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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
-----------------------
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, 1995 Commission file number 1-9553
OR
/ / Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
VIACOM INVESTMENT PLAN
----------------------------------------------------------
(Full title of the plan)
----------------------------------------------------------
(Name of issuer of the securities held pursuant to the plan)
1515 Broadway
New York, New York 10036
----------------------------------------------------------
(Address of principal executive offices)
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VIACOM INVESTMENT PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1995
INDEX
-----
Pages
-----
(a) Financial Statements:
Report of Independent Accountants .................................... 1
Statement of net assets available for benefits, with fund
information at December 31, 1995 ................................... 2
Statement of net assets available for benefits, with fund
information at December 31, 1994 ................................... 3
Statement of changes in net assets available for benefits, with
fund information for the year ended December 31, 1995 .............. 4
Statement of changes in net assets available for benefits, with
fund information for the year ended December 31, 1994 .............. 5
Notes to financial statements ........................................6-14
Schedules
---------
Additional information:
Item 27a - Schedule of assets held for investment purposes
at December 31, 1995.............................................. I
Item 27d - Schedule of reportable transactions...................... 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.
VIACOM INVESTMENT PLAN
Date: June 28, 1996 By: Marguerite Heilman
---------------------------------
Marguerite Heilman
Member of the Retirement Committee
Report of Independent Accountants
June 28, 1996
To the Participants and
Administrator of the
Viacom Investment Plan
In our opinion, the financial statements in the accompanying index present
fairly, in all material respects, the net assets available for benefits
of the Viacom Investment Plan (the "Plan") at December 31, 1995 and 1994, 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.
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 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
VIACOM INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1995
-----------------
Employee Funds
-------------------------------------------------------------------------------------------------
Putnam Putnam Certus Putnam
Putnam Putnam Fund U.S. Gov't Interest Money Viacom Inc.
Voyager Vista for Growth Income Income Market Common Stock Loan
Fund Fund and Income Trust Fund Fund Fund Fund
---- ---- ---------- ----- ---- ---- ---- ----
Assets:
Investments:
Registered investment
companies............... $44,415,248 $21,793,509 $27,829,153 $9,785,722 $3,575,658
Plan's interest in
Master Trust............ $26,239,822
Viacom Inc. common stock.. $ 2,017,323
Loans to participants..... $ 7,263,971
----------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
Total investments 44,415,248 21,793,509 27,829,153 9,785,722 26,239,822 3,575,658 2,017,323 7,263,971
----------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
Cash and cash equivalents... 34,550
Receivables:
Investment income....... 45,220
Contributions:
Employer ............. 307,294 163,458 167,607 57,396 112,977 24,117 31,550
Employee ............. 17,998 7,498 10,202 6,354 10,506 2,653 1,122
----------- ----------- ----------- ----------- ----------- ---------- ----------- -----------
Net assets available for
benefits.................. $44,740,540 $21,964,465 $28,006,962 $ 9,849,472 $26,397,855 $3,602,428 $ 2,049,995 $ 7,309,191
=========== =========== =========== =========== =========== ========== =========== ===========
Employer Fund
-------------
Viacom Inc.
Common Stock
Fund Total
---- -----
Assets:
Investments:
Registered investment
companies............... $107,399,290
Plan's interest in
Master Trust............ 26,239,822
Viacom Inc. common stock.. $31,258,321 33,275,644
Loans to participants..... 7,263,971
----------- ------------
Total investments 31,258,321 174,178,727
----------- ------------
Cash and cash equivalents... 34,550
Receivables:
Investment income....... 45,220
Contributions:
Employer ............. 259,321 1,123,720
Employee ............. 56,333
----------- ------------
Net assets available for
benefits.................. $31,517,642 $175,438,550
=========== ============
See accompanying notes to financial statements.
-2-
VIACOM INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
DECEMBER 31, 1994
-----------------
Employee Funds
--------------------------------------------------------------------------------------------
Putnam Putnam Certus Putnam
Putnam Putnam Fund U.S. Gov't Interest Money
Voyager Vista for Growth Income Income Market Loan
Fund Fund and Income Trust Fund Fund Fund
---- ---- ---------- ----- ---- ---- ----
Assets:
Investments:
Registered investment companies.. $29,836,926 $14,030,296 $18,867,030 $8,489,178 $2,943,622
Plan's interest in Master Trust.. $26,318,278
Viacom Inc. common stock.........
