-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ub5Bi1zC3DvFqPnZYGC0IFia/6oNB8jAMUztvxEN50yQQ87x5i6IbxplxZwhsyXZ v26D6GUU/29V25RrLorjIQ== 0001005150-97-001070.txt : 19971216 0001005150-97-001070.hdr.sgml : 19971216 ACCESSION NUMBER: 0001005150-97-001070 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970716 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SINCLAIR BROADCAST GROUP INC CENTRAL INDEX KEY: 0000912752 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 521494660 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-26076 FILM NUMBER: 97737575 BUSINESS ADDRESS: STREET 1: 2000 WEST 41ST ST CITY: BALTIMORE STATE: MD ZIP: 21211 BUSINESS PHONE: 4104675005 MAIL ADDRESS: STREET 1: 2000 W 41ST ST CITY: BALTIMORE STATE: MD ZIP: 21211 8-K/A 1 FORM 8-K/A ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 JULY 16, 1997 --------------------------------- (Date of earliest event reported) SINCLAIR BROADCAST GROUP, INC. (Exact name of Registrant as specified in its charter) MARYLAND 33-69482 52-1494660 (State of incorporation) (Commission File Number) (IRS Employer Identification Number)
2000 W. 41st Street, Baltimore, Maryland 21211-1420 ------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (410) 467-5005 ================================================================================ ITEM 5. OTHER EVENTS As previously reported, Sinclair Broadcast Group, Inc. (the "Company") entered into acquisition agreements on July 16, 1997 (the "Heritage Acquisition Agreements") with The News Corporation Limited, Heritage Media Group, Inc. and certain subsidiaries of Heritage Media Corporation (collectively "Heritage") pursuant to which the Company will acquire the assets of, or the right to program pursuant to Local Marketing Agreements ("LMAs"), six television stations in three markets and the assets of 24 radio stations in seven markets (the "Heritage Acquisition"). The Company is filing with this Current Report on Form 8-K pro forma financial information for the Company showing the effect of the Heritage Acquisition and certain other transactions completed by the Company since January 1, 1996 (the "1996 Acquisitions"). The audited financial statements of Heritage Media Services, Inc. -- Broadcast Segment ("HMSI"), which includes all the assets to be acquired by the Company pursuant to the Heritage Acquisition Agreements, were filed with a previous amendment to this report on Form 8-K. THE TENDER OFFER On November 17, 1997, the Company commenced a tender offer (the "Tender Offer") for all of its outstanding 10% Senior Subordinated Notes due 2003 (the "1993 Notes") and a solicitation of consents ("Consents") from the holders of the 1993 Notes to eliminate or modify certain covenants and other provisions contained in the indenture relating to the 1993 Notes. The consummation of the Tender Offer is conditioned on, among other things, the valid tender of a majority of the outstanding 1993 Notes, the Company having obtained the requisite financing for payment of the tendered 1993 Notes and the Company having obtained consent from lenders under the Third Amended and Restated Credit Agreement dated as of May 20, 1997 with the Chase Manhattan Bank, as agent (as amended from time to time, the "Bank Credit Agreement"), to purchase of the 1993 Notes. As of midnight on December 9, 1997 holders of 98.1% of the outstanding principal amount of the 1993 Notes had tendered and not withdrawn their 1993 Notes and, therefore, are entitled to receive the payment (the "Consent Payment") to be made in connection with the timely giving of Consents. The Tender Offer will expire on December 16, 1997, unless extended, at which time the Company expects to purchase all of the 1993 Notes validly tendered with a portion of the net proceeds of a proposed offering by the Company of $250,000,000 in principal amount of Senior Subordinated Notes (the "Offering") or funds available under the Bank Credit Agreement. The total consideration and expenses payable in connection with the Tender Offer are expected to be approximately $108.2 million and $0.3 million, respectively. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS (A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED The financial statements required by this item were filed with a previous amendment to this report on Form 8-K. (B) PRO FORMA CONSOLIDATED FINANCIAL INFORMATION OF SINCLAIR The following Pro Forma Consolidated Financial Data include the unaudited pro forma consolidated balance sheet as of September 30, 1997 (the "Pro Forma Consolidated Balance Sheet") and the unaudited pro forma consolidated statement of operations for the year ended December 31, 1996 and the nine months ended September 30, 1997 (the "Pro Forma Consolidated Statement of Operations"). The unaudited Pro Forma Consolidated Balance Sheet is adjusted to give effect to the Heritage Acquisition, the completion of the Tender Offer and the Offering and the application of $108.5 million of the net proceeds of the Offering to pay the consideration payable in connection with, and expenses of, the Tender Offer, as if such transactions occurred on September 30, 1997. The unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 1996 and the nine months ended September 30, 1997 are adjusted to give effect to the 1996 Acquisitions, the issuance of $200,000,000 in liquidation amount of the Company's 11 5/8% High Yield Trust Offered Preferred Securities (the "HYTOPS") issued on March 14, 1997, (the "HYTOPS Issuance"), the issuance of $200,000,000 in principal amount of the Company's 9% Senior Subordinated Notes due 2007 (the "1997 Notes") issued on July 2, 1997 (the "July Debt Issuance"), the September 23, 1997 public offering by the Company of 4,345,000 shares (including shares sold on September 30, 1997 pursuant to the exercise of an overallotment option) of Class A Common Stock (the "Common Stock Offering"), and the September 23, 1997 public offering by the Company of $172.5 million aggregate liquidation value (including shares sold on September 30, 1997 pursuant to the exercise of an overallotment option) of its Series D Convertible Exchangeable Preferred Stock (the "Preferred Stock Offering"), the Heritage Acquisition, the completion of the Tender Offer (assuming that 100% of the outstanding 1993 Notes are purchased in the Tender Offer) and the Offering and the application of $108.5 million of the net proceeds of the Offering to pay the consideration payable in connection with, and expenses of, the Tender Offer as if such transactions occurred at the beginning of such periods. The pro forma adjustments are based upon available information and certain assumptions that the Company believes are reasonable. The Pro Forma Consolidated Financial Data should be read in conjunction with the Company's Consolidated Financial Statements as of and for the year ended December 31, 1996 and related notes thereto, the Company's unaudited consolidated financial statements as of and for the nine months ended September 30, 1997 and related notes thereto, the historical financial data of Flint T.V., Inc. ("Flint-TV"), the historical financial data of Superior Communications, Inc. ("Superior"), the historical financial data of KSMO and WSTR, the historical financial