NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1.
NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Operations
Sinclair Broadcast Group, Inc. (the Company) is a diversified television broadcasting company with national reach and a strong focus on providing high-quality content on our local television stations and digital platforms. The content, distributed through our broadcast platform, consists of programming provided by third-party networks and syndicators, local news, and other original programming produced by us. We also distribute our original programming, and owned and operated network affiliates, on other third-party platforms. Additionally, we own digital media products that are complementary to our extensive portfolio of television station related digital properties. Outside of our media related businesses, we operate technical services companies focused on supply and maintenance of broadcast transmission systems as well as research and development for the advancement of broadcast technology, and we manage other non-media related investments.
As of
September 30, 2017
, our broadcast distribution platform is a single reportable segment for accounting purposes. It consists primarily of our broadcast television stations, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements (LMAs), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements (JSAs) and shared services agreements (SSAs)) to
192
stations in
89
markets. These stations broadcast
586
channels, as of
September 30, 2017
. For the purpose of this report, these
192
stations and
586
channels are referred to as “our” stations and channels.
Principles of Consolidation
The consolidated financial statements include our accounts and those of our wholly-owned and majority-owned subsidiaries and variable interest entities (VIEs) for which we are the primary beneficiary. Noncontrolling interest represents a minority owner’s proportionate share of the equity in certain of our consolidated entities. All intercompany transactions and account balances have been eliminated in consolidation.
Interim Financial Statements
The consolidated financial statements for the
three and nine months ended
September 30, 2017
and
2016
are unaudited. In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statement of equity (deficit) and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements discussed below.
As permitted under the applicable rules and regulations of the Securities and Exchange Commission (SEC), the consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended
December 31, 2016
filed with the SEC. The consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.
Variable Interest Entities
In determining whether we are the primary beneficiary of a VIE for financial reporting purposes, we consider whether we have the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE and whether we have the obligation to absorb losses or the right to receive returns that would be significant to the VIE. We consolidate VIEs when we are the primary beneficiary.
Third-party station licensees.
Certain of our stations provide services to other station owners within the same respective market through agreements, such as LMAs, where we provide programming, sales, operational and administrative services, and JSAs and SSAs, where we provide non-programming, sales, operational and administrative services. In certain cases, we have also entered into purchase agreements or options to purchase the license related assets of the licensee. We typically own the majority of the non-license assets of the stations, and in some cases where the licensee acquired the license assets concurrent with our acquisition of the non-license assets of the station, we have provided guarantees to the bank for the licensee’s acquisition financing. The terms of the agreements vary, but generally have initial terms of over
five
years with several optional renewal terms. Based on the terms
of the agreements and the significance of our investment in the stations, we are the primary beneficiary when, subject to the ultimate control of the licensees, we have the power to direct the activities which significantly impact the economic performance of the VIE through the services we provide and we absorb losses and returns that would be considered significant to the VIEs. The fees paid between us and the licensees pursuant to these arrangements are eliminated in consolidation. Several of these VIEs are owned by a related party, Cunningham Broadcasting Corporation (Cunningham). See
Note 7. Related Person Transactions
for more information about the arrangements with Cunningham. See
Changes in the Rules of Television Ownership, Joint Sales Agreements, Retransmission Consent Negotiations, and National Ownership Cap
within
Note 4. Commitments and Contingencies
for discussion of recent changes in Federal Communications Commission (FCC) rules related to JSAs.