Loans to participants............ $6,575,871
----------- ----------- ----------- ---------- ----------- ---------- ----------
Total investments....... 29,836,926 14,030,296 18,867,030 8,489,178 26,318,278 2,943,622 6,575,871
----------- ----------- ----------- ---------- ----------- ---------- ----------
Cash and cash equivalents.......... 35,690
Receivables:
Investment income.............. 39,087
Contributions:
Employer .................... 319,034 177,497 198,099 69,640 146,784 36,354
Employee .................... 10,266 5,308 6,827 3,332 7,255 633
----------- ----------- ----------- ---------- ----------- ---------- ----------
Total assets.......... 30,166,226 14,213,101 19,071,956 8,562,150 26,508,007 2,980,609 6,614,958
----------- ----------- ----------- ---------- ----------- ---------- ----------
Liabilities:
Payable for investments purchased.. -- -- -- -- -- -- --
----------- ----------- ----------- ---------- ----------- ---------- ----------
Net assets available for benefits.. $30,166,226 $14,213,101 $19,071,956 $8,562,150 $26,508,007 $2,980,609 $6,614,958
=========== =========== =========== ========== =========== ========== ==========
Employer Fund
-------------
Viacom Inc.
Common Stock
Fund Total
---- -----
Assets:
Investments:
Registered investment companies.. $74,167,052
Plan's interest in Master Trust.. 26,318,278
Viacom Inc. common stock......... $25,973,483 25,973,483
Loans to participants............ 6,575,871
----------- ------------
Total investments....... 25,973,483 133,034,684
----------- ------------
Cash and cash equivalents.......... 35,690
Receivables:
Investment income.............. 39,087
Contributions:
Employer .................... 502,235 1,449,643
Employee .................... 33,621
----------- ------------
Total assets.......... 26,475,718 134,592,725
----------- ------------
Liabilities:
Payable for investments purchased.. 28,034 28,034
----------- ------------
Net assets available for benefits.. $26,447,684 $134,564,691
=========== ============
See accompanying notes to financial statements.
-3-
VIACOM INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1995
Employee Funds
-----------------------------------------------------------------------------------------------------
Certus Putnam
Putnam Putnam Putnam Fund Putnam Interest Money Viacom Inc.
Voyager Vista for Growth U.S. Gov't Income Market Common Stock Loan
Fund Fund and Income Income Trust Fund Fund Fund Fund
---- ---- ---------- ------------ ---- ---- ---- ----
Additions (deductions) to
net assets attributed to:
Contributions:
Employer ............... $ 5,324,901 $ 2,817,746 $ 3,112,951 $ 1,126,684 $ 1,962,591 $ 453,126 $ 217,488
Employees .............. 197,459 116,843 166,060 79,336 121,992 19,690 6,751
Rollover ............... 291,346 180,924 203,866 86,559 77,668 9,046 65,078
Investment income ........ 2,374,727 1,892,410 1,831,488 661,502 1,860 182,157 350 $ 499,080
Plan's interest in
Master Trust investment
income ................. 1,814,940
Net appreciation
(depreciation) in
fair value of
investments ............ 10,057,128 4,074,095 5,456,692 732,129 (49,153)
Interfund transfers and
loan activity, net ..... (1,019,985) (49,489) 18,663 (784,201) (904,621) 182,358 1,831,707 725,086
------------ ------------ ----------- ----------- ------------ ---------- ----------- ----------
Total additions ........ 17,225,576 9,032,529 10,789,720 1,902,009 3,074,430 846,377 2,072,221 1,224,166
------------ ------------ ----------- ----------- ------------ ---------- ----------- ----------
Deductions to net assets
attributed to:
Participants benefits
paid ................... 2,121,500 867,383 1,381,816 509,352 2,300,492 109,929 4,452 369,496
Transfer to other plan...... 522,944 410,813 469,448 104,297 877,146 114,008 17,621 160,437
Plan expenses ............ 6,818 2,969 3,450 1,038 6,944 621 153
------------ ------------ ----------- ----------- ------------ ---------- ----------- ----------
Total deductions ....... 2,651,262 1,281,165 1,854,714 614,687 3,184,582 224,558 22,226 529,933
------------ ------------ ----------- ----------- ------------ ---------- ----------- ----------
Net additions .......... 14,574,314 7,751,364 8,935,006 1,287,322 (110,152) 621,819 2,049,995 694,233
Net assets available for
benefits, beginning of year 30,166,226 14,213,101 19,071,956 8,562,150 26,508,007 2,980,609 -- 6,614,958
------------ ------------ ----------- ----------- ------------ ---------- ----------- ----------
Net assets available for
benefits, end of year .... $ 44,740,540 $ 21,964,465 $28,006,962 $ 9,849,472 $ 26,397,855 $3,602,428 $ 2,049,995 $7,309,191
============ ============ =========== =========== ============ ========== =========== ==========
Employer Fund
-------------
Viacom Inc.