data of River City Broadcasting, L.P. ("River City") and the historical financial data of HMSI, all of which have been filed with the Securities and Exchange Commission as part of either (i) the Company's Annual Report on Form 10-K for the year ended December 31, 1996 (as amended), together with the report of Arthur Andersen LLP, independent certified public accountants; (ii) the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997; or (iii) the Company's Current Reports on Form 8-K and Form 8-K/A filed May 10, 1996, May 13, 1996, May 17, 1996, May 29, 1996, August 30, 1996, September 5, 1996, August 26, 1997, October 8, 1997 and December 5, 1997. The unaudited Pro Forma Consolidated Financial Data do not purport to represent what the Company's results of operations or financial position would have been had any of the above events occurred on the dates specified or to project the Company's results of operations or financial position for or at any future period or date. (C) EXHIBITS None SINCLAIR BROADCAST GROUP, INC. PRO FORMA CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1997 (DOLLARS IN THOUSANDS) (UNAUDITED)
CONSOLIDATED HERITAGE HISTORICAL ACQUISITION(A) -------------- -------------------- ASSETS CURRENT ASSETS: Cash and cash equivalents ................................. $ 10,336 Accounts receivable, net of allowance for doubtful accounts 96,492 Current portion of program contract costs ................. 54,186 $ 1,270 Prepaid expenses and other current assets ................. 5,790 Deferred barter costs ..................................... 4,474 2,201 Deferred tax asset ........................................ 5,533 ---------- Total current assets .................................... 176,811 3,471 PROGRAM CONTRACT COSTS, less current portion ............... 49,607 262 LOANS TO OFFICERS AND AFFILIATES ........................... 11,210 PROPERTY AND EQUIPMENT, net ................................ 161,301 22,666 NON-COMPETE AND CONSULTING AGREEMENTS, net ....................................................... 1,225 OTHER ASSETS ............................................... 145,302 (63,000) ACQUIRED INTANGIBLE BROADCASTING ASSETS, net ....................................................... 1,335,320 545,839 ---------- ------------- Total Assets ............................................ $1,880,776 $ 509,238 ========== ============= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable .......................................... $ 4,191 Accrued liabilities ....................................... 33,575 Current portion of long-term liabilities- Notes payable and commercial bank financing .............. 35,344 Capital leases payable ................................... -- Notes and capital leases payable to affiliates ........... 2,481 Program contracts payable ................................ 62,993 $ 1,080 Deferred barter revenues .................................. 5,124 ---------- Total current liabilities ............................... 143,708 1,080 LONG-TERM LIABILITIES: Notes payable and commercial bank financing .............. 880,719 $ 507,000 (d) Capital leases payable ................................... -- Notes and capital leases payable to affiliates ........... 20,635 Program contracts payable ................................ 75,688 1,158 Other long-term liabilities .............................. 4,640 ---------- Total liabilities ....................................... 1,125,390 509,238 ---------- ------------- MINORITY INTEREST IN CONSOLIDATED SUBSID- IARIES 3,837 -- ---------- ------------- COMPANY OBLIGATED MANDATORILY REDEEM- ABLE SECURITY OF SUBSIDIARY TRUST HOLD- ING SOLELY KDSM SENIOR DEBENTURES 200,000 -- ---------- ------------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Series B Preferred Stock ................................. 11 Series D Preferred Stock ................................. 35 Class A Common Stock ..................................... 134 Class B Common Stock ..................................... 258 Additional paid-in capital ............................... 553,801 Additional paid-in capital - deferred compensation ....... (779) Additional paid-in capital - equity put options .......... 23,117 Accumulated deficit ...................................... (25,028) ---------- Total stockholders' equity .............................. 551,549 -- ---------- ------------- Total Liabilities and Stockholders' Equity .............. $1,880,776 $ 509,238 ========== ============= CONSOLIDATED HISTORICAL, HERITAGE CONSOLIDATED TENDER OFFER ACQUISITION, HISTORICAL AND AND TENDER OFFER, HERITAGE ACQUISITION OFFERING(B) AND OFFERING ---------------------- ------------------ -------------- ASSETS CURRENT ASSETS: Cash and cash equivalents ................................. $ 10,336 $ $ 10,336 Accounts receivable, net of allowance for doubtful accounts 96,492 96,492 Current portion of program contract costs ................. 55,456 55,456 Prepaid expenses and other current assets ................. 5,790 5,790 Deferred barter costs ..................................... 6,675 6,675 Deferred tax asset ........................................ 5,533 5,533 ---------- ---------- Total current assets .................................... 180,282 -- 180,282 PROGRAM CONTRACT COSTS, less current portion ............... 49,869 49,869 LOANS TO OFFICERS AND AFFILIATES ........................... 11,210 11,210 PROPERTY AND EQUIPMENT, net ................................ 183,967 183,967 NON-COMPETE AND CONSULTING AGREEMENTS, net ....................................................... 1,225 1,225 OTHER ASSETS ............................................... 82,302 8,030 (c) 90,332 ACQUIRED INTANGIBLE BROADCASTING ASSETS, net ....................................................... 1,881,159 1,881,159 ---------- ---------- Total Assets ............................................ $2,390,014 $ 8,030 $2,398,044 ========== =========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable .......................................... $ 4,191 $ 4,191 Accrued liabilities ....................................... 33,575 33,575 Current portion of long-term liabilities- Notes payable and commercial bank financing .............. 35,344 35,344 Capital leases payable ................................... -- -- Notes and capital leases payable to affiliates ........... 2,481 2,481 Program contracts payable ................................ 64,073 64,073 Deferred barter revenues .................................. 5,124 5,124 ---------- ---------- Total current liabilities ............................... 144,788 144,788 LONG-TERM LIABILITIES: Notes payable and commercial bank financing .............. 1,387,719 $ 14,100 (e) 1,401,819 Capital leases payable ................................... -- -- Notes and capital leases payable to affiliates ........... 20,635 20,635 Program contracts payable ................................ 76,846 76,846 Other long-term liabilities .............................. 4,640 4,640 ---------- ---------- Total liabilities ....................................... 1,634,628 14,100 1,648,728 ---------- ----------- ---------- MINORITY INTEREST IN CONSOLIDATED SUBSID- IARIES 3,837 -- 3,837 ---------- ----------- ---------- COMPANY OBLIGATED MANDATORILY REDEEM- ABLE SECURITY OF SUBSIDIARY TRUST HOLD- ING SOLELY KDSM SENIOR DEBENTURES 200,000 -- 200,000 ---------- ----------- ---------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Series B Preferred Stock ................................. 11 11 Series D Preferred Stock ................................. 35 35 Class A Common Stock ..................................... 134 134 Class B Common Stock ..................................... 258 258 Additional paid-in capital ............................... 553,801 553,801 Additional paid-in capital - deferred compensation ....... (779) (779) Additional paid-in capital - equity put options .......... 23,117 23,117 Accumulated deficit ...................................... (25,028) (6,070)(f) (31,098) ---------- ----------- ---------- Total stockholders' equity .............................. 551,549 (6,070) 545,479 ---------- ----------- ---------- Total Liabilities and Stockholders' Equity .............. $2,390,014 $ 8,030 $2,398,044 ========== =========== ==========
