UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-10042
-------------------------------
FORM 11-K
(Mark One)
/ X / Annual Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the year ended December 31, 1996 Commission file number 1-9553
OR
/ / Transition Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
------------------------------------------------------------
(Full title of the plan)
VIACOM INC.
------------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
1515 Broadway
New York, New York 10036
------------------------------------------------------------
(Address of principal executive offices)
THE SAVINGS AND INVESTMENT PLAN
FOR EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1996
INDEX
PAGES
---------
(a) Financial Statements
Report of Independent Accountants................................................. 1
Statement of net assets available for benefits, with fund information at December
31, 1996......................................................................... 2--3
Statement of net assets available for benefits, with fund information at December
31, 1995......................................................................... 4
Statement of changes in net assets available for benefits, with fund information
for the year ended December 31, 1996............................................. 5--6
Statement of changes in net assets available for benefits, with fund information
for the year ended December 31, 1995............................................. 7
Notes to financial statements..................................................... 8--17
SCHEDULES
---------
Additional information:
Item 27a--Schedule of assets held for investment purposes at December 31, 1996.... I
Item 27d--Schedule of reportable transactions for the year ended
December 31, 1996................................................................ II
All other schedules are omitted as not applicable or not required.
(b) Exhibit I--Consent of Independent Accountants
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
persons who administer the Plan have duly caused this annual report to be
signed on its behalf by the undersigned, hereunto duly authorized.
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION AND
PARAMOUNT DISTRIBUTION INC.
Date: July 2, 1997 By: /s/ Barbara Mickowski
-----------------------------------
Barbara Mickowski
Member of the Retirement Committee
Report of Independent Accountants
To the Participants and
Administrator of the
Savings and Investment Plan
for Employees of PVI Transmission
and Paramount Distribution Inc.
In our opinion, the financial statements in the accompanying index present
fairly, in all material respects, the net assets available for benefits of
the Savings and Investment Plan for Employees of PVI Transmission and
Paramount Distribution Inc. (the "Plan") at December 31, 1996 and 1995, and
the changes in net assets available for benefits for the years then ended, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Plan's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note 1 of the Financial Statements, effective January 1,
1996, Paramount (PDI) Distribution Inc. Employees' Savings Plan was merged
with and into the Plan.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information listed in
the accompanying index is presented for purpose of additional analysis and is
not a required part of the basic financial statements but is additional
information required by the Employee Retirement Income Security Act of 1974
(ERISA). The Fund Information in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for
benefits for each fund. The supplemental schedules and the Fund Information
have been subjected to the auditing procedures applied in the audits 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.
PRICE WATERHOUSE LLP
New York, New York
July 2, 1997
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
---------------------
(Continued on Page 3)
Participant Directed
----------------------------------------------------------
Putnam Fund Certus Viacom Inc.
Putnam for Growth Interest Common
Voyager Fund and Income Income Fund Stock Fund
---------------- ------------- ------------ -----------
Assets:
- -------
Investments:
Registered investment
companies............... $ 3,514,960 $ 1,619,734
Plan's interest in Master
Trust................... $ 591,925
Viacom Inc. Class B
Common Stock............ $ 767,714
Other.................... 208
Loans to participants....
------------ ------------- ------------ -----------
Total investments..... 3,514,960 1,619,734 591,925 767,922
------------ ------------- ------------ -----------
Receivables:
Interest income..........
Contributions receivable:
Employer...............
Employee............... 19,193 9,553 6,075 6,492
------------ ------------- ------------ -----------
Net assets available for
benefits................ $ 3,534,153 $ 1,629,287 $ 598,000 $ 774,414
============ ============= ============ ===========
See accompanying notes to financial statements.
-2-
THE SAVINGS AND INVESTMENT PLAN
FOR EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1996
-----------------
(Continued)
Non - Participant
Participant Directed Directed
------------------------------------------------------------------ -------------
George Putnam Putnam Viacom Inc.
Europacific Putnam Fund Investors Income Common
Growth Fund of Boston Fund Fund Loan Fund Stock Fund Total
----------- ------------- ------------ ---------- ------------ -------------- ------------
Assets:
- -------
Investments:
Registered investment
companies............. $ 411,639 $ 140,578 $ 1,201,129 $ 261,667 $ 7,149,707
Plan's interest in Master
Trust................. 591,925
Viacom Inc. Class B
Common Stock.......... $ 706,370 1,474,084
Other.................. 660 868
Loans to participants.. $ 252,233 252,233
----------- ------------- ------------ ---------- ------------ -------------- ------------
Total investments.. 411,639 140,578 1,201,129 261,667 252,233 707,030 9,468,817
----------- ------------- ------------ ---------- ------------ -------------- ------------
Receivables:
Interest income........ 1,080 1,080
Contributions receivable:
Employer............. 15,651 15,651
Employee............. 4,604 2,198 5,788 2,533 56,436
----------- ------------- ------------ ---------- ------------ -------------- ------------
Net assets available for
benefits............... $ 416,243 $ 142,776 $ 1,206,917 $ 264,200 $ 253,313 $ 722,681 $ 9,541,984
=========== ============= ============ ========== ============ ============== ============
See accompanying notes to financial statements.
