1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] Annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1994
or
[ ] Transition report pursuant to Section 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
---------- ----------
Commission file number: 0-12700
BLOCKBUSTER ENTERTAINMENT
RETIREMENT AND SAVINGS PLAN
(Full Title of the Plan)
VIACOM INC.
(Name of Issuer of Securities Held Pursuant to the Plan)
1515 Broadway
New York, New York 10036-5794
(Address of Principal Executive Office)
2
BLOCKBUSTER ENTERTAINMENT
RETIREMENT AND SAVINGS PLAN
DECEMBER 31, 1994
CONTENTS
Page
----
Report of Independent Auditors 1
Audited Financial Statements:
Statement of Assets Available for Benefits with Fund Information
as of December 31,1994 2
Statement of Assets Available for Benefits with Fund Information
as of December 31,1993 3
Statement of Changes in Assets Available for Benefits with Fund Information
for the period ended December 31, 1994 4
Notes to Financial Statements 5
Supplemental Schedules:
Schedule I - Item 27a - Schedule of Assets Held
for Investment Purposes 10
Schedule II - Item 27d - Schedule of Reportable Transactions 11
All other schedules are omitted as not applicable or not required.
3
REPORT OF INDEPENDENT AUDITORS
To the Plan Administrator of
Blockbuster Entertainment
Retirement and Savings Plan:
We have audited the statement of assets available for benefits with fund
information of Blockbuster Entertainment Retirement and Savings Plan as of
December 31, 1994 and the related statement of changes in assets available for
benefits with fund information for the year then ended. These financial
statements and the schedules referred to below are the responsibility of the
Plan's Administrator. Our responsibility is to express an opinion on these
financial statements and schedules based on our audit. The financial statements
of Blockbuster Entertainment Retirement & Savings Plan as of December 31, 1993
were audited by other auditors whose report dated May 16, 1994 expressed an
unqualified opinion on the statements.
We conducted our audit 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 the Plan Administrator, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of the Plan as of
December 31, 1994, and the changes in its assets available for benefits for the
year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes and reportable transactions (Schedules I and II
respectively) are presented for purposes of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules have been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Hollywood, Florida Shaun M. Davis, CPA
June 23, 1995
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BLOCKBUSTER ENTERTAINMENT
RETIREMENT AND SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1994
Participant Directed
-------------------------------------------------------------------
Nations
Nations Nations Strategic
Capital Balanced Fixed Nations
Company Stock Growth Assets Income Prime
Fund Fund Fund Fund Fund Total
----------- ----------- ----------- ----------- ----------- -----------
Investments, at fair value:
Company Stock Fund $ 2,041,627 $ 2,041,627
Shares of registered
investment companies:
Nations Capital Growth
Fund $ 1,584,876 1,584,876
Nations Balanced Assets
Fund $ 1,127,608 1,127,608
Nations Strategic Fixed
Income Fund $ 790,772 790,772
Nations Prime Fund $ 1,270,976 1,270,976
----------- ----------- ----------- ----------- ----------- -----------
Total investments 2,041,627 1,584,876 1,127,608 790,772 1,270,976 6,815,859
----------- ----------- ----------- ----------- ----------- -----------
Contributions receivable:
Employer's 454,872 308,092 232,122 1,620,392 2,615,478
Participants' 9,251 4,926 4,093 20,987 39,257
----------- ----------- ----------- ----------- ----------- -----------
Total contributions
receivable 464,123 313,018 236,215 1,641,379 2,654,735
----------- ----------- ----------- ----------- ----------- -----------
Cash 1,668
----------- ----------- ----------- ----------- ----------- -----------
Contingency
----------- ----------- ----------- ----------- ----------- -----------
Assets available for benefits $ 2,041,627 $ 2,048,999 $ 1,440,626 $ 1,026,987 $ 2,912,355 $ 9,472,262
=========== =========== =========== =========== =========== ===========
See notes to financial statements.