(Continued on following page) 1 NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET (DOLLARS IN THOUSANDS) (a) The Heritage Acquisition column reflects the assets and liabilities acquired in connection with the $630,000 purchase of Heritage less the $60,000 divestiture of the Heritage television station KOKH in Oklahoma City, Oklahoma, which is required pursuant to the Heritage Acquisition Agreements and with respect to which the Company has entered into a letter of intent. The Heritage Acquisition is subject to a number of conditions customary for acquisitions of broadcasting properties. Total acquired intangibles are calculated as follows:
HERITAGE HERITAGE KOKH ACQUISITION ---------- ---------- ------------ Purchase Price .......................................... $630,000 Add: Liabilities acquired-- Current portion of program contracts payable ......... $ 1,461 $ (381) 1,080 Long-term portion of program contracts payable ....... 1,761 (603) 1,158 Less: Assets acquired-- Current portion of program contract costs ............ 2,140 (870) 1,270 Deferred barter costs ................................ 2,278 (77) 2,201 Program contract costs, less current portion ......... 1,075 (813) 262 Property and equipment ............................... 28,387 (5,721) 22,666 Sale of KOKH ......................................... 60,000 --------- Acquired intangibles ................................. $545,839 =========
(b) To reflect the proceeds of the Offering, net of $5,600 of underwriting discounts and commissions and estimated expenses and the application of a portion of the net proceeds therefrom to complete the Tender Offer. (c) To record underwriting discounts and commissions and estimated expenses and the deferred tax asset related to the Offering net of the write-off of the deferred financing costs related to the 1993 Notes. (d) To reflect the incurrence of $507,000 of borrowings under the Bank Credit Agreement in connection with the Heritage Acquisition. (e) To reflect the increase in indebtedness resulting from the Offering after giving effect to the Tender Offer and application of excess cash proceeds as follows: Indebtedness incurred ....................................... $ 249,020 Excess cash proceeds(l) ..................................... (134,920) Indebtedness repaid ......................................... (100,000) ---------- Pro forma adjustment ........................................ $ 14,100 ==========
(1) Offering proceeds, net of issuance discount ............... $ 249,020 Underwriting discounts, commissions and estimated expenses ... (5,600) Tender Offer Expenses ........................................ (300) Tender Offer ................................................. (108,200) ---------- Excess cash proceeds ......................................... $ 134,920 ==========
(f) To reflect the extraordinary loss of $6,070, net of the tax effect, related to the Tender Offer and the write-off of the deferred financing costs related to the 1993 Notes. 2 SINCLAIR BROADCAST GROUP, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
CONSOLIDATED FLINT- HISTORICAL TV(A) SUPERIOR(B) KSMO(C) -------------- -------- ------------- ---------- REVENUES: Station broadcast revenues, net of agency commis- sions $ 346,459 $1,012 $4,431 $ 7,694 Revenues realized from station barter arrangements 32,029 2,321 ---------- -------- Total revenues ....................................... 378,488 1,012 4,431 10,015 ---------- ------- ------ -------- OPERATING EXPENSES: Program and production .............................. 66,652 101 539 1,550 Selling, general and administrative .................. 75,924 345 2,002 2,194 Expenses realized from barter arrangements ............ 25,189 2,276 Amortization of program contract costs and net re- alizable value adjustments 47,797 125 736 601 Amortization of deferred compensation ............... 739 Depreciation and amortization of property and equipment .......................................... 11,711 4 373 374 Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets .................................... 58,530 529 Amortization of excess syndicated programming ......... 3,043 ---------- Total operating expenses ........................... 289,585 575 4,179 6,995 ---------- ------- ------ -------- Broadcast operating income (loss) .................. 88,903 437 252 3,020 ---------- ------- ------ -------- OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense . (84,314) (457) (823) Interest income ....................................... 3,136 Subsidiary trust distributions ....................... Other income (expense) .............................. 342 19 4 7 ---------- ------- ------ -------- Income (loss) before provision (benefit) for in- come taxes 8,067 456 (201) 2,204 PROVISION (BENEFIT) FOR INCOME TAXES ................................................ 6,936 ---------- NET INCOME (LOSS) BEFORE EXTRAORDI- NARY ITEM ............................................ $ 1,131 EXTRAORDINARY ITEM .................................... -- ---------- NET INCOME (LOSS) .................................... $ 1,131 $ 456 $ (201) $ 2,204 ========== ======= ====== ======== NET INCOME (LOSS) AVAILABLE TO COM- MON STOCKHOLDERS .................................... $ 1,131 ========== NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE: NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ........... $ 0.03 ========== EXTRAORDINARY ITEM .................................... $ -- ========== NET INCOME (LOSS) AVAILABLE TO COM- MON STOCKHOLDERS ..................................... $ 0.03 ========== WEIGHTED AVERAGE COMMON AND COM- MON EQUIVALENT SHARES OUTSTAND- ING .................................................. 37,381 ========== RIVER CITY(E) 1996 -------------------------- ACQUISITION WSTR(D) RIVER CITY WSYX WYZZ(F) ADJUSTMENTS ----------- ------------ ------------- --------- ------------------ REVENUES: Station broadcast revenues, net of agency commis- sions $ 7,488 $ 86,869 $ (10,783) $1,838 Revenues realized from station barter arrangements 1,715 --------- Total revenues ....................................... 9,203 86,869 (10,783) 1,838 --------- ---------- ---------- ------- OPERATING EXPENSES: Program and production .............................. 