|
|
Maryland
(State or other jurisdiction of
Incorporation or organization)
|
|
52-1494660
(I.R.S. Employer Identification No.)
|
Yes
x
|
|
No
o
|
Yes
x
|
|
No
o
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Emerging growth company
o
|
Yes
o
|
|
No
x
|
Title of each class
|
|
Number of shares outstanding as of
May 7, 2018
|
Class A Common Stock
|
|
76,560,510
|
Class B Common Stock
|
|
25,670,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31,
2018 |
|
As of December 31,
2017 |
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
810,232
|
|
|
$
|
681,326
|
|
Restricted cash, current
|
226,558
|
|
|
313,110
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $2,209 and $2,590, respectively
|
538,472
|
|
|
566,464
|
|
||
Current portion of program contract costs
|
42,736
|
|
|
71,387
|
|
||
Income taxes receivable
|
27,909
|
|
|
28,150
|
|
||
Prepaid expenses and other current assets
|
68,784
|
|
|
54,310
|
|
||
Total current assets
|
1,714,691
|
|
|
1,714,747
|
|
||
Assets held for sale
|
152,880
|
|
|
—
|
|
||
Program contract costs, less current portion
|
2,178
|
|
|
3,202
|
|
||
Property and equipment, net
|
654,432
|
|
|
738,298
|
|
||
Restricted cash, less current portion
|
1,505
|
|
|
1,504
|
|
||
Goodwill
|
2,021,970
|
|
|
2,124,033
|
|
||
Indefinite-lived intangible assets
|
156,629
|
|
|
159,371
|
|
||
Definite-lived intangible assets, net
|
1,729,563
|
|
|
1,801,670
|
|
||
Other assets
|
229,563
|
|
|
241,645
|
|
||
Total assets (a)
|
$
|
6,663,411
|
|
|
$
|
6,784,470
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
356,792
|
|
|
$
|
370,403
|
|
Deferred spectrum auction proceeds
|
—
|
|
|
84,341
|
|
||
Income taxes payable
|
2,503
|
|
|
2,503
|
|
||
Current portion of notes payable, capital leases and commercial bank financing
|
154,944
|
|
|
161,049
|
|
||
Current portion of program contracts payable
|
77,442
|
|
|
108,053
|
|
||
Total current liabilities
|
591,681
|
|
|
726,349
|
|
||
Liabilities held for sale
|
12,210
|
|
|
—
|
|
||
Notes payable, capital leases and commercial bank financing, less current portion
|
3,875,025
|
|
|
3,887,601
|
|
||
Program contracts payable, less current portion
|
37,170
|
|
|
41,909
|
|
||
Deferred tax liabilities
|
498,719
|
|
|
515,236
|
|
||
Other long-term liabilities
|
77,063
|
|
|
79,009
|
|
||
Total liabilities (a)
|
5,091,868
|
|
|
5,250,104
|
|
||
Commitments and contingencies (See
Note 4
)
|
|
|
|
|
|
||
|
|
|
|
|
|
||
Shareholders' Equity:
|
|
|
|
|
|
||
Class A Common Stock, $.01 par value, 500,000,000 shares authorized, 76,509,574 and 76,071,145 shares issued and outstanding, respectively
|
765
|
|
|
761
|
|
||
Class B Common Stock, $.01 par value, 140,000,000 shares authorized, 25,670,684 and 25,670,684 shares issued and outstanding, respectively, convertible into Class A Common Stock
|
257
|
|
|
257
|
|
||
Additional paid-in capital
|
1,332,432
|
|
|
1,320,298
|
|
||
Retained earnings
|
275,676
|
|
|
248,845
|
|
||
Accumulated other comprehensive loss
|
(1,423
|
)
|
|
(1,423
|
)
|
||
Total Sinclair Broadcast Group shareholders’ equity
|
1,607,707
|
|
|
1,568,738
|
|
||
Noncontrolling interests
|
(36,164
|
)
|
|
(34,372
|
)
|
||
Total equity
|
1,571,543
|
|
|
1,534,366
|
|
||
Total liabilities and equity
|
$
|
6,663,411
|
|
|
$
|
6,784,470
|
|
|
(a)
|
Our consolidated total assets as of
March 31, 2018
and
December 31, 2017
include total assets of variable interest entities (VIEs) of
$122.5 million
and
$130.6 million
, respectively, which can only be used to settle the obligations of the VIEs. Our consolidated total liabilities as of
March 31, 2018
and
December 31, 2017
include total liabilities of VIEs of
$23.0 million
and
$27.0 million
, respectively, for which the creditors of the VIEs have no recourse to us. See
Note 1. Nature of Operations and Summary of Significant Accounting Policies
.
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
REVENUES:
|
|
|
|
|
|
||
Media revenues (a)
|
$
|
643,651
|
|
|
$
|
607,057
|
|
Non-media revenues
|
21,701
|
|
|
19,879
|
|
||
Total revenues
|
665,352
|
|
|
626,936
|
|
||
|
|
|
|
||||
OPERATING EXPENSES:
|
|
|
|
|
|
||
Media production expenses
|
288,549
|
|
|
258,401
|
|
||
Media selling, general and administrative expenses
|
146,899
|
|
|
124,721
|
|
||
Amortization of program contract costs and net realizable value adjustments
|
26,950
|
|
|
31,019
|
|
||
Non-media expenses
|
21,223
|
|
|
18,402
|
|
||
Depreciation of property and equipment
|
27,325
|
|
|
23,981
|
|
||
Corporate general and administrative expenses
|
24,596
|
|
|
20,576
|
|
||
Amortization of definite-lived intangible and other assets
|
43,605
|
|
|
45,554
|
|
||
Gain on asset dispositions, net of impairment
|
(21,109
|
)
|
|
(53,347
|
)
|
||
Total operating expenses
|
558,038
|
|
|
469,307
|
|
||
Operating income
|
107,314
|
|
|
157,629
|
|
||
|
|
|
|
||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
||
Interest expense and amortization of debt discount and deferred financing costs
|
(69,742
|
)
|
|
(57,318
|
)
|
||
Loss from extinguishment of debt
|
—
|
|
|
(1,404
|
)
|
||
Loss from equity and cost method investments
|
(12,477
|
)
|
|
(1,321
|
)
|
||
Other income, net
|
3,271
|
|
|
1,696
|
|
||
Total other expense, net
|
(78,948
|
)
|
|
(58,347
|
)
|
||
Income before income taxes
|
28,366
|
|
|
99,282
|
|
||
INCOME TAX BENEFIT (PROVISION)
|
15,628
|
|
|
(28,579
|
)
|
||
NET INCOME
|
43,994
|
|
|
70,703
|
|
||
Net income attributable to the noncontrolling interests
|
(871
|
)
|
|
(13,501
|
)
|
||
NET INCOME ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP
|
$
|
43,123
|
|
|
$
|
57,202
|
|
Dividends declared per share
|
$
|
0.18
|
|
|
$
|
0.18
|
|
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR BROADCAST GROUP:
|
|
|
|
|
|
||
Basic earnings per share
|
$
|
0.42
|
|
|
$
|
0.62
|
|
Diluted earnings per share
|
$
|
0.42
|
|
|
$
|
0.61
|
|
Weighted average common shares outstanding
|
101,899
|
|
|
92,630
|
|
||
Weighted average common and common equivalent shares outstanding
|
102,917
|
|
|
93,692
|
|
|
(a)
|
See
Revenue Recognition
within
Note 1. Nature of Operations and Summary of Significant Accounting Policies
for a discussion of the adoption of the new accounting principles for revenue recognition.
