1991(9)
(ggg) -- Agreement No. 2 to revolving Credit and Term Loan
Agreement (Television) (Stage Two) among Boston
Celtics Broadcasting Limited Partnership, Boston
Celtics Communications Limited Partnership, Boston
Celtics Limited Partnership and Shawmut Bank, N.A.
dated as of April 10, 1991(9)
(hhh) -- Agreement Regarding Deferral of Television Broadcast
Rights Payments among Boston Celtics Broadcasting
limited Partnership, Boston Celtics Limited
Partnership and Shawmut Bank, N.A. dated as of April
10, 1991(9)
(iii) -- Modification Agreement Regarding Interest Rates among
Boston Celtics Broadcasting Limited Partnership,
Boston Celtics Communications Limited Partnership,
Boston Celtics Limited Partnership and Shawmut Bank,
N.A. dated as of April 10, 1991(9)
39
(jjj) -- Letter of Waiver and Amendment Regarding Various Loan
Agreements among Shawmut Bank, N.A., Boston Celtics
Limited Partnership, Boston Celtics Broadcasting
Limited Partnership and Boston Celtics Communications
Limited Partnership dated March 27, 1992.(10)
(kkk) -- Three year extension, dated July 6, 1992, of agreement
dated December 8, 1983, as amended, between Jan Volk
and Boston Celtics Incorporated.
(lll) -- Credit Agreement among Celtics Limited Partnership
("CLP"), Boston Celtics Limited Partnership ("BCLP")
and Shawmut Bank, N.A. ("Shawmut"), dated as of
January 21, 1993.(11)
(mmm) -- Revolving Credit Note from CLP to Shawmut, dated as of
January 21, 1993.(11)
(nnn) -- Security Agreement between CLP and Shawmut, dated as of
January 21, 1993.(11)
(ooo) -- Merger Agreement dated as of December 8, 1992 by and
among Boston Celtics Limited Partnership, BCCLP
Holding Corporation, BCCLP Acquisition Limited
Partnership and Boston Celtics Communications Limited
Partnership.(12)
(ppp) -- Second Amended and Restated Agreement of Limited
Partnership of Boston Celtics Communications Limited
Partnership dated May 6, 1993.(13)
(qqq) -- Agreement dated October 1, 1993, between Boston Celtics
Limited Partnership and Fox Television Stations, Inc.
("FTS") that provides that, subject to certain
conditions, a subsidiary of FTS would purchase an
option to acquire ownership interests in BCBLP which,
together with existing rights, could eventually result
in FTS becoming the sole owner of WFXT.(13)
(rrr) -- Financing Agreement dated October 29, 1993 by and among
Boston Celtics Communications Limited Partnership
Holding Corporation and Shawmut Bank, N.A.(14)
(sss) -- Promissory Note dated October 29, 1993 executed by BCCLP
Holding Corporation in favor of Shawmut Bank, N.A.(14)
(ttt) -- Unit Option Agreement dated December 31, 1993 by and
between Boston Celtics Limited Partnership and Paul E.
Gaston.(15)
(uuu) -- Unit Option Agreement dated December 31, 1993 by and
between Boston Celtics Limited Partnership and Stephen
C. Schram.(15)
(vvv) -- Unit Option Agreement dated December 31, 1993 by and
between Boston Celtics Limited Partnership and Thomas
M. Bartlett, Jr.(15)
40
(www) -- Financing Agreement dated September 15, 1994 between
Boston Celtics Communications Limited Partnership and
Shawmut Bank, N.A.(16)
(xxx) -- Promissory Note dated September 15, 1994 executed by
Boston Celtics Communications Limited Partnership and
Shawmut Bank, N.A.(16)
(yyy) -- Credit Agreement dated October 31, 1994 by and among
BCCLP and Shawmut Bank, N.A.(17)
(zzz) -- Assignment and Security Agreement dated October 31, 1994
by and between BCCLP and Shawmut Bank, N.A.(17)
(aaaa) -- Commercial Promissory Note between BCCLP and Shawmut
Bank, N.A.(17)
(bbbb) -- Support Agreement between BCLP and Shawmut Bank,
N.A.(17)
(cccc) -- Second Amendment To Agreement To Purchase Partnership
Interests by and among BCBLP and CCI and FTS dated
November 29, 1994.(18)
(dddd) -- Unit Redemption Agreement dated August 30, 1995 between
Boston Celtics Limited Partnership and Alan N.
Cohen.(19)
(eeee) -- Unit Redemption Agreement dated August 30, 1995 between
Boston Celtics Limited Partnership and Gordon Cohen.(19)
(ffff) -- Unit Redemption Agreement dated August 30, 1995 between
Boston Celtics Limited Partnership and Laurie Cohen-
Fenster.(19)
(gggg) -- Promissory Note dated August 1, 1995 by BCLP to Alan N.
Cohen.(19)
(hhhh) -- Promissory Note dated August 1, 1995 by BCLP to Alan N.
Cohen.(19)
(iiii) -- Consulting Agreement dated August 30, 1995 between
Celtics Limited Partnership and Alan N. Cohen.(19)
(jjjj) -- Press Release dated August 30, 1995.(19)
(1) Incorporated by reference from the exhibits filed with the
Partnership's registration statement on Form S-1 filed under the Securities
Act of 1933 (File No. 33-9796).
(2) Incorporated by reference from exhibits filed with the Partnership's
report on Form 10-K filed with the Securities and Exchange Commission for the
year ended June 30, 1987.
41
(3) Incorporated by reference from exhibits filed with the Partnerships'
report on Form 10-K filed with the Securities and Exchange Commission for the
year ended June 30, 1988.
(4) Incorporated by reference from exhibits filed with the Partnership's
report on Form 10-K filed with the Securities and Exchange Commission for the
year ended June 30, 1989.
(5) Incorporated by reference from the exhibits filed with the
Partnership's Current Report on Form 8-K filed with the Securities and
Exchange Commission on May 24, 1990.
(6) Incorporated by reference from the exhibits filed with the
Registration Statement on Form S-1 of Boston Celtics Communications Limited
Partnership and the Partnership filed under the Securities Act of 1933 (File
No. 33-34768).
(7) Incorporated by reference from the exhibits filed with the Report on
Form 10-K of the Registrant filed with the Securities and Exchange Commission
for the year ended June 30, 1990.
(8) Incorporated by reference from the exhibits filed with the Report on
Form 10-K of Boston Celtics Communications Limited Partnership filed with the
Securities and Exchange Commission for the year ended December 31, 1990.
(9) Incorporated by reference from the exhibits filed with Boston
Celtics Communications Limited Partnership's report on Form 8 filed with the
Securities and Exchange Commission on April 15, 1991.
(10) Incorporated by reference to the exhibits filed with Boston Celtics
Communications Limited Partnership report on Form 10-K filed with the
Securities and Exchange Commission on April 15, 1992.
(11) Incorporated by reference to the exhibits filed with the report on
Form 8-K filed with the Securities and Exchange Commission on January 22, 1993
(File No. 0-19324).
(12) Incorporated by reference to the exhibits filed with the Boston
Celtics Communications Limited Partnership report on Schedule 13E-3 filed with
the Securities and Exchange Commission on December 9, 1992.
(b) Reports on Form 8-K filed in the fourth quarter of 1993: Form 8-K
dated May 14, 1993.
(c) Exhibits - The response to this portion of Item 14 is filed as a
part of this report.