961 10,001 (736) 214 Selling, general and administrative .................. 2,173 39,786 (3,950) 702 $ (3,577)(h) Expenses realized from barter arrangements ............ 1,715 Amortization of program contract costs and net re- alizable value adjustments 1,011 9,721 (458) 123 Amortization of deferred compensation ............... 194 (j) Depreciation and amortization of property and equipment .......................................... 284 6,294 (1,174) 6 (943)(k) Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets .................................... 39 14,041 (3,599) 3 4,034 (m) Amortization of excess syndicated programming ......... Total operating expenses ........................... 6,183 79,843 (9,917) 1,048 (292) --------- ---------- ---------- ------- ------------- Broadcast operating income (loss) .................. 3,020 7,026 (866) 790 292 --------- ---------- ---------- ------- ------------- OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense . (1,127) (12,352) (17,409)(q) Interest income ....................................... 15 195 (1,636)(w) Subsidiary trust minority interest expense ............ Other income (expense) .............................. (149) (8) ---------- ---------- Income (loss) before provision (benefit) for in- come taxes 1,908 (5,280) (874) 790 (18,753) PROVISION (BENEFIT) FOR INCOME TAXES ................................................ (7,900)(y) ------------- NET INCOME (LOSS) BEFORE EXTRAORDI- NARY ITEM EXTRAORDINARY ITEM .................................... NET INCOME (LOSS) .................................... $ 1,908 $ (5,280) $ (874) $ 790 $ (10,853) ========= ========== ========== ======= ============= NET INCOME (LOSS) AVAILABLE TO COM- MON STOCKHOLDERS NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE: NET INCOME (LOSS) .................................... EXTRAORDINARY ITEM .................................... NET INCOME (LOSS) AVAILABLE TO COM- MON STOCKHOLDERS WEIGHTED AVERAGE COMMON AND COM- MON EQUIVALENT SHARES OUTSTAND- ING 1996 ACQUISITIONS, JULY HYTOPS ISSUANCE HYTOPS DEBT AND JULY ISSUANCE ISSUANCE DEBT ISSUANCE ------------------ -------------------- ------------------- REVENUES: Station broadcast revenues, net of agency commis- sions $ 445,008 Revenues realized from station barter arrangements 36,065 ----------- Total revenues ....................................... 481,073 ----------- OPERATING EXPENSES: Program and production .............................. 79,282 Selling, general and administrative .................. 115,599 Expenses realized from barter arrangements ............ 29,180 Amortization of program contract costs and net re- alizable value adjustments 59,656 Amortization of deferred compensation ............... 933 Depreciation and amortization of property and equipment .......................................... 16,929 Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets .................................... $ 500 (n) $ 450 (o) 74,527 Amortization of excess syndicated programming ......... 3,043 ----------- Total operating expenses ........................... 500 450 379,149 ------------- -------------- ----------- Broadcast operating income (loss) .................. (500) (450) 101,924 ------------- -------------- ----------- OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense . 11,820 (r) (18,000) (s) (122,662) Interest income ....................................... 1,710 Subsidiary trust minority interest expense ............ (23,250)(x) (23,250) Other income (expense) .............................. 215 ----------- Income (loss) before provision (benefit) for in- come taxes (11,930) (18,450) (42,063) PROVISION (BENEFIT) FOR INCOME TAXES ................................................ (4,772)(y) (7,380)(y) (13,116) ------------- -------------- ----------- NET INCOME (LOSS) BEFORE EXTRAORDI- NARY ITEM EXTRAORDINARY ITEM .................................... NET INCOME (LOSS) .................................... $ (7,158) $ (11,070) $ (28,947) ============= ============== =========== NET INCOME (LOSS) AVAILABLE TO COM- MON STOCKHOLDERS NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE: NET INCOME (LOSS) .................................... EXTRAORDINARY ITEM .................................... NET INCOME (LOSS) AVAILABLE TO COM- MON STOCKHOLDERS WEIGHTED AVERAGE COMMON AND COM- MON EQUIVALENT SHARES OUTSTAND- ING
(Continued on following page) 3 SINCLAIR BROADCAST GROUP, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
1996 ACQUISITIONS, COMMON HYTOPS ISSUANCE STOCK OFFERING AND JULY AND PREFERRED DEBT ISSUANCE STOCK OFFERING -------------------- ---------------- REVENUES: Station broadcast revenues, net of agency commissions .................. $ 445,008 Revenues realized from station barter arrangements ..................... 36,065 ----------- Total revenues ....................................................... 481,073 -- ----------- ------------ OPERATING EXPENSES: Program and production ................................................. 79,282 Selling, general and administrative .................................... 115,599 Expenses realized from barter arrangements ............................. 29,180 Amortization of program contract costs and net realizable value adjust- ments ................................................................. 59,656 Amortization of deferred compensation .................................. 933 Depreciation and amortization of property and equipment ................ 16,929 Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets ................................ 74,527 Amortization of excess syndicated programming .......................... 3,043 ----------- Total operating expenses ......................................... 379,149 -- ----------- ------------ Broadcast operating income (loss) ..................................... 101,924 -- OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense ..................... (122,662) 21,769 (t) Gain on sale of station ................................................ -- Interest income ........................................................ 1,710 Subsidiary trust distributions ......................................... (23,250) Other income (expense) ................................................. 215 ----------- Income (loss) before provision (benefit) for income taxes ............. (42,063) 21,769 PROVISION (BENEFIT) FOR INCOME TAXES .................................... (13,116) 8,708 (y) ----------- ------------ NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ............................. (28,947) 13,061 EXTRAORDINARY ITEM ...................................................... -- -- ----------- ------------ NET INCOME (LOSS) ....................................................... $ (28,947) $ 13,061 =========== ============ NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS NET INCOME (LOSS) PER COMMON AND COMMON EQUIVA- LENT SHARE: NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ............................. EXTRAORDINARY ITEM ...................................................... NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING .....................................................
