UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
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For the quarterly period ended March 31, 2003 |
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OR |
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
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For the transition period from to . |
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Commission File Number : 000-26076 |
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SINCLAIR BROADCAST GROUP, INC. |
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(Exact name of Registrant as specified in its charter) |
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Maryland |
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52-1494660 |
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(State or other
jurisdiction of |
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(I.R.S. Employer Identification No.) |
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10706 Beaver Dam Road |
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(Address of principal executive offices) |
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(410) 568-1500 |
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(Registrant’s telephone number, including area code) |
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None |
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(Former name, former address and former fiscal year-if changed since last report) |
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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 May 8, 2003, there were 43,898,320 shares of Class A Common Stock, $.01 par value; 41,705,678 shares of Class B Common Stock, $.01 par value; and 3,450,000 shares of Series D Preferred Stock, $.01 par value, convertible into 7,561,644 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 March 31, 2003
Table of Contents
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Part I. Financial Information |
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Item 1. Consolidated Financial Statements |
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Consolidated Balance Sheets as of March 31, 2003 and December 31, 2002 |
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Consolidated Statements of Operations for the Three Months Ended March 31, 2003 and 2002 |
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Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2003 |
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Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002 |
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Notes to Unaudited Consolidated Financial Statements |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosure About Market Risk |
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Disclosure Certification by CEO |
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Disclosure Certification by CFO |
2
SINCLAIR BROADCAST GROUP, INC. AND SUBSIDIARIES
(In thousands)
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March 31, |
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December
31, |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
49,690 |
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$ |
5,327 |
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Accounts receivable, net of allowance for doubtful accounts |
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127,018 |
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147,002 |
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Current portion of program contract costs |
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60,569 |
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76,472 |
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Refundable income taxes |
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2,481 |
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38,906 |
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Prepaid expenses and other current assets |
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11,837 |
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20,807 |
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Deferred barter costs |
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3,573 |
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2,539 |
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Deferred tax assets |
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7,627 |
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6,001 |
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Total current assets |
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262,795 |
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297,054 |
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PROGRAM CONTRACT COSTS, less current portion |
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40,594 |
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51,229 |
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LOANS TO AFFILIATES |
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1,467 |
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1,489 |
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PROPERTY AND EQUIPMENT, net |
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335,784 |
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337,250 |
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OTHER ASSETS |
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109,262 |
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91,119 |
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GOODWILL |
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1,123,080 |
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1,122,982 |
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BROADCAST LICENSES |
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429,928 |
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429,928 |
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DEFINITE-LIVED INTANGIBLE ASSETS, net |
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271,182 |
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275,722 |
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Total Assets |
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$ |
2,574,092 |
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$ |
2,606,773 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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$ |
9,464 |
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$ |
15,573 |
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Accrued liabilities |
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62,205 |
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64,165 |
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Notes payable, capital leases and commercial bank financing – current portion |
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329 |
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292 |
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Notes and capital leases payable to affiliates – current portion |
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4,157 |
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4,157 |
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Current portion of program contracts payable |
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114,613 |
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121,396 |
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Deferred barter revenues |
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3,707 |
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2,971 |
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Total current liabilities |
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194,475 |
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208,554 |
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LONG-TERM LIABILITIES: |
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Notes payable, capital leases and commercial bank financing, less current portion |
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1,525,915 |
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1,518,690 |
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Notes and capital leases payable to affiliates, less current portion |
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28,130 |
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28,831 |
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Program contracts payable, less current portion |
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107,376 |
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124,658 |
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Deferred tax liability |
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170,436 |
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173,209 |
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Other long-term liabilities |
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137,173 |
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138,905 |
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Total liabilities |
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2,163,505 |
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2,192,847 |
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MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES |
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2,694 |
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2,746 |
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COMMITMENTS AND CONTINGENCIES |
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COMPANY OBLIGATED MANDATORILY REDEEMABLE SECURITIES OF SUBSIDIARY TRUST HOLDING SOLELY KDSM SENIOR DEBENTURES |
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200,000 |
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200,000 |
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STOCKHOLDERS’ EQUITY: |
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Series D Preferred Stock, $0.01 par value, 3,450,000 shares authorized, issued and outstanding, liquidation preference of $172,500,000 |
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35 |
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35 |
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Class A Common Stock, $0.01 par value, 500,000,000 shares authorized and 43,847,174 and 43,866,259 shares issued and outstanding, respectively |
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438 |
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439 |
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Class B Common Stock, $0.01 par value, 140,000,000 shares authorized and 41,705,678 and 41,705,678 shares issued and outstanding, respectively |
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417 |
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417 |
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Additional paid-in capital |
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760,704 |
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760,478 |
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Additional paid-in capital deferred compensation |
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(407 |
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(551 |
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Retained deficit |
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(551,894 |
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(547,958 |
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Accumulated other comprehensive loss |
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(1,400 |
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(1,680 |
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Total stockholders’ equity |
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207,893 |
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211,180 |
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Total Liabilities and Stockholders’ Equity |
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$ |
2,574,092 |
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$ |
2,606,773 |
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The accompanying notes are an integral part of these unaudited consolidated statements.
3
SINCLAIR BROADCAST GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) (Unaudited)
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Three
Months Ended |
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2003 |
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2002 |
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REVENUES: |
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Station broadcast revenues, net of agency commissions |
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$ |
152,481 |
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$ |
144,533 |
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Revenues realized from station barter arrangements |
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14,117 |
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14,733 |
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Other operating divisions revenue |
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4,079 |
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1,113 |
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Total revenues |
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170,677 |
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160,379 |
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OPERATING EXPENSES: |
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Station production expenses |
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36,754 |
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33,761 |
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Station selling, general and administrative expenses |
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34,706 |
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33,681 |
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Expenses recognized from station barter arrangements |
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12,905 |
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12,842 |
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Amortization of program contract costs and net realizable value adjustments |
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28,690 |
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29,702 |
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Stock-based compensation expense |
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592 |
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442 |
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Other operating divisions expenses |
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5,221 |
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1,628 |
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Depreciation and amortization of property and equipment |
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11,098 |
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9,720 |
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Corporate general and administrative expenses |
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