Common Stock
Fund Total
---- -----
Additions (deductions) to
net assets attributed to:
Contributions:
Employer ............... $ 4,168,521 $ 19,184,008
Employees .............. 708,131
Rollover ............... 914,487
Investment income ........ 6,328 7,449,902
Plan's interest in
Master Trust investment
income ................. 1,814,940
Net appreciation
(depreciation) in
fair value of
investments ............ 3,520,517 23,791,408
Interfund transfers and
loan activity, net ..... 482 --
----------- ------------
Total additions ........ 7,695,848 53,862,876
----------- ------------
Deductions to net assets
attributed to:
Participants benefits
paid ................... 2,089,163 9,753,583
Transfer to other plan...... 536,727 3,213,441
Plan expenses ............ 21,993
----------- ------------
Total deductions ....... 2,625,890 12,989,017
----------- ------------
Net additions .......... 5,069,958 40,873,859
Net assets available for
benefits, beginning of year 26,447,684 134,564,691
----------- ------------
Net assets available for
benefits, end of year .... $31,517,642 $175,438,550
=========== ============
See accompanying notes to the financial statements.
-4-
VIACOM INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1994
----------------------------
Employee Funds
--------------------------------------------------------------------------------------
Certus
Putnam Putnam PutnamFund Putnam Interest Putnam Money
Voyager Vista for Growth and U.S. Gov't Income Market Loan
Fund Fund Income IncomeTrust Fund Fund Fund
---- ---- ------ ----------- ---- ---- ----
Additions (deductions) to net assets
attributed to:
Contributions:
Employer..................... $4,716,984 $2,607,066 $2,976,684 $1,156,206 $2,064,754 $318,260
Employees.................... 196,626 123,783 159,354 77,272 112,312 6,753
Rollover .................... 153,585 159,814 171,304 123,131 65,697 29,430
Investment income................ 1,245,513 105,030 1,162,657 616,544 1,296 103,528 $402,467
Plan's interest in Master Trust
investment income.............. 1,729,532
Net depreciation in fair value
of investments............... (1,109,782) (624,959) (1,218,997) (825,685)
Interfund transfers and loan
activity, net................. 199,354 47,990 (482,311) (785,586) (251,298) 541,015 645,654
----------- ----------- ----------- ---------- ----------- ---------- ----------
Total additions........ 5,402,280 2,418,724 2,768,691 361,882 3,722,293 998,986 1,048,121
----------- ----------- ----------- ---------- ----------- ---------- ----------
Deductions to net assets attributed to:
Participants benefits paid....... 1,494,599 655,014 859,870 398,349 1,508,588 463,729 260,713
Plan expenses.................... 1,747 777 931 337 1,114 2,015
----------- ----------- ----------- ---------- ----------- ---------- ----------
Total deductions....... 1,496,346 655,791 860,801 398,686 1,509,702 465,744 260,713
----------- ----------- ----------- ---------- ----------- ---------- ----------
Net additions (deductions) 3,905,934 1,762,933 1,907,890 (36,804) 2,212,591 533,242 787,408
Net assets available for benefits,
beginning of year............. 26,260,292 12,450,168 17,164,066 8,598,954 24,295,416 2,447,367 5,827,550
----------- ----------- ----------- ---------- ----------- ---------- ----------
Net assets available for benefits, end
of year....................... $30,166,226 $14,213,101 $19,071,956 $8,562,150 $26,508,007 $2,980,609 $6,614,958
=========== =========== =========== ========== =========== ========== ==========
Employer Fund
-------------
Viacom Inc.