2
5
BLOCKBUSTER ENTERTAINMENT
RETIREMENT AND SAVINGS PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
AS OF DECEMBER 31, 1993
Participant Directed
--------------------------------------------------------------
Nations
Nations Nations Strategic
Capital Balanced Fixed Nations
Company Stock Growth Assets Income Prime
Fund Fund Fund Fund Fund Total
---------- ---------- ---------- ---------- ---------- ----------
Investments, at fair value
Company Stock Fund $ 658,212 $ 658,212
Shares of registered
investment companies:
Nations Capital Growth
Fund $ 436,542 436,542
Nations Balanced Assets
Fund $ 357,086 357,086
Nations Strategic Fixed
Income Fund $ 265,703 265,703
Nations Prime Fund $ 241,710 241,710
---------- ---------- ---------- ---------- ---------- ----------
Total investments 658,212 436,542 357,086 265,703 241,710 1,959,253
---------- ---------- ---------- ---------- ---------- ----------
Contributions receivable:
Employer's 150,257 85,951 71,076 55,278 113,344 475,906
Participants' 7,373 2,639 3,490 2,470 2,470 18,379
---------- ---------- ---------- ---------- ---------- ----------
Total contributions
receivable 157,630 88,590 74,566 57,748 115,751 494,285
---------- ---------- ---------- ---------- ---------- ----------
Contingency
---------- ---------- ---------- ---------- ---------- ----------
Assets available for benefits $ 815,842 $ 525,132 $ 431,652 $ 323,451 $ 357,461 $2,453,538
========== ========== ========== ========== ========== ==========
See notes to financial statements.
3
6
BLOCKBUSTER ENTERTAINMENT
RETIREMENT AND SAVINGS PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE PERIOD ENDED DECEMBER 31, 1994
Participant Directed
----------------------------------------------------------------------------------
Nations
Nations Nations Strategic
Capital Balanced Fixed Nations
Company Stock Growth Assets Income Prime
Fund Fund Fund Fund Fund Total
------------- ------------- ------------- ------------- ------------- -------------
Additions to assets
attributed to:
Contributions:
Participants' $ 1,437,082 $ 1,147,159 $ 826,888 $ 587,151 $ 987,312 $ 4,985,592
Employer's 7 454,905 308,109 232,122 1,620,845 2,615,988
------------- ------------- ------------- ------------- ------------- -------------
1,437,089 1,602,064 1,134,997 819,273 2,608,157 7,601,580
------------- ------------- ------------- ------------- ------------- -------------
Net realized and unrealized
gains (losses) on
investments 144,477 (58,240) (42,481) (44,525) (769)
Investment income 15 45,095 22,568 28,097 24,874 120,649
------------- ------------- ------------- ------------- ------------- -------------
Total additions 1,581,581 1,588,919 1,115,084 802,845 2,633,031 7,721,460
------------- ------------- ------------- ------------- ------------- -------------
Deductions from assets
attributed to:
Benefits paid to
participants 304,877 119,785 98,696 72,345 105,340 701,043
------------- ------------- ------------- ------------- ------------- -------------
Total deductions 304,877 119,785 98,696 72,345 105,340 701,043
------------- ------------- ------------- ------------- ------------- -------------
Net increase prior to
interfund transfers 1,276,704 1,469,134 1,016,388 730,500 2,527,691 7,020,417
Interfund transfers, net (45,126) 56,919 (5,553) (25,203) 18,963
------------- ------------- ------------- ------------- ------------- -------------
Net increase 1,231,578 1,526,053 1,010,835 705,297 2,546,654 7,020,417
Assets available for benefits:
Beginning of period 815,842 525,132 431,652 323,451 357,461 2,453,538
Adjustment to Beginning
Balance (171) (100) (11) (10) (1,401) (1,693)
------------- ------------- ------------- ------------- ------------- -------------
Adjusted Beginning Balance 815,671 525,032 431,641 323,441 356,060 2,451,845
------------- ------------- ------------- ------------- ------------- -------------
End of period $ 2,047,249 $ 2,051,085 $ 1,442,476 $ 1,028,738 $ 2,902,714 $ 9,472,262
============= ============= ============= ============= ============= =============
See notes to financial statements.
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BLOCKBUSTER ENTERTAINMENT
RETIREMENT AND SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 1 - DESCRIPTION OF PLAN:
The following description of the Blockbuster Entertainment Retirement and
Savings Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan document for a more complete description
of the Plan.
The Plan was established effective July 1, 1993. The Plan, as amended, is a
defined contribution plan commonly known as an Internal Revenue Code ("IRC")
section 401(k) profit sharing plan and is subject to the Employee Retirement
Income Security Act of 1974 ("ERISA") as amended.