-3-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
-----------------
Participant Directed
------------------------------------------------------------------------------------------------------
Putnam Putnam Putnam Viacom Inc.
Putnam Putnam Fund U.S. Gov't Certus Money Common
Voyager Vista for Growth Income Interest Market Loan Stock
Fund Fund and Income Trust Income Fund Fund Fund Fund
----------- ---------- ----------- ----------- ------------- ----------- --------- -----------
Assets:
Investments:
Registered investment
companies.......... $ 2,320,783 $1,190,172 $ 1,182,107 $ 255,767 $ 94,556
Plan's interest in
Master Trust....... $ 291,577
Viacom Inc. Class B
Common Stock....... $ 127,641
Loans to
participants....... $ 124,320
----------- ---------- ----------- ----------- ------------- ----------- --------- -----------
Total
investments.... 2,320,783 1,190,172 1,182,107 255,767 291,577 94,556 124,320 127,641
----------- ---------- ----------- ----------- ------------- ----------- --------- -----------
Receivables:
Interest Income...... 680
Contributions
receivable:
Employer........... 7,330 3,482 3,848 916 1,283 366 1,099
Employee........... 31,114 15,110 16,566 3,641 5,300 1,457 4,726
----------- ---------- ----------- ----------- ------------- ----------- ---------- -----------
Net assets available
for benefits......... $ 2,359,227 $1,208,764 $ 1,202,521 $ 260,324 $ 298,160 $ 96,379 $ 125,000 $ 133,466
=========== ========== =========== =========== ============= =========== ========== ===========
Total
---------
Assets:
Investments:
Registered investment
companies.......... $5,043,385
Plan's interest in
Master Trust....... 291,577
Viacom Inc. Class B
Common Stock....... 127,641
Loans to
participants....... 124,320
---------
Total
investments.... 5,586,923
---------
Receivables:
Interest Income...... 680
Contributions
receivable:
Employer........... 18,324
Employee........... 77,914
---------
Net assets available
for benefits......... $5,683,841
=========
See accompanying notes to financial statements.
-4-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1996
----------------------------
(Continued on Page 6)
Participant Directed
-------------------------------------------------------------------------------------------------------
Certus
Putnam Putnam Putnam Fund for Putnam Interest Putnam Viacom Inc.
Voyager Vista Growth and U.S. Gov't Income Money Market Common Stock
Fund Fund Income Income Trust Fund Fund Fund
---------- ---------- ----------------- ------------ -------------- ------------- --------------
Additions
(deductions) to
net assets
attributed to:
Contributions:
Employer.......
Employee....... $ 860,296 $ 325,498 $ 259,454 $ 479,911
Rollover....... 8,662 980 12,562
Investment
income......... 220,513 134,836 3
Plan's interest
in Master Trust
investment
income......... 33,700
Net appreciation
(depreciation)
in fair value
of
investments.... 126,623 $ (3,924) 135,164 $ 194 (127,171)
Interfund
transfers and
loan activity,
net............ 86,764 (1,204,840) (119,161) (260,518) (212,027) $ (96,379) 293,437
---------- ---------- ----------------- ------------ -------------- ------------- --------------
Total
additions... 1,302,858 (1,208,764) 477,317 (260,324) 81,127 (96,379) 658,742
---------- ---------- ----------------- ------------ -------------- ------------- --------------
Deductions to net
assets attributed
to:
Participants
benefits
paid........... 127,797 50,493 31,631 17,762
Plan expenses.... 135 58 92 32
---------- ---------- ----------------- ------------ -------------- ------------- --------------
Total
deductions.. 127,932 -- 50,551 -- 31,723 -- 17,794
---------- ---------- ----------------- ------------ -------------- ------------- --------------
Net
increase
(decrease). 1,174,926 (1,208,764) 426,766 (260,324) 49,404 (96,379) 640,948
Transfer from
PDI............ 250,436
Net assets
available for
benefits,
beginning of
year............. 2,359,227 1,208,764 1,202,521 260,324 298,160 96,379 133,466
---------- ---------- ----------------- ------------ -------------- ------------- --------------
Net assets
available for
benefits, end of
year............. $3,534,153 $ -- $ 1,629,287 $ -- $ 598,000 $ -- $ 774,414
========== ========== ================= ============ ============== ============= ==============
See accompanying notes to financial statements.