As of the dates indicated, the carrying amounts and classification of the assets and liabilities of the VIEs mentioned above which have been included in our consolidated balance sheets for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
|
September 30,
2017
|
|
December 31,
2016
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Restricted cash
|
$
|
122,948
|
|
|
$
|
—
|
|
Accounts receivable
|
18,820
|
|
|
21,879
|
|
Other current assets
|
12,851
|
|
|
12,076
|
|
Total current assets
|
154,619
|
|
|
33,955
|
|
|
|
|
|
Program contract costs, less current portion
|
1,091
|
|
|
2,468
|
|
Property and equipment, net
|
6,418
|
|
|
2,996
|
|
Goodwill and indefinite-lived intangible assets
|
16,475
|
|
|
16,475
|
|
Definite-lived intangible assets, net
|
76,487
|
|
|
79,509
|
|
Other assets
|
5,601
|
|
|
6,871
|
|
Total assets
|
$
|
260,691
|
|
|
$
|
142,274
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Deferred spectrum auction proceeds
|
$
|
122,948
|
|
|
$
|
—
|
|
Other current liabilities
|
23,899
|
|
|
18,992
|
|
|
|
|
|
Long-term liabilities:
|
|
|
|
|
|
Notes payable, capital leases and commercial bank financing, less current portion
|
15,043
|
|
|
19,449
|
|
Program contracts payable, less current portion
|
12,063
|
|
|
14,353
|
|
Other long-term liabilities
|
8,452
|
|
|
12,921
|
|
Total liabilities
|
$
|
182,405
|
|
|
$
|
65,715
|
|
The amounts above represent the consolidated assets and liabilities of the VIEs described above, for which we are the primary beneficiary, and have been aggregated as they all relate to our broadcast business. Excluded from the amounts above are payments made to Cunningham under the LMAs and certain outsourcing agreements which are treated as a prepayment of the purchase price of the stations and capital leases between us and Cunningham which are eliminated in consolidation. The total payments made under these LMAs and certain JSAs as of
September 30, 2017
and
December 31, 2016
, which are excluded from liabilities above, were
$42.8 million
and
$40.8 million
, respectively. The total capital lease liabilities, net of capital lease assets, excluded from the above were
$4.7 million
and
$4.5 million
for the years ended
September 30, 2017
and
December 31, 2016
, respectively. Also excluded from the amounts above are liabilities associated with certain outsourcing agreements and purchase options with certain VIEs totaling
$78.1 million
and
$74.5 million
as of
September 30, 2017
and
December 31, 2016
, respectively, as these amounts are eliminated in consolidation. The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE. All the liabilities are non-recourse to us except for certain debt of VIEs which we guarantee. The risk and reward characteristics of the VIEs are similar.
Other investments.
We have investments in real estate ventures and investment companies which are considered VIEs. However, we do not participate in the management of these entities including the day-to-day operating decisions or other decisions which
would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs. We account for these entities using the equity or cost method of accounting.
The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary as of
September 30, 2017
and
December 31, 2016
are
$105.2 million
and
$117.0 million
, respectively, and are included in other assets in the consolidated balance sheets. Our maximum exposure is equal to the carrying value of our investments. The income and loss related to these investments are recorded in income from equity and cost method investments in the consolidated statement of operations. We recorded loss of
$1.3 million
and income of
$2.1 million
for the
three and nine months ended
September 30, 2017
, and income of
$1.4 million
and
$2.8 million
for the
three and nine months ended September 30, 2016
, respectively.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses in the consolidated financial statements and in the disclosures of contingent assets and liabilities. Actual results could differ from those estimates.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued guidance on revenue recognition for revenue from contracts with customers. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance when it becomes effective. The new standard will be effective for annual reporting periods beginning after December 15, 2017. The standard permits the use of either the retrospective or cumulative effect transition method. Since ASU 2014-09 was issued, several additional ASUs have been issued and incorporated within ASC 606 to clarify various elements of the guidance. We have not finalized our assessment of the impact of this guidance on our consolidated financial statements. However, we do not currently believe that the adoption of this guidance will have a material impact on our station advertising or retransmission consent revenue. We have determined that under the new standard, certain barter revenue and expense related to syndicated programming will no longer be recognized. Barter revenues and expenses for the three and nine months ending September 30, 2017 was
$26.4 million
and
$76.4 million
, respectively.
In January 2016, the FASB issued new guidance which address certain aspects of recognition, measurement, presentation, and disclose of financial instruments. The new guidance requires entities to measure equity investments (except those accounted for under the equity method of accounting or those that resulted in consolidation of the investee) at fair value, with changes in fair value recognized in net income. The new standard is effective for the interim and annual periods beginning after December 15, 2017. We are currently evaluating the impact of this guidance on our consolidated financial statements.
In February 2016, the FASB issued new guidance related to accounting for leases, which requires the assets and liabilities that arise from leases to be recognized on the balance sheet. Currently only capital leases are recorded on the balance sheet. This update will require the lessee to recognize a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and recognize the lease expense for such leases generally on a straight-line basis over the lease term. This new guidance will be effective for fiscal periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.