1996 ACQUISITIONS, HYTOPS ISSUANCE, JULY DEBT ISSUANCE, HERITAGE(G) COMMON STOCK -------------------------- OFFERING AND PREFERRED STOCK HERITAGE OFFERING ACQUISITION KOKH -------------------- ------------- ------------ REVENUES: Station broadcast revenues, net of agency commissions .................. $ 445,008 $ 95,302 $ (7,953) Revenues realized from station barter arrangements ..................... 36,065 4,292 (178) -------------- ---------- -------- Total revenues ....................................................... 481,073 99,594 (8,131) -------------- ---------- -------- OPERATING EXPENSES: Program and production ................................................. 79,282 20,089 (1,871) Selling, general and administrative .................................... 115,599 31,916 (1,722) Expenses realized from barter arrangements ............................. 29,180 3,478 (70) Amortization of program contract costs and net realizable value adjust- ments ................................................................. 59,656 3,165 (1,208) Amortization of deferred compensation .................................. 933 -- -- Depreciation and amortization of property and equipment ................ 16,929 5,472 (1,022) Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets ................................ 74,527 8,460 (367) Amortization of excess syndicated programming .......................... 3,043 -- -- -------------- ---------- -------- Total operating expenses ......................................... 379,149 72,580 (6,260) -------------- ---------- -------- Broadcast operating income (loss) ..................................... 101,924 27,014 (1,871) OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense ..................... (100,893) (17,949) 1,025 Gain on sale of station ................................................ -- 6,031 -- Interest income ........................................................ 1,710 -- -- Subsidiary trust distributions ......................................... (23,250) -- -- Other income (expense) ................................................. 215 (203) -- -------------- ---------- -------- Income (loss) before provision (benefit) for income taxes ............ (20,294) 14,893 (846) PROVISION (BENEFIT) FOR INCOME TAXES .................................... (4,408) 7,853 (466) -------------- ---------- -------- NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ............................. (15,886) 7,040 (380) EXTRAORDINARY ITEM ...................................................... -- -- -- -------------- ---------- -------- NET INCOME (LOSS) ....................................................... $ (15,886) $ 7,040 $ (380) ============== ========== ======== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ (26,236) ============== NET INCOME (LOSS) PER COMMON AND COMMON EQUIVA- LENT SHARE: NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ............................. $ (0.37) ============== EXTRAORDINARY ITEM ...................................................... $ -- ============== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ (0.60) ============== WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING ..................................................... 43,405 (aa) ==============
1996 ACQUISITIONS, HYTOPS ISSUANCE, JULY DEBT ISSUANCE, COMMON STOCK OFFERING, PREFERRED STOCK OFFERING HERITAGE OFFERING AND THE, AND ACQUISITION HERITAGE TENDER ADJUSTMENTS ACQUISITION OFFER ----------------- -------------------- ----------------- REVENUES: Station broadcast revenues, net of agency commissions .................. $ 532,357 Revenues realized from station barter arrangements ..................... 40,179 ----------- Total revenues ....................................................... -- 572,536 -- ------------- ----------- ------------ OPERATING EXPENSES: Program and production ................................................. 97,500 Selling, general and administrative .................................... (1,808)(i) 143,985 Expenses realized from barter arrangements ............................. 32,588 Amortization of program contract costs and net realizable value adjust- ments ................................................................. 61,613 Amortization of deferred compensation .................................. 933 Depreciation and amortization of property and equipment ................ (900)(l) 20,479 Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets ................................. 9,531 (p) 92,151 Amortization of excess syndicated programming .......................... 3,043 ----------- Total operating expenses ......................................... 6,823 452,292 -- ------------- ----------- ------------ Broadcast operating income (loss) ..................................... (6,823) 120,244 -- OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense ..................... (17,776)(u) (135,593) Gain on sale of station ................................................ 6,031 Interest income ........................................................ 1,710 Subsidiary trust distributions ......................................... (23,250) Other income (expense) ................................................. 12 ----------- Income (loss) before provision (benefit) for income taxes ............. (24,599) (30,846) (3,194) PROVISION (BENEFIT) FOR INCOME TAXES .................................... (9,840)(y) (6,861) ------------- ----------- ------ NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ............................. (14,759) (23,985) (1,874) EXTRAORDINARY ITEM ...................................................... -- -- ------------- ----------- ------ NET INCOME (LOSS) ....................................................... $ (14,759) $ (23,985) $ (8,230) ============= =========== ============ NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ (34,335) =========== NET INCOME (LOSS) PER COMMON AND COMMON EQUIVA- LENT SHARE: NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ............................. $ (0.55) =========== EXTRAORDINARY ITEM ...................................................... $ -- =========== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS $ (0.79) =========== WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING ..................................................... 43,405 ===========
1996 ACQUISITIONS, HYTOPS ISSUANCE, JULY DEBT ISSUANCE, COMMON STOCK OFFERING, PREFERRED STOCK OFFERING, HERITAGE ACQUISITION, OFFERING, AND TENDER OFFER, ------------------- REVENUES: Station broadcast revenues, net of agency commissions .................. $ 532,357 Revenues realized from station barter arrangements ..................... 40,179 ----------- Total revenues ....................................................... 572,536 ----------- OPERATING EXPENSES: Program and production ................................................. 97,500 Selling, general and administrative .................................... 143,985 Expenses realized from barter arrangements ............................. 32,588 Amortization of program contract costs and net realizable value adjust- ments ................................................................. 61,613 Amortization of deferred compensation ................................. 933 Depreciation and amortization of property and equipment ............... 20,479 Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets ................................. 92,151 Amortization of excess syndicated programming .......................... 3,043 ----------- Total operating expenses ............................................. 452,292 ----------- Broadcast operating income (loss) ..................................... 120,244 OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense ..................... (138,787) Gain on sale of station ................................................ 6,031 Interest income ........................................................ 1,710 Subsidiary trust distributions ......................................... (23,250) Other income (expense) ................................................. 12 ----------- Income (loss) before provision (benefit) for income taxes ............. (34,040) PROVISION (BENEFIT) FOR INCOME TAXES .................................... (8,181) ----------- NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ............................. (25,859) EXTRAORDINARY ITEM ...................................................... (6,356) ----------- NET INCOME (LOSS) ....................................................... $ (32,215) =========== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ...................... (42,565) =========== NET INCOME (LOSS) PER COMMON AND COMMON EQUIVA- LENT SHARE: NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ............................. $ (0.60) =========== EXTRAORDINARY ITEM ...................................................... $ (0.15) =========== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ...................... $ (0.98) =========== WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING ..................................................... 43,405 ===========