Common Stock
Fund Total
---- -----
Additions (deductions) to net assets
attributed to:
Contributions:
Employer..................... $4,075,508 $17,915,462
Employees.................... 676,100
Rollover .................... 702,961
Investment income................ 4,106 3,641,141
Plan's interest in Master Trust
investment income.............. 1,729,532
Net depreciation in fair value
of investments............... (2,411,007) (6,190,430)
Interfund transfers and loan
activity, net................. 85,182 --
----------- ------------
Total additions........ 1,753,789 18,474,766
----------- ------------
Deductions to net assets attributed to:
Participants benefits paid....... 1,186,559 6,827,421
Plan expenses.................... 6,921
----------- ------------
Total deductions....... 1,186,559 6,834,342
----------- ------------
Net additions (deductions) 567,230 11,640,424
Net assets available for benefits,
beginning of year............. 25,880,454 122,924,267
----------- ------------
Net assets available for benefits, end
of year....................... $26,447,684 $134,564,691
=========== ============
See accompanying notes to the financial statements.
-5-
VIACOM INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - PLAN DESCRIPTION:
- --------------------------
General:
- --------
The following is a brief description of the Viacom Investment Plan (the "Plan")
and is provided for general information only. Participants should refer to the
Plan document for more complete information regarding the Plan.
The Plan is a defined contribution plan. During the periods presented the Plan
was offered on a voluntary basis to substantially all employees (except for
employees of Paramount Pictures, Simon & Schuster, Paramount Parks and the
former Paramount Communications Inc.) of Viacom International Inc. (the
"Company"), a wholly-owned subsidiary of Viacom Inc. National Amusements, Inc.
("NAI") owned approximately 25% of Viacom Inc. Class A and B Common Stock on a
combined basis as of December 31, 1995.
Effective January 1, 1994, certain participants of the Plan became employed by
an affiliated company owned by NAI (the "Affiliated Company") and therefore, as
of that date, become eligible to participate in the affiliated company's defined
contribution plan (the "Affiliated Plan"). Such participants previously existing
account balances remain subject to the provisions of the Plan.
Effective October 1, 1995, certain collective bargining employees of the Company
ceased participation in the plan and became eligible to participate in a
separate collective bargain plan ("CBP").
Eligible employees may become participants in the Plan following completion of
twelve months of employment service, 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 committee appointed by
the Board of Directors of the Company. Although the Company anticipates that the
Plan will continue indefinitely, it reserves the right by action of its Board of
Directors to amend or terminate the Plan provided that such action does not
retroactively reduce earned participant benefits.
Investment and participant accounts (See note 8):
- -------------------------------------------------
Putnam Fiduciary Trust Company (the "Trustee") is the trustee and custodian of
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
Vista Fund; (3) The Putnam Fund for Growth and Income; (4) Putnam U. S.
Government Income Trust; (5) Certus Interest Income Fund; (6) Putnam Money
Market Fund; and effective May 1, 1995, (7) Viacom Inc. Common Stock Fund . Each
of the funds, except for the Certus Interest Income Fund and the Viacom Inc.
Common Stock Fund, are registered investment companies managed by Putnam
Management Company, Inc. and, therefore, are identified as parties-in-interest.
The Certus Interest Income Fund, which is managed by the Certus Financial
Corporation ("Certus"), 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 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
-6-
VIACOM INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
ERISA Section 404 (c). Thus, to the extent participants exercise control over
the investment of contributions, neither the Plan nor any other Plan fiduciary
will be responsible for any losses which may occur.
Effective January 1, 1994, the Company and the Affiliated Company entered into a
master trust agreement ("Master Trust") with the Trustee for the purpose of
permitting the commingling of investments of the Plan, the Affiliated Plan,
and, effective October 1, 1995, the CBP, which 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.