In August 2016, the FASB issued new guidance related to the classification of certain cash receipts and cash payments. The new standard, which includes eight specific cash flow issues with the objective of reducing the existing diversity in practice as to how cash receipts and cash payments are represented in the statement of cash flow. The new standard is effective for fiscal year beginning after December 15, 2017, including the interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impact of this guidance on our consolidated financial statements.
In October 2016, the FASB issued new guidance related to the accounting for income tax consequences of intra-entity transfers of assets other than inventory. Currently the recognition of current and deferred income taxes for an intra-entity are prohibited until the asset has been sold to an outside party. This update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. We adopted this guidance during the first quarter of 2017. The impact of the adoption did not have a material impact on our financial statements.
In October 2016, the FASB issued new guidance which relates to related party considerations in the variable interest entities assessment. The new standard is effective for the interim and annual periods beginning after December 15, 2017. We adopted this guidance during the first quarter of 2017. The impact of the adoption did not have a material impact on our financial statements.
In November 2016, FASB issued new guidance related to the classification and presentation of changes in restricted cash on the statement of cash flows. This new standard requires that a statement of cash flow explain change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling from period to period as shown on the cash flow. The new standard is effective for the fiscal year beginning after December 15, 2017, including the interim periods within that reporting period. Early adoption is permitted. Upon adoption, we will retrospectively reconcile the consolidated statement of cash flows to the restricted cash balance included in the consolidated balance sheet for the period presented in our financial statements. We are currently evaluating the method of presentation on our financial statements.
In January 2017, the FASB issued guidance which clarifies the definition of a business with additional guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard should be applied prospectively and is effective for the interim and annual periods beginning after December 15, 2017. We do not expect the adoption of this guidance will have a material impact on our financial statements.
In January 2017, the FASB issued guidance which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The new standard should be applied prospectively and is effective for the interim and annual periods beginning after December 15, 2019. Early adoption is permitted. We adopted this guidance during the first quarter of 2017. The impact of the adoption did not have a material impact on our financial statements.
In May 2017, the FASB issued new guidance which relates to stock based compensation and clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The new standard is effective for the interim and annual periods beginning after December 15, 2017. We adopted this guidance during the second quarter of 2017. The impact of the adoption did not have a material impact on our financial statements.
Broadcast Incentive Auction
Congress authorized the FCC to conduct so-called “incentive auctions” to auction and re-purpose broadcast television spectrum for mobile broadband use. Pursuant to the auction, television broadcasters submitted bids to receive compensation for relinquishing all or a portion of its rights in the television spectrum of their full-service and Class A stations. Low power stations were not eligible to participate in the auction and are not protected and therefore may be displaced or forced to go off the air as a result of the post-auction repacking process. On April 13, 2017, the FCC issued a public notice which announced the conclusion of the spectrum auction. In July 2017, we received
$310.8 million
of gross proceeds from the auction. These proceeds are reflected as restricted cash because we directed the FCC to deposit those proceeds with the qualifying intermediaries accounts to facilitate potential like kind exchange transactions.
We are limited in our ability to access this cash for a period of time which ends at the earlier of the date that we close on the acquisition of qualifying replacement property or 180 days from the date that the cash was received. We received the auction proceeds in advance of vacating the spectrum sold in the auction; as a result, we have recorded a corresponding deferred liability of
$310.8 million
. We expect to recognize a gain of approximately
$308.2 million
once we vacate/cease using the spectrum sold in the auction which we expect will occur during the first quarter of 2018. The results of the auction are not expected to produce any material change in operations of the Company as there is no change in on air operations.
In the repacking process associated with the auction, the FCC has reassigned some stations to new post-auction channels. We do not expect reassignment to new channels to have a material impact on our coverage. We have received notification from the FCC that
98
of our stations have been assigned to new channels. The legislation authorizing the incentive auction provides the FCC with a
$1.75 billion
fund to reimburse reasonable costs incurred by stations that are reassigned to new channels in the repack. We expect that the reimbursements from the fund will cover the majority of our expenses related to the repack. However, we cannot predict whether the fund will be sufficient to reimburse all of our expenses. The sufficiency of the fund is dependent upon a number of factors including the amounts to be reimbursed to other industry participants for repacking costs.
Revenue Recognition
Total revenues include: (i) station advertising revenue, net of agency commissions; (ii) barter advertising revenues; (iii) retransmission consent fees; (iv) other media revenues and (v) revenues from our other businesses.