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Net income
|
$
|
43,994
|
|
|
$
|
70,703
|
|
Comprehensive income
|
$
|
43,994
|
|
|
$
|
70,703
|
|
Comprehensive income attributable to the noncontrolling interests
|
(871
|
)
|
|
(13,501
|
)
|
||
Comprehensive income attributable to Sinclair Broadcast Group
|
$
|
43,123
|
|
|
$
|
57,202
|
|
|
Sinclair Broadcast Group Shareholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
Class A
Common Stock
|
|
Class B
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||||
|
Shares
|
|
Values
|
|
Shares
|
|
Values
|
|
|
|
|
|
|||||||||||||||||||||
BALANCE, December 31, 2016
|
64,558,207
|
|
|
$
|
646
|
|
|
25,670,684
|
|
|
$
|
257
|
|
|
$
|
843,691
|
|
|
$
|
(255,804
|
)
|
|
$
|
(807
|
)
|
|
$
|
(30,047
|
)
|
|
$
|
557,936
|
|
Issuance of common stock, net of issuance costs
|
12,000,000
|
|
|
120
|
|
|
—
|
|
|
—
|
|
|
487,763
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
487,883
|
|
|||||||
Dividends declared and paid on Class A and Class B Common Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,257
|
)
|
|
—
|
|
|
—
|
|
|
(16,257
|
)
|
|||||||
Class A Common Stock issued pursuant to employee benefit plans
|
376,262
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
12,339
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,342
|
|
|||||||
Distributions to noncontrolling interests, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,708
|
)
|
|
(15,708
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,202
|
|
|
—
|
|
|
13,501
|
|
|
70,703
|
|
|||||||
BALANCE, March 31, 2017
|
76,934,469
|
|
|
$
|
769
|
|
|
25,670,684
|
|
|
$
|
257
|
|
|
$
|
1,343,793
|
|
|
$
|
(214,859
|
)
|
|
$
|
(807
|
)
|
|
$
|
(32,254
|
)
|
|
$
|
1,096,899
|
|
|
Sinclair Broadcast Group Shareholders
|
|
|
|
|
||||||||||||||||||||||||||||
|
Class A
Common Stock
|
|
Class B
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||||||||||||
|
Shares
|
|
Values
|
|
Shares
|
|
Values
|
|
|
|
|
|
|||||||||||||||||||||
BALANCE, December 31, 2017
|
76,071,145
|
|
|
$
|
761
|
|
|
25,670,684
|
|
|
$
|
257
|
|
|
$
|
1,320,298
|
|
|
$
|
248,845
|
|
|
$
|
(1,423
|
)
|
|
$
|
(34,372
|
)
|
|
$
|
1,534,366
|
|
Cumulative effect of adoption of new accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,100
|
|
|
—
|
|
|
—
|
|
|
2,100
|
|
|||||||
Dividends declared and paid on Class A and Class B Common Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,392
|
)
|
|
—
|
|
|
—
|
|
|
(18,392
|
)
|
|||||||
Class A Common Stock issued pursuant to employee benefit plans
|
438,429
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
12,134
|
|
|
|
|
|
—
|
|
|
—
|
|
|
12,138
|
|
|||||||
Distributions to noncontrolling interests, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,663
|
)
|
|
(2,663
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43,123
|
|
|
—
|
|
|
871
|
|
|
43,994
|
|
|||||||
BALANCE, March 31, 2018
|
76,509,574
|
|
|
$
|
765
|
|
|
25,670,684
|
|
|
$
|
257
|
|
|
$
|
1,332,432
|
|
|
$
|
275,676
|
|
|
$
|
(1,423
|
)
|
|
$
|
(36,164
|
)
|
|
$
|
1,571,543
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income
|
$
|
43,994
|
|
|
$
|
70,703
|
|
Adjustments to reconcile net income to net cash flows from operating activities:
|
|
|
|
|
|
||
Depreciation of property and equipment
|
27,325
|
|
|
23,981
|
|
||
Amortization of definite-lived intangible and other assets
|
43,605
|
|
|
45,554
|
|
||
Amortization of program contract costs and net realizable value adjustments
|
26,950
|
|
|
31,019
|
|
||
Loss on extinguishment of debt, non-cash portion
|
—
|
|
|
1,404
|
|
||
Stock-based compensation expense
|
6,956
|
|
|
7,571
|
|
||
Deferred tax benefit
|
(16,342
|
)
|
|
(4,269
|
)
|
||
Gain on asset disposition, net of impairment
|
(20,324
|
)
|
|
(53,347
|
)
|
||
Loss from equity and cost method investments
|
12,593
|
|
|
1,504
|
|
||
Change in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||
Decrease in accounts receivable
|
26,504
|
|
|
1,543
|
|
||
Increase in prepaid expenses and other current assets
|
(18,353
|
)
|
|
(5,539
|
)
|
||
Decrease in accounts payable and accrued liabilities
|
(8,473
|
)
|
|
(58,945
|
)
|
||
Net change in net income taxes payable/receivable
|
241
|
|
|
32,513
|
|
||
Payments on program contracts payable
|
(28,492
|
)
|
|
(28,600
|
)
|
||
Other, net
|
4,759
|
|
|
4,550
|
|
||
Net cash flows from operating activities
|
100,943
|
|
|
69,642
|
|
||
|
|
|
|
||||
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Acquisition of property and equipment
|
(22,219
|
)
|
|
(20,774
|
)
|
||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(8,000
|
)
|
||
Proceeds from the sale of assets
|
49
|
|
|
195,149
|
|
||
Investments in equity and cost method investees
|
(7,750
|
)
|
|
(3,080
|
)
|
||
Distributions from equity and cost method investees
|
10,832
|
|
|
3,272
|
|
||
Other, net
|
(1,862
|
)
|
|
(8,408
|
)
|
||
Net cash flows (used in) from investing activities
|
(20,950
|
)
|
|
158,159
|
|
||
|
|
|
|
||||
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from notes payable and commercial bank financing
|
363
|
|
|
163,089
|
|
||
Repayments of notes payable, commercial bank financing and capital leases
|
(16,950
|
)
|
|
(284,422
|
)
|
||
Net proceeds from the sale of Class A Common Stock
|
—
|
|
|
487,883
|
|
||
Dividends paid on Class A and Class B Common Stock
|
(18,392
|
)
|
|
(16,257
|
)
|
||
Other, net
|
(2,659
|
)
|
|
(17,884
|
)
|
||
Net cash flows (used in) from financing activities
|
(37,638
|
)
|
|
332,409
|
|
||
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH
|
42,355
|
|
|
560,210
|
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period
|
995,940
|
|
|
260,184
|
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period
|
$
|
1,038,295
|
|
|
$
|
820,394
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Accounts receivable
|
$
|
18,764
|
|
|
$
|
19,566
|
|
Other current assets
|
5,672
|
|
|
8,937
|
|
||
Total current assets
|
24,436
|
|
|
28,503
|
|
||
|
|
|
|
||||
Assets held for sale
|
546
|
|
|
—
|
|
||
Program contract costs, less current portion
|
469
|
|
|
822
|
|
||
Property and equipment, net
|
4,242
|
|
|
6,215
|
|
||
Goodwill and indefinite-lived intangible assets
|
15,039
|
|
|
15,064
|
|
||
Definite-lived intangible assets, net
|
72,186
|
|
|
74,442
|
|
||
Other assets
|
5,601
|
|
|
5,601
|
|
||
Total assets
|
$
|
122,519
|
|
|
$
|
130,647
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Other current liabilities
|
$
|
20,164
|
|
|
$
|
23,564
|
|
|
|
|
|
||||
Notes payable, capital leases and commercial bank financing, less current portion
|
21,380
|
|
|
23,217
|
|
||
Program contracts payable, less current portion
|
10,519
|
|
|
11,213
|
|
||
Other long-term liabilities
|
650
|
|
|
650
|
|
||
Total liabilities
|
$
|
52,713
|
|
|
$
|
58,644
|
|
|
Three Months Ended
|
||||||||||
|
March 31, 2017
|
||||||||||
|
As Reported
|
|
Adoption of ASC 606
|
|
As Adjusted
|
||||||
Revenues realized from station barter arrangements (a)
|
$
|
27,570
|
|
|
$
|
(22,999
|
)
|
|
$
|
4,571
|
|
Expenses realized from barter arrangements (b)
|
$
|
23,245
|
|
|
$
|
(22,999
|
)
|
|
$
|
246
|
|
Operating income
|
$
|
157,629
|
|
|
$
|
—
|
|
|
$
|
157,629
|
|
Net income
|
$
|
57,202
|
|
|
$
|
—
|
|
|
$
|
57,202
|
|
Basic EPS
|
$
|
0.62
|
|
|
$
|
—
|
|
|
$
|
0.62
|
|
Diluted EPS
|
$
|
0.61
|
|
|
$
|
—
|
|
|
$
|
0.61
|
|
|
(a)
|
The remaining balance in the "as adjusted" column relates to trade revenue, which was unaffected by the adoption and has been reclassified to media revenue as of March 31, 2018.
|
(b)
|
The remaining balance in the "as adjusted" column relates to trade expense, which was unaffected by the adoption and has been reclassified to media production expense as of March 31, 2018.