-5-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1996
----------------------------
(Continued)
Non - Participant
Participant Directed Directed
--------------------------------------------------------------- --------------
Putnam Putnam Viacom Inc.
Europacific George Putnam Investors Income Loan Common Stock
Growth Fund Fund of Boston Fund Fund Fund Fund Total
------------- --------------- ---------- --------- --------- ------------ -----------
Additions (deductions) to net assets
attributed to:
Contributions:
Employer......................... $ 608,840 $ 608,840
Employee......................... $ 163,150 $ 49,903 $ 214,018 $ 71,232 2,423,462
Rollover......................... 22,204
Investment income.................. 18,155 11,660 139,609 16,815 $ 10,935 11 552,537
Plan's interest in Master Trust
investment income.................. 33,700
Net appreciation (depreciation) in
fair value of investments........ 31,634 6,573 38,281 (6,131) (65,869) 135,374
Interfund transfers and loan
activity, net.................... 210,402 47,466 856,222 210,584 121,588 66,462 --
------------- --------------- ---------- --------- --------- ------------ -----------
Total additions................ 423,341 115,602 1,248,130 292,500 132,523 609,444 3,776,117
------------- --------------- ---------- --------- --------- ------------ -----------
Deductions to net assets attributed
to:
Participants benefits paid......... 7,065 26 41,186 28,289 4,210 6,232 314,691
Plan expenses...................... 33 9 27 11 -- 397
------------- --------------- ---------- --------- --------- ------------ -----------
Total deductions............... 7,098 35 41,213 28,300 4,210 6,232 315,088
------------- --------------- ---------- --------- --------- ------------ -----------
Net increase................... 416,243 115,567 1,206,917 264,200 128,313 603,212 3,461,029
Transfer from PDI.................. 27,209 119,469 397,114
Net assets available for benefits,
beginning of year.................. -- -- -- -- 125,000 -- 5,683,841
------------- --------------- ---------- --------- --------- ------------ -----------
Net assets available for benefits,
end of year........................ $ 416,243 $ 142,776 $1,206,917 $ 264,200 $ 253,313 $ 722,681 $ 9,541,984
============= =============== ========== ========= ========= ============ ===========
See accompanying notes to financial statements.
-6-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS,
WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1995
----------------------------
Participant Directed
-------------------------------------------------------------------------------------------------------------------
Putnam Putnam Putnam Fund for Putnam Certus Interest Putnam Viacom Inc.
Voyager Vista Growth and U.S. Gov't Income Money Market Loan Common Stock
Fund Fund Income Income Trust Fund Fund Fund Fund
---------- ---------- --------------- ------------ --------------- --------------- --------- ---------------
Additions
(deductions)
to net
assets
attributed
to:
Contributions:
Employer.. $ 222,065 $ 107,606 $ 119,964 $ 22,997 $ 29,673 $ 9,732 $ 9,675
Employee.. 706,383 371,988 366,645 88,953 106,999 33,258 45,420
Rollover.. 14,777 1,884 13,094 565 6,717 1,625
Investment
income... 119,652 99,284 70,995 14,086 4,100 $ 6,193 417
Plan's
interest
in Master
Trust
investment
income... 15,419
Net
appreciation
(depreciation)
in fair
value of
investments.. 439,879 183,391 189,965 15,398 (1,027)
Interfund
transfers
and loan
activity,
net...... (64,719) (17,251) (43,772) (10,615) (26,855) (10,607) 94,502 79,317
---------- ---------- --------------- ------------ --------------- --------------- --------- ---------------
Total
additions.. 1,438,037 746,902 716,891 131,384 131,953 38,108 100,695 133,802
---------- ---------- --------------- ------------ --------------- --------------- --------- ---------------
Deductions to
net assets
attributed
to:
Participants
benefits
paid..... 128,414 59,499 60,578 18,875 12,876 513 2,366 315
Plan
expenses.. 325 128 149 41 34 16 21
---------- ---------- --------------- ------------ --------------- --------------- --------- ---------------
Total
deductions.. 128,739 59,627 60,727 18,916 12,910 529 2,366 336
---------- ---------- --------------- ------------ --------------- --------------- --------- ---------------
Net
increase... 1,309,298 687,275 656,164 112,468 119,043 37,579 98,329 133,466
Net assets
available
for
benefits,
beginning
of year.... 1,049,929 521,489 546,357 147,856 179,117 58,800 26,671 --
---------- ---------- --------------- ------------ --------------- --------------- --------- ---------------
Net assets
available
for
benefits,
end of
year....... $2,359,227 $1,208,764 $ 1,202,521 $ 260,324 $ 298,160 $ 96,379 $ 125,000 $ 133,466
========== ========== =============== ============ =============== =============== ========= ===============
Total
----------
Additions
(deductions)
to net
assets
attributed
to:
Contributions:
Employer.. $ 521,712
Employee.. 1,719,646
Rollover.. 38,662
Investment
income... 314,727
Plan's
interest
in Master
Trust
investment
income... 15,419
Net
appreciation
(depreciation)
in fair
value of
investments.. 827,606
Interfund
transfers
and loan
activity,
net...... --
----------
Total
additions.. 3,437,772
----------
Deductions to
net assets
attributed
to:
Participants
benefits
paid..... 283,436
Plan
expenses.. 714
----------
Total
deductions.. 284,150
----------
Net
increase... 3,153,622
Net assets
available
for
benefits,
beginning
of year.... 2,530,219
----------
Net assets
available
for
benefits,
end of
year....... $5,683,841
==========
See accompanying notes to financial statements.