To become a participant, an employee must complete one year of service and
attain the age of 21. Participation becomes effective on the January 1 or July
1 immediately following completion of the age and service requirement. There
were 10,190 active Plan participants as of December 31,1994.
On September 29, 1994, Blockbuster was merged with and into Viacom, Inc. (the
"Blockbuster Merger"). Each share of Blockbuster Common Stock outstanding at
the time of the Blockbuster Merger was converted into the right to receive (i)
0.08 of a share of Viacom Class A Common Stock, (ii) 0.60615 of a share of
Viacom Class B Common Stock, and (iii) one right to receive up to a fraction of
a share of Viacom Class B Common Stock. Included in the Viacom Inc. securities
were certain variable common rights ("VCRs") representing the right to receive
Viacom Class B common stock depending on the market value of Viacom Class B
common stock during a specified period following the merger. The Plan's
fiduciary assumed the VCRs were not "Qualifying Employer Securities" under
ERISA and that it was a prohibited transaction under ERISA Sections 406 and
407 for the Plan to acquire and hold the VCRs. The Plan's fiduciary determined
that it was in the best interest of plan participants to sell the VCRs and such
sales were completed by December, 1994.
Pursuant to the Blockbuster Merger, Blockbuster ceased to exist as a company
and Viacom (the "Company"), the employer, is the Plan Administrator. The
Company has entered into an agreement whereby NationsBank of Georgia, N.A. (the
"Trustee") has been appointed Trustee. Under the terms of the agreement, the
Trustee holds and invests the funds of the Plan subject to the direction of the
Plan Advisory Committee. The Plan provides five distinct investment fund
alternatives for participants. Participant may direct the investment of the
amount allocated to their account into any of the fund options.
5
8
BLOCKBUSTER ENTERTAINMENT RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - continued
The Company has selected the following investment options for use in the Plan:
Company Stock Fund - Funds are invested in common stock of the Company and cash
equivalent.
Nations Capital Growth Fund - Funds are invested primarily in common stocks of
companies with above average potential for capital appreciation.
Nations Balanced Assets Fund - Funds are invested primarily among three asset
groups: common stocks, fixed income securities and cash equivalent.
Nations Strategic Fixed Income Fund - Funds are invested primarily in
investment grade fixed income and related securities.
Nations Prime Fund - Funds are invested primarily in money market instrument.
The Plan includes a 401(k) arrangement by which eligible participants may
direct the Company to contribute a portion of their compensation to the Plan.
Amount contributed by participants are 100% vested at all times. In 1994, each
qualified employee could contribute up to $9240, subject to limitations by the
Internal Revenue Code. During each Plan year, the Company will contribute at
its discretion to the Plan an amount determined by the Company. The Company may
choose not to contribute to the Plan for a particular Plan year. Participants
must be employed by the Company on the last day of the Plan year to be entitled
to an allocation of the Company's contribution. Company contributions are
allocated to active participant' accounts using a ratio based upon relative
employee compensation and become vested in accordance with the following
schedule:
Percent of
Nonforfeitable
Years of Service Interest
---------------- --------------
Less than 1 0%
1 25%
2 50%
3 75%
4 or more 100%
Additionally, allocated amounts become fully vested upon normal retirement age
as defined in the Plan, death or termination of employment because of inability
to work due to total or permanent disability while employed. The Company
retains the right to amend, and if necessary, terminate the Plan. In the event
of Plan termination, all amounts credited to participants' accounts become 100%
vested. Nonvested amount forfeited upon any participant's withdrawal are
allocated to active participant's accounts using a ratio based upon relative
employee compensation.
The Company amended the Plan on December 13,1993 to grant credit for years of
service to employees of businesses which are merged or consolidated with the
Company subsequent to July 1, 1993. Credit for years of service granted by this
amendment applies only for purposes of determining participation and not for
purposes of determining vesting in the Plan.
6
9
BLOCKBUSTER ENTERTAINMENT RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - continued
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting-
The financial statements of the Plan are prepared under the accrual method of
accounting.
Investment Valuation and Income Recognition-
The Plan's investments are stated at fair value. Shares of common stock of the
Company included in the Company Stock Fund are stated at current value based on
the last reported sales price on the last business day of the year. Shares of
registered investment companies are valued at quoted market prices which
represent the net asset value of shares held by the Plan at period end.