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||||||||||
|
March 31, 2018
|
|
March 31, 2017
|
||||||||||||||||||||
|
Broadcast
|
|
Other
|
|
Total
|
|
Broadcast
|
|
Other
|
|
Total
|
||||||||||||
Advertising revenue, net of agency commissions
|
$
|
298,912
|
|
|
$
|
17,416
|
|
|
$
|
316,328
|
|
|
$
|
310,071
|
|
|
$
|
8,379
|
|
|
$
|
318,450
|
|
Distribution revenue
|
287,125
|
|
|
27,235
|
|
|
314,360
|
|
|
249,065
|
|
|
26,849
|
|
|
275,914
|
|
||||||
Other media and non-media revenues
|
9,855
|
|
|
24,809
|
|
|
34,664
|
|
|
10,733
|
|
|
21,839
|
|
|
32,572
|
|
||||||
Total revenues
|
$
|
595,892
|
|
|
$
|
69,460
|
|
|
$
|
665,352
|
|
|
$
|
569,869
|
|
|
$
|
57,067
|
|
|
$
|
626,936
|
|
Accounts receivable
|
$
|
14,536
|
|
Prepaid expenses and other current assets
|
699
|
|
|
Program contract costs
|
988
|
|
|
Property and equipment
|
27,295
|
|
|
Definite-lived intangible assets
|
161,936
|
|
|
Indefinite-lived intangible assets
|
425
|
|
|
Other assets
|
3,609
|
|
|
Accounts payable and accrued liabilities
|
(8,846
|
)
|
|
Program contracts payable
|
(988
|
)
|
|
Deferred tax liability
|
(66,158
|
)
|
|
Other long term liabilities
|
(12,156
|
)
|
|
Fair value of identifiable, net assets acquired
|
121,340
|
|
|
Goodwill
|
120,812
|
|
|
Total purchase price, net of cash acquired
|
$
|
242,152
|
|
|
Three months ended March 31,
|
||
|
2017
|
||
Total revenues
|
$
|
646,818
|
|
Net income
|
$
|
71,108
|
|
Net income attributable to Sinclair Broadcast Group
|
$
|
57,607
|
|
Basic earnings per share attributable to Sinclair Broadcast Group
|
$
|
0.62
|
|
Diluted earnings per share attributable to Sinclair Broadcast Group
|
$
|
0.61
|
|
Current assets
|
$
|
1,778
|
|
Property and equipment
|
17,537
|
|
|
Goodwill and indefinite-lived intangible assets
|
104,916
|
|
|
Definite-lived intangible assets
|
28,582
|
|
|
Other non-current assets
|
67
|
|
|
Assets held for sale
|
$
|
152,880
|
|
|
|
||
Current liabilities
|
$
|
4,278
|
|
Non-current liabilities
|
7,932
|
|
|
Liabilities held for sale
|
$
|
12,210
|
|
|
Three Months Ended
March 31, |
||||||
|
2018
|
|
2017
|
||||
Income (Numerator)
|
|
|
|
||||
Net income
|
$
|
43,994
|
|
|
$
|
70,703
|
|
Net income attributable to noncontrolling interests
|
(871
|
)
|
|
(13,501
|
)
|
||
Numerator for basic and diluted earnings per common share available to common shareholders
|
$
|
43,123
|
|
|
$
|
57,202
|
|
|
|
|
|
||||
Shares (Denominator)
|
|
|
|
|
|
||
Weighted-average common shares outstanding
|
101,899
|
|
|
92,630
|
|
||
Dilutive effect of stock-settled appreciation rights and outstanding stock options
|
1,018
|
|
|
1,062
|
|
||
Weighted-average common and common equivalent shares outstanding
|
102,917
|
|
|
93,692
|
|
|
Three Months Ended
March 31, |
||||
|
2018
|
|
2017
|
||
Weighted-average stock-settled appreciation rights and outstanding stock options excluded
|
500
|
|
|
—
|
|
For the three months ended March 31, 2018
|
|
Broadcast
|
|
Other
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenue
|
|
$
|
595,892
|
|
|
$
|
69,460
|
|
|
$
|
—
|
|
|
$
|
665,352
|
|
Depreciation of property and equipment
|
|
25,399
|
|
|
1,906
|
|
|
20
|
|
|
27,325
|
|
||||
Amortization of definite-lived intangible assets and other assets
|
|
38,471
|
|
|
5,134
|
|
|
—
|
|
|
43,605
|
|
||||
Amortization of program contract costs and net realizable value adjustments
|
|
26,950
|
|
|
—
|
|
|
—
|
|
|
26,950
|
|
||||
General and administrative overhead expenses
|
|
21,744
|
|
|
255
|
|
|
2,597
|
|
|
24,596
|
|
||||
(Gain) on asset dispositions, net of impairment
|
|
(84,100
|
)
|
(d)
|
62,991
|
|
(c)
|
—
|
|
|
(21,109
|
)
|
||||
Operating income (loss)
|
|
176,166
|
|
(d)
|
(66,235
|
)
|
(c)
|
(2,617
|
)
|
|
107,314
|
|
||||
Interest expense
|
|
1,372
|
|
|
202
|
|
|
68,168
|
|
|
69,742
|
|
||||
Loss from equity and cost method investments
|
|
—
|
|
|
(12,477
|
)
|
|
—
|
|
|
(12,477
|
)
|
||||
Assets
|
|
5,096,281
|
|
|
685,140
|
|
|
881,990
|
|
|
6,663,411
|
|
For the three months ended March 31, 2017
|
|
Broadcast
|
|
Other
|
|
Corporate
|
|
Consolidated
|
||||||||
Revenue (b)
|
|
$
|
569,869
|
|
|
$
|
57,067
|
|
|
$
|
—
|
|
|
$
|
626,936
|
|
Depreciation of property and equipment
|
|
21,946
|
|
|
1,769
|
|
|
266
|
|
|
23,981
|
|
||||
Amortization of definite-lived intangible assets and other assets
|
|
38,326
|
|
|
7,228
|
|
|
—
|
|
|
45,554
|
|
||||
Amortization of program contract costs and net realizable value adjustments
|
|
31,019
|
|
|
—
|
|
|
—
|
|
|
31,019
|
|
||||
General and administrative overhead expenses
|
|
18,992
|
|
|
288
|
|
|
1,296
|
|
|
20,576
|
|
||||
(Gain) on asset dispositions, net of impairment
|
|
(357
|
)
|
|
(52,990
|
)
|
(a)
|
—
|
|
|
(53,347
|
)
|
||||
Operating income (loss)
|
|
114,544
|
|
|
44,649
|
|
(a)
|
(1,564
|
)
|
|
157,629
|
|
||||
Interest expense
|
|
1,366
|
|
|
1,213
|
|
|
54,739
|
|
|
57,318
|
|
||||
Loss from equity and cost method investments
|
|
—
|
|
|
(1,321
|
)
|
|
—
|
|
|
(1,321
|
)
|
|
(a)
|
Includes gain on the sale of Alarm of
$53.0 million
of which
$12.3 million
was attributable to noncontrolling interests. See
Note 2. Acquisitions and Dispositions of Assets
.
|
(b)
|
Revenue has been adjusted for the adoption of ASC 606. See
Note 1. Nature of Operations and Summary of Significant Accounting Policies
.
|
(c)
|
Includes a
$63.0 million
impairment to the carrying value of a consolidated real estate venture as discussed in
Note 2. Acquisitions and Dispositions of Assets
.
|
(d)
|
Includes a gain of
$83.3 million
related to the auction proceeds as discussed in
Note 2. Acquisitions and Dispositions of Assets
.