-7-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1--PLAN DESCRIPTION:
- -------------------------
General:
- --------
The following is a brief description of the Savings and Investment Plan for
Employees of PVI Transmission and Paramount Distribution Inc. (the "Plan")
and is provided for general information only. Participants should refer to
the Plan document for more complete information regarding the Plan.
Effective January 1, 1996, the Paramount (PDI) Distribution Inc. Employee
Savings Plan (the "PDI Plan") (a defined contribution plan sponsored by,
Paramount Distribution Inc. ("PDI"), a subsidiary of National Amusements,
Inc. ("NAI")) merged with and into The Savings and Investment Plan for
Employees of PVI Transmission Inc. (the "PVI Plan"). The merged plan was
renamed The Savings and Investment Plan for Employees of PVI Transmission and
Paramount Distribution Inc. Effective January 1, 1996, the plan was amended
and restated, including amendments to reflect the plan mergers, to change the
method used to determine employer matching contributions, to change the
vesting schedule and to change the funds available for investment of employee
contributions. The Plan is a defined contribution plan.
The Plan was offered on a voluntary basis to substantially all employees of
PVI Transmission Inc. ("PVI"), PDI and their subsidiaries (collectively, the
"Company"). PVI and PDI were subsidiaries of NAI until September 30, 1996
when they became indirect subsidiaries of Viacom Inc. NAI owned
approximately 28% of Viacom Inc. Class A and Class B Common Stock on a combined
basis as of December 31, 1996.
Eligible employees may become participants in the Plan following both
attainment of age 21 and the completion of twelve months of employment
service for PDI or PVI, generally measured from date of hire. The Plan is
subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and is administered by a retirement committee
(the "Administrator") appointed by the Board of Directors of the Company.
-8-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
INVESTMENT AND PARTICIPANT ACCOUNTS
- -----------------------------------
Putnam Fiduciary Trust Company (the "Trustee") is the trustee and custodian
of the Plan assets.
Plan participants have the option of investing their contributions, or
existing account balances among the following funds: (1) Putnam Voyager Fund;
(2) Putnam Investors Fund; (3) George Putnam Fund of Boston; (4) Europacific
Growth Fund; (5) Putnam Fund for Growth and Income; (6) Putnam Income Fund;
(7) Certus Interest Income Fund and (8) Viacom Inc. Common Stock Fund. Each
of the funds, except for the Certus Interest Income Fund, Europacific Growth
Fund and the Viacom Inc. Common Stock Fund, are managed by Putnam Management
Company, Inc. and, therefore, are identified as parties-in-interest. The
Certus Interest Income Fund, is managed by the Certus Financial Corporation
("Certus") and primarily invests in guaranteed investment contracts and bank
investment contracts, some of which are created by way of the concurrent
purchase of a bank guarantee contract and a United States government security
(the "pass through" contract). The Europacific Growth Fund is a registered
investment company managed by Capital Research and Management Company. The
Viacom Inc. Common Stock Fund invests in shares of Viacom Inc. Class B Common
Stock and therefore is identified as a party-in-interest. Investment
elections are required to be in multiples of 5% and can be changed at any
time. The Plan is intended to meet the requirements of ERISA Section 404 (c).
Thus, to the extent participants exercise control over the investment of
contributions, neither the Plan nor any Plan fiduciary will be responsible
for any losses which may occur.