Net realized and unrealized gains (losses) on investments consist of the
following:
Realized gains (losses) on sales of investments represent the difference
between proceeds received at the time of sale and the cost of the assets at the
time of purchase.
Unrealized appreciation (depreciation) of investments represents the difference
between the current value of assets at year end and the cost of those assets at
the time of purchase.
Purchases and sales of securities are recorded on a trade-date basis.
Investment income consists of interest and dividend income.
Payment of Benefit-
Benefits are recorded when paid.
NOTE 3 - PARTIES-IN-INTEREST TRANSACTIONS:
Certain Plan investments are shares of mutual funds managed by NationsBank of
North Carolina, N.A., an affiliate of the Trustee. The Company pays for all
fees and expenses of the Plan. The fees and expenses primarily consist of
legal, accounting, and other administrative services.
NOTE 4 - INCOME TAX STATUS:
The Plan filed a request with the Internal Revenue Service ("IRS") to determine
whether the Plan is qualified under Section 401 of the IRC. Although the Plan
has not received a determination letter from the IRS, it is the Plan Advisory
Committee's opinion that the Plan as amended and as currently operating is in
compliance with all applicable provisions of the IRC.
NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
The following is a reconciliation of assets available for benefits per the
financial statements to net assets available for benefits per the Form 5500 at
December 31, 1994: -
Assets available for benefit per the financial statements $9,472,262
Less: Amounts allocated to withdrawing participants 7,990
----------
Net assets available for benefits per the Form 5500 $9,464,272
==========
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10
BLOCKBUSTER ENTERTAINMENT RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - continued
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the period ended December 31, 1994:
Benefits paid to participants per the financial statements $701,043
Add: Amounts allocated to withdrawing participants at
December 31, 1994 7,990
--------
Benefits paid to participants per the Form 5500 $709,033
========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, 1994 but are not yet paid as of that date.
The following is a reconciliation of net realized and unrealized gains on
investments per the financial statements to the sum of net gain on sale of
assets, unrealized appreciation of assets and net investment gain from
registered investment companies per the Form 5500 at December 31, 1994:
Net realized and unrealized losses per the financial statements $ (769)
Add: Investment income from registered investment companies 120,649
---------
Total net investment gains per the Form 5500 $ 119,880
=========
The following is a reconciliation of investment income per the financial
statements to net investment gain from registered investment companies per the
Form 5500 for the period ended December 31, 1994:
Investment income per the financial statements $ 120,649
Add: Net realized and unrealized losses from registered
investment companies (145,246)
---------
Net investment loss from registered investment companies
per the Form 5500 $ (24,597)
=========
NOTE 6 - UNIT INFORMATION:
The Plan assigns units to participants within each of the respective funds used
in the Plan. Total units and net asset values per unit for each of the funds at
December 31, 1994 is as follows:
Total Net Asset
Units Value per Unit
----- --------------
Company Stock Fund 180,127 $ 11.33
Nations Capital Growth Fund 144,342 10.98
Nations Balanced Assets Fund 108,216 $ 10.42
Nations Strategic Fixed Income Fund 84,665 $ 9.34
Nations Prime Fund 1,270,976 $ 1.00
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BLOCKBUSTER ENTERTAINMENT RETIREMENT AND SAVINGS PLAN
Notes to Financial Statements - continued
NOTE 7 - SUBSEQUENT EVENT:
The plan was further amended on February 24, 1995 to include that for each plan
year. The Company will contribute for each participant a matching contribution
equal to 40% of the participant's "eligible contributions". A participant's
"eligible contributions" equals the amount of the participant's elective
deferrals for the plan year which does not exceed 5% of a participant's
compensation for the payroll period.
NOTE 8 - CONTINGENCY:
The Plan will terminate upon the merger of the Company (see Note 1), unless the
successor makes provisions to continue the Plan, in which event the successor
must substitute itself as the Company under the Plan.