(d) Financial Statement Schedules - The response to this portion of
Item 14 is filed as part of this report.
(13) Incorporated by reference to the exhibits filed with the report on
Form 10-K/A Amendment No. 1 filed with the Securities and Exchange Commission
on October 20, 1993 (File No. 0-19324).
(14) Incorporated by reference to the exhibits filed with the report on
Form 10-Q filed with the Securities and Exchange Commission on November 15,
1993 (File No. 0-19324).
42
(15) Incorporated by reference to the exhibits filed with the report on
Form 10-Q filed with the Securities and Exchange Commission on February 14,
1994 (File No. 0-19324).
(16) Incorporated by reference to the exhibits filed with the report on
Form 10-K filed with the Securities and Exchange Commission on September 28,
1994 (File No. 0-19324).
39
(17) Incorporated by reference to the exhibits filed with the report on
Form 10-Q filed with the Securities and Exchange Commission on November 14,
1994 (File No. 0-19324).
(18) Incorporated by reference to the exhibits filed with the report on
Form 10-Q filed with the Securities and Exchange Commission on Feburary 14,
1995 (File No. 0-19324).
(19) Incorporated by reference to the exhibits filed with the report on
Form 8-K filed with the Securities and Exchange Commission on August 31, 1995
(File No. 0-19324).
43
ANNUAL REPORT ON FORM 10-K
ITEM 8, ITEM 14(a)(1) and (2)(c) and (d)
LIST OF FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
CERTAIN EXHIBITS
YEAR ENDED JUNE 30, 1995
BOSTON CELTICS LIMITED PARTNERSHIP
BOSTON, MASSACHUSETTS
44
FORM 10-K -- ITEM 14(a)(1) and (2)
BOSTON CELTICS LIMITED PARTNERSHIP
LIST OF CONSOLIDATED FINANCIAL STATEMENTS
The following consolidated financial statements of Boston Celtics Limited
Partnership and subsidiaries are included in Item 8:
<TABLE>
<CAPTION>
Page
<S> <C>
Consolidated Balance Sheets at June 30, 1995 and 1994. 46
Consolidated Statements of Income for each of the three years in the period
ended June 30, 1995. 48
Consolidated Statements of Changes in Partners' Capital (Deficit) for each of
the three years in the period ended June 30, 1995. 50
Consolidated Statements of Cash Flows for each of the three years in the
period ended June 30, 1995. 54
Notes to Consolidated Financial Statements. 57
</TABLE>
All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission have been omitted because
the required information has been disclosed in the footnotes to the
Consolidated Financial Statements, or are not required under the related
instructions or are inapplicable, and therefore have been omitted.
45
Report of Independent Auditors
To the General Partner
Boston Celtics Limited Partnership
We have audited the accompanying consolidated balance sheets of Boston Celtics
Limited Partnership and subsidiaries as of June 30, 1995, and 1994, and the
related consolidated statements of income, changes in partners' capital
(deficit) and cash flows for each of the three years in the period ended June
30, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Boston Celtics Limited Partnership and subsidiaries at June 30, 1995 and
1994, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended June 30, 1995, in conformity
with generally accepted accounting principles.
As discussed in Note B to the consolidated financial statements, in 1995, the
Partnership changed its method of accounting for certain investments in debt
and equity securities.
/s/ Ernst & Young LLP
Boston, Massachusetts
September 22, 1995
46
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, June 30,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 39,563,015 $ 38,093,082
Marketable securities 45,132,667 22,205,099
Other short term investments 67,558,465
Accounts receivable (less allowance for
doubtful accounts - $195,193 in 1995
and $407,544 in 1994) 16,236,108 11,828,640
Note receivable 4,444,444
Program broadcast rights - current portion 7,301,340 7,084,177
Prepaid expenses 664,715 281,311
Other current assets and deferred charges 5,200,000
------------ ------------
TOTAL CURRENT ASSETS 186,100,754 79,492,309
PROGRAM BROADCAST RIGHTS - noncurrent portion 10,627,670 11,421,647
PROPERTY AND EQUIPMENT, net of depreciation of
$3,647,208 in 1995 and $2,949,994 in 1994 2,504,354 2,544,234
NATIONAL BASKETBALL ASSOCIATION FRANCHISE,
net of amortization of $1,850,880 in 1995
and $1,696,640 in 1994 4,318,701 4,472,941
NETWORK AFFILIATION AND OTHER INTANGIBLE ASSETS,
net of amortization of $493,961 in 1995
and $393,043 in 1994 4,074,826 3,308,911
OTHER ASSETS 3,028,318 1,693,424
------------ ------------
$210,654,623 $102,933,466
============ ============
47
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 13,406,721 $ 8,758,022
Distribution payable 9,697,083
Deferred revenues - current portion 6,645,562
Ticket refunds payable 120,908 126,262
Program broadcast rights payable - current portion 6,048,649 6,023,495
Federal and state income taxes payable 5,163,158 100,000
Notes payable to bank - current portion 80,000,000 5,000,000
Deferred compensation - current portion 4,927,999 3,281,101
------------ ------------
TOTAL CURRENT LIABILITIES 126,010,080 23,288,880
PROGRAM BROADCAST RIGHTS - noncurrent portion 9,061,781 8,566,453
DEFERRED REVENUES - noncurrent portion 1,440,612
DEFERRED FEDERAL AND STATE INCOME TAXES 6,000,000 2,900,000
CONVERTIBLE SUBORDINATED NOTE PAYABLE 10,000,000 10,000,000
NOTES PAYABLE TO BANK - noncurrent portion 50,000,000 50,000,000
DEFERRED COMPENSATION - noncurrent portion 14,850,057 18,248,329
OTHER NON-CURRENT LIABILITIES 4,023,750 850,000
MINORITY INTEREST IN BCBLP 4,988,790 1,909,304
PARTNERS' CAPITAL (DEFICIT)
Boston Celtics Limited Partnership -
General Partner (160,255) (127,387)
Limited Partners (15,690,191) (12,542,458)
------------ ------------
(15,850,446) (12,669,845)
Celtics Limited Partnership - General Partner (105,194) (54,311)
Boston Celtics Communications Limited Partnership
- General Partner 96,791 (122,686)
Boston Celtics Broadcasting Limited Partnership
- Limited Partner 138,402 17,342
------------ ------------
TOTAL PARTNERS' CAPITAL (DEFICIT) (15,720,447) (12,829,500)
------------ ------------
$210,654,623 $102,933,466
============ ============
</TABLE>
See notes to consolidated financial statements.