4 SINCLAIR BROADCAST GROUP, INC. PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
JULY CONSOLIDATED HYTOPS DEBT HISTORICAL ISSUANCE ISSUANCE -------------- --------------------- --------------------- REVENUES: Station broadcast revenues, net of agency commissions ...... $ 333,028 Revenues realized from station barter arrangements ......... 31,289 ---------- Total revenues ........................................ 364,317 -- -- ========== ============== ============== OPERATING EXPENSES: Program and production ..................................... 68,776 Selling, general and administrative ........................ 78,637 Expenses realized from barter arrangements ................ 26,279 Amortization of program contract costs and net realizable value adjustments ......................................... 47,069 Amortization of deferred compensation ...................... 350 Depreciation and amortization of property and equipment .... 12,786 Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets .... 51,717 88 (dd) $ 225 (ee) ---------- -------------- -------------- Total operating expenses .............................. 285,614 88 225 ---------- -------------- -------------- Broadcast operating income (loss) ......................... 78,703 (88) (225) OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense ......... (77,342) 2,894 (gg) (9,000) (hh) Gain on Sale of Station .................................... -- Interest income ............................................ 1,364 Subsidiary trust distributions ............................. (12,852) (4,618) (ll) Other income ............................................... 36 ---------- Income (loss) before provision (benefit) for income taxes (10,091) (1,812) (9,225) PROVISION (BENEFIT) FOR INCOME TAXES ........................ (4,170) (725) (y) (3,690) (y) ---------- -------------- -------------- NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ....................................................... (5,921) (1,087) (5,535) EXTRAORDINARY ITEM .......................................... -- -- -- ---------- -------------- -------------- NET INCOME (LOSS) ........................................... $ (5,921) $ (1,087) $ (5,535) ========== ============== ============== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................................... $ (6,096) ========== NET INCOME (LOSS) PER COMMON SHARE AND COMMON EQUIVALENT SHARE: ................................... NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ....................................................... $ (0.15) ========== EXTRAORDINARY ITEM .......................................... $ -- ========== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................................... $ (0.16) ========== WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING .............................. 38,929 ==========
HYTOPS ISSUANCE, JULY DEBT ISSUANCE, HERITAGE(G) COMMON STOCK COMMON STOCK -------------------------- OFFERING AND OFFERING AND PREFERRED STOCK PREFERRED HERITAGE OFFERING STOCK OFFERING ACQUISITION KOKH ----------------- ------------------ ------------- ------------ REVENUES: Station broadcast revenues, net of agency commissions ...... $ 333,028 $ 73,049 $ (5,696) Revenues realized from station barter arrangements ......... 31,289 3,860 (195) ------------ ---------- -------- Total revenues ........................................ -- 364,317 76,909 (5,891) =========== ============ ========== ======== OPERATING EXPENSES: Program and production ..................................... 68,776 24,578 (1,758) Selling, general and administrative ........................ 78,637 15,037 (1,137) Expenses realized from barter arrangements ................. 26,279 3,053 (105) Amortization of program contract costs and net realizable value adjustments .......................................... 47,069 1,275 (470) Amortization of deferred compensation ...................... 350 -- -- Depreciation and amortization of property and equipment .... 12,786 4,238 (678) Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets ..... 52,030 6,326 (275) ------------ ---------- -------- Total operating expenses .................................. -- 285,927 54,507 (4,423) ----------- ------------ ---------- -------- Broadcast operating income (loss) ......................... -- 78,390 22,402 (1,468) OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense ......... 15,420 (ii) (68,028) (13,412) 1,008 Gain on Sale of Station .................................... -- 9,401 -- Interest income ............................................ 1,364 -- -- Subsidiary trust distributions ............................. (17,470) -- -- Other income ............................................... 36 (276) -- ------------ ---------- -------- Income (loss) before provision (benefit) for income taxes 15,420 (5,708) 18,115 (460) PROVISION (BENEFIT) FOR INCOME TAXES ........................ 6,168 (y) (2,417) 9,546 (242) ----------- ------------ ---------- -------- NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ....................................................... 9,252 (3,291) 8,569 (218) EXTRAORDINARY ITEM .......................................... -- -- -- -- ----------- ------------ ---------- -------- NET INCOME (LOSS) ........................................... $ 9,252 $ (3,291) $ 8,569 $ (218) =========== ============ ========== ======== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................................... $ (11,054) ============ NET INCOME (LOSS) PER COMMON SHARE AND COMMON EQUIVALENT SHARE: ................................... NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ...................................................... $ (0.08) ============ EXTRAORDINARY ITEM .......................................... $ -- ============ NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................................... $ (0.26) ============ WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING .............................. 43,274 (aa) ============
HYTOPS ISSUANCE, JULY DEBT ISSUANCE, COMMON STOCK OFFERING, PREFERRED STOCK OFFERING HERITAGE AND TENDER OFFER ACQUISITION HERITAGE AND ADJUSTMENTS ACQUISITION OFFERING --------------------- ------------------ --------------------- REVENUES: Station broadcast revenues, net of agency commissions ...... $ 400,381 Revenues realized from station barter arrangements ......... 34,954 --------- Total revenues ........................................ -- 435,335 -- ============== ========= ============== OPERATING EXPENSES: Program and production .................................... 91,596 Selling, general and administrative ........................ (1,412) (bb) 91,125 Expenses realized from barter arrangements ................. 29,227 Amortization of program contract costs and net realizable value adjustments ......................................... 47,874 Amortization of deferred compensation ...................... 350 Depreciation and amortization of property and equipment .... (897) (cc) 15,449 Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets .... 7,167 (ff) 65,248 -------------- --------- Total operating expenses .............................. 4,858 340,869 -- -------------- --------- -------------- Broadcast operating income (loss) ......................... (4,858) 94,466 -- OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense ......... (13,621) (jj) (94,053) (2,396) (kk) Gain on Sale of Station .................................... 9,401 Interest income ............................................ 1,364 Subsidiary trust distributions ............................. (17,470) Other income ............................................... (240) --------- Income (loss) before provision (benefit) for income taxes (18,479) (6,532) (2,396) PROVISION (BENEFIT) FOR INCOME TAXES ........................ (7,392) (y) (505) (990)(y) -------------- --------- -------------- NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ....................................................... (11,087) (6,027) (1,406) EXTRAORDINARY ITEM .......................................... -- -- (6,193) (z) -------------- --------- -------------- NET INCOME (LOSS) ........................................... $ (11,087) $ (6,027) $ (7,599) ============== ========= ============== NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................................... $ (13,790) ========= NET INCOME (LOSS) PER COMMON SHARE AND COMMON EQUIVALENT SHARE: ................................... NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ....................................................... $ (0.14) ========= EXTRAORDINARY ITEM .......................................... $ -- ========= NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................................... $ (0.32) ========= WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING .............................. 43,274 =========
