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 SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended September 30, 2003 |
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OR |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
Commission File Number: 00-21315
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ON COMMAND CORPORATION |
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(Exact name of Registrant as specified in its charter) |
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Delaware |
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77-0435194 |
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(State or other
jurisdiction of |
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(I.R.S. Employer Identification No.) |
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4610
South Ulster Street, 6th Floor |
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80237 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: (720) 873-3200 |
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Indicate by check mark whether the registrant is an accelerated filer (as described in Rule 12(b)-2 of the Securities Exchange Act). o Yes ý No
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 ý Yes o No
The number of shares outstanding of the Registrant’s Common Stock as of October 31, 2003 was 30,822,340 shares.
ON COMMAND CORPORATION
(An Indirect Consolidated Subsidiary of Liberty Media
Corporation)
Condensed Consolidated Balance Sheets
(unaudited)
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September 30, |
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December 31, |
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(amounts in thousands) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
1,642 |
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$ |
4,501 |
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Accounts receivable, net |
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29,675 |
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33,525 |
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Other current assets |
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3,305 |
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3,461 |
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Total current assets |
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34,622 |
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41,487 |
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Property and equipment: |
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Video systems |
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In service |
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680,719 |
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668,697 |
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Construction in progress |
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28,924 |
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37,511 |
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709,643 |
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706,208 |
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Support equipment, vehicles and leasehold improvements |
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26,774 |
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26,245 |
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736,417 |
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732,453 |
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Accumulated depreciation |
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(483,159 |
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(457,482 |
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253,258 |
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274,971 |
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Goodwill |
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65,642 |
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65,580 |
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Other assets, net |
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14,798 |
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14,444 |
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Total assets |
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$ |
368,320 |
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$ |
396,482 |
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I-1
ON COMMAND CORPORATION
(An Indirect Consolidated Subsidiary of Liberty Media
Corporation)
Condensed Consolidated Balance Sheets (continued)
(unaudited)
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September 30, |
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December 31, |
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(amounts in thousands) |
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Liabilities and Stockholders’ Deficit |
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Current liabilities: |
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Accounts payable |
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$ |
18,807 |
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$ |
28,689 |
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Accounts payable to parent (note 7) |
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1,724 |
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1,906 |
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Accrued compensation |
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5,523 |
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6,433 |
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Sales, use and property tax liabilities |
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5,125 |
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4,585 |
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Other accrued liabilities |
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8,142 |
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7,987 |
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Common stock subject to repurchase obligation (notes 3 and 9) |
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1,876 |
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2,333 |
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Current portion of debt (note 6) |
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9,704 |
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833 |
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Total current liabilities |
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50,901 |
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52,766 |
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Long-term debt (note 6): |
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Third party |
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218,890 |
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261,946 |
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Due to parent |
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40,000 |
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— |
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258,890 |
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261,946 |
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Other long-term liabilities |
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— |
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496 |
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Total liabilities |
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309,791 |
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315,208 |
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Minority interest in consolidated subsidiary |
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— |
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259 |
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Mandatorily redeemable preferred stock |
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104,612 |
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97,848 |
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Stockholders’ deficit: |
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Preferred stock, $.01 par value; shares authorized – 10,000,000; shares issued and outstanding – 98,500 at September 30, 2003 and December 31, 2002 |
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— |
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Common stock, $.01 par value; shares authorized - 150,000,000; shares issued – 30,977,840 at September 30, 2003 and 30,973,989 at December 31, 2002 |
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310 |
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310 |
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Additional paid-in capital |
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294,500 |
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299,398 |
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Accumulated other comprehensive loss |
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(1,704 |
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(4,533 |
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Accumulated deficit |
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(311,092 |
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(285,777 |
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(17,986 |
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9,398 |
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Common stock held in treasury, at cost (155,500 shares at September 30, 2003 and 119,500 shares at December 31, 2002) |
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(1,884 |
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(1,344 |
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Note receivable from stockholder (note 7) |
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(26,213 |
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(24,887 |
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Total stockholders’ deficit |
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(46,083 |
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(16,833 |
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Commitments and contingencies (notes 6, 8 and 9) |
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Total liabilities and stockholders’ deficit |
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$ |
368,320 |
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$ |
396,482 |
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See accompanying notes to condensed consolidated financial statements.
I-2
ON COMMAND CORPORATION
(An Indirect Consolidated Subsidiary of Liberty Media
Corporation)
Condensed Consolidated Statements of Operations
(unaudited)
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Three
Months Ended |
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Nine
Months Ended |
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2003 |
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2002 |
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2003 |
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2002 |
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(amounts in thousands, except per share amounts) |
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Net Revenue: |
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Net room revenue |
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$ |
59,462 |
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$ |
58,009 |
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$ |
171,687 |
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$ |
171,393 |
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System and equipment sales and other |
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1,504 |
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2,781 |
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5,551 |
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7,779 |
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60,966 |
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60,790 |
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177,238 |
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179,172 |
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Direct costs of net revenue: |
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Content fees, commissions and other in-room services (note 7) |
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31,358 |
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28,901 |
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90,310 |
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