Advertising revenues, net of agency commissions, are recognized in the period during which advertisements are placed.
Some of our retransmission consent agreements contain both advertising and retransmission consent elements. We have determined that these retransmission consent agreements are revenue arrangements with multiple deliverables. Advertising and retransmission consent deliverables sold under our agreements are separated into different units of accounting at fair value. Revenue applicable to the advertising element of the arrangement is recognized similar to the advertising revenue policy noted above. Revenue applicable to the retransmission consent element of the arrangement is recognized over the life of the agreement.
Income Taxes
Our income tax provision for all periods consists of federal and state income taxes. The tax provision for the three and nine months ended September 30, 2017 and 2016 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests. We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating our ability to realize net deferred tax assets, we consider all available evidence, both positive and negative, including our past operating results, tax planning strategies and forecasts of future taxable income. In considering these sources of taxable income, we must make certain judgments that are based on the plans and estimates used to manage our underlying businesses on a long-term basis. A valuation allowance has been provided for deferred tax assets related to a substantial portion of our available state net operating loss (NOL) carryforwards, based on past operating results, expected timing of the reversals of existing temporary book/tax basis differences, alternative tax strategies and projected future taxable income.
Our effective income tax rate for the three and nine months ended September 30, 2017 and 2016, approximated the statutory rate.
Equity Offering
On March 15, 2017, we issued and sold
12.0 million
shares of Class A Common stock to the public at a price of
$42.00
per share. The proceeds from the offering, net of financing costs, were approximately
$487.9 million
and are intended to fund future potential acquisitions and general corporate purposes.
Share Repurchase Program
On March 20, 2014, the Board of Directors authorized a
$150.0 million
share repurchase authorization. On September 6, 2016 the Board of Directors authorized an additional
$150.0 million
shares repurchases authorization. There is no expiration date and currently, management has no plans to terminate this program. For the
three and nine months ended September 30, 2017
, we purchased approximately
1.0 million
shares of Class A Common Stock for
$30.3 million
. As of
September 30, 2017
, the total remaining repurchase authorization is
$88.8 million
.
Subsequent Events
In October 2017, our Board of Directors declared a quarterly dividend of
$0.18
per share, payable on December 15, 2017 to holders of record at the close of business on December 1, 2017.
Reclassifications
Certain reclassifications have been made to prior years' consolidated financial statements to conform to the current year's presentation.
2.
ACQUISITIONS AND DISPOSITION OF ASSETS:
2017 Acquisitions.
Bonten .
On September 1, 2017, we acquired the stock of Bonten Media Group Holdings, Inc. (Bonten) and Cunningham acquired the membership interest of Esteem Broadcasting (Esteem) for an aggregate purchase price of
$240 million
plus a working capital adjustment, excluding cash acquired, of
$1.3 million
accounted for as a business combination under the acquisition method of accounting. As a result of the transaction we added
14
television stations in
8
markets: Tri-Cities, TN/VA; Greensville/New Bern/Washington, NC; Chico/Redding, CA; Abilene/Sweetwater, TX; Missoula, MT; Butte/Bozeman, MT; San Angelo, TX; and Eureka, CA. Cunningham assumed the joint sales agreement under which we will provide services to
4
additional stations. The transaction was funded through cash on hand. The acquisition will expand our regional presence in several states where we already operate and help us bring improvements to small market stations.
The following table summarizes the allocated fair value of acquired assets and assumed liabilities (in thousands):
|
|
|
|
|
Accounts receivable
|
14,665
|
|
Prepaid expenses and other current assets
|
699
|
|
Program contract costs
|
683
|
|
Property and equipment
|
23,019
|
|
Definite-lived intangible assets
|
157,979
|
|
Indefinite-lived intangible assets
|
8,363
|
|
Other assets
|
3,609
|
|
Accounts payable and accrued liabilities
|
(8,481
|
)
|
Program contracts payable
|
(783
|
)
|
Deferred tax liability
|
(65,789
|
)
|
Other long term liabilities
|
(3,409
|
)
|
Fair value of identifiable net assets acquired
|
130,555
|
|
Goodwill
|
110,716
|
|
Total purchase price, net of cash acquired
|
$
|
241,271
|
|
The preliminary purchase price allocation presented above is based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using valuation techniques including income, cost and market approaches. The fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates. The allocation is preliminary pending a final determination of the fair value of the assets and liabilities.