Employer matching contributions are invested entirely in a fund consisting of
both classes of Viacom common stock. Effective January 1, 1995, employer
matching contributions are invested in Viacom Inc. Class B Common Stock;
investments prior to such date were invested 50% in Viacom Class A Common Stock
and 50% in Viacom Class B Common Stock.
The number of Participants in each fund as of December 31, 1995 was as
follows:
Putnam Voyager Fund............................... 3,814
Putnam Vista Fund................................. 2,675
The Putnam Fund for Growth and Income............. 2,976
Putnam U. S. Government Income Trust.............. 1,619
Certus Interest Income Fund....................... 2,279
Putnam Money Market Fund.......................... 827
Viacom Inc. Common Stock Fund..................... 4,765
The total number of Participants in the Plan was less than the sum of the number
of Participants shown above because many of the Participants invest in more than
one fund.
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 participants vested account balance 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 a loan is
established on the first day of each 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 with the first payroll date
immediately following the
-7-
VIACOM INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
distribution of the loan. The Plan was amended effective July 1, 1994, allowing
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.
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. The Company's matching contribution is
equal to 40% (for participants with less than five years of service with the
company) or 50% (for participants with five or more years of service with the
company) of the first 5% of annual compensation that is contributed on a
before-tax basis. As reflected in the financial statements, employer
contributions consist of participants' before-tax contributions and the
employer's matching contributions, and employee contributions consist of
participants' after-tax contributions.
The IRC limits the amount of annual contributions that can be made on a
before-tax basis; the limit was $9,240 for 1995 and 1994. Compensation
recognized under the plan may not exceed $150,000 for 1995 and 1994. 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.
Vesting:
- --------
Participants in the Plan are immediately vested in their own contributions. They
are vested in the employer matching contributions upon completion of the earlier
of one year of Plan participation or five years of service generally measured
from date of hire. 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 Company contributions and administrative expenses.
Employer matching contributions of $39,616 and $97,708 during the years ended
December 31, 1995 and December 31, 1994, 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 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.
Participants who have been in the Plan or 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
-8-
VIACOM INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
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 (including the pre-1989 earnings
thereon) provided that the requirements for hardship are met. There is no
restriction on the number of hardship withdrawals permitted.
Plan Expenses:
- --------------
The Company pays for expenses incurred in connection with the administration of
the Plan, while the Plan pays for expenses incurred in connection with the
investment of Plan assets. Such investment fees are charged directly to or
included in the net earnings of the respective funds.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
- ----------------------------------------------------
Accounting Method
- -----------------
The accrual method of accounting is used for recordkeeping and financial
statement 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 Class A Common
Stock and Viacom Class B Common Stock are 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, which approximates market value. The loans
outstanding as of December 31, 1995 and 1994 carry interest rates ranging from
7% to 11%. Cash and cash equivalents are valued at cost plus accrued
interest, which approximates market.
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.
-9-
VIACOM INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
Payment of Benefits:
- -------------------
Benefits are recorded when paid.
NOTE 3 - INVESTMENTS:
- --------------------
Individual investments that represent greater than 5% of net assets available
for benefits are identified below:
December 31,
----------------------
1995 1994
---- ----
Putnam Voyager Fund..................... $44,415,248 $29,836,926
Putnam Vista Fund....................... 21,793,509 14,030,296
Putnam Fund for Growth and Income....... 27,829,153 18,867,030
Putnam U.S. Government Income Trust..... 9,785,722 8,489,178
Viacom Class A Common Stock............. 13,240,079 12,890,680
Viacom Class B Common Stock............. 20,035,565 13,082,803
Plan's interest in Master Trust......... 26,239,822 26,318,278
During 1995 and 1994 the Plan's investments (including investments bought, sold
and held during the year) appreciated (depreciated), as follows:
Year Ended December 31,
------------------------
1995 1994
---- ----
Putnam Voyager Fund..................... $10,057,128 $(1,109,782)
Putnam Vista Fund....................... 4,074,095 (624,959)
Putnam Fund for Growth and Income....... 5,456,692 (1,218,997)
Putnam U.S. Government Income Trust..... 732,129 (825,685)
Viacom Inc. Class A Common Stock........ 1,343,186 (1,659,966)