Effective January 1, 1994, PVI, PDI and the Viacom International Inc. entered
into a master trust agreement ("Master Trust") with the Trustee for the
purpose of permitting the commingling of investments of the PDI Plan, PVI Plan
and the Viacom Investment Plan and, effective October 1, 1995, a collective
bargaining plan. The Master Trust assets are managed by Certus. However, the
Trustee records the activity of each plan separately in order to distinguish
the specific assets available to each plan. Net investment assets and net
investment earnings on the investments of the Master Trust are allocated daily
to the plans participating in the Master Trust. Such allocation is based on
the ratio of net investment assets of each of the participating plans to total
net investment at the time the Master Trust was formed, adjusted for any
contributions or disbursements attributable to specific participating plans.
Note 7 sets forth the Plan's proportionate interest in the Master Trust, and
certain financial information of the Master Trust.
-9-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
Loans to Participants
- ---------------------
The Loan Fund is a separate fund established solely for the purpose of
administering loans to participants. Participants are eligible to receive
loans based on their account balances. The maximum loan available to a
participant is the lesser of 50% of the participant's vested account balance
in the Plan and the Affiliated Plan or $50,000, reduced by the highest
outstanding balance of any Plan loan made to the participant during the
twelve month period ending on the day before the loan is made. The minimum
loan available to a participant is $500. The interest rate on participant
loans is established on the first day of the calendar quarter at a rate of
1% above the prime commercial rate. Participants may elect repayment periods
from twelve to sixty months through payroll deductions commencing as soon as
administratively possible following the distribution of the loan. The Plan
allows participants to elect a repayment term of up to 300 months for loans
used for the acquisition of a principle residence. Transfers of participant
balances for loan disbursements and repayments of loan principal and interest
to the Loan Fund are specifically identified in the respective participants'
accounts within each fund.
-10-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
Contributions
- -------------
The Plan permits participants to contribute up to 15% of annual compensation
on a before-tax, after-tax or combination basis, subject to the Internal
Revenue Code ("IRC") limitations set forth below. Effective January 1, 1996,
the employer's matching contribution is equal to (i) 50% of the first 6% of
annual compensation that is contributed on a before-tax basis if base pay is
$65,000 or less at a specified date or (ii) 50% of the first 5% of annual
compensation contributed on a before tax basis if base pay is greater than
$65,000.
The IRC limits the amount of annual contributions that can be made on a
before-tax basis; the limit was $9,500 and $9,240 for 1996 and 1995,
respectively. Compensation recognized under the Plan may not exceed $150,000
for 1996 and 1995. The IRC also contains an annual limit on aggregate
participant and employer contributions to defined contribution plans equal to
the lesser of $30,000 or 25% of compensation. All contributions made to the
Plan on an annual basis may be further limited due to certain
non-discrimination tests prescribed by the IRC.
Effective January 1, 1996, employer matching contributions are invested in
Viacom Inc. Class B Common Stock; prior to this date, the employer
contributions were made in cash for PVI Plan participants and invested in
funds at the employees' discretion.
Vesting
- -------
Participants in the Plan are immediately vested in their own contributions
and earnings thereon. After January 1, 1996, the employer's matching
contribution will vest at 20% per year of service, becoming fully vested
after five years of service. Employees who on December 31, 1995 were
participants in the Plan or affiliated plans will be credited with eligible
years of service at that time if they are more favorable. If participants
terminate employment prior to being vested in their employer matching
contributions and receive a distribution of the vested portion of their
account, the non-vested portion of their account is forfeited and used to
reduce future employer matching contributions or defray administrative
expenses. Employer matching contributions of $9,028 and $4,111 during the
year ended December 31, 1996 and December 31, 1995, respectively, were
forfeited by terminating employees before those amounts became vested.
Distributions and Withdrawals
- -----------------------------
Earnings on both employee and employer contributions are not subject to
income tax until they are distributed or withdrawn from the Plan.
Participants in the Plan, or their beneficiaries, may receive their account
balances, in a lump sum or in installments over a period of up to 20 years,
in the event of retirement, termination of employment, disability, or death.
Participants must receive a required minimum distribution upon attainment of
age 70 1/2 even if they are still employed.
-11-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
Participants who have been in the Plan or a previously affiliated plan at
least five years may elect to withdraw up to 100% of their employer matching
contribution account and earnings thereon, while those who have participated
less than five years are limited to withdrawing vested employer matching
contributions made at least two years prior to the withdrawal including earnings
thereon. In addition, participants in the Plan may receive part or all of their
after-tax and rollover contributions. Upon attainment of age 59 1/2
participants may withdraw all or part of their before-tax contributions and
earnings thereon. All of the above withdrawal elections are subject to a
provision that a participant can make only one such request during each
calendar year.