|
•
|
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
|
•
|
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
|
|
As of March 31, 2018
|
|
As of December 31, 2017
|
||||||||||||
|
Face Value (a)
|
|
Fair Value
|
|
Face Value (a)
|
|
Fair Value
|
||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
||||
6.125% Senior Unsecured Notes due 2022
|
$
|
500,000
|
|
|
$
|
512,500
|
|
|
$
|
500,000
|
|
|
$
|
515,535
|
|
5.875% Senior Unsecured Notes due 2026
|
350,000
|
|
|
346,500
|
|
|
350,000
|
|
|
363,475
|
|
||||
5.625% Senior Unsecured Notes due 2024
|
550,000
|
|
|
545,875
|
|
|
550,000
|
|
|
568,205
|
|
||||
5.375% Senior Unsecured Notes due 2021
|
600,000
|
|
|
605,250
|
|
|
600,000
|
|
|
610,440
|
|
||||
5.125% Senior Unsecured Notes due 2027
|
400,000
|
|
|
371,000
|
|
|
400,000
|
|
|
396,088
|
|
||||
Term Loan A-1
|
111,354
|
|
|
111,354
|
|
|
117,370
|
|
|
117,370
|
|
||||
Term Loan A-2
|
108,968
|
|
|
108,968
|
|
|
113,327
|
|
|
113,327
|
|
||||
Term Loan B
|
1,352,875
|
|
|
1,356,257
|
|
|
1,356,300
|
|
|
1,357,995
|
|
||||
Debt of variable interest entities
|
28,530
|
|
|
28,530
|
|
|
29,614
|
|
|
29,614
|
|
||||
Debt of other operating divisions
|
24,476
|
|
|
24,476
|
|
|
25,238
|
|
|
25,238
|
|
|
|
Sinclair
Broadcast Group, Inc. |
|
Sinclair
Television Group, Inc. |
|
Guarantor
Subsidiaries and KDSM, LLC |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Sinclair
Consolidated |
||||||||||||
Cash
|
$
|
—
|
|
|
$
|
790,930
|
|
|
$
|
8,304
|
|
|
$
|
10,998
|
|
|
$
|
—
|
|
|
$
|
810,232
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
226,558
|
|
|
—
|
|
|
—
|
|
|
226,558
|
|
||||||
Accounts receivable
|
—
|
|
|
—
|
|
|
493,922
|
|
|
44,550
|
|
|
—
|
|
|
538,472
|
|
||||||
Other current assets
|
1,874
|
|
|
11,377
|
|
|
130,298
|
|
|
23,333
|
|
|
(27,453
|
)
|
|
139,429
|
|
||||||
Total current assets
|
1,874
|
|
|
802,307
|
|
|
859,082
|
|
|
78,881
|
|
|
(27,453
|
)
|
|
1,714,691
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
810
|
|
|
32,025
|
|
|
569,047
|
|
|
65,163
|
|
|
(12,613
|
)
|
|
654,432
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in consolidated subsidiaries
|
1,576,613
|
|
|
4,050,589
|
|
|
4,179
|
|
|
—
|
|
|
(5,631,381
|
)
|
|
—
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
2,018,103
|
|
|
3,867
|
|
|
—
|
|
|
2,021,970
|
|
||||||
Indefinite-lived intangible assets
|
—
|
|
|
—
|
|
|
142,356
|
|
|
14,273
|
|
|
—
|
|
|
156,629
|
|
||||||
Definite-lived intangible assets
|
—
|
|
|
—
|
|
|
1,710,136
|
|
|
75,377
|
|
|
(55,950
|
)
|
|
1,729,563
|
|
||||||
Other long-term assets
|
31,854
|
|
|
771,367
|
|
|
260,001
|
|
|
192,713
|
|
|
(869,809
|
)
|
|
386,126
|
|
||||||
Total assets
|
$
|
1,611,151
|
|
|
$
|
5,656,288
|
|
|
$
|
5,562,904
|
|
|
$
|
430,274
|
|
|
$
|
(6,597,206
|
)
|
|
$
|
6,663,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
299
|
|
|
$
|
80,345
|
|
|
$
|
243,674
|
|
|
$
|
60,837
|
|
|
$
|
(28,363
|
)
|
|
$
|
356,792
|
|
Current portion of long-term debt
|
—
|
|
|
142,489
|
|
|
3,587
|
|
|
9,343
|
|
|
(475
|
)
|
|
154,944
|
|
||||||
Other current liabilities
|
—
|
|
|
—
|
|
|
68,269
|
|
|
11,676
|
|
|
—
|
|
|
79,945
|
|
||||||
Total current liabilities
|
299
|
|
|
222,834
|
|
|
315,530
|
|
|
81,856
|
|
|
(28,838
|
)
|
|
591,681
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
3,793,804
|
|
|
36,081
|
|
|
366,207
|
|
|
(321,067
|
)
|
|
3,875,025
|
|
||||||
Other liabilities
|
3,145
|
|
|
39,510
|
|
|
1,159,952
|
|
|
172,500
|
|
|
(749,945
|
)
|
|
625,162
|
|
||||||
Total liabilities
|
3,444
|
|
|
4,056,148
|
|
|
1,511,563
|
|
|
620,563
|
|
|
(1,099,850
|
)
|
|
5,091,868
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Sinclair Broadcast Group equity (deficit)
|
1,607,707
|
|
|
1,600,140
|
|
|
4,051,341
|
|
|
(149,669
|
)
|
|
(5,501,812
|
)
|
|
1,607,707
|
|
||||||
Noncontrolling interests in consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,620
|
)
|
|
4,456
|
|
|
(36,164
|
)
|
||||||
Total liabilities and equity (deficit)
|
$
|
1,611,151
|
|
|
$
|
5,656,288
|
|
|
$
|
5,562,904
|
|
|
$
|
430,274
|
|
|
$
|
(6,597,206
|
)
|
|
$
|
6,663,411
|
|
|
Sinclair
Broadcast Group, Inc. |
|
Sinclair
Television Group, Inc. |
|
Guarantor
Subsidiaries and KDSM, LLC |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Sinclair
Consolidated |
||||||||||||
Cash
|
$
|
—
|
|
|
$
|
645,830
|
|
|
$
|
12,273
|
|
|
$
|
23,223
|
|
|
$
|
—
|
|
|
$
|
681,326
|
|
Restricted Cash
|
—
|
|
|
—
|
|
|
311,110
|
|
|
2,000
|
|
|
—
|
|
|
313,110
|
|
||||||
Accounts receivable
|
—
|
|
|
—
|
|
|
530,273
|
|
|
36,191
|
|
|
—
|
|
|
566,464
|
|
||||||
Other current assets
|
3,034
|
|
|
5,758
|
|
|
145,637
|
|
|
9,687
|
|
|
(10,269
|
)
|
|
153,847
|
|
||||||
Total current assets
|
3,034
|
|
|
651,588
|
|
|
999,293
|
|
|
71,101
|
|
|
(10,269
|
)
|
|
1,714,747
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Property and equipment, net
|
829
|
|
|
31,111
|
|
|
586,950
|
|
|
132,010
|
|
|
(12,602
|
)
|
|
738,298
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment in consolidated subsidiaries
|
1,537,337
|
|
|
4,116,241
|
|
|
4,179
|
|
|
—
|
|
|
(5,657,757
|
)
|
|
—
|
|
||||||
Goodwill
|
—
|
|
|
—
|
|
|
2,120,166
|
|
|
3,867
|
|
|
—
|
|
|
2,124,033
|
|
||||||
Indefinite-lived intangible assets
|
—
|
|
|
—
|
|
|
145,073
|
|
|
14,298
|
|
|
—
|
|
|
159,371
|
|
||||||
Definite-lived intangible assets
|
—
|
|
|
—
|
|
|
1,781,045
|
|
|
77,944
|
|
|
(57,319
|
)
|
|
1,801,670
|
|
||||||
Other long-term assets
|
31,757
|
|
|
770,312
|
|
|
104,363
|
|
|
208,367
|
|
|
(868,448
|
)
|
|
246,351
|
|
||||||
Total assets
|
$
|
1,572,957
|
|
|
$
|
5,569,252
|
|
|
$
|
5,741,069
|
|
|
$
|
507,587
|
|
|
$
|
(6,606,395
|
)
|
|
$
|
6,784,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
1,100
|
|
|
$
|
84,326
|
|
|
$
|
261,266
|
|
|
$
|
36,029
|
|
|
$
|
(12,318
|
)
|
|
$
|
370,403
|
|
Current portion of long-term debt
|
—
|
|
|
148,505
|
|
|
3,445
|
|
|
9,645
|
|
|
(546
|
)
|
|
161,049
|
|
||||||