HYTOPS ISSUANCE, JULY DEBT ISSUANCE, COMMON STOCK OFFERING, PREFERRED STOCK OFFERING HERITAGE ACQUISITION, TENDER, OFFER AND OFFERING ----------------- REVENUES: Station broadcast revenues, net of agency commissions ...... 400,381 Revenues realized from station barter arrangements ......... 34,954 --------- Total revenues ........................................ 435,335 ========= OPERATING EXPENSES: Program and production ..................................... 91,596 Selling, general and administrative ........................ 91,125 Expenses realized from barter arrangements ................. 29,227 Amortization of program contract costs and net realizable value adjustments ......................................... 47,874 Amortization of deferred compensation ...................... 350 Depreciation and amortization of property and equipment .... 15,449 Amortization of acquired intangible broadcasting assets, non-compete and consulting agreements and other assets .... 65,248 --------- Total operating expenses .............................. 340,869 --------- Broadcast operating income (loss) ......................... 94,466 OTHER INCOME (EXPENSE): Interest and amortization of debt discount expense ......... (96,449) Gain on Sale of Station .................................... 9,401 Interest income ............................................ 1,364 Subsidiary trust distributions ............................. (17,470) Other income ............................................... (240) --------- Income (loss) before provision (benefit) for income taxes (8,928) PROVISION (BENEFIT) FOR INCOME TAXES ........................ (1,495) --------- NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ....................................................... (7,433) EXTRAORDINARY ITEM .......................................... (6,193) --------- NET INCOME (LOSS) ........................................... $ (13,626) ========= NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................................... $ (21,389) ========= NET INCOME (LOSS) PER COMMON SHARE AND COMMON EQUIVALENT SHARE: ................................... NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM ....................................................... $ (0.17) ========= EXTRAORDINARY ITEM .......................................... $ (0.14) ========= NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS ............................................... $ (0.49) ========= WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING .............................. 43,274 =========
5 SINCLAIR BROADCAST GROUP, INC. NOTES TO PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (DOLLARS IN THOUSANDS) (a) The Flint-TV column reflects the results of operations for WSMH for the period from January 1, 1996 to February 28, 1996, the date the acquisition of Flint-TV was consummated. (b) The Superior column reflects the results of operations for Superior for the period from January 1, 1996 to May 7, 1996, the date the acquisition of Superior was consummated. (c) The KSMO column reflects the results of operations for the period from January 1, 1996 to June 30, 1996 as the transaction was consummated in July 1996. (d) The WSTR column reflects the results of operations for the period from January 1, 1996 to July 31, 1996 as the transaction was consummated in August 1996. (e) The River City column reflects the results of operations for River City (including KRRT, Inc.) for the period from January 1, 1996 to May 31, 1996, the date the River City acquisition was consummated. The WSYX column removes the results of WSYX from the results of River City for the period as the Company has not yet acquired WSYX. See "Business of Sinclair -- Broadcasting Acquisition Strategy" contained in the Company's Current Report on Form 8-K filed on October 8, 1997. (f) The WYZZ column reflects the results of operations for the period from January 1, 1996 to June 30, 1996 as the transaction was consummated in July 1996. (g) The Heritage Acquisition column reflects the Pro Forma Consolidated Statement of Operations for the period from January 1, 1996 to December 31, 1996 and the Pro Forma Consolidated Statement of Operations for the period from January 1, 1997 to September 30, 1997. The KOKH column removes the results of KOKH from the results of Heritage for both periods to reflect the sale of KOKH, which is required pursuant to the Heritage Acquisition Agreements and with respect to which the Company has entered into a letter of intent. See "Business of Sinclair -- 1997 Acquisitions" contained in the Company's Current Report on Form 8-K filed on October 8, 1997. (h) To adjust River City operating expenses for non-recurring LMA payments made to KRRT, Inc. for KRRT, Inc. debt service and to adjust River City and Superior operating expenses for employment contracts and other corporate overhead expenses not assumed at the time of the 1996 Acquisitions. (i) To adjust Heritage operating expenses for corporate overhead expenses which the Company does not expect to incur upon consummation of the Heritage Acquisition on a going-forward basis. (j) To record compensation expense related to options granted under the Company's Long-Term Incentive Plan:
YEAR ENDED DECEMBER 31, 1996 ------------- Compensation expense related to the Long-Term Incentive Plan on a pro forma basis ............................. $ 933 Less: Compensation expense recorded by the Company re- lated to the Long-Term Incentive Plan (739) ------ Pro forma adjustment ................................... $ 194 ======
(k) To record depreciation expense related to acquired tangible assets and eliminate depreciation expense recorded by Flint-TV, Superior, KSMO, WSTR, River City and WYZZ from the period of January 1, 1996 through the date of acquisition. Tangible assets are to be depreciated over lives ranging from 5 to 29.5 years, calculated as follows:
YEAR ENDED DECEMBER 31, 1996 --------------------------------- FLINT-TV SUPERIOR KSMO WSTR RIVER CITY WYZZ TOTAL ---------- ---------- ----------- --------- ------------ ----------- --------- Depreciation expense on acquired tangible assets $ 32 $ 315 $ 240 $ 507 $ 3,965 $ 159 $ 5,218 Less: Depreciation expense recorded by Flint-TV, Superior, KSMO, WSTR, River City and WYZZ ....... (4) (373) (374) (284) (5,120) (6) (6,161) ----- ------ ------- ------- --------- ------ --------- Pro forma adjustment ............................. $ 28 $ (58) $ (134) $ 223 $ (1,155) $ 153 $ (943) ===== ====== ======= ======= ========= ====== =========
(l) To record depreciation expense related to acquired tangible assets of $3,550 and eliminate depreciation expense of $4,450 recorded by Heritage. Tangible assets are to be depreciated over lives ranging from 5 to 29.5 years. (m) To record amortization expense related to acquired intangible assets and deferred financing costs and eliminate amortization expense recorded by Flint-TV, Superior, KSMO, WSTR, River City and WYZZ from the period of January 1, 1996 through date of acquisition. Intangible assets are to be amortized over lives ranging from 1 to 40 years, calculated as follows:
YEAR ENDED DECEMBER 31, 1996 ----------------------------- FLINT-TV SUPERIOR KSMO WSTR RIVER CITY WYZZ TOTAL ---------- ---------- ------- ------- ------------ ---------- ----------- Amortization expense on acquired intangible assets $ 167 $ 827 $ 180 $ 285 $ 12,060 $ 99 $ 13,618 Deferred financing costs ............................. 1,429 1,429 Less: Amortization expense recorded by Flint-TV, Superior, KSMO, WSTR, River City and WYZZ ........... -- (529) -- (39) (10,442) (3) (11,013) ------ ------- ------ ----- ---------- ----- ---------- Pro forma adjustment ................................. $ 167 $ 298 $ 180 $ 246 $ 3,047 $ 96 $ 4,034 ====== ======= ====== ===== ========== ===== ==========
6 (n) To record amortization expense on other assets that relate to the HYTOPS Issuance for one year ($6,000 over 12 years). (o) To record amortization expense on other assets that relate to the July Debt Issuance for one year ($4,500 over 10 years). (p) To record amortization expense related to acquired intangible assets of $17,624 and eliminate amortization expense of $8,093 recorded by Heritage. Intangible assets are to be amortized over lives ranging from 1 to 40 years. (q) To record interest expense for the year ended December 31, 1996 on acquisition financing relating to Superior of $59,850 (under the Bank Credit Agreement at 8.0% for four months), KSMO and WSTR of $10,425 and $7,881, respectively (both under the Bank Credit Agreement at 8.0% for six months), River City (including KRRT) of $868,300 (under the Bank Credit Agreement at 8.0% for five months) and of $851 for hedging agreements related to the River City financing and WYZZ of $20,194 (under the Bank Credit Agreement at 8.0% for six months) and eliminate interest expense recorded. No interest expense has been recorded for Flint-TV as it has been assumed that the proceeds from the issuance of $300,000,000 in principal amount of the Company's 10% Senior Subordinated Notes due 2005 (the "1995 Notes") issued on August 23, 1995 were used to purchase Flint-TV.