A participant may obtain a hardship withdrawal of employer matching
contributions and before-tax contributions provided that the requirements for
hardship are met. There is no restriction on the number of hardship
withdrawals permitted.
Plan Expenses
- -------------
The Plan pays for expenses incurred in connection with the administration of
the Plan and the investment of Plan assets, to the extent not covered by
forfeitures.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
- ---------------------------------------------------
Accounting Method
- -----------------
The accrual method of accounting is used for financial statement presentation.
Certain previously reported amounts have been reclassified to conform with
the current presentation.
Investments
- -----------
Short-term money market obligations are carried at cost which approximates
fair value due to the short-term maturity of these investments. Viacom Inc.
Class B Common Stock is reported at fair value based on the quoted market
price of the stock on the American Stock Exchange, Inc. Investments with
registered investment companies are reported at fair value based upon the
market value of the underlying securities as priced by national security
exchanges. Guaranteed investment income contracts and bank investment
contracts held by the Master Trust are reported at contract value (cost plus
interest at contract rate less distributions to participants). Although the
investment components of the bank investment "pass through" contracts are
stated at fair market value based on quoted market prices, the addition of
the guarantee component results in such contracts being reported at contract
value. Participant loans consist of the outstanding principal of loans to
Plan participants at December 31, 1996 and 1995 which approximate market
value. The loans outstanding as of December 31, 1996 and 1995 carry interest
rates ranging from 7% to 10%. Cash and cash equivalents are valued at cost
plus accrued interest, which approximates market value.
Security Transactions
- ---------------------
Purchases and sales of securities are recorded on the trade date. The
historical average cost basis is used to determine gains or losses on
security dispositions.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires the Plan to make estimates and assumptions,
such as those regarding fair value, that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of changes in
net assets available for benefits during the reporting period. Actual results
could differ from those estimates.
-12-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
NOTE 3--INVESTMENTS:
- --------------------
Individual investments that represent greater than 5% of net assets available
for benefits are identified below:
DECEMBER 31,
--------------------------
1996 1995
------------ ------------
Putnam Voyager Fund............................... $ 3,514,960 $ 2,320,783
Putnam Fund for Growth and Income................. 1,619,734 1,182,107
Viacom Inc. Class B Common Stock.................. 1,474,084 127,641
Putnam Investors Fund............................. 1,201,129 --
Plan's Interest in Master Trust................... 591,925 291,577
Putnam Vista Fund................................. -- 1,190,172
-13-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
During 1996 and 1995, the Plan's investments (including investments bought,
sold and held during the year) appreciated/(depreciated), as follows:
YEAR ENDED DECEMBER 31,
-----------------------
1996 1995
---------- -----------
Putnam Voyager Fund................................ $ 126,623 $ 439,879
Putnam Vista Fund.................................. (3,924) 183,391
Putnam Fund for Growth and Income.................. 135,164 189,965
Putnam U.S. Government Income Trust................ 194 15,398
Viacom Inc. Class B Common Stock Funds............. (193,040) (1,027)
George Putnam Fund of Boston....................... 6,573 --
Europacific Growth Fund............................ 31,634 --
Putnam Investors Fund.............................. 38,281 --
Putnam Income Fund................................. (6,131) --
---------- -----------
Net appreciation................................... $ 135,374 $ 827,606
========== ===========
-14-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
The Plan uses daily valuations and assigns units to participants within each
of the respective funds. Total units, net asset value per unit and total net
asset available for benefits in each fund at December 31, 1996 and 1995 were
as follows:
NET ASSET TOTAL NET
AVAILABLE FOR ASSET
TOTAL BENEFITS PER AVAILABLE FOR
FUND UNITS UNIT BENEFITS
- --------------------------- ----------- ----------------- ---------------
December 31, 1996:
- ------------------
Participant Directed:
Putnam Voyager Fund...... 218,050 $ 16.21 $ 3,534,153
Putnam Fund for Growth
and Income............. 89,885 18.13 1,629,287
Certus Interest
Income Fund............ 598,000 1.00 598,000
Viacom Inc. Common Stock
Fund................... 22,016 35.18 774,414
George Putnam Fund of
Boston................. 8,572 16.66 142,776
Europacific Growth Fund.. 15,808 26.33 416,243
Putnam Investors Fund.... 130,416 9.25 1,206,917
Putnam Income Fund....... 37,328 7.08 264,200
Loan Fund................ 253,313
Non-Participant Directed:
Viacom Inc. Common Stock
Fund................... 20,261 35.67 722,681
---------------
$ 9,541,984
===============
December 31, 1995:
- ------------------
Participant Directed:
Putnam Voyager Fund........ 152,182 $ 15.50 $ 2,359,227
Putnam Fund for Growth and
Income................... 73,015 16.47 1,202,521
Certus Master Trust........ 298,160 1.00 298,160
Viacom Inc. Common Stock
Fund..................... 2,694 49.54 133,466
Putnam Vista Fund.......... 130,788 9.24 1,208,764
Putnam U. S. Government
Income Trust............. 19,391 13.42 260,324
Putnam Money Market
Trust.................... 96,379 1.00 96,379
Loan Fund.................. 125,000
---------------
$ 5,683,841
===============
NOTE 4--INCOME TAX STATUS:
- --------------------------
The Plan, as amended through January 1, 1996, has not obtained a
determination letter, however, it is intended that the Plan qualify under
Section 401(a) of the IRC and will therefore, be exempt from federal income
taxes under the provisions of Section 501(a). The PVI Plan, as amended
through December 1994, was found by the Internal Revenue Service ("IRS") in a
letter issued June 16, 1995, to be qualified under Section 401(a) of the IRC.