48
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Statements of Income
<TABLE>
<CAPTION>
For The Year Ended
-----------------------------------------
June 30, June 30, June 30,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Revenues:
Basketball regular season -
Ticket sales $22,036,880 $20,238,531 $20,197,068
Television and radio
broadcast rights fees 20,956,405 19,168,268 21,861,510
Other, principally
promotional advertising 7,418,487 5,176,618 3,597,177
Basketball playoffs 1,913,481 1,903,357
----------- ----------- -----------
52,325,253 44,583,417 47,559,112
----------- ----------- -----------
Costs and expenses:
Basketball regular season -
Team 31,203,697 22,468,500 24,742,993
Game 2,880,566 2,761,572 2,968,858
Basketball playoffs 696,583 609,328
General and administrative 14,085,982 11,304,284 6,575,087
Selling and promotional 2,692,208 1,395,798 1,152,312
Depreciation 86,347 82,878 70,393
Amortization of NBA franchise
and other related assets 164,703 164,703 159,472
----------- ----------- -----------
51,810,086 38,177,735 36,278,443
----------- ----------- -----------
515,167 6,405,682 11,280,669
Interest expense, including $1,184,829
in 1995, $1,084,943 in 1994 and
$1,423,963 in 1993 related to deferred
compensation obligations (9,074,657) (4,013,276) (1,766,913)
Interest income 6,507,902 2,347,691 785,163
Net revenues from league expansion 7,113,665
Net insurance proceeds 5,592,143
Net realized and unrealized gains
(losses) from marketable securities 110,254 (3,595,647) 79,062
----------- ----------- -----------
Income from Continuing Operations
before Income Taxes 5,172,331 6,736,593 10,377,981
Provision for (benefit from) Income Taxes (345,000) (600,000)
----------- ----------- ------------
Income from Continuing Operations 5,517,331 7,336,593 10,377,981
49
Discontinued Operations:
Income (loss) from discontinued
operations (less applicable income
taxes of $7,095,000 in 1995 and
$450,000 in 1994) 10,638,675 2,145,576 (5,150,096)
Gain from disposal of discontinued
operations (less applicable income
taxes of $3,150,000 in 1994) 14,284,064
----------- ----------- -----------
NET INCOME 16,156,006 23,766,233 5,227,885
Net income applicable to
interests of General Partners 610,815 640,343 71,155
----------- ----------- -----------
Net income applicable to
interests of Limited Partners $15,545,191 $23,125,890 $5,156,730
=========== =========== ===========
Per unit:
Income from continuing operations $0.84 $1.11 $1.59
Net income $2.43 $3.61 $0.80
Distributions:
Boston Celtics Limited Partnership
unitholders:
Cash $1.50 $1.25 $1.25
Declared $1.50
Cash distribution to Boston Celtics
Communications Limited Partnership
unitholders (the purchase price of
BCCLP units) $2.40
Average units outstanding throughout
the period 6,399,722 6,399,722 6,419,493
Cash distribution to
Fox Television Stations, Inc. $ 3,774,000
</TABLE>
See notes to consolidated financial statements.
50
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Statements of Changes in Partners' Capital (Deficit)
<TABLE>
<CAPTION>
Limited Partners
-------------------------
Total Units Amount
-----------------------------------------
<S> <C> <C> <C>
BALANCE AT JUNE 30, 1992 ($10,984,723) 6,435,000 ($10,704,898)
Boston Celtics Limited Parntership
units contributed to Boston Celtics
Corporation (General Partner of
Celtics Limited Partnership) (35,278) 24,783
Net income for year ended
June 30, 1993 5,227,885 5,156,730
Cash distribution to Boston Celtics
Limited Partnership unitholders -
$1.25 per unit (8,125,000) (8,043,750)
Cash distribution to Boston Celtics
Communications Limited Partnership
unitholders - $2.40 per unit (the
purchase price of BCCLP units) (14,244,000) (14,101,560)
------------ --------- ------------
BALANCE AT JUNE 30, 1993 (28,125,838) 6,399,722 (27,668,695)
Net income for year ended
June 30, 1994 23,766,233 23,125,890
Distributions:
Cash by Boston Celtics Limited
Partnership to its unitholders -
$1.25 per unit (8,080,903) (7,999,653)
Cash by Celtics Limited Partnership to
Boston Celtics Corporation (General
Partners Share) (250,000)
Declared by Boston Celtics Communications
Limited Partnership to Celtics
Communications, Inc. (General Partners
Share) (150,000)
26% of Celtics Communications, Inc.'s 1%
interest in Boston Celtics Broadcasting
Limited Partnership transferred to
Minority Interest Held by FTS TelEvison,
Inc. 11,008
------------ --------- ------------
BALANCE AT JUNE 30, 1994 (12,829,500) 6,399,722 (12,542,458)
51
Net income for year ended
June 30, 1995 16,156,006 15,545,191
Distributions:
Boston Celtics Limited
Partnership to unitholders -
Cash - $1.50 per unit (9,697,083) (9,599,583)
Declared - $1.50 per unit (9,697,082) (9,599,582)
Cash by Boston Celtics Broadcasting
Limited Partnership to Celtics
Communications, Inc. (General Partners
Share) (74,000)
Cash by Celtics Limited Partnership to
Boston Celtics Corporation (General
Partners Share) (165,000)
Purchase of 99% of General Partners
interest in Boston Celtics Communications
Limited Partnership 74,858
Unrealized gain on
marketable securities 511,354 506,241
------------ --------- ------------
BALANCE AT JUNE 30, 1995 ($15,720,447) 6,399,722 ($15,690,191)
============ ========= ============
</TABLE>
See notes to consolidated financial statements.
52
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Statements of Changes in Partners' Capital (Deficit) (Continued)
<TABLE>
<CAPTION>
Boston Boston
Boston Celtics Celtics
Celtics Celtics Communications Broadcasting
Limited Limited Limited Limited
Total Partnership Partnership Partnership Partnership
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE AT JUNE 30, 1992 ($279,825) ($108,130) ( $98,607) ( $73,088)
Boston Celtics Limited Parntership
units contributed to Boston Celtics
Corporation (General Partner of
Celtics Limited Partnership) (24,783) (24,783)
Net income for year ended
June 30, 1993 71,155 52,088 63,611 (54,153) 9,609
Cash distribution to Boston Celtics
Limited Partnership unitholders -
$1.25 per unit (81,250) (81,250)
Cash distribution to Boston Celtics
Communications Limited Partnership
unitholders - $2.40 per unit (the
purchase price of BCCLP units) (142,440) (142,440)
--------- --------- --------- --------- ---------
BALANCE AT JUNE 30, 1993 (457,143) (279,732) 38,828 (152,760) (63,479)
Net income for year ended
June 30, 1994 640,343 233,595 156,861 180,074 69,813
Distributions:
Cash by Boston Celtics Limited
Partnership to its unitholders -
$1.25 per unit (81,250) (81,250)
Cash by Celtics Limited Partnership
to Boston Celtics Corporation
(General Partners Share) (250,000) (250,000)
Declared by Boston Celtics
Communications Limited Partnership
to Celtics Communications, Inc.
(General Partners Share) (150,000) (150,000)
26% of Celtics Communications, Inc.'s
1% interest in Boston Celtics
Broadcasting Limited Partnership
transferred to Minority Interest
Held by FTS Telivison, Inc. 11,008 11,008
--------- --------- --------- --------- ---------
BALANCE AT JUNE 30, 1994 (287,042) (127,387) (54,311) (122,686) 17,342
53
Net income for year ended
June 30, 1995 610,815 157,019 114,117 144,619 195,060
Distributions:
Boston Celtics Limited
Partnership to unitholders -
Cash - $1.50 per unit (97,500) (97,500)
Declared - $1.50 per unit (97,500) (97,500)
Cash by Boston Celtics
Broadcasting Limited Partnership
to Celtics Communications, Inc.
(General Partners Share) (74,000) (74,000)
Cash by Celtics Limited Partnership
to Boston Celtics Corporation
(General Partners Share) (165,000) (165,000)
Purchase of 99% of General Partners
interest in Boston Celtics
Communications Limited Partnership 74,858 74,858
Unrealized gain on
marketable securities 5,113 5,113
--------- --------- --------- --------- ---------
BALANCE AT JUNE 30, 1995 ( $30,256) ($160,255) ($105,194) $ 96,791 $ 138,402
========= ========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements.
