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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURI-
TIES AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to ___________
Commission file number 000-26076
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Sinclair Broadcast Group, Inc. 401(k) Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, MD 21211
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<PAGE>
SINCLAIR BROADCAST GROUP, INC.
401(k) PROFIT SHARING PLAN AND TRUST
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1998 AND 1997
TOGETHER WITH REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS
<PAGE>
SINCLAIR BROADCAST GROUP, INC.
401(k) PROFIT SHARING PLAN AND TRUST
AS OF DECEMBER 31, 1998 AND 1997
INDEX
PAGE
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 2
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits
as of December 31, 1998 and 1997 3
Statement of Changes in Net Assets Available for Plan Benefits,
for the Year Ended December 31, 1998, with Fund Information, and 1997 4
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES 5
SUPPLEMENTAL SCHEDULES:
Schedule I - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 7
Schedule II - Schedule of Reportable Transactions for the Year
Ended December 31, 1998 8
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustees of Sinclair Broadcast Group, Inc.
401(k) Profit Sharing Plan and Trust:
We have audited the accompanying statements of net assets available for plan
benefits of the Sinclair Broadcast Group, Inc. 401(K) Profit Sharing Plan and
Trust for plan benefits as of December 31, 1998 and 1997, and the related
statement of changes in net assets for the years then ended. These financial
statements and the schedules referred to below are the responsibility of the
Plan's trustee. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1998 and 1997, and the changes in its net assets available for
plan benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the statement of
changes in net assets available for plan benefits for the year ended December
31, 1998, is presented for purposes of additional analysis rather than to
present the changes in net assets available for plan benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Baltimore, Maryland,
June 23, 1999
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<PAGE>
SINCLAIR BROADCAST GROUP, INC.
401(k) PROFIT SHARING PLAN AND TRUST
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
ASSETS:
Investments, at market value (participant directed)-
Legg Mason High Yield Portfolio $ 2,389,838 $ 1,740,774
Legg Mason Investment Grade Income Fund 1,745,807 920,661
Legg Mason Special Investment Trust 7,037,556 4,747,235
Legg Mason Total Return Trust 4,611,382 3,076,786
Legg Mason U.S. Government Portfolio 1,179,605 658,561
Legg Mason U.S. Government Money Market Portfolio 1,184,282 354,887
Legg Mason Value Trust 8,706,010 3,167,564
Putnam International Growth Fund 3,964,310 2,108,446
Putnam New Opportunities Fund 6,014,510 2,488,276
-------------- --------------
36,833,300 19,263,190
Sinclair stock, at market 583,745 -
Disbursement account 2,909 11,404
Loans to participants 1,342,641 667,950
Receivables-
Employee contributions 461,558 162,107
Employer matching contributions 1,382,723 859,409
-------------- --------------
1,844,281 1,021,516
-------------- --------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 40,606,876 $ 20,964,060
============== ==============
</TABLE>
The accompanying notes and schedules are an integral part of these statements.
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<PAGE>
SINCLAIR BROADCAST GROUP, INC.