The Administrator believes that the Plan is currently designed and being
operated in compliance with the applicable requirements of the IRC. The
Administrator intends to apply for a determination letter during 1997.
-15-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
During August 1996, the Company submitted an application for the Voluntary
Compliance Resolution Program established by the IRS to correct errors in the
administration of the PVI Plan. The matter was resolved in a manner satisfactory
to the IRS and there was no change in the qualified status of the Plan.
NOTE 5--RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
- ------------------------------------------------------------
The following is a reconciliation of net assets available for benefits per
the December 31, 1996 financial statements to the Form 5500:
Net assets available for benefits per the financial statements............. $9,541,984
Amounts allocated to withdrawing participants.............................. (13,911)
-----------------
Net assets available for benefits per the Form 5500........................ $9,528,073
=================
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the year ended December 31, 1996:
Benefits paid to participants per the financial statements........ $ 314,691
Add: Amounts allocated to withdrawing participants at December
31, 1996...................................................... 13,911
Less: Amounts allocated to withdrawing participants at December
31, 1995...................................................... --
---------
Benefits paid to participants per the Form 5500................... $ 328,602
=========
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, 1996 but are not paid as of that date. At December 31,
1995, there were no amounts allocated to withdrawing participants.
NOTE 6--TERMINATION PRIORITIES:
- -------------------------------
In the event that the Plan is terminated, subject to conditions set forth in
ERISA, the Plan provides that the net assets of the Plan be distributed to
participants in proportion to their respective vested interests in such net
assets at that date.
-16-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
NOTE 7--INVESTMENT IN MASTER TRUST:
- -----------------------------------
The value of the Plan's interest in the total investments of the Master Trust
at December 31, 1996 and 1995 was .6% and 1.1%, respectively, and the
allocated share of investment income was .4% and .8% for the respective years
then ended.
The following table presents the fair value of investments of the Master Trust:
December 31,
-----------------------------
1996 1995
-------------- -------------
Guaranteed investment contracts.............. $ 52,807,733 $ 10,069,048
Bank investment pass through contracts....... 41,701,819 13,960,645
Putnam short-term investment fund............ 6,092,420 3,176,052
Receivable for investments sold.............. -- 211,205
Accrued plan expenses........................ (2,091) (8,405)
Payable for investments purchased............ (146,511) --
-------------- -------------
Net Investments in Master Trust........ $ 100,453,370 $ 27,408,545
============== =============
Investment income of the Master Trust is as follows:
Year ended December 31,
--------------------------
Investment Income: 1996 1995
------------ ------------
Guaranteed investment contracts................. $ 3,676,184 $ 877,860
Bank investment "pass through" contracts........ 2,686,416 905,644
Short-term investment funds..................... 1,656,893 98,381
Investment manager fees......................... (64,046) (51,526)
------------ ------------
Net Investment Income........................... $ 7,955,447 $ 1,830,359
============ ============
The guaranteed investment contracts and bank investment "pass through"
contracts are fully benefit-responsive and are therefore presented in the
financial statements at contract value. The Company does not expect any
employer initiated events that may cause premature liquidation to a contract
at market value. At December 31, 1996 and 1995, the fair value of such assets
in the aggregate was $100,359,722 and $27,322,047, respectively, with an
average yield of 6.31% and 6.85%, respectively. The return on assets for the
years ended December 31, 1996 and 1995 were 6.18% and 7.18%, respectively.
The bank investment "pass through" contracts interest rates reset quarterly,
with minimum crediting interest rates of zero, based upon the interest rate
which, when applied to the current book value, will reproduce the expected
cash flows of the underlying asset.