54
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For The Year Ended
---------------------------------------------
June 30, June 30, June 30,
1995 1994 1993
------------- ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts:
Basketball regular season receipts:
Ticket sales $ 27,544,392 $ 19,946,664 $ 18,782,281
Television and radio
broadcast rights fees 20,344,641 18,294,528 13,703,860
Other, principally promotional advertising 6,382,803 4,688,551 3,840,347
Basketball playoff receipts 2,278,100 289,000 7,249,268
Television and radio broadcast receipts 48,428,604 37,851,535 42,538,257
------------- ------------ ------------
104,978,540 81,070,278 86,114,013
Costs and expenses:
Basketball regular season expenditures:
Team expenses 24,632,232 21,363,042 25,318,116
Game expenses 2,880,566 2,762,205 2,968,224
Basketball playoff expenses 719,799 475 608,854
Payments for program broadcast rights 9,021,984 10,440,227 13,061,585
Other television and
radio operating expenses 4,738,903 7,678,367 8,406,511
General and administrative expenses 16,426,791 14,308,429 10,151,401
Selling and promotional expenses 9,765,549 7,932,689 7,805,608
------------- ------------ ------------
68,185,824 64,485,434 68,320,299
------------- ------------ ------------
36,792,716 16,584,844 17,793,714
Interest income 5,173,939 2,667,452 505,970
Interest expense (8,635,122) (5,226,177) (3,156,556)
Ticket refunds paid (5,354) (1,837,619) (3,921,256)
Proceeds from league expansion 4,814,814
Payment of income taxes (3,751,320)
Insurance proceeds received 17,000,000
Payment of deferred compensation (3,624,319) (3,504,319) (726,250)
------------- ------------ ------------
NET CASH FLOWS FROM OPERATING ACTIVITIES 30,765,354 25,684,181 10,495,622
55
CASH FLOWS (USED BY) FROM INVESTING ACTIVITIES
Purchases of:
Marketable securities (76,285,589)
Short term investments (143,000,000) (66,542,982) (23,321,456)
Proceeds from sales of:
Marketable securities 54,237,041
Short term investments 77,000,000 64,274,412
Proceeds from issuance of option for acquisition
of 26% ownership interest in BCBLP 14,850,000
Proceeds from sale of WEEI 4,000,000
Capital expenditures (769,431) (769,398) (464,643)
Other receipts (expenditures) (825,359) (560,276) 95,292
------------- ------------ ------------
NET CASH (USED BY) FROM
INVESTING ACTIVITIES (89,643,338) 15,251,756 (23,690,807)
------------- ------------ ------------
NET CASH FLOWS (USED BY) FROM OPERATING
AND INVESTING ACTIVITIES (58,877,984) 40,935,937 (13,195,185)
</TABLE>
56
BOSTON CELTICS LIMITED PARTNERSHIP
and Subsidiaries
Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
For The Year Ended
--------------------------------------------
June 30, June 30, June 30,
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bank borrowings 85,000,000 15,000,000 50,750,000
Payment of bank borrowings (10,000,000) (19,560,000) (12,000,000)
Purchase of interest in Boston Celtics
Communications Limited Partnership from
Celtics Communications, Inc. (792,000)
Cash distributions:
To limited partners of Boston Celtics
Limited Partnership (9,599,583) (7,999,652) (8,043,750)
To limited partners of Boston Celtics
Communications Limited Partnership
the purchase price of BCCLP units) (14,244,000)
To Fox Television Stations, Inc. from Boston
Celtics Broadcasting Limited Partnership (3,774,000)
To General Partners (486,500) (331,250) (81,250)
------------ ------------ ------------
NET CASH FLOWS (USED BY) FROM
FINANCING ACTIVITIES 60,347,917 (12,890,902) 16,381,000
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH 1,469,933 28,045,035 3,185,815
Cash and cash equivalents
at beginning of period 38,093,082 10,048,047 6,862,232
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 39,563,015 $ 38,093,082 $ 10,048,047
============ ============ ============
Non-cash investing and financing activities:
Note receivable - league expansion $ 4,444,444
Distribution to limited parnters ($9,599,583)
and general partner ($97,500) of Boston
Celtics Limited Partnership declared
June 26, 1995, payable July 21, 1995 $ 9,697,082
</TABLE>
See notes to consolidated financial statements.
57
Notes to Consolidated Financial Statements
-----------------------------------------------------------------------------
Boston Celtics Limited Partnership And Subsidiaries
Note A - Basis of Presentation
Boston Celtics Limited Partnership (the "Boston Celtics", "BCLP" or the
"Partnership") a Delaware limited partnership, through Celtics Limited
Partnership ("CLP"), its 99% owned limited partnership, owns and operates
the Boston Celtics professional basketball team of the National Basketball
Association, and through BCCLP Holding Corporation ("Holdings") and Celtics
Investments Incorporated ("CII"), wholly-owned subsidiaries of BCLP and
Holdings' wholly-owned subsidiary Celtics Capital Corporation ("CCC") (which
holds investments) and Holdings' 99% owned limited partnership Boston
Celtics Communications Limited Partnership ("BCCLP") and its 99% owned
limited partnership Boston Celtics Broadcasting Limited Partnership
("BCBLP") which owns and operates Television Station WFXT - Channel 25
("WFXT") and until its sale on June 30, 1994 owned and operated Radio
Station WEEI - 590 AM both of Boston, Massachusetts. The General Partner of
BCLP is Celtics, Inc. ("CI"); the General Partner of CLP is Boston Celtics
Corporation ("BCC"); the General Partner of BCCLP is Celtics Communications,
Inc. ("CCI"); and the General Partner of BCBLP is BCCLP. The General
Partners of BCLP, CLP and BCCLP are Delaware corporations whose sole
stockholders are Don Gaston, Paul Dupee, Paul Gaston (son of Don Gaston)
and an affiliate. Alan Cohen's interest in the general partners was
acquired by Paul Gaston and an affiliate on August 30, 1995 (see Note Q -
Redemption of Partnership Interest Subsequent to Year End). The consolidated
financial statements include the accounts of the Partnership, Holdings, CCC,
CII and their subsidiary partnerships. All intercompany transactions are
eliminated in consolidation.
The previously reported agreement between BCLP and Fox Television, Inc.
("FTS") pursuant to which FTS acquired BCBLP was closed on July 7, 1995,
when FTS exercised its option (acquired for $15,000,000) for the acquisition
of a 26% interest in BCBLP, converted $10,000,000 of convertible debt for
an additional 25% interest in BCBLP and purchased the remaining 49% interest
in BCBLP for $80,000,000 cash. Accordingly the income statement has been
restated for all periods presented to report the results of operations of
Television Station WFXT and Radio Station WEEI (sold June 30, 1994) as
discontinued operations. For financial reporting purposes, the excess of the
proceeds from the issuance of the option to FTS over the carrying value of
the related 26% interest in BCLP and the gain on the sale of Radio Station
WEEI are reported as Gain From Disposal of Discontinued Operations
($14,284,000 net of related income taxes of $3,150,000) in 1994. The gain
from the conversion of the convertible note and sale of the remaining
interest for cash (Estimated to be $40,000,000 net of related income taxes
of $20,000,000) will be included in income when realized in July 1995.