401(k) PROFIT SHARING PLAN AND TRUST
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1998,WITH FUND INFORMATION, AND 1997
<TABLE>
<CAPTION>
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PARTICIPANT-DIRECTED
-------------------------------------------------------------------------------------------------
LEGG MASON LEGG MASON LEGG MASON LEGG MASON
LEGG MASON INVESTMENT SPECIAL LEGG MASON U.S. U.S. GOVERNMENT
HIGH YIELD GRADE INVESTMENT TOTAL RETURN GOVERNMENT MONEY MARKET
PORTFOLIO INCOME FUND TRUST TRUST PORTFOLIO PORTFOLIO
--------- ----------- ----- ----- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Additions to net assets
attributed to:
Contributions-
Employee $ 396,595 $ 221,615 $ 889,306 $ 604,386 $ 107,124 $ 109,158
Employer - - - - - -
Rollover 767,259 751,066 1,286,633 1,739,099 483,091 1,512,325
Interest and dividend
income 178,382 104,971 290,320 276,199 51,231 37,647
Realized and unrealized
gains on investments (259,858) (13,896) 934,403 (297,575) 9,755 -
------------- ------------- ------------- ------------- ------------- ---------------
Total additions 1,082,378 1,063,756 3,400,662 2,322,109 651,201 1,659,130
------------- ------------- ------------- ------------- ------------- ---------------
Deductions from net assets attributed to :
Benefits paid to
participants 360,041 222,059 881,731 658,918 385,039 442,139
Administrative expenses 2,677 1,594 6,393 4,539 1,059 946
------------- ------------- ------------- ------------- ------------- ---------------
Total deductions 362,718 223,653 888,124 663,457 386,098 443,085
------------- ------------- ------------- ------------- ------------- ---------------
TRANSFERS (70,596) (14,957) (222,217) (124,056) 255,941 (386,650)
------------- ------------- ------------- ------------- ------------- ---------------
Net increase 649,064 825,146 2,290,321 1,534,596 521,044 829,395
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 1,740,774 920,661 4,747,235 3,076,786 658,561 354,887
------------- ------------- ------------- ------------- ------------- ---------------
End of year $ 2,389,838 $ 1,745,807 $ 7,037,556 $ 4,611,382 $ 1,179,605 $ 1,184,282
============= ============ ============= ============= ============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1998
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FUND INFORMATION
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NONPARTICIPANT-DIRECTED
----------------------------------------------------------------------------------------------------
PUTNAM PUTNAM
LEGG MASON INTERNATIONAL NEW
VALUE GROWTH OPPORTUNITIES SINCLAIR LOANS TO DISBURSEMENT
TRUST FUND FUND STOCK PARTICIPANTS ACCOUNT
----- ---- ---- ----- ------------ -------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Additions to net assets
attributed to:
Contributions-
Employee $ 1,161,603 $ 706,837 $ 969,537 $ - $ - $ -
Employer - - - 859,409 - -
Rollover 2,698,856 1,134,284 2,048,729 - 210,802 -
Interest and dividend
income 130,239 116,607 189,382 - - -
Realized and unrealized
gains on investments 2,150,654 339,845 780,933 (172,957) - -
------------- ------------- ------------- ------------- ------------- -------------
Total additions 6,141,352 2,297,573 3,988,581 686,452 210,802 -
------------- ------------- ------------- ------------- ------------- -------------
Deductions from net assets attributed to :
Benefits paid to
participants 806,915 308,504 420,259 44,633 122,254 -
Administrative expenses 5,820 3,540 4,885 - - -
------------- ------------- ------------- ------------- ------------- -------------
Total deductions 812,735 312,044 425,144 44,633 122,254 -
------------- ------------- ------------- ------------- ------------- -------------
TRANSFERS 209,829 (129,665) (37,203) (58,074) 586,143 (8,495)
------------- ------------- ------------- ------------- ------------- -------------
Net increase 5,538,446 1,855,864 3,526,234 583,745 674,691 (8,495)
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 3,167,564 2,108,446 2,488,276 - 667,950 11,404
------------- ------------- ------------- ------------- ------------- -------------
End of year $ 8,706,010 $ 3,964,310 $ 6,014,510 $ 583,745 $ 1,342,641 $ 2,909
============= ============= ============ ============ ============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1998
--------------------------------------------------------------
NONPARTICIPANT-DIRECTED
--------------------------------------------------------------
DISBURSEMENT 1998 1997
ACCOUNT RECEIVABLES TOTAL TOTAL
------- ----------- ----- -----
<S> <C> <C> <C> <C>
ASSETS:
Additions to net assets
attributed to:
Contributions-
Employee $ - $ 299,451 $ 5,465,612 $ 3,734,462
Employer - 523,314 1,382,723 893,201
Rollover - - 12,632,144 2,074,653
Interest and dividend
income - - 1,374,978 1,114,282
Realized and unrealized
gains on investments - - 3,471,304 2,293,896
------------- ------------- ------------- -------------
Total additions - 822,765 24,326,761 10,110,494
------------- ------------- ------------- -------------
Deductions from net assets attributed to :
Benefits paid to
participants - - 4,652,492 1,911,274
Administrative expenses - - 31,453 15,992
------------- ------------- ------------- -------------
Total deductions - - 4,683,945 1,927,266
------------- ------------- ------------- -------------
TRANSFERS (8,495) - - -
------------- ------------- ------------- ------------
Net increase (8,495) 822,765 19,642,816 8,183,228
NET ASSETS AVAILABLE FOR
PLAN BENEFITS:
Beginning of year 11,404 1,021,516 20,964,060 12,780,832
------------- ------------- ------------- -------------
End of year $ 2,909 $ 1,844,281 $ 40,606,876 $ 20,964,060
============= ============= ============= =============
</TABLE>
The accompanying notes and schedules are an integral part of this statement.