Viacom Inc. Class B Common Stock........ 2,128,178 (751,041)
----------- ------------
Net appreciation (depreciation)...... $23,791,408 $(6,190,430)
=========== ============
-10-
VIACOM INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
The Plan 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, 1995 and 1994 were as follows:
Net Asset Total Net
Available for Asset
Benefits Available for
Fund Total Units per Unit Benefits
---- ----------- -------- --------
December 31, 1995:
Employee Funds:
Putnam Voyager Fund ...................... 2,910,460 $ 15.37 $ 44,740,540
Putnam Vista Fund ........................ 2,394,330 9.17 21,964,465
Putnam Fund for Growth and Income ........ 1,718,408 16.30 28,006,962
Putnam U. S. Government Income Trust ..... 741,343 13.29 9,849,472
Certus Interest Income Fund .............. 26,397,855 1.00 26,397,855
Putnam Money Market Trust ................ 3,602,428 1.00 3,602,428
Viacom Inc. Common Stock Fund ............ 42,582 48.14 2,049,995
Loan Fund ................................ 7,309,191
Employer Fund:
Viacom Inc. Common Stock Fund............. 668,529 47.14 31,517,642
------------
$175,438,550
============
December 31, 1994:
Employee Funds:
Putnam Voyager Fund ...................... 2,590,011 $ 11.65 $ 30,166,226
Putnam Vista Fund ........................ 1,954,080 7.27 14,213,101
Putnam Fund for Growth and Income ........ 1,483,257 12.86 19,071,956
Putnam U. S. Government Income Trust ..... 696,405 12.29 8,562,150
Certus Interest Income Fund .............. 26,508,007 1.00 26,508,007
Putnam Money Market Trust ................ 2,980,609 1.00 2,980,609
Viacom Inc. Common Stock Fund ............ 631,534 41.88 26,447,684
Loan Fund ................................ 6,614,958
------------
$134,564,691
============
-11-
VIACOM INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 4 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
- -------------------------------------------------- ----------
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31, 1995
-----------------
Net assets available for benefits per the financial statements ....... $ 175,438,550
Amounts allocated to withdrawing participants ........................ (270,251)
-------------
Net assets available for benefits per the Form 5500 .................. 175,168,299
=============
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the year ended December 31, 1995:
Benefits paid to participants per the financial statements ........... $ 9,753,583
Add: Amounts allocated to withdrawing participants
at December 31, 1995 .............................................. 270,251
-------------
Benefits paid to participants per the Form 5500 ...................... $ 10,023,834
=============
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, 1995 but are not yet paid as of that date. There were no such
amounts as of December 31, 1994.
NOTE 5 - INCOME TAX STATUS:
- ---------------------------
The Plan, as amended through December 1994, was found by the Internal Revenue
Service ("IRS") in a letter issued August 17, 1995, to be qualified under
Section 401(a) of the IRC and is, therefore, exempt from federal income taxes
under the provisions of Section 501(a). The Company believes that Plan
amendments subsequent to December 1994, have not adversely affected the
qualified status of the Plan.
During December 1995, the Company submitted an application for the Voluntary
Compliance Resolution Program established by the IRS to correct errors in Plan
operation relating to certain contributions made during 1994. The Company's
management believes that the matter will be resolved in a manner satisfactory to
the IRS and thereby will preserve the qualified status of the Plan.
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 interests in such net assets.
-12-
VIACOM INVESTMENT PLAN
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
was 95.7% and 99.4% at December 31, 1995 and 1994, respectively, and the
allocated share of investment income was 99.2% and 99.4% for the respective
years then ended.
The following table presents the fair value of investments of the Master Trust:
December 31,
------------
1995 1994
---- ----
Guaranteed investment contracts ..................... $ 10,069,048 $ 12,689,002
Bank investment "pass through" contracts ............ 13,960,645 11,950,472
Putnam short-term investment fund ................... 3,176,052 1,861,942
Receivable for investments sold ..................... 211,205 --
Accrued plan expenses ............................... (8,405) (9,015)
Payable for investments purchased ................... -- (7,136)
------------ ------------
Net Investments in Master Trust ............... $ 27,408,545 $ 26,485,265
============ ============
Investment income of the Master Trust is as follows:
Year ended December 31,
-----------------------
1995 1994
---- ----
Investment Income:
Guaranteed investment contracts ..................... $ 877,860 $ 995,929
Bank investment "pass through" contracts ............ 905,644 723,140
Short-term investment fund .......................... 98,381 53,976
Investment manager fees ............................. (51,526) (38,072)
------------ ------------
Net Investment Income ..................... $ 1,830,359 $ 1,734,973
============ ============
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, 1995, the fair value of such assets in the aggregate was
$27,322,047 with an average yield of 6.85%. The return on assets for the year
ended December 31, 1995 was 7.18%. The bank investment "pass through" contracts
interest rates reset quarterly, with a 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.