58
Assets and liabilities of discontinued operations included in the balance
sheet at June 30, 1995 were:
<TABLE>
<S> <C>
Current assets:
Cash and cash equivalents and accounts receivable $29,893,362
Program broadcast rights - current portion 7,301,340
Prepaid expenses 261,761
-----------
Total curent assets 37,456,463
Property and equipment, net of depreciation of $3,261,633 1,657,936
Program broadcast rights - non-current portion 10,627,670
Other intangible assets, principally network affiliation agreement 3,150,450
-----------
52,892,519
-----------
Current liabilities:
Accounts payable and accrued expenses 1,479,045
Program broadcast rights payable - current portion 6,048,649
-----------
Total current liabilities 7,527,694
Program broadcast rights payable - noncurrent portion 9,061,781
Convertible subordinated note payable 10,000,000
-----------
Net assets $26,303,044
===========
</TABLE>
Pursuant to terms of the agreement, as amended, $15,288,714 of available
cash (as defined) ($7,338,583 to BCCLP, $152,887 to CCI and $7,797,244 to
FTS), was distributed prior to the closing and the $10,000,000 convertible
note was converted to a 25% interest in BCBLP at the closing.
Revenues of discontinued operations were $51,897,000, $38,295,000 and
$33,188000 for the years ended June 30, 1995, 1994 and 1993, respectively.
Note B - Significant Accounting Policies
Cash Equivalents and Marketable Securities: Cash equivalents represent
short-term investments with maturities at date of purchase of three months
or less. Marketable securities represent investments with maturities
greater than three months.
Concentrations of Credit Risk: Financial instruments which potentially
subject the Partnership to concentration of credit risk consist principally
of cash equivalents, marketable securities and accounts receivable. The
Partnership places its cash equivalents and marketable securities with
highly rated financial institutions and United States government entities.
Concentrations of credit risk with respect to accounts receivable are
limited due to the large number of customers comprising the Partnership's
customer base and their dispersion across many different industries and
geographic areas and to the shortness of payment terms.
59
Marketable Securities and Other Short Term Investments: Effective July 1,
1994, the Partnership adopted Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities"
(FAS 115) which established the accounting and reporting requirements for
investments in equity securities that have readily determinable fair values
and for all investments in debt securities. All affected investment
securities must be classified as securities to be held to maturity, for
trading, or available-for-sale.
Financial Instruments: Effective July 1, 1994, the Partnership adopted
Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments." This Statement extends existing fair value
disclosure practices for some instruments by requiring all entities to
disclose the fair value of financial instruments, both assets and
liabilities recognized and not recognized in the balance sheet, for which it
is practicable to estimate fair value. The carrying value reported in the
Consolidated Balance Sheet for financial instruments approximates their fair
values.
Franchise, Network Affiliation and Other Intangible Assets: These assets,
consisting principally of the National Basketball Association franchise, the
value assigned to the Fox network affiliation agreement and other intangible
assets are being amortized primarily on a straight-line basis over 40 years.
Program Broadcast Rights: Program broadcast rights for films and tapes are
recorded as assets, at cost, together with the related liability when
licenses are executed and the program is available for its first showing.
The asset is amortized on a straight-line method generally based on the
usage of the product or the term of the license. The current portion of
these rights represents the estimated amount to be amortized during the next
year. The liability to licensors is classified as current or noncurrent
based on the payment terms of the license agreements.
Property and Equipment: Property and equipment acquired in the purchase of
the television station is stated at the amounts based on fair value which
was allocated to these assets at the time of acquisition. Other property
and equipment is stated at cost. Building and leasehold improvements are
depreciated over the remaining lives of the leases. Other property and
equipment is being depreciated over estimated useful lives of from five to
fifteen years using straight line or accelerated methods of depreciation as
appropriate.
Basketball Operations: Revenues, principally ticket sales and television
and radio broadcasting fees generally are recorded as revenues at the time
the game to which such proceeds relate is played. Team expenses,
principally player and coaches salaries, related fringe benefits and
insurance, and game and playoff expenses, principally National Basketball
Association attendance assessments, arena rentals and travel, are recorded
as expense on the same basis. Accordingly, advance ticket sales and
payments on television and radio broadcasting contracts and payments for
team and game expenses not earned or incurred are recorded as deferred
revenues and deferred expenses, respectively, and amortized ratably as
regular season games are played. General and administrative and selling and
promotional expenses are charged to operations as incurred.
60
Television and Radio Operations: Revenues, principally advertising sold to
sponsors for commercials during program broadcasting, including Boston
Celtics basketball games, are recognized when the commercials are broadcast.
Operating expenses, principally broadcast production related costs, are
expensed as incurred.
Income Taxes: No provision for income taxes is required by BCLP or, prior to
their merger into Holdings in May 1993, for BCCLP or BCBLP. Their income and
expenses have been or prior to the merger were taxable to or deductible to
their partners. CCC, Holdings and CII, wholly-owned subsidiary corporations
of BCLP, are subject to income taxes and report their income tax provision,
including income (losses) of subsidiary partnerships BCCLP and BCBLP, using
the liability method in accordance with Financial Accounting Standards Board
(the "Board") Statement 109, Accounting for Income Taxes (see Note N). Under
this method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and
liabilities and are measured using tax rates and laws that will be in effect
when the differences are expected to reverse. Although BCLP is considering
strategies for exemption, under provisions of adopted legislation it may
become taxable for income tax purposes as if it were a corporation effective
July 1, 1998.
Net Income Per Unit: Net income per Unit is based upon the weighted average
number of units outstanding each year plus any unit equivalents attributable
to options, if material.
Note C - Marketable Securities and Other Short Term Investments
The following is a summary of marketable securities at June 30, 1995, which
are classified as available for sale securities:
<TABLE>
<CAPTION>
Available-for-Sale Securities
---------------------------------------------------
Gross Gross Estimated
Unrealized Unrealized Fair
Cost Gains Losses Value
---- ---------- ---------- ---------
<S> <C> <C> <C> <C>
U. S. corporate securities $ 6,709,160 $118,313 ($ 2,396) $ 6,825,077
U. S. government securities 37,912,153 403,349 (7,912) 38,307,590
----------- -------- -------- -----------
$44,621,313 $521,662 ($10,308) $45,132,667
=========== ======== ======== ===========
</TABLE>
Other short term investments, which consist primarily of private placement
notes with a commercial bank with a maturity of under one year, are
classified as held-to-maturity and are carried at amortized cost, which
approximates market value. There were no unrealized gains or losses at June
30, 1995.
61
The gross realized gains on available-for-sale securities totaled $76,140
and $63,328, for U. S. corporate securities and U. S. government securities
respectively, and the gross realized losses totaled $29,214 for U. S.
government securities. The net adjustment to unrealized holding gains on
available-for-sale securities included as a separate component of Partners'
Capital (Deficit) totaled $511,354 in 1995.
The amortized cost and estimated fair value of available-for-sale securities
at June 30, 1995, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because the issuers of
the securities may have the right to prepay obligations without prepayment
penalties.