-17-
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION
AND PARAMOUNT DISTRIBUTION INC.
NOTES TO FINANCIAL STATEMENTS (continued)
-----------------------------
NOTE 8--SUBSEQUENT EVENTS
- -------------------------
Effective January 1, 1997 the Plan was merged with and into the Viacom
Investment Plan ("VIP"), a defined contribution plan sponsored by Viacom Inc.
The VIP has identical provisions as the Plan, with Putnam Fiduciary Trust
Company as the trustee and custodian of VIP assets.
-18-
SCHEDULE I
THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION AND
PARAMOUNT DISTRIBUTION INC.
ITEM 27A--SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
YEAR ENDED DECEMBER 31, 1996
----------------------------
(c) Units/Principal/
Maturity Value
and (d) Cost of (e) Current
(a) (b) Identity of issue, borrowing lessor or similar party Interest Rates acquisitions Value
- ------------------------------------------------------------------- -------------------- ------------ ------------
REGISTERED INVESTMENT COMPANIES:
* Putnam Voyager Fund............................................ 218,050 units $ 3,045,882 $ 3,514,960
* Putnam Fund for Growth and Income.............................. 89,885 units 1,373,844 1,619,734
Europacific Growth Fund........................................ 15,808 units 381,055 411,639
* George Putnam Fund of Boston................................... 8,572 units 134,957 140,578
* Putnam Investors Fund.......................................... 130,416 units 1,153,459 1,201,129
* Putnam Income Fund............................................. 37,328 units 265,722 261,667
* Viacom Inc. Class B Common Stock................................. 42,268 shares 1,654,525 1,474,084
Other............................................................ 9 shares 1,071 868
Various maturities
* Loans to participants............................................ and interest rates -- 252,233
------------
Total investments....................... $ 8,876,892
============
* Identified as a party-in-interest to the Plan.
S-1
SCHEDULE II
SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF PVI TRANSMISSION AND
PARAMOUNT DISTRIBUTION INC.
ITEM 27D--SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1996
----------------------------
DESCRIPTION OF PURCHASE SELLING LEASE EXPENSE INCURRED
IDENTITY OF PARTY INVOLVED ASSET PRICE PRICE RENTAL WITH TRANSACTION
- --------------------------------- ------------------ ------------ ------------ ----------- ------------------
Single Transactions:
- --------------------
None
Series Transactions:
- --------------------
Putnam Voyager Fund.............. 91,260 units $ 1,472,860 N/A N/A
25,595 units $ 405,318 N/A N/A
Putnam Vista Fund................ 130,788 units $ 1,186,249 N/A N/A
Putnam Fund for Growth and
Income......................... 37,966 units $ 653,122 N/A N/A
21,278 units $ 350,660 N/A N/A
Putnam Investors Fund............ 186,937 units $ 1,642,625 N/A N/A
56,521 units $ 479,796 N/A N/A
Putnam Income Fund............... 53,439 units $ 381,743 N/A N/A
16,111 units $ 113,944 N/A N/A
Viacom Inc. Class B.............. 39,441 units $ 1,500,541 N/A N/A
2,479 units 92,318 N/A N/A
Europacific Growth Fund.......... 16,695 units $ 402,468 N/A N/A
887 units $ 22,460 N/A N/A
CURRENT VALUE
OF ASSET ON
COST OF TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED ASSET DATE (LOSS)
- --------------------------------- ------------ ------------- ----------
Single Transactions:
- --------------------
None
Series Transactions:
- --------------------
Putnam Voyager Fund.............. $ 1,472,860
$ 336,848 $ 405,138 $ 68,470
Putnam Vista Fund................ $ 1,027,952 $ 1,186,249 $ 158,297
Putnam Fund for Growth and
Income......................... $ 653,122
$ 305,338 $ 350,660 $ 45,322
Putnam Investors Fund............ $ 1,642,625
$ 489,165 $ 479,796 ($ 9,369)
Putnam Income Fund............... $ 381,473
$ 116,021 $ 113,944 ($ 2,077)
Viacom Inc. Class B.............. $ 1,500,541
$ 105,867 92,318 ($ 13,549)
Europacific Growth Fund.......... $ 402,468
$ 21,413 $ 22,460 $ 1,047
S-2
Exhibit I
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-60943, 33-41934, 33-56088, 33-59049,
33-59141, 33-55173 and 33-55709) of Viacom Inc. of our report dated July 2,
1997, relating to the financial statements and schedules of The Savings and
Investment Plan for Employees of PVI Transmission and Paramount Distribution
Inc. appearing on page 1 of this Form 11-K.
PRICE WATERHOUSE LLP
New York, New York
July 2, 1997