YEAR ENDED DECEMBER 31, 1996 ------------------------------------- SUPERIOR KSMO WSTR RIVER CITY WYZZ TOTAL ------------- ----------- ---------------------- ---------- ------------- Interest expense adjustment as noted above ........ $ (1,596) $ (417) $ (315) $ (29,032) $ (808) $ (32,168) Less: Interest expense recorded by Superior, KSMO, WSTR, River City and WYZZ ........................ 457 823 1,127 12,352 -- 14,759 --------- ------- ------- --------- ------- ---------- Pro forma adjustment .............................. $ (1,139) $ 406 $ 812 $ (16,680) $ (808) $ (17,409) ========= ======= ======= ========= ======= ==========
(r) To record the net interest expense reduction for 1996 related to application of the HYTOPS Issuance proceeds to the outstanding balance under the revolving credit facility under the Bank Credit Agreement offset by an increase in commitment fees for the available but unused portion of the revolving credit facility for the year ended December 31, 1996. Interest on adjusted borrowing on the revolving credit facility .................. $ 12,600 Commitment fee on available but unused borrowings of $250,000 of revolving credit facility at 1/2 of 1% for 12 months ............................................ (1,250) Commitment fee on available borrowings recorded by the Company ................... 470 -------- Pro forma adjustment ............................................................. $ 11,820 ========
(s) To record interest expense on the 1997 Notes for one year ($200,000 at 9%). (t) To record the interest expense reduction of $23,055 related to application of the net proceeds of the Common Stock Offering and the Preferred Stock Offering to the outstanding balance under the revolving credit facility offset by an increase in commitment fees of $1,286 for the available but unused portion of revolving credit facility. (u) To record interest expense on acquisition financing of $507,000 (under the Bank Credit Agreement at 6.72%) and $630 of commitment fees for the available but unused portion of the revolving credit facility and to eliminate interest expense of $16,924 recorded by Heritage. (v) To record interest expense including deferred financing costs related to the Offering and to eliminate interest expense including deferred financing costs related the Tender Offer. (w) To eliminate interest income for the year ended December 31, 1996 on proceeds from the sale of the 1995 Notes due to assumed utilization of excess cash for the following acquisitions: Flint-TV, KSMO and WSTR and WYZZ of $34,400 (with a commercial bank at 5.7% for two months), $10,425 and $7,881 (both with a commercial bank at 5.7% for six months) and $20,194 (with a commercial bank at 5.7% for six months).
YEAR ENDED DECEMBER 31, 1996 ------------------------------------------------------------------------- FLINT-TV KSMO WSTR RIVER CITY WYZZ TOTAL ---------- ----------- ----------- ------------ ----------- ------------- Interest income adjustment as noted above ........ $ (327) $ (297) $ (226) $ -- $ (576) $ (1,426) Less: Interest income recorded by Flint-TV, KSMO, WSTR, River City and WYZZ ...................... -- -- (15) (195) -- (210) ------- ------- ------- ------- ------- --------- Pro forma adjustment ............................. $ (327) $ (297) $ (241) $ (195) $ (576) $ (1,636) ======= ======= ======= ======= ======= =========
(x) To record subsidiary trust minority interest expense for the year ended December 31, 1996 ($200,000 aggregate liquidation value of HYTOPS). (y) To record tax provision (benefit) at the applicable tax rates. (z) To record the extraordinary loss, net of the tax effect, related to the Tender Offer and the write-off of the deferred financing costs related to the 1993 Notes. 7 (aa) Weighted average shares outstanding on a pro forma basis assumes that 1,150,000 shares of Series B Preferred Stock were converted to 4,181,818 shares of Class A Common Stock and the Company's Incentive Stock Options and Long-Term Incentive Plan Options were outstanding as of the beginning of the period, and that the 4,345,000 shares of Class A Common Stock issued in the Common Stock Offering converted to Class A Common Stock were outstanding as of the beginning of the period. (bb) To adjust Heritage operating expenses for corporate overhead expenses which the Company does not expect to incur upon its consummation of the Heritage Acquisition on a going-forward basis. (cc) To record depreciation expenses related to acquired tangible assets of $2,663 and eliminate depreciation expense of $3,560 recorded by Heritage. Tangible assets are to be depreciated over lives ranging from 5 to 29.5 years. (dd) To record amortization expense on other assets that resulted from the HYTOPS Issuance ($6,000 over 12 years). Amortization expense on other assets ................ $ 250 Amortization expense recorded by the Company ........ (162) ------ Pro forma adjustment ................................ $ 88 ======
(ee) To record amortization expense on other assets for six months ($4,500 over 10 years). (ff) To record amortization expense related to acquired intangible assets of $13,218 and eliminate amortization expense of $6,051 recorded by Heritage. Intangible assets are to be amortized over lives ranging from 1 to 40 years. (gg) To record the net interest expense reduction for 1997 related to application of the HYTOPS Issuance proceeds to the outstanding balance under the revolving credit facility offset by an increase in commitment fees for the available but unused portion of the revolving credit facility. Interest on adjusted borrowing on the revolving credit facility .................. $3,235 Commitment fee on available but unused borrowings of $250,000 of revolving credit facility at 1/2 of 1% for six months ........................................... (625) Commitment fee on available borrowings recorded by the Company ................... 284 ------ Pro forma adjustment ............................................................. $2,894 ======
(hh) To record interest expense on the 1997 Notes for six months ($200,000 at 9%). (ii) To record the interest expense reduction of $16,331 related to application of the net proceeds of the Common Stock Offering and the Preferred Stock Offering to the outstanding balance under the revolving credit facility offset by an increase in commitment fees of $911 for the available but unused portion of the revolving credit facility. (jj) To record interest expense on acquisition financing of $507,000 (under the Bank Credit Agreement at 6.72%) and $473 of commitment fees for the available but unused portion of the revolving credit facility and eliminate interest expense of $12,404 recorded by Heritage for the nine months ended. (kk) To record interest expense including deferred financing costs related to the Offering and to eliminate interest expense including deferred financing costs related to the Tender Offer for the nine months ended. (ll) To record subsidiary trust minority interest expense ($200,000 aggregate liquidation value HYTOPS). Subsidiary trust minority interest expense for six months ......................... $ (11,625) Subsidiary trust minority interest expense recorded by the Company for three months 7,007 --------- Pro forma adjustment .............................................................. $ (4,618) =========
8 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to this report to be signed on its behalf by the undersigned hereunto duly authorized. SINCLAIR BROADCAST GROUP, INC. BY: /s/ DAVID B. AMY ----------------------------------- David B. Amy Chief Financial Officer/ Principal Accounting Officer Dated: December 12, 1997 -----END PRIVACY-ENHANCED MESSAGE-----