Other current liabilities
|
—
|
|
|
—
|
|
|
180,616
|
|
|
14,281
|
|
|
—
|
|
|
194,897
|
|
||||||
Total current liabilities
|
1,100
|
|
|
232,831
|
|
|
445,327
|
|
|
59,955
|
|
|
(12,864
|
)
|
|
726,349
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Long-term debt
|
—
|
|
|
3,799,987
|
|
|
39,730
|
|
|
381,127
|
|
|
(333,243
|
)
|
|
3,887,601
|
|
||||||
Other liabilities
|
3,119
|
|
|
38,282
|
|
|
1,141,266
|
|
|
187,569
|
|
|
(734,082
|
)
|
|
636,154
|
|
||||||
Total liabilities
|
4,219
|
|
|
4,071,100
|
|
|
1,626,323
|
|
|
628,651
|
|
|
(1,080,189
|
)
|
|
5,250,104
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Sinclair Broadcast Group equity (deficit)
|
1,568,738
|
|
|
1,498,152
|
|
|
4,114,746
|
|
|
(82,051
|
)
|
|
(5,530,847
|
)
|
|
1,568,738
|
|
||||||
Noncontrolling interests in consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
(39,013
|
)
|
|
4,641
|
|
|
(34,372
|
)
|
||||||
Total liabilities and equity (deficit)
|
$
|
1,572,957
|
|
|
$
|
5,569,252
|
|
|
$
|
5,741,069
|
|
|
$
|
507,587
|
|
|
$
|
(6,606,395
|
)
|
|
$
|
6,784,470
|
|
|
Sinclair
Broadcast Group, Inc. |
|
Sinclair
Television Group, Inc. |
|
Guarantor
Subsidiaries and KDSM, LLC |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Sinclair
Consolidated |
||||||||||||
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
625,683
|
|
|
$
|
58,011
|
|
|
$
|
(18,342
|
)
|
|
$
|
665,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Media program and production expenses
|
—
|
|
|
—
|
|
|
273,415
|
|
|
32,020
|
|
|
(16,886
|
)
|
|
288,549
|
|
||||||
Selling, general and administrative
|
2,597
|
|
|
21,754
|
|
|
143,301
|
|
|
4,284
|
|
|
(441
|
)
|
|
171,495
|
|
||||||
Depreciation, amortization and other operating expenses
|
19
|
|
|
1,250
|
|
|
6,416
|
|
|
91,008
|
|
|
(699
|
)
|
|
97,994
|
|
||||||
Total operating expenses
|
2,616
|
|
|
23,004
|
|
|
423,132
|
|
|
127,312
|
|
|
(18,026
|
)
|
|
558,038
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating (loss) income
|
(2,616
|
)
|
|
(23,004
|
)
|
|
202,551
|
|
|
(69,301
|
)
|
|
(316
|
)
|
|
107,314
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in earnings of consolidated subsidiaries
|
45,037
|
|
|
171,770
|
|
|
429
|
|
|
—
|
|
|
(217,236
|
)
|
|
—
|
|
||||||
Interest expense
|
—
|
|
|
(68,168
|
)
|
|
(972
|
)
|
|
(4,550
|
)
|
|
3,948
|
|
|
(69,742
|
)
|
||||||
Other income (expense)
|
681
|
|
|
2,295
|
|
|
(13,361
|
)
|
|
1,179
|
|
|
—
|
|
|
(9,206
|
)
|
||||||
Total other income (expense)
|
45,718
|
|
|
105,897
|
|
|
(13,904
|
)
|
|
(3,371
|
)
|
|
(213,288
|
)
|
|
(78,948
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax benefit (provision)
|
21
|
|
|
15,398
|
|
|
(15,676
|
)
|
|
15,885
|
|
|
—
|
|
|
15,628
|
|
||||||
Net income (loss)
|
43,123
|
|
|
98,291
|
|
|
172,971
|
|
|
(56,787
|
)
|
|
(213,604
|
)
|
|
43,994
|
|
||||||
Net income attributable to the noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,056
|
)
|
|
185
|
|
|
(871
|
)
|
||||||
Net income (loss) attributable to Sinclair Broadcast Group
|
$
|
43,123
|
|
|
$
|
98,291
|
|
|
$
|
172,971
|
|
|
$
|
(57,843
|
)
|
|
$
|
(213,419
|
)
|
|
$
|
43,123
|
|
Comprehensive income (loss)
|
$
|
43,123
|
|
|
$
|
98,291
|
|
|
$
|
172,971
|
|
|
$
|
(56,787
|
)
|
|
$
|
(213,604
|
)
|
|
$
|
43,994
|
|
|
Sinclair
Broadcast Group, Inc. |
|
Sinclair
Television Group, Inc. |
|
Guarantor
Subsidiaries and KDSM, LLC |
|
Non-
Guarantor Subsidiaries |
|
Eliminations
|
|
Sinclair
Consolidated |
||||||||||||
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
595,239
|
|
|
$
|
50,857
|
|
|
$
|
(19,160
|
)
|
|
$
|
626,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Media program and production expenses
|
—
|
|
|
—
|
|
|
248,451
|
|
|
28,444
|
|
|
(18,494
|
)
|
|
258,401
|
|
||||||
Selling, general and administrative
|
1,296
|
|
|
18,958
|
|
|
122,435
|
|
|
2,633
|
|
|
(25
|
)
|
|
145,297
|
|
||||||
Depreciation, amortization and other operating expenses
|
266
|
|
|
1,725
|
|
|
90,513
|
|
|
(26,450
|
)
|
|
(445
|
)
|
|
65,609
|
|
||||||
Total operating expenses
|
1,562
|
|
|
20,683
|
|
|
461,399
|
|
|
4,627
|
|
|
(18,964
|
)
|
|
469,307
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating (loss) income
|
(1,562
|
)
|
|
(20,683
|
)
|
|
133,840
|
|
|
46,230
|
|
|
(196
|
)
|
|
157,629
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in earnings of consolidated subsidiaries
|
58,189
|
|
|
87,805
|
|
|
50
|
|
|
—
|
|
|
(146,044
|
)
|
|
—
|
|
||||||
Interest expense
|
(36
|
)
|
|
(54,704
|
)
|
|
(1,119
|
)
|
|
(7,623
|
)
|
|
6,164
|
|
|
(57,318
|
)
|
||||||
Loss from extinguishment of debt
|
—
|
|
|
(1,404
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,404
|
)
|
||||||
Other income (expense)
|
101
|
|
|
799
|
|
|
496
|
|
|
(1,021
|
)
|
|
—
|
|
|
375
|
|
||||||
Total other income (expense)
|
58,254
|
|
|
32,496
|
|
|
(573
|
)
|
|
(8,644
|
)
|
|
(139,880
|
)
|
|
(58,347
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax benefit (provision)
|
510
|
|
|
25,106
|
|
|
(44,229
|
)
|
|
(9,966
|
)
|
|
—
|
|
|
(28,579
|
)
|
||||||
Net income (loss)
|
57,202
|
|
|
36,919
|
|
|
89,038
|
|
|
27,620
|
|
|
(140,076
|
)
|
|
70,703
|
|
||||||
Net income attributable to the noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,494
|
)
|
|
(7
|
)
|
|
(13,501
|
)
|
||||||
Net income (loss) attributable to Sinclair Broadcast Group
|
$
|
57,202
|
|
|
$
|
36,919
|
|
|
$
|
89,038
|
|
|
$
|
14,126
|
|
|
$
|
(140,083
|
)
|
|
$
|
57,202
|
|
Comprehensive income (loss)
|
$
|
57,202
|
|
|
$
|
36,919
|
|
|
$
|
89,039
|
|
|
$
|
27,619
|
|
|
$
|
(140,076
|
)
|
|
$
|
70,703
|
|
•
|
the impact of changes in national and regional economies and credit and capital markets;
|
•
|
consumer confidence;
|
•
|
the potential impact of changes in tax law;
|
•
|
the activities of our competitors;
|
•
|
terrorist acts of violence or war and other geopolitical events;
|
•
|
natural disasters that impact our advertisers and our stations; and
|
•
|
cybersecurity.