NOTE 8 - SUBSEQUENT EVENTS:
- ---------------------------
Effective January 1, 1996, the Company merged the following defined contribution
plans sponsored by subsidiaries of Viacom Inc., with and into the Plan:
Paramount Communications Inc. Employees' Savings Plan, Prentice Hall Computer
Publishing Division Retirement Plan, and Blockbuster Entertainment Retirement
and Savings Plan. The following paragraphs reflect the significant effects of
the merger.
-13-
VIACOM INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
Plan participants have the option of investing their contributions or existing
account balance among the following funds: (1) Putnam Voyager Fund; (2) Putnam
Investors Fund; (3) George Putnam Fund of Boston; (4) Capital Research
EuroPacific Growth Fund; (5) Putnam Fund for Growth and Income; (6) Putnam
Income Fund; (7) Certus Interest Income Fund; and (8) the Viacom Common Stock
Fund. The Putnam Investors Fund, George Putnam Fund of Boston and Putnam Income
Fund are registered investment companies managed by Putnam Management Company,
Inc. and, therefore, are identified as parties-in-interest. The Capital
Research EuroPacific Growth Fund is a registered investment company managed by
Capital Research and Management Company.
The Plan was amended regarding the Company's matching contributions. Such
contributions will be equal to 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 (5% of annual compensation if base pay is greater than $65,000).
For employees hired after January 1, 1996, the Company's matching contribution
will vest at 20% per year of service, becoming fully vested after five years of
service.
-14-
SCHEDULE I
VIACOM INVESTMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
YEAR ENDED DECEMBER 31, 1995
(c) Unit/ Principal
Amount/Shares/
Maturity and (d) Cost of (e) Current
(b) Identity of issue, borrowing lessor or similar party Interest Rates Acquisitions Value
---------------------------------------------------- -------------- ------------ -----
Registered Investment Companies:
--------------------------------
* Putnam Voyager Fund......................................... 2,910,460 units 34,646,705 44,415,248
* Putnam Vista Fund........................................... 2,394,330 units 19,003,958 21,793,509
* Putnam Fund for Growth and Income........................... 1,718,408 units 24,097,008 27,829,153
* Putnam U.S. Government Income Trust........................ 741,343 units 9,811,716 9,785,722
* Putnam Money Market Trust................................... 3,573,658 units 3,575,658 3,575,658
Investment in Master Trust..................................... 26,239,822 26,239,822 26,239,822
COMMON STOCK FUND:
* Viacom Inc. Class A Common Stock............................ 288,482 shares 8,510,675 13,240,079
* Viacom Inc. Class B Common Stock............................ 422,629 shares 14,545,040 20,035,565
Loans to participants.......................................... Various maturities and
interest rates 7,263,971 7,263,971
------------ ------------
Total investments................. $147,694,553 $174,178,727
============ ============
* Identified as a party-in-interest to the Plan.
S-1
SCHEDULE II
VIACOM INVESTMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1995
Current Value
of Asset on
Purchase Selling Cost of Transaction Net Gain
Identity of Party Involved Description of Asset Price Price Asset Date (Loss)
- -------------------------- -------------------- ----- ----- ----- ---- ------
Single Transactions:
- --------------------
None
Series Transactions:
- --------------------
Putnam Voyager Fund 839,314 units $9,104,450
Viacom Inc. Class B Common Stock 144,847 shares $7,423,608
S-2
Exhibit I
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of 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 June 28, 1996, relating to the financial statements and
schedules of the Viacom Investment Plan appearing on page 1 of this Form 11-K.
PRICE WATERHOUSE LLP
New York, New York
June 28, 1996
