SINCLAIR BROADCAST GROUP INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)
ý		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the quarterly period ended September 30, 2002

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

		For the transition period from to .

Commission File Number : 000-26076

SINCLAIR BROADCAST GROUP, INC.

(Exact name of Registrant as specified in its charter)

Maryland		52-1494660
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or organization)

10706 Beaver Dam Road Hunt Valley, Maryland 21030
(Address of principal executive offices)

(410) 568-1500
(Registrant’s telephone number, including area code)

None
(Former name, former address and former fiscal year-if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý Noo

As of November 8, 2002, there were 43,718,396 shares of Class A Common Stock, $.01 par value; 41,815,887 shares of Class B Common Stock, $.01 par value; and 3,450,000 shares of Series D Preferred Stock, $.01 par value, convertible into 7,561,444 shares of Class A Common Stock at a conversion price of $22.813 per share; of the Registrant issued and outstanding.

In addition, 2,000,000 shares of $200 million aggregate liquidation value 11 5/8% High Yield Trust Offered Preferred Securities of Sinclair Capital, a subsidiary trust of Sinclair Broadcast Group, Inc. are issued and outstanding.

SINCLAIR BROADCAST GROUP, INC. AND SUBSIDIARIES

Form 10-Q

For the Quarter Ended September 30, 2002

Table of Contents

Part I. Financial Information

Item 1. Consolidated Financial Statements
	Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001

	Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2002 and 2001

	Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2002

	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2002 and 2001

	Notes to Unaudited Consolidated Financial Statements

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Part II. Other Information

Item 4. Controls and Procedures

Item 6. Exhibits and Reports on Form 8-K

	Signature

	Disclosure Certification by CEO

	Disclosure Certification by CFO

SINCLAIR BROADCAST GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30, 2002			December 31, 2001
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	44,069		$	32,063
Accounts receivable, net of allowance for doubtful accounts	128,346			143,811
Current portion of program contract costs	84,946			82,850
Refundable income taxes	18,777			44,789
Prepaid expenses and other current assets	18,320			18,050
Deferred barter costs	3,169			3,026
Assets held for sale	—			128,394
Deferred tax assets	2,032			2,014
Total current assets	299,659			454,997

PROGRAM CONTRACT COSTS, less current portion	65,004			63,167
LOANS TO OFFICERS AND AFFILIATES	1,513			7,916
PROPERTY AND EQUIPMENT, net	322,498			281,651
OTHER ASSETS	94,048			105,894
GOODWILL	1,730,386			1,733,073
BROADCAST LICENSES	429,573			421,914
DEFINITE-LIVED INTANGIBLE ASSETS, net	280,420			297,019
Total Assets	$	3,223,101		$	3,365,631
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	8,180		$	29,316
Accrued liabilities	72,372			63,623
Notes payable, capital leases and commercial bank financing, – current portion	4,088			182
Notes and capital leases payable to affiliates – current portion	264			7,086
Current portion of program contracts payable	124,753			111,069
Deferred barter revenues	3,597			3,548
Liabilities held for sale	—			20,823
Total current liabilities	213,254			235,647
LONG-TERM LIABILITIES:
Notes payable, capital leases and commercial bank financing, less current portion	1,552,371			1,645,138
Notes and capital leases payable to affiliates, less current portion	30,209			33,224
Program contracts payable, less current portion	136,473			127,958
Deferred tax liability	233,485			233,679
Other long-term liabilities	142,106			113,691
Total liabilities	2,307,898			2,389,337

MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES	11,388			4,334

COMMITMENTS AND CONTINGENCIES

COMPANY OBLIGATED MANDATORILY REDEEMABLE SECURITIES OF SUBSIDIARY
TRUST HOLDING SOLELY KDSM SENIOR DEBENTURES	200,000			200,000

STOCKHOLDERS’ EQUITY:
Series D Preferred Stock, $0.01 par value, 3,450,000 shares authorized, issued and outstanding, liquidation preference of $172,500,000	35			35
Class A Common Stock, $0.01 par value, 500,000,000 shares authorized and 43,702,775 and 41,088,992 shares issued and outstanding, respectively	429			411
Class B Common Stock, $0.01 par value, 140,000,000 shares authorized and 41,815,887 and 43,219,035 shares issued and outstanding, respectively	418			432
Additional paid-in capital	752,708			748,353
Additional paid-in capital deferred compensation	(903		)	(1,452		)
Retained earnings (deficit)	(46,708		)	26,886
Accumulated other comprehensive loss	(2,164		)	(2,705		)
Total stockholders’ equity	703,815			771,960
Total Stockholders’ Equity and Liabilities	$	3,223,101		$	3,365,631

The accompanying notes are an integral part of these unaudited consolidated statements.

SINCLAIR BROADCAST GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data) (Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30
	2002		2001		2002		2001
REVENUES:
Station broadcast revenues, net of agency commissions	$	163,875	$	148,577	$	483,986	$	462,335