|
•
|
the business conditions of our advertisers particularly in the automotive and service industries;
|
•
|
competition with other broadcast television stations, radio stations, multi-channel video programming distributors (MVPDs), internet and broadband content providers and other print and media outlets serving in the same markets;
|
•
|
the performance of networks and syndicators that provide us with programming content, as well as the performance of internally originated programming;
|
•
|
the availability and cost of programming from networks and syndicators, as well as the cost of internally originated programming;
|
•
|
our relationships with networks and their strategies to distribute their programming via means other than their local television affiliates, such as over-the-top content;
|
•
|
the effects of the Federal Communications Commission’s (FCC) National Broadband Plan, the impact of the repacking of our broadcasting spectrum, as a result of the incentive auction, within a limited timeframe and funding allocated;
|
•
|
the potential for additional governmental regulation of broadcasting or changes in those regulations and court actions interpreting those regulations, including ownership regulations limiting over-the-air television's ability to compete effectively (including regulations relating to Joint Sales Agreements (JSA), Shared Services Agreements (SSA), the national ownership cap, and the UHF discount), arbitrary enforcement of indecency regulations, retransmission consent regulations and political or other advertising restrictions, such as payola rules;
|
•
|
the impact of FCC and Congressional efforts which may restrict a television station's retransmission consent negotiations;
|
•
|
the impact of FCC rules requiring broadcast stations to publish, among other information, political advertising rates online;
|
•
|
the impact of foreign government rules related to digital and online assets;
|
•
|
labor disputes and legislation and other union activity associated with film, acting, writing and other guilds and professional sports leagues;
|
•
|
the broadcasting community’s ability to develop and adopt a viable mobile digital broadcast television (mobile DTV) strategy and platform, such as the adoption of ATSC 3.0 broadcast standard, and the consumer’s appetite for mobile television;
|
•
|
the impact of programming payments charged by networks pursuant to their affiliation agreements with broadcasters requiring compensation for network programming;
|
•
|
the effects of declining live/appointment viewership as reported through rating systems and local television efforts to adopt and receive credit for same day viewing plus viewing on-demand thereafter;
|
•
|
changes in television rating measurement methodologies that could negatively impact audience results;
|
•
|
the ability of local MVPDs to coordinate and determine local advertising rates as a consortium;
|
•
|
changes in the makeup of the population in the areas where stations are located;
|
•
|
the operation of low power devices in the broadcast spectrum, which could interfere with our broadcast signals;
|
•
|
Over-the-top (OTT) technologies and their potential impact on cord-cutting;
|
•
|
the impact of MVPDs, virtual MVPDs (vMVPDs), and OTTs offering “skinny” programming bundles that may not include television broadcast stations or our other properties, such as Tennis Channel and our emerging networks; and
|
•
|
fluctuations in advertising rates and availability of inventory.
|
•
|
the effectiveness of our management;
|
•
|
our ability to attract and maintain local, national, and network advertising and successfully participate in new sales channels such as programmatic and addressable advertising through business partnership ventures and the development of technology;
|
•
|
our ability to service our debt obligations and operate our business under restrictions contained in our financing agreements;
|
•
|
our ability to successfully implement and monetize our own content management system (CMS) designed to provide our viewers significantly improved content via the internet and other digital platforms;
|
•
|
our ability to successfully renegotiate retransmission consent and affiliation fees (cable network fees) agreements;
|
•
|
our ability to renew our FCC licenses;
|
•
|
our limited ability to obtain FCC approval for any future acquisitions, as well as, in certain cases, customary antitrust clearance for any future acquisitions;
|
•
|
our exposure to any wrongdoing by those outside the Company, but which could affect our business or pending acquisitions;
|
•
|
our ability to identify media business investment opportunities and to successfully integrate any acquired businesses, as well as the success of our digital initiatives in a competitive environment;
|
•
|
our ability to maintain our affiliation and programming service agreements with our networks and program service providers and at renewal, to successfully negotiate these agreements with favorable terms;
|
•
|
our ability to effectively respond to technology affecting our industry and to increasing competition from other media providers;
|
•
|
our ability to deploy a nationwide next generation broadcast platforms network (NextGen);
|
•
|
the strength of ratings for our local news broadcasts including our news sharing arrangements;
|
•
|
the successful execution of our program development and multi-channel broadcasting initiatives including CHARGE!, TBD, Comet, other original programming, and mobile DTV; and
|
•
|
the results of prior year tax audits by taxing authorities.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Statement of Operations Data:
|
|
|
|
|
|
||
Media revenues (a)
|
$
|
643,651
|
|
|
$
|
607,057
|
|
Non-media revenues
|
21,701
|
|
|
19,879
|
|
||
Total revenues
|
665,352
|
|
|
626,936
|
|
||
|
|
|
|
||||
Media production expenses
|
288,549
|
|
|
258,401
|
|
||
Media selling, general and administrative expenses
|
146,899
|
|
|
124,721
|
|
||
Depreciation and amortization expenses (b)
|
97,880
|
|
|
100,554
|
|
||
Non-media expenses
|
21,223
|
|
|
18,402
|
|
||
Corporate general and administrative expenses
|
24,596
|
|
|
20,576
|
|
||
Gain on asset dispositions, net of impairment
|
(21,109
|
)
|
|
(53,347
|
)
|
||
Operating income
|
107,314
|
|
|
157,629
|
|
||
|
|
|
|
||||
Interest expense and amortization of debt discount and deferred financing costs
|
(69,742
|
)
|
|
(57,318
|
)
|
||
Loss from extinguishment of debt
|
—
|
|
|
(1,404
|
)
|
||
Loss from equity and cost method investees
|
(12,477
|
)
|
|
(1,321
|
)
|
||
Other income, net
|
3,271
|
|
|
1,696
|
|
||
Income before income taxes
|
28,366
|
|
|
99,282
|
|
||
Income tax benefit (provision)
|
15,628
|
|
|
(28,579
|
)
|
||
Net income
|
43,994
|
|
|
70,703
|
|
||
Net income attributable to the noncontrolling interests
|
(871
|
)
|
|
(13,501
|
)
|
||
Net income attributable to Sinclair Broadcast Group
|
$
|
43,123
|
|
|
$
|
57,202
|
|
|
|
|
|
||||
Basic and Diluted Earnings Per Common Share Attributable to Sinclair Broadcast Group:
|
|
|
|
|
|
||
Basic earnings per share
|
$
|
0.42
|
|
|
$
|
0.62
|
|
Diluted earnings per share
|
$
|
0.42
|
|
|
$
|
0.61
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Balance Sheet Data
:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
810,232
|
|
|
$
|
681,326
|
|
Total assets
|
$
|
6,663,411
|
|
|
$
|
6,784,470
|
|
Total debt (c)
|
$
|
4,029,969
|
|
|
$
|
4,048,650
|
|
Total equity
|
$
|
1,571,543
|
|
|
$
|
1,534,366
|
|
|
(a)
|
Media revenues are defined as television advertising revenue, net of agency commissions; distribution revenue; and other media revenues. See
Revenue Recognition
under
Note 1. Nature of Operations and Summary of Significant Accounting Policies
within the
Consolidated Financial Statements
for a discussion of the adoption of the new accounting principles for revenue recognition.
|
(b)
|
Depreciation and amortization includes depreciation and amortization of property and equipment, definite-lived intangible assets, program contract costs, and other assets.
|
(c)
|
Total debt is defined as current and long-term notes payable, capital leases, and commercial bank financing, including notes payable and capital leases of affiliates.
