================================================================================
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)
<TABLE>
<S> <C> <C>
MARYLAND 33-69482 52-1494660
(State of incorporation) (Commission File Number) (IRS Employer
Identification Number)
</TABLE>
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
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<PAGE>
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
<PAGE>
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
<PAGE>
SINCLAIR BROADCAST GROUP, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
CONSOLIDATED HERITAGE
HISTORICAL ACQUISITION(A)
-------------- --------------------
ASSETS
<S> <C> <C>
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
========== =============
<CAPTION>
CONSOLIDATED
HISTORICAL,
HERITAGE
CONSOLIDATED TENDER OFFER ACQUISITION,
HISTORICAL AND AND TENDER OFFER,
HERITAGE ACQUISITION OFFERING(B) AND OFFERING
---------------------- ------------------ --------------
ASSETS
<S> <C> <C> <C>
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
========== =========== ==========
</TABLE>
(Continued on following page)
1
<PAGE>
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:
<TABLE>
<CAPTION>
HERITAGE
HERITAGE KOKH ACQUISITION
---------- ---------- ------------
<S> <C> <C> <C>
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
=========
</TABLE>
(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:
<TABLE>
<S> <C>
Indebtedness incurred ....................................... $ 249,020
Excess cash proceeds(l) ..................................... (134,920)
Indebtedness repaid ......................................... (100,000)
----------
Pro forma adjustment ........................................ $ 14,100
==========
</TABLE>
<TABLE>
<S> <C>
(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
==========
</TABLE>
(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
<PAGE>
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)
<TABLE>
<CAPTION>
CONSOLIDATED FLINT-
HISTORICAL TV(A) SUPERIOR(B) KSMO(C)
-------------- -------- ------------- ----------
<S> <C> <C> <C> <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
==========
<CAPTION>
RIVER CITY(E) 1996
-------------------------- ACQUISITION
WSTR(D) RIVER CITY WSYX WYZZ(F) ADJUSTMENTS
----------- ------------ ------------- --------- ------------------
<S> <C> <C> <C> <C> <C>
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
<CAPTION>
1996 ACQUISITIONS,
JULY HYTOPS ISSUANCE
HYTOPS DEBT AND JULY
ISSUANCE ISSUANCE DEBT ISSUANCE
------------------ -------------------- -------------------
<S> <C> <C> <C>
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)
============= ============== ===========
<PAGE>
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
</TABLE>
(Continued on following page)
3
<PAGE>
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)
<TABLE>
<CAPTION>
1996 ACQUISITIONS, COMMON
HYTOPS ISSUANCE STOCK OFFERING
AND JULY AND PREFERRED
DEBT ISSUANCE STOCK OFFERING
-------------------- ----------------
<S> <C> <C>
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 .....................................................
</TABLE>
<TABLE>
<CAPTION>
1996 ACQUISITIONS,
HYTOPS ISSUANCE,
JULY DEBT
ISSUANCE, HERITAGE(G)
COMMON STOCK --------------------------
OFFERING AND
PREFERRED STOCK HERITAGE
OFFERING ACQUISITION KOKH
-------------------- ------------- ------------
<S> <C> <C> <C>
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)
==============
</TABLE>
<TABLE>
<CAPTION>
1996 ACQUISITIONS,
HYTOPS ISSUANCE,
JULY DEBT
ISSUANCE,
COMMON STOCK
OFFERING,
PREFERRED STOCK OFFERING
HERITAGE OFFERING AND THE, AND
ACQUISITION HERITAGE TENDER
ADJUSTMENTS ACQUISITION OFFER
----------------- -------------------- -----------------
<S> <C> <C> <C>
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
===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1996 ACQUISITIONS,
HYTOPS ISSUANCE,
JULY DEBT
ISSUANCE,
COMMON STOCK
OFFERING,
PREFERRED STOCK
OFFERING,
HERITAGE
ACQUISITION,
OFFERING,
AND TENDER OFFER,
-------------------
<S> <C>
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
===========
</TABLE>
4
<PAGE>
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)
<TABLE>
<CAPTION>
JULY
CONSOLIDATED HYTOPS DEBT
HISTORICAL ISSUANCE ISSUANCE
-------------- --------------------- ---------------------
REVENUES:
<S> <C> <C> <C>
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
==========
</TABLE>
<TABLE>
<CAPTION>
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:
<S> <C> <C> <C> <C>
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)
============
</TABLE>
<TABLE>
<CAPTION>
HYTOPS ISSUANCE,
JULY DEBT
ISSUANCE,
COMMON STOCK
OFFERING,
PREFERRED STOCK
OFFERING
HERITAGE AND TENDER OFFER
ACQUISITION HERITAGE AND
ADJUSTMENTS ACQUISITION OFFERING
--------------------- ------------------ ---------------------
REVENUES:
<S> <C> <C> <C>
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
=========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HYTOPS ISSUANCE,
JULY DEBT
ISSUANCE,
COMMON STOCK
OFFERING,
PREFERRED STOCK
OFFERING
HERITAGE
ACQUISITION,
TENDER,
OFFER AND
OFFERING
-----------------
REVENUES:
<S> <C>
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
=========
</TABLE>
5
<PAGE>
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:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1996
-------------
<S> <C>
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
======
</TABLE>
(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:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
---------------------------------
FLINT-TV SUPERIOR KSMO WSTR RIVER CITY WYZZ TOTAL
---------- ---------- ----------- --------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
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)
===== ====== ======= ======= ========= ====== =========
</TABLE>
(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:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-----------------------------
FLINT-TV SUPERIOR KSMO WSTR RIVER CITY WYZZ TOTAL
---------- ---------- ------- ------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
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
====== ======= ====== ===== ========== ===== ==========
</TABLE>
6
<PAGE>
(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.
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-------------------------------------
SUPERIOR KSMO WSTR RIVER CITY WYZZ TOTAL
------------- ----------- ---------------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
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)
========= ======= ======= ========= ======= ==========
</TABLE>
(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.
<TABLE>
<S> <C>
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
========
</TABLE>
(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).
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1996
-------------------------------------------------------------------------
FLINT-TV KSMO WSTR RIVER CITY WYZZ TOTAL
---------- ----------- ----------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
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)
======= ======= ======= ======= ======= =========
</TABLE>
(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
<PAGE>
(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).
<TABLE>
<S> <C>
Amortization expense on other assets ................ $ 250
Amortization expense recorded by the Company ........ (162)
------
Pro forma adjustment ................................ $ 88
======
</TABLE>
(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.
<TABLE>
<S> <C>
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
======
</TABLE>
(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).
<TABLE>
<S> <C>
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)
=========
</TABLE>
8
<PAGE>
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