9
12
BLOCKBUSTER ENTERTAINMENT
RETIREMENT AND SAVINGS PLAN
ITEM 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1994
(c) Description of investment
including maturity date, rate
(b) Identity of issue, borrower, of interest, collateral, par or (e) Current
(a) lessor or similar party maturity value (d) Cost Value
- --- ----------------------------------- ------------------------------ -------- -----------
* Company Stock Fund 180,127 units $1,875,968 $2,041,627
* Nations Capital Growth Fund 144,342 units 1,625,577 1,584,876
* Nations Balanced Assets Fund 108,216 units 1,163,919 1,127,608
* Nations Strategic Fixed Income Fund 84,665 units 838,662 790,772
* Nations Prime Fund 1,270,976 units 1,270,976 1,270,976
---------- ----------
$6,775,102 $6,815,859
========== ==========
* Identified as a party-in-interest to the Plan.
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13
BLOCKBUSTER ENTERTAINMENT CORPORATION
RETIREMENT AND SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE PERIOD ENDED DECEMBER 31, 1994
(B) DESCRIPTION OF ASSET
(INCLUDING INTEREST RATE
(A) IDENTITY OF AND MATURITY IN (C) PURCHASE (D) SELLING (E) LEASE
PARTY INVOLVED CASE OF LOAN) PRICE PRICE RENTAL
- -------------- ------------------------ ------------ ----------- ----------
PURCHASES: UNITS: TRANSACTIONS:
* COMPANY STOCK FUND 166,149 112 $1,694,151
* NATIONS CAPITAL GROWTH FUND 122,711 135 $1,390,644
* NATIONS BALANCED ASSETS
FUND 88,129 112 $943,440
* NATIONS STRATEGIC FIXED
* INCOME FUND 70,303 109 $681,648
* NATIONS PRIME FUND 1,172,834 155 $1,172,834
SALES:
* COMPANY STOCK FUND 45,888 162 $455,041
* NATIONS CAPITAL GROWTH FUND 16,354 132 $183,972
* NATIONS BALANCED ASSETS
FUND 12,286 141 $130,426
* NATIONS STRATEGIC FIXED
* INCOME FUND 11,957 132 $112,083
* NATIONS PRIME FUND 142,161 140 $142,161
(B) DESCRIPTION OF ASSET (F) EXPENSE (H) CURRENT VALUE
(INCLUDING INTEREST RATE INCURRED OF ASSET ON
(A) IDENTITY OF AND MATURITY IN WITH (G) COST OF TRANSACTION (I) NET GAIN
PARTY INVOLVED CASE OF LOAN) TRANSACTION ASSET DATE OR (LOSS)
- -------------- ------------------------ ----------- ----------- ---------- ---------
PURCHASES:
* COMPANY STOCK FUND $1,694,151 $1,694,151 N/A
* NATIONS CAPITAL GROWTH FUND $1,390,644 $1,390,644 N/A
* NATIONS BALANCED ASSETS
FUND $ 943,440 $ 943,440 N/A
* NATIONS STRATEGIC FIXED
* INCOME FUND $ 681,648 $ 681,648 N/A
* NATIONS PRIME FUND $1,172,834 $1,172,834 N/A
SALES:
* COMPANY STOCK FUND $ 444,905 $ 455,041 10,136
* NATIONS CAPITAL GROWTH FUND $ 185,291 $ 183,972 (1,319)
* NATIONS BALANCED ASSETS
FUND $ 133,572 $ 130,426 (3,146)
* NATIONS STRATEGIC FIXED
* INCOME FUND $ 119,135 $ 112,083 (7,052)
* NATIONS PRIME FUND $ 142,161 $ 142,161
NOTES: TRANSACTIONS INCLUDED HEREIN REPRESENT INDIVIDUAL TRANSACTIONS OR A
SERIES OF TRANSACTIONS OR A SERIES OF TRANSACTIONS IN SECURITIES OF THE SAME
ISSUE IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS AT THE BEGINNING OF
THE PLAN PERIOD.
THIS SCHEDULE INCORPORATES ALL DISCLOSURES REQUIRED BY THE DEPARTMENT OF LABOR
FOR ASSETS PURCHASED OR SOLD WITHIN THE PERIOD.
* IDENTIFIED AS A PARTY-IN-INTEREST TO THE PLAN.
11
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Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan
Administrator has duly caused this annual report to be signed on its behalf by
the undersigned thereunto duly authorized.
Blockbuster Entertainment
Retirement and Savings Plan
/s/ Michael R. Carpenter
------------------------
Michael R. Carpenter
Vice President,
Corporate Controller
Blockbuster Entertainment Group,
A Division of Viacom, Inc.