|
•
|
In April and May 2018, the company announced definitive agreements to sell 23 television stations to Standard Media Group LLC, the Fox Broadcasting Company, Meredith Corporation, Howard Stirk and Cunningham Broadcasting Corporation, upon consummation of Sinclair’s acquisition of the stock of Tribune. Excluding those stations where Sinclair will continue to provide services after the dispositions, the stations are being sold for a combined $1.5 billion of gross sales proceeds, with another approximate $100 million of working capital to be retained by the Company, representing a 9.7x multiple of the stations’ 2017/2018 average cash flow. The sales are part of Sinclair’s larger acquisition of Tribune, in order to obtain necessary governmental approval of the Tribune transaction and for other business purposes, and are expected to close immediately prior to or immediately after the Tribune transaction.
|
•
|
In January 2018, the Company entered into multi-year affiliation renewals with ABC that extend affiliations across all Sinclair stations to 2022. Additionally, ABC agreed to an extension of all affiliations with ABC affiliated stations that Sinclair provides sales and other services to under joint sales agreements. Contingent upon the closing of Sinclair's acquisition of Tribune, the ABC Television Network and Sinclair also agreed to an extension of Tribune's ABC affiliation agreements in New Orleans, LA, Scranton-Wilkes-Barre, PA, and Moline, IL (Quad Cities) to be co-terminus with Sinclair's ABC affiliations.
|
•
|
In January 2018, Circa expanded its digital footprint with the debut of a video-driven, live news app, providing unique live video covering a wide range of breaking news stories that are in-the-moment, pushing trending issues, alerting users as stories are developing.
|
•
|
In January 2018, the Company and Sorenson Media Group entered into the first large-scale addressable advertising agreement whereby the two companies will sell targeted ads via smart TVs.
|
•
|
In February 2018, the Company entered into a multi-year renewal with Nielsen Holdings for TV ratings services.
|
•
|
In February 2018, the Company entered into multi-year affiliation renewals with NBC in three markets, including KSNV in Las Vegas, NV; WJAC in Johnstown, PA; and WTOV in Wheeling, WV. Additionally, NBC renewed an affiliation with KRNV in Reno, NV that Sinclair provides sales and other services to under a joint sales agreement.
|
•
|
So far in 2018, Sinclair’s award-winning news rooms, dedicated to impactful journalism with a local focus, won 160 local news awards, including 45 Regional RTDNA Edward R. Murrow Awards. Three of the stations that were recognized with regional Murrows, WBFF (Baltimore), WJLA (Washington, DC) and WGME (Portland, ME), separately, earned nationally-recognized awards for outstanding journalism. WBFF won the Investigative Reporting Award from the Society of Professional Journalists (SPJ) and a National Headliner Award. WJLA won a National Headliner Award, as well as the June L. Biedler Prize presented by The American Association for Cancer Research. WGME won a Gracie Award for News program from the Alliance of Women in Media.
|
•
|
In January 2018, the Company entered into a multi-year retransmission renewal with Verizon Fios for the carriage of Sinclair stations on its platforms.
|
•
|
In April 2018, the Company entered into a multi-year retransmission renewal with Cox for the carriage of Sinclair stations, Tennis Channel, and Sinclair’s national networks on its platforms.
|
•
|
In May 2018, Sinclair and the licensees of stations to which Sinclair provides services and Fox Broadcasting Company agreed to multi-year renewals of 34 Fox affiliates, including all eight of Tribune’s Fox affiliates which are not being sold to Fox.
|
•
|
In January 2018, the Company and Imagine Communications reached an agreement to collaborate on the new monetization opportunities of ATSC 3.0 digital television technology. By providing oversight in the product development process and beta testing for both ATSC 1.0 and 3.0 models, Sinclair will play a critical role in the development of Imagine's next-generation business process systems for traffic, ad sales, and data analytics that allow for unit- and impression-based buys.
|
•
|
In January 2018, Sinclair, Nexstar, Univision and American Tower announced the first domestic deployment of the Next Gen TV standard and a single frequency network in Dallas, TX. The deployment will involve multiple stations, Next Gen TV program transmissions, and simulcasts on 1.0 host stations using customized channel sharing agreements. The Single Frequency Network sites will allow us to validate the mobile, customized programming, and other data-use cases enabled by the ATSC 3.0 standard.
|
•
|
In January 2018, the Company and SK Telecom entered into an MOU for the development of systems to allow the convergence of NextGen and 5G data delivery.
|
•
|
In April 2018, India based OTT/Cloud solutions company Gaian Solutions, Sinclair, and Sinclair's subsidiary ONE Media 3.0, LLC signed an MOU to work together to create a Next Generation Broadcast Platform to support Sinclair's ATSC 3.0 vision and plan to deploy a proof of concept before the end of the year.
|
•
|
In February 2018 and May 2018, we declared quarterly cash dividends of $0.18 per share.
|
•
|
In January 2018, Rob Weisbord assumed the role of Chief Revenue Officer for the Company, a new role reflecting the increased diversification of our business and new revenue streams we are creating.
|
•
|
In April 2018, Sinclair Vice President of Advanced Technology, Mark Aitken, was awarded the 2018 NAB Television Engineering Achievement Award for his leadership in the development of Next Gen TV and Sinclair Chief Revenue Officer, Rob Weisbord, was honored with the Technology Leadership Award, one of the most highly recognized tech awards in the TV industry, presented by the industry publications, Broadcasting & Cable and TV Technology to executives who have become outstanding tech leaders since the year 2000.
|
•
|
In May 2018, Sinclair awarded its Broadcast Diversity Scholarship to seven applicants, distributing over $30,000 in financial assistance to students demonstrating a promising future in the broadcast industry.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Media revenues (a) (b)
|
$
|
643.7
|
|
|
$
|
607.1
|
|
Non-media revenues
|
21.7
|
|
|
19.9
|
|
||
Total revenues
|
665.4
|
|
|
627.0
|
|
||
Media production expenses (a)
|
288.6
|
|
|
258.4
|
|
||
Media selling, general and administrative expenses (a)
|
146.9
|
|
|
124.7
|
|
||
Depreciation and amortization expenses
|
97.9
|
|
|
100.6
|
|
||
Non-media expenses
|
21.2
|
|
|
18.4
|
|
||
Corporate general and administrative expenses
|
24.6
|
|
|
20.6
|
|
||
Gain on asset dispositions, net of impairment
|
(21.1
|
)
|
|
(53.3
|
)
|
||
Operating income
|
$
|
107.3
|
|
|
$
|
157.6
|
|
Net income attributable to Sinclair Broadcast Group
|
$
|
43.1
|
|
|
$
|
57.2
|
|
|
(a)
|
Our media related revenues and expenses are primarily derived from our broadcast segment, but also from our other media related business, including our networks and content such as Tennis Channel, Comet, CHARGE!, and non-broadcast digital properties. The results of our broadcast segment and the other media businesses are discussed further below under
Broadcast Segment
and
Other
, respectively.
|
(b)
|
See
Revenue Recognition
under
Note 1. Nature of Operations and Summary of Significant Accounting Policies
within the
Consolidated Financial Statements
for a discussion of the adoption of the new accounting principles for revenue recognition.