-4-
<PAGE>
SINCLAIR BROADCAST GROUP, INC.
401(k) PROFIT SHARING PLAN AND TRUST
NOTES TO FINANCIAL STATEMENTS AND SCHEDULES
DECEMBER 31, 1998 AND 1997
1. PLAN DESCRIPTION:
The Sinclair Broadcast Group, Inc. 401(k) Profit Sharing Plan and Trust (the
Plan) was established with an effective date of January 1, 1988. The Plan is a
participatory defined contribution plan covering substantially all employees of
Sinclair Broadcast Group Inc. (the Company) who have completed one year of
credited service (1,000 hours) and are at least twenty-one years of age. Under
the provisions of the Plan, the Company may make discretionary matching
contributions. These matching contributions equaled 50% of the amount of the
participant's salary reduction, up to 4% of the participant's salary for 1998
and 1997. The 1998 matching contribution, included as a receivable of the plan
in the accompanying financial statements, was made in the form of the Company's
common stock, which is called Sinclair Stock Fund. The Company may also make
additional discretionary contributions each year. There were no additional
discretionary contributions during 1998 or 1997. During 1988, the Company
acquired several companies, and certain employees of those companies acquired
rolled over their benefit plan account balances into the Plan.
Each participant's account is credited with the participant's contribution, the
Company's matching contribution and their pro rata share of earnings on invested
assets of the trust funds. Effective during 1996, participants may direct
contributions in any of nine investment options. Participants are fully vested
in their salary reduction amounts contributed to the Plan and related earnings.
Under the provisions of the Plan, eligible employees become 20% vested in all
other amounts credited to their account after two years of service, 40% vested
after three years of service, 60% vested after four years of service, 80% vested
after five years of service and are fully vested after six years of service.
Participants may elect one of several methods to receive their vested benefits
including (a) a joint and survivor option whereby the employee receives a
reduced monthly benefit during his/her lifetime and, upon death, the surviving
spouse will receive a monthly benefit for his/her lifetime, (b) the purchase of
a different form of annuity, (c) equal installments over a period of not more
than the participant's assumed life expectancy (or participant's and
participant's beneficiary's assumed life expectancy) at the time of
distribution, or (d) a lump sum distribution. In the absence of such election by
the participant, the method of distribution shall be determined by the Plan.
Upon termination of employment before normal retirement, a lump sum distribution
may also be made.
In addition, participants may borrow the lesser of $50,000 or one-half of their
vested balance, with interest charged based on the prime rate at the time of
borrowing. Interest income from these loans is treated as income to the Plan and
is allocated with other earnings on investments.
-5-
<PAGE>
Effective in 1998, an amendment to the Plan occurred which allows in-service
distributions of salary deferred contributions upon attainment of age 59 1/2.
Additionally, the amendment allows the withdrawal of after-tax and rollover
contributions at any time.
2. SIGNIFICANT ACCOUNTING POLICIES:
Basis of Financial Presentation
The accompanying financial statements are presented on the accrual basis of
accounting. Certain administrative expenses of the Plan are borne by the
Company.
Income Tax Status
The Plan received a favorable determination letter dated March 26, 1996. This
letter certifies that under its present form, the Plan is currently designed in
compliance with the applicable requirements of the Internal Revenue Code.
Management believes that the Plan is being operated in compliance with the
applicable requirements of the Internal Revenue Code. Therefore, the Plan is
qualified for tax-exempt status, and the related trust was qualified as of the
financial statement dates.
Investments
Investments are stated at market value. All investments of the Plan are held by
EMJAY Corporation (the Trustee), and are invested with Legg Mason Wood Walker
Incorporated (Legg Mason) and Putnam Investments.
The accompanying Schedule of Assets Held for Investment Purposes represents a
detailed listing of investments held by the Plan as of December 31, 1998.