<TABLE>
<CAPTION>
Estimated Fair
Cost Value
---- --------------
<S> <C> <C>
Due in one year or less $ 9,358,044 $ 9,390,231
Due after one year through three years 33,276,071 33,730,576
Due after three years 1,987,198 2,011,860
----------- -----------
$44,621,313 $45,132,667
=========== ===========
</TABLE>
Note D - Property and Equipment
Property and equipment are summarized as follows:
<TABLE>
<CAPTION>
June 30,
-----------------------
1995 1994
---- ----
<S> <C> <C>
Building and leasehold improvements $2,295,773 $1,837,985
Broadcast equipment 3,472,555 3,466,047
Furniture and fixtures 341,661 190,196
Construction in progress 41,573
---------- ----------
6,151,562 5,494,228
Less accumulated depreciation 3,647,208 2,949,994
---------- ----------
Net property and equipment $2,504,354 $2,544,234
========== ==========
</TABLE>
62
Note E - Deferred Compensation
Certain player contracts provide for guaranteed compensation payments which
are deferred until a future date. Operations are charged amounts equal to
the present value of future guaranteed payments in the period in which the
compensation is earned. The present value of payments due under these
agreements is as follows:
<TABLE>
<S> <C>
Years ending June 30, 1996 $ 4,928,000
1997 3,381,000
1998 1,444,000
1999 1,193,000
2000 991,000
2001 and thereafter 7,841,000
-----------
$19,778,000
===========
</TABLE>
Note F - Notes Payable
Notes payable are comprised of:
<TABLE>
<CAPTION>
June 30,
---------------------------
1995 1994
---- ----
<S> <C> <C>
Commercial bank borrowings -
CLP $ 50,000,000 $50,000,000
BCCLP 80,000,000
BCBLP 5,000,000
Convertible subordinated note payable 10,000,000 10,000,000
------------ -----------
140,000,000 65,000,000
Less amount included in current liabilities 80,000,000 5,000,000
------------ -----------
$ 60,000,000 $60,000,000
============ ===========
</TABLE>
63
The CLP balance represents the outstanding borrowings under a $50,000,000 loan
with its commercial bank. The loan agreement as amended permits borrowings of
up to $50,000,000 through December 31, 1997, with the available amount declining
thereafter by $1,250,000 per quarter. The term of the loan extends through
December 31, 2002. Interest on the initial $30,000,000 is payable quarterly in
arrears at an annual rate of 6.4% through December 31, 1995. Borrowings in
excess of the initial $30,000,000, and all borrowings outstanding after
December 31, 1995, bear interest at optional floating rates (7.375% and 4.875%
at June 30, 1995 and 1994). Quarterly payments of interest only are payable in
arrears through December 31, 1997. Effective January 1, 1998, the agreement
related to the loan requires quarterly payments of principal in the amount
necessary to reduce the outstanding principal balance to equal the declining
available borrowings, if necessary, together with interest. The borrowings
under the Bank Loan are secured by all of the assets and are the liability
of CLP, the basketball subsidiary partnership.
The BCCLP balance represents the outstanding borrowings under an $85,000,000
financing agreement dated October 31, 1994 with the Partnership's commercial
bank. The loan bears interest at a floating rate plus one percent (6.25% at
June 30, 1995 and a weighted average interest rate of 6.85% from September
15, 1994 to June 30, 1995 ) and is due on September 30, 1995. The balance
of the loan was repaid on July 7, 1995 concurrent with the sale of the
remaining partnership interests in BCBLP to FTS.
The principal of the Convertible Subordinated Note Payable (the "Fox Note")
is due in a single payment at May 11, 2000. The Fox Note bears interest at
the rate of 10% per year payable semi-annually in arrears. The Convertible
Subordinated Note Payable was converted into a 25% interest in BCBLP on July
7, 1995 (see Note A).
The agreements relating to both the commercial bank borrowings and the
convertible subordinated note payable include various provisions and
covenants customary in lending arrangements of this type including
limitations on distributions to unitholders. In addition, the agreements
relating to the commercial bank borrowings include covenants requiring BCBLP
to achieve certain minimum cash flows, and to restrict borrowings (other
than purchase money obligations) to borrowings with the consent of the bank.
At June 30, 1995 BCBLP was in compliance with these covenants. Aggregate
maturities of notes payable at June 30, 1995 are as follows:
<TABLE>
<S> <C>
Years ending June 30, 1996 $80,000,000
1997 0
1998 2,500,000
1999 5,000,000
2000 5,000,000
2001 and thereafter 37,500,000
</TABLE>
At June 30, 1995 and 1994, $237,639 and $394,479 were included in accounts
payable and accrued expenses for accrued interest.
64
Interest charged to operations in connection with borrowings (including the
BCBLP term loan with interest at optional floating rates (6.375% and 5.5% at
June 30, 1994 and 1993) from a commercial bank which was repaid during
fiscal year 1995 and a $15,000,000 short term loan with interest at 4% from
the commercial bank borrowed and repaid during fiscal year 1994) were
$8,478,000, $4,387,000 and $3,106,000 in the years ended June 30, 1995, 1994
and 1993, respectively.
Note G - Related Party Transactions
Management fee obligations of $2,333,974, $2,873,942 and $1,481,444
applicable to Celtics, Inc., general partner of the Partnership, Boston
Celtics Corporation, general partner of CLP, and Celtics Communications,
Inc., general partner of BCCLP and BCBLP were charged to operations during
the years ended June 30, 1995, 1994 and 1993, respectively. Boston Celtics
Corporation receives a management fee of $750,000 per annum subject to
annual increases based on annual cash flows from basketball operations after
June 30, 1989. Prior to a restructuring on January 21, 1993 pursuant to
which BCLP contributed all of its basketball assets and business, subject to
all of its liabilities (including its liabilities under the $50 million
commercial bank loan agreement) such fee was paid to Celtics, Inc. general
partner of BCLP. Celtics Communications, Inc. received management fees from
BCCLP and BCBLP based on a percentage of sales. The rates of these fees
were 1% through December 31, 1992 and 2% thereafter.
Note H - Program Broadcast Rights Obligations
The Partnership is committed to the following minimum payments for program
broadcast rights obligations of BCBLP (see Note A - Basis of Presentation
for a description of the disposition of BCBLP to FTS on July 7, 1995) for
films and programs available for broadcast at June 30, 1995:
<TABLE>
<S> <C>
Years ending June 30, 1996 $ 6,049,000
1997 5,669,000
1998 2,240,000
1999 1,014,000
2000 139,000
-----------
15,111,000
Less current portion 6,049,000
-----------
$ 9,062,000
===========
</TABLE>
65
Note I - Commitments and Contingencies
The Partnership has employment agreements with officers, coaches and players
of the basketball team (CLP) and an executive of BCCLP. Certain of the
contracts provide for guaranteed payments which must be paid even if the
employee is injured or terminated. Amounts required to be paid under such
contracts in effect as of September 20, 1995, including option years and
$4,175,000 included in accounts payable at June 30, 1995, but excluding
amounts previously earned (see Note E - Deferred Compensation), are as
follows:
<TABLE>
<S> <C>
Years ending June 30, 1996 $20,630,000
1997 24,277,000
1998 24,508,000
1999 20,743,000
2000 20,163,000
2001 and thereafter 20,600,000
</TABLE>
BCLP maintains disability and life insurance policies on most of its key
players. The level of insurance coverage maintained is based on BCLP's
determination of the insurance proceeds which would be required to meet its
guaranteed obligations in the event of permanent or total disability of its
key players.