|
|
Three Months Ended March 31,
|
|
Percent Change Increase / (Decrease)
|
||||||
|
2018
|
|
2017
|
|
|||||
Revenue:
|
|
|
|
|
|
||||
Advertising revenue, net of agency commissions
|
$
|
298.9
|
|
|
$
|
310.1
|
|
|
(3.6)%
|
Distribution revenue
|
287.1
|
|
|
249.1
|
|
|
15.3%
|
||
Other media revenues
|
9.9
|
|
|
10.7
|
|
|
(7.5)%
|
||
Media revenues
|
$
|
595.9
|
|
|
$
|
569.9
|
|
|
4.6%
|
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
|
|
||||
Media production expenses
|
$
|
266.4
|
|
|
$
|
232.9
|
|
|
14.4%
|
Media selling, general and administrative expenses
|
$
|
124.8
|
|
|
$
|
112.5
|
|
|
10.9%
|
Amortization of program contract costs and net realizable value adjustments
|
$
|
27.0
|
|
|
$
|
31.0
|
|
|
(12.9)%
|
Corporate general and administrative expenses
|
$
|
21.7
|
|
|
$
|
19.0
|
|
|
14.2%
|
Depreciation and amortization expenses
|
$
|
63.9
|
|
|
$
|
60.3
|
|
|
6.0%
|
|
Percent of Advertising Revenue for the
|
||
|
Three Months Ended March 31,
|
||
|
2018
|
|
2017
|
Local news
|
32.2%
|
|
30.1%
|
Syndicated/Other programming
|
30.3%
|
|
30.0%
|
Network programming
|
23.9%
|
|
25.9%
|
Sports programming
|
9.7%
|
|
10.0%
|
Paid programming
|
3.9%
|
|
4.0%
|
|
# of Channels
|
|
Percent of Advertising Revenue for the
|
||
|
|
Three Months Ended March 31,
|
|||
|
|
2018
|
|
2017
|
|
ABC
|
41
|
|
28.8%
|
|
28.0%
|
FOX
|
59
|
|
23.2%
|
|
27.0%
|
CBS
|
30
|
|
19.2%
|
|
20.0%
|
NBC
|
24
|
|
15.0%
|
|
11.4%
|
CW
|
47
|
|
7.6%
|
|
6.9%
|
MNT
|
39
|
|
4.7%
|
|
5.3%
|
Other (a)
|
363
|
|
1.5%
|
|
1.4%
|
Total
|
603
|
|
|
|
|
|
(a)
|
We broadcast other programming from the following providers on our channels including: Antenna TV, Azteca, Bounce Network, CHARGE!, Comet, CoziTV, Estrella TV, Get TV, Grit, Me TV, Movies!, Stadium Network, TBD, Telemundo, This TV, UniMas, Univision, and Weather
.
|
|
Three Months Ended March 31,
|
|
Percent Change Increase / (Decrease)
|
||||||
|
2018
|
|
2017
|
|
|||||
Revenue:
|
|
|
|
|
|
||||
Advertising revenue, net of agency commissions
|
$
|
17.4
|
|
|
$
|
8.4
|
|
|
107.1%
|
Distribution revenue
|
27.2
|
|
|
26.8
|
|
|
1.5%
|
||
Other media revenues
|
3.1
|
|
|
2.0
|
|
|
55.0%
|
||
Media revenues
|
$
|
47.7
|
|
|
$
|
37.2
|
|
|
28.2%
|
Non-media revenues
|
$
|
21.7
|
|
|
$
|
19.9
|
|
|
9.0%
|
|
|
|
|
|
|
||||
Operating Expenses:
|
|
|
|
|
|
||||
Media expenses
|
$
|
44.2
|
|
|
$
|
37.2
|
|
|
18.8%
|
Non-media expenses
|
$
|
22.5
|
|
|
$
|
22.9
|
|
|
(1.7)%
|
Corporate general and administrative expenses
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
—%
|
Loss (gain) on asset dispositions and impairments
|
$
|
63.0
|
|
|
$
|
(53.0
|
)
|
|
n/m
|
Loss from equity and cost method investments
|
$
|
12.5
|
|
|
$
|
1.3
|
|
|
861.5%
|
|
|
Three Months Ended March 31,
|
|
Percent Change
Increase/ (Decrease) |
||||||
|
2018
|
|
2017
|
|
|||||
Corporate general and administrative expenses
|
$
|
24.6
|
|
|
$
|
20.6
|
|
|
19.4%
|
Interest expense
|
$
|
69.7
|
|
|
$
|
57.3
|
|
|
21.6%
|
Income tax benefit (provision)
|
$
|
15.6
|
|
|
$
|
(28.6
|
)
|
|
n/m
|
Loss from extinguishment of debt
|
$
|
—
|
|
|
$
|
1.4
|
|
|
n/m
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net cash flows from operating activities
|
$
|
100.9
|
|
|
$
|
69.6
|
|
|
|
|
|
||||
Cash flows from (used in) investing activities:
|
|
|
|
|
|
||
Acquisition of property and equipment
|
$
|
(22.2
|
)
|
|
$
|
(20.8
|
)
|
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(8.0
|
)
|
||
Proceeds from the sale of assets
|
0.1
|
|
|
195.1
|
|
||
Investments in equity and cost method investees
|
(7.8
|
)
|
|
(3.1
|
)
|
||
Other
|
8.9
|
|
|
(5.0
|
)
|
||
Net cash flows from (used in) investing activities
|
$
|
(21.0
|
)
|
|
$
|
158.2
|
|
|
|
|
|
||||
Cash flows from (used in) financing activities:
|
|
|
|
|
|
||
Proceeds from notes payable, commercial bank financing and capital leases
|
$
|
0.4
|
|
|
$
|
163.1
|
|
Repayments of notes payable, commercial bank financing and capital leases
|
(16.9
|
)
|
|
(284.4
|
)
|
||
Net proceeds from the sale of Class A Common Stock
|
—
|
|
|
487.9
|
|
||
Dividends paid on Class A and Class B Common Stock
|
(18.4
|
)
|
|
(16.3
|
)
|
||
Other
|
(2.7
|
)
|
|
(17.9
|
)
|
||
Net cash flows from (used in) financing activities
|
$
|
(37.6
|
)
|
|
$
|
332.4
|
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that our receipts and expenditures are being made in accordance with authorizations of management or our Board of Directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material adverse effect on our financial statements.
|
Exhibit
Number
|
|
Description
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
32.2
|
|
|
|
|
|
99
|
|
|
|
|
|
101.INS
|
|
|
|
|
|
101.SCH
|
|
|
|
|
|
101.CAL
|
|
|
|
|
|
101.LAB
|
|
|
|
|
|
101.PRE
|
|
|
|
|
|
101.DEF
|
|
|
SINCLAIR BROADCAST GROUP, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ David R. Bochenek
|
|
|
David R. Bochenek
|
|
|
Senior Vice President/Chief Accounting Officer/Corporate Controller
|
|
|
(Authorized Officer and Chief Accounting Officer)
|
1.
|
Governing Law
. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Maryland applicable to agreements made and to be performed entirely in Maryland.
|
Date:
|
May 10, 2018
|
|
|
|
|
|
|
|
|
|
/s/ Christopher S. Ripley
|
|||
|
Signature:
|
Christopher S. Ripley
|
||
|
|
Chief Executive Officer
|
Date:
|
May 10, 2018
|
|
|
|
|
|
|
|
|
|
/s/ Lucy A. Rutishauser
|
|||
|
Signature:
|
Lucy A. Rutishauser
|
||
|
|
Chief Financial Officer
|
/s/ Christopher S. Ripley
|
|
Christopher S. Ripley
|
|
Chief Executive Officer
|
|
May 10, 2018
|
|
/s/ Lucy A. Rutishauser
|
|
Lucy A. Rutishauser
|
|
Chief Financial Officer
|
|
May 10, 2018
|
|
Portion of Extension Term
|
Monthly
|
Annually
|
1/1/18 – 12/31/18
|
$162,980.38
(see note 3)
|
$1,629,803.84
|
1/1/19 – 12/31/19
|
$166,647.44
(see note 3)
|
$1,666,474.40
|
1/1/20 – 12/31/20
|
$170,397.00
(see note 3)
|
$1,703,970.00
|
1/1/21 – 12/31/21
|
$174,230.94
|
$2,090,771.30
|
1/1/22 – 12/31/22
|
$178,151.14
|
$2,137,813.66
|
1/1/23 – 12/31/23
|
$182,159.54
|
$2,185,914.47
|
1/1/24 – 12/31/24
|
$186,258.13
|
$2,235,097.54
|
1/1/25 – 12/31/25
|
$190,448.94
|
$2,285,387.23
|
1/1/26 – 12/31/26
|
$194,734.04
|
$2,336,808.45
|
1/1/27 – 12/31/27
|
$199,115.55
|
$2,389,386.64
|
1.
|
Rent for 1/1/18 – 12/31/18 = ($27.11 per square feet x 66,551 square feet) PLUS ($19.13 per square feet x 7,923 square feet).
|
2.
|
Annual rent increases beginning on 1/1/19 = 2.25%.
|
3.
|
No monthly rent due at the then-current rate on 1/1/18; 10/1/18; 1/1/19; 10/1/19; 1/1/20; and 10/1/20.
|