The accompanying Schedule of Reportable Transactions represents a listing of all
transactions of the Plan for the year ended December 31, 1998, within a
particular security which exceeded, either individually or in the aggregate, 5%
of the net plan assets as of the beginning of the plan year.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities as of the date of the financial statements and
the reported amounts of revenues and expenses during the reporting periods.
While actual results could differ from those estimates, the administrator of the
Plan believes that actual results will not be materially different from amounts
provided in the financial statements.
3. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Employer has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan, subject to the provisions of the Employee Retirement Income Security Act
of 1974. In the event of plan termination, participants will become 100% vested
in their accounts.
-6-
<PAGE>
Schedule I
SINCLAIR BROADCAST GROUP, INC.
401(k) PROFIT SHARING PLAN AND TRUST
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1998
<TABLE>
<CAPTION>
NUMBER OF
INVESTMENT/DESCRIPTION UNITS/SHARES COST MARKET
---------------------- ------------ ---- ------
<S> <C> <C> <C>
Legg Mason High Yield Portfolio 162,796 $ 2,550,472 $ 2,389,838
Legg Mason Investment Grade Income Fund 165,951 1,743,159 1,745,807
Legg Mason Special Investment Trust 191,759 5,411,740 7,037,556
Legg Mason Total Return Trust 213,095 4,378,447 4,611,382
Legg Mason U.S. Government Portfolio 117,236 1,165,667 1,179,605
Legg Mason U.S. Government Money Market Portfolio 1,184,282 1,184,282 1,184,282
Legg Mason Value Trust 141,377 6,325,669 8,706,010
Putnam International Growth Fund 206,152 3,543,007 3,964,310
Putnam New Opportunities Fund 102,935 5,033,888 6,014,510
Sinclair Stock Fund 29,377 811,546 583,745
Disbursement account 2,909 2,909 2,909
Loans (with interest rates which ranged from 8.25%
to 11.00%) 1,342,641 1,342,641
-------------- --------------
$ 33,493,427 $ 38,762,595
============== ==============
</TABLE>
The accompanying notes are an integral part of this schedule.
-7-
<PAGE>
Schedule II
SINCLAIR BROADCAST GROUP, INC.
401(k) PROFIT SHARING PLAN AND TRUST
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
SALES
-------------------------------------------------------
PURCHASES NET
INVESTMENT/DESCRIPTION AT COST COST PROCEEDS GAIN
---------------------- ------- ---- -------- ----
<S> <C> <C> <C> <C>
Aggregate:
Legg Mason High Yield Portfolio $ 1,627,734 $ 717,595 $ 718,993 $ 1,398
Legg Mason Investment Grade Income
Fund 1,387,972 537,402 548,931 11,529
Legg Mason Special Investment Trust 3,182,672 1,616,933 1,826,950 210,017
Legg Mason Total Return Trust 3,135,337 1,200,053 1,303,154 103,101
Legg Mason U.S. Government Portfolio 1,070,078 553,751 564,663 10,912
Legg Mason U.S. Government Money
Market 2,155,015 1,325,620 1,325,620 -
Legg Mason Value Trust 5,500,066 1,864,533 2,113,369 248,836
Putnam International Growth Fund 2,179,241 618,358 663,223 44,865
Putnam New Opportunities Fund 3,951,203 1,123,257 1,205,325 82,068
</TABLE>
The accompanying notes are an integral part of this schedule.
-8-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Sinclair Broadcast Group, Inc.
401(k) Savings Plan
Date June 29, 1999
/s/ David B. Amy
---------------------------------
David B. Amy
Sinclair Broadcast Group, Inc.
Plan Administrator
-9-
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated June 23, 1999, on the financial statements of Sinclair Broadcast Group,
Inc. 401(k) Profit Sharing Plan and Trust (the Plan) as of December 31, 1998 and
1997, and for the years then ended, which is included in this Form 11-K\A for
the year ended December 31, 1998. It should be noted that we have performed no
audit procedures subsequent to June 23, 1999, the date of our report.
Furthermore, we have not made an audit of any financial statements of the Plan
as of any date or for any period subsequent to December 31, 1998, the date of
the latest financial statements covered by our report.
/s/ARTHUR ANDERSEN LLP
Baltimore, Maryland
June 28, 1999