Unavailable program rights commitments -
The Partnership is committed to the following payments for program broadcast
rights obligations of BCBLP (see Note A - Basis of Presentation for a
description of the disposition of BCBLP to FTS on July 7, 1995) for film and
program rights not available for broadcast at June 30, 1995:
<TABLE>
<S> <C>
Years ending June 30, 1996 $3,661,000
1997 3,983,000
1998 3,902,000
1999 2,601,000
</TABLE>
66
Lease commitments -
The Partnership and its subsidiaries are committed under noncancelable,
long-term leases substantially all of which are related to BCBLP (see Note A
- Basis of Presentation for a description of the disposition of BCBLP to FTS
on July 7, 1995) for certain of their facilities and equipment. Rent
expense charged to operations during the years ended June 30, 1995, 1994 and
1993 were $2,272,000, $2,746,000 and $2,670,000, respectively. Minimum
annual payments, including renewable option periods, required by these
leases are:
<TABLE>
<S> <C>
Years ending June 30, 1996 $730,000
1997 752,000
1998 670,000
1999 646,000
2000 650,000
2001 and thereafter 827,000
</TABLE>
Note J - Options to Acquire Units of Partnership Interest
On December 31, 1993 the Partnership granted options to three employees to
acquire 530,000 Limited Partnership Units of BCLP (Units) at the price of
$16.25 per Unit less all cash distributions per Unit made by the Partnership
from July 31, 1993 to the date of exercise. Options for 500,000 of such
Units become exercisable in installments as follows:
<TABLE>
<CAPTION>
Aggregate Amount of
Period Option Exercisable
------ -------------------
<C> <C>
June 30, 1994 - June 29, 1995 1%
June 30, 1995 - June 29, 1996 60%
June 30, 1996 - June 29, 1997 80%
June 30, 1997 - December 31, 2003 100%
</TABLE>
Options for the remaining 30,000 Units became exercisable June 30, 1994.
All of the options expire 10 years from the date of grant. In addition to
exercising the right to purchase units pursuant to the options, a holder may
exercise a Unit Appreciation Right, entitling the holder to receive an
amount equal to the excess of the fair market value of a Unit, determined on
the date of exercise over the exercise price of the related option on the
date the Unit Appreciation Right was granted in which event options for an
equivalent number of units will be cancelled. In the sole discretion of the
General Partner of BCLP payments of amounts payable pursuant to Unit
Appreciation Rights may be made solely in Units, solely in cash, or in a
combination of cash and Units. The compensation element of the options,
$3,174,000 and $850,000 in the years ended June 30, 1995 and June 30, 1994,
respectively, is being charged to earnings ratably over the period from the
date of grant until the date of exercise based on the exercise price of the
optioned Units at the end of each quarter. The market price of Limited
Units of BCLP on June 30, 1995 was $21.25.
67
Note K - Benefit Plans
Each of the Partnership's subsidiaries have defined contribution plans
covering substantially all employees who meet certain eligibility
requirements. Participants may make contributions to the plans from 3% to
15% of their compensation (as defined). Contributions to these plans range
from 50% to 100% on the first 2.5% to 5% of compensation contributed by each
participant. Contributions are fully vested after three to five years of
service. Costs of the plans charged to operations amounted to $374,623,
$219,819 and $226,360 during the years ended June 30, 1995, 1994 and 1993,
respectively.
A subsidiary partnership participated in a multiemployer retirement plan
covering certain union employees of the radio station. This subsidiary
charged $78,746 and $128,698 to operations during the years ended June 30,
1994 and 1993, respectively, for its share of plan costs.
Note L - Cash Flows
Reconciliations of net income to net cash flows from operating activities
are as follows:
<TABLE>
<CAPTION>
Year ended June 30,
-------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net income $16,156,006 $23,766,233 $ 5,227,885
Items not affecting cash flows from operating activities:
Depreciation 766,264 1,042,785 884,668
Amortization 343,695 1,166,765 1,267,199
Provision for doubtful accounts 185,193 75,954 192,185
Changes in -
Accrued interest receivable (1,815,877) 43,651 (357,838)
Accounts receivable (4,616,167) (1,764,151) 1,257,876
Notes receivable (4,444,444)
Accounts payable and accrued expenses 10,972,665 4,553,349 1,280,052
Ticket refunds payable (5,354) (932,383) (858,506)
Deferred compensation (1,751,374) 9,803,180 2,206,951
Deferred game revenues 8,086,174
Net realized and unrealized gains on disposition
of assets and investments (110,254) (13,734,953) 79,062
Minority interest in earnings of BCBLP 6,853,486 1,710,079
Other 145,341 (46,328) (683,912)
----------- ----------- -----------
Net cash flows from operating activities $30,765,354 $25,684,181 $10,495,622
=========== =========== ===========
</TABLE>
The change in accounts receivable is after write-offs, net of recoveries, of
$397,544, $6,376 and $131,903 in 1995, 1994 and 1993, respectively.
68
Note M - Quarterly Results (Unaudited)
A summary of operating results, net income per unit based on the average
units outstanding throughout each year calculated for financial statement
purposes only, and cash distributions for the quarterly periods in the two
years ended June 30, 1994 is set forth below (000's omitted).
<TABLE>
<CAPTION>
Quarter Ended
-------------------------------------------------------------
September 30, December 31, March 31, June 30,
1994 1994 1995 1995 Total
------------- ------------ --------- -------- -----
<S> <C> <C> <C> <C> <C>
Year Ended June 30, 1995 -
Revenues $0 $16,927 $25,994 $9,404 $52,325
Net income (loss) from continuing operations (3,727) (64) 4,905 4,403 5,517
Net income (loss) from continuing operations
applicable to Limited Partners (3,662) (70) 4,816 4,312 5,396
Net income (loss) (2,115) 4,651 6,018 7,602 16,156
Net income (loss) applicable to
Limited Partners (2,125) 4,465 5,843 7,362 15,545
Per Unit:
Net income (loss) from continuing
operations applicable to Limited Partners ($.57) ($.01) $.75 $ .67 $ .84
Net income (loss) applicable to
Limited Partners ($.33) $ .70 $.91 $1.15 $2.43
Distributions to BCLP unitholders:
Cash $1.50 $1.50
Declared $1.50 $1.50
<CAPTION>
Quarter Ended
-------------------------------------------------------------
September 30, December 31, March 31, June 30,
1993 1993 1994 1994 Total
------------- ------------ --------- -------- -----
<S> <C> <C> <C> <C> <C>
Year Ended June 30, 1994 -
Revenues $0 $15,032 $21,060 $8,491 $44,583
Net income from continuing operations 2,765 2,325 2,205 42 7,337
Net income from continuing operations
applicable to Limited Partners 2,705 2,257 2,102 60 7,124
Net income 2,151 16,112 1,645 3,858 23,766
Net income applicable to Limited Partners 2,101 15,717 1,554 3,754 23,126
Per Unit:
Net income from continuing operations
applicable to Limited Partners $.42 $ .35 $.33 $.01 $1.11
Net income applicable to Limited Partners $.33 $2.46 $.24 $.58 $3.61
Cash distributions to BCLP Unitholders $1.25 $1.25
</TABLE>
69
Note N - Income Taxes
No income tax provision was made for Holdings or its subsidiary partnerships
BCCLP or BCBLP at June 30, 1993 because their taxable loss for the period
from May 6 (date of merger) to June 30, 1993 was not material.
For financial reporting purposes a valuation reserve of $11 million was
established to reduce the deferred tax assets (intangibles) acquired in the
merger to the amount considered realizable on a more likely than not basis.
Components of deferred tax liabilities and assets, all of which relate to
Holdings or its subsidiary partnerships BCCLP and BCBLP are:
<TABLE>
<CAPTION>
June 30,
-------------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Deferred tax liabilities:
Deposit related to issuance of option to acquire 26%
partnership interest in BCBLP (tax over financial basis) $ 6,000,000 $ 6,000,000
Financial basis in excess of tax basis of assets
related to restructuring of ownership of BCCLP 11,000,000
----------- -----------
Total deferred tax liabilities 17,000,000 6,000,000
----------- -----------
Deferred tax assets:
Intangibles arising from acquisition of BCBLP in a
merger accounted for as a transaction between entities
under common control (tax over financial basis) 11,000,000 11,000,000 $11,000,000
Valuation allowance for deferred tax assets 0 (7,900,000) (11,000,000)
----------- ----------- -----------
Net deferred tax assets 11,000,000 3,100,000 0
----------- ----------- -----------
Net deferred tax liability $ 6,000,000 $ 2,900,000 $ 0
=========== =========== ===========
</TABLE>
Income taxes applicable to the sale of BCBLP to FTS, Inc. ($5,200,000) other
than taxes applicable to the recognition of gain from the sale of the option
to FTS, Inc. (see Note A) are included in other current assets and deferred
charges on the balance sheet at June 30, 1995 and are to be charged to
income when the gain on the sale is recognized upon its realization on
July 7, 1995.
At June 30, 1995 the tax basis of the net assets of BCLP and CLP exceeded
their financial bases by approximately $49,200,000, consisting primarily of
Deferred Compensation of $21,200,000 and the National Basketball Franchise
of $28,000,000. A substantial part of the Deferred Compensation will be paid
prior to July 1, 1998, when BCLP may become subject to federal income taxes.
No deferred tax assets or liabilities have been provided for these
differences because BCLP and CLP are not subject to income taxes.
70
The provision for income taxes included in the consolidated statement of
income is comprised of state taxes currently payable of $1,750,000 and
federal taxes currently payable of $5,000,000 for the year ended June 30,
1995 and state taxes currently payable of $100,000 and deferred taxes,
principally federal of $2,900,000 for the year ended June 30, 1994.
A reconciliation of the statutory federal income tax rate applied to
reported pre-tax earnings of CII, CCC, Holdings, BCCLP and BCBLP
($23,400,000 in 1995 and $17,982,000 in 1994) before deduction of taxable
minority interest ($6,800,000 in 1995 and $1,700,000 in 1994) to the
effective tax rate of the provision is:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Statutory federal income tax rate 34.0% 34.0%
State income taxes, net of federal tax benefit 6.3% 6.3%
Benefit from reversal of reserve for valuation
of deferred tax assets (20.7%)
Income tax applicable to sale of BCBLP to
FTS, Inc. to be charged to operations
when the sale is realized (See Note A) (11.7%)
Goodwill ( 2.8%)
Other .5% ( 0.1%)
----- -----
Effective tax rate 29.1% 16.7%
===== =====
</TABLE>
Note O - Accounts Payable and Accrued Expenses
The balances include accrued compensation of $8,331,000 and $1,768,000 at
June 30, 1995 and 1994 and accrued management fees of $586,000 and
$1,276,000 due to the general partners of the Partnership and its
subsidiaries at June 30, 1995 and 1994.
Note P - Advertising
The Partnership charged $1,135,000, $1,534,000 and $1,025,000 to operations
for advertising during the years ended June 30, 1995, 1994 and 1993,
respectively, of which $464,000 and $639,000 were included in accounts
payable and accrued expenses at June 30, 1995 and 1994, respectively.
Note Q - Redemption of Partnership Interest Subsequent to Year End
On August 30, 1995 the Partnership redeemed an aggregate of 758,444 units
representing assignments of beneficial ownership of limited partnership
interest in BCLP. The redeemed units were beneficially owned by Alan Cohen
and his son and daughter. Mr. Cohen was formerly an officer and director of
the corporate general partners of the Partnership and its 99% owned limited
partnerships BCCLP and BCBLP.
71
Under the terms of the redemption, Mr. Cohen's son and daughter were paid
$1,941,450 equal to $21.50 in cash for each of the 90,300 units acquired
from them.
Mr. Cohen received two notes from BCLP in exchange for the aggregate of
668,144 units acquired by BCLP from him. The two notes have an aggregate
initial face amount of $14,365,096 equal to $21.50 per unit for each unit
acquired from him. The two notes, which are due and payable on July 1, 2000
(unless prepaid earlier pursuant to mandatory prepayment provisions
contained therein) also provide that the amounts to be paid to Mr. Cohen
pursuant to the terms of the notes will be increased by specified amounts
on each July 1 during their term. If Mr. Cohen holds the two notes until
July 1, 2000 he would be entitled to receive aggregate payments (excluding
interest) in the amount of $20,044,320 equal to $30.00 per unit for each
unit acquired from him. Each of the notes bears interest payable quarterly
at the rate of 7.76% per annum.
The Partnership also announced that CLP has entered into a three year
consulting agreement with Alan Cohen. The consulting agreement provides that
Mr. Cohen is to be paid $260,000 per year in exchange for making himself
available to provide consulting services to CLP. In addition, the interests
of Mr. Cohen in the corporate general partners of the Partnership, CLP and
BCCLP were acquired by Mr. Paul Gaston and an affilliate.
72
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
BOSTON CELTICS LIMITED PARTNERSHIP
By: Celtics, Inc., General Partner
Date: September 28, 1995 By: /s/ Stephen C. Schram
Stephen C. Schram
Director and President
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
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title* Date
--------- ------ ----
<S> <S> <S>
/s/ Paul E. Gaston Chairman of the Board September 28, 1995
Paul E. Gaston and Director
/s/ Don F. Gaston Director September 28, 1995
Don F. Gaston
/s/ Paul R. Dupee, Jr. Vice Chairman of the September 28, 1995
Paul R. Dupee, Jr. Board and Director
/s/ Paula B. Gaston Director September 28, 1995
Paula B. Gaston
/s/ John H.M. Leithead Director September 28, 1995
John H.M. Leithead
/s/ John B. Marsh, III Director September 28, 1995
John B. Marsh, III
/s/ Thomas M. Bartlett Jr. Executive Vice President, September 28, 1995
Thomas M. Bartlett, Jr. Chief Financial Officer,
Chief Accounting Officer
and Director
/s/ Richard G. Pond Vice President, September 28, 1995
Richard G. Pond Controller and
Secretary
<FN>
<F1> * Title indicates position with General Partner.
</FN>
</TABLE>
73
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF BOSTON CELTICS LIMITED PARTNERSHIP AND ITS
SUBSIDIARIES AS OF JUNE 30, 1995 AND THE RELATED CONSOLIDATED STATEMENT OF
INCOME FOR THE YEAR ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 39,563
<SECURITIES> 45,133
<RECEIVABLES> 16,431
<ALLOWANCES> 195
<INVENTORY> 0
<CURRENT-ASSETS> 186,101
<PP&E> 6,151
<DEPRECIATION> 3,647
<TOTAL-ASSETS> 210,655
<CURRENT-LIABILITIES> 126,010
<BONDS> 50,000
<COMMON> 0
<PREFERRED-MANDATORY> 0
<PREFERRED> 0
<OTHER-SE> (15,720)
<TOTAL-LIABILITY-AND-EQUITY> 210,655
<SALES> 0
<TOTAL-REVENUES> 52,325
<CGS> 0
<TOTAL-COSTS> 51,810
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,075
<INCOME-PRETAX> 5,172
<INCOME-TAX> (345)
<INCOME-CONTINUING> 5,517
<DISCONTINUED> 10,639
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,156
<EPS-PRIMARY> 2.43
<EPS-DILUTED> 2.43
</TABLE>