The definite-lived intangible assets of
$158.0 million
is comprised of network affiliations of
$49.5 million
and customer relationships of
$108.5 million
. These intangible assets will be amortized over a weighted average useful life of
14
years for network affiliations and other intangible assets. Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies. We expect that goodwill deductible for tax purposes will be approximately
$5.6 million
.
In connection with the acquisition for the
three and nine months ended
September 30, 2017
, we incurred a total of
$0.3 million
and
$0.8 million
, respectively, of costs primarily related to legal and other professional services which we expensed as incurred and classified as corporate general and administrative expenses in the consolidated statements of operations. Net revenues and operating income of the Bonten stations in our consolidated statements of operations, were
$7.6 million
and
$0.9 million
for the
three and nine months ended
September 30, 2017
.
Other 2017 Acquisitions.
During 2017,
we acquired certain media assets for an aggregate
$27 million
, less working capital of
$2.8 million
.
The transactions were funded with cash on hand.
2016 Acquisitions.
Tennis Channel.
In March 2016, we acquired all of the outstanding common stock of Tennis Channel (Tennis), a cable network which includes coverage of the top 100 tennis tournaments and original professional sport and tennis lifestyle shows for
$350.0 million
plus a working capital adjustment, excluding cash acquired, of
$4.1 million
accounted for as a business combination under the acquisition method of accounting. The transaction was funded through cash on hand and a draw on the Bank Credit Agreement. The acquisition provides an expansion of our network business and increases value based on the synergies we can achieve. Tennis is reported within Other within
Note 6. Segment Data
.
The following table summarizes the allocated fair value of acquired assets and assumed liabilities (in thousands):
|
|
|
|
|
Accounts receivable
|
17,629
|
|
Prepaid expenses and other current assets
|
6,518
|
|
Property and equipment
|
5,964
|
|
Definite-lived intangible assets
|
272,686
|
|
Indefinite-lived intangible assets
|
23,400
|
|
Other assets
|
619
|
|
Accounts payable and accrued liabilities
|
(7,414
|
)
|
Capital leases
|
(115
|
)
|
Deferred tax liability
|
(16,991
|
)
|
Other long term liabilities
|
(1,669
|
)
|
Fair value of identifiable net assets acquired
|
300,627
|
|
Goodwill
|
53,427
|
|
Total purchase price, net of cash acquired
|
$
|
354,054
|
|
The purchase price allocation presented above is based upon management’s estimate of the fair value of the acquired assets and assumed liabilities using valuation techniques including income, cost and market approaches. The fair value estimates are based on, but not limited to, expected future revenue and cash flows, expected future growth rates, and estimated discount rates.
The definite-lived intangible assets of
$272.7 million
related primarily to customer relationships, which represent existing advertiser relationships and contractual relationships with multi-channel video programming distributors (MVPDs) and will be amortized over a weighted average useful life of
15
years. Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives. Goodwill is calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships, as well as expected future synergies. Goodwill will not be deductible for tax purposes.
In connection with the acquisition, for the year ended December 31, 2016, we incurred a total of
$0.2 million
of costs primarily related to legal and other professional services which we expensed as incurred and classified as corporate general and administrative expenses in the consolidated statements of operations.
Net revenues of Tennis included in our consolidated statements of operations, were
$33.9 million
and
$103.2 million
for the
three and nine months ended
September 30, 2017
, and
$27.4 million
and
$62.5 million
for the
three and nine months ended September 30, 2016
, respectively. Our consolidated statements of operations included operating income of Tennis of
$3.0 million
and
$8.1 million
for the
three and nine months ended
September 30, 2017
, respectively, and an operating income of
$1.3 million
and an operating loss of
$9.6 million
for the
three and nine months ended September 30, 2016
, respectively.
Other 2016 Acquisitions.
During the year ended December 31, 2016, we acquired certain television station related assets for an aggregate purchase price of
$72.0 million
less working capital of
$0.1 million
. We also exchanged certain broadcast assets which
had a carrying value of
$23.8 million
with another broadcaster for no cash consideration, and recognized a gain on the derecognition of those broadcast assets of
$4.4 million
, respectively.
Pro Forma Information.
The following table sets forth unaudited results of operations, assuming that Bonten for the
three and nine months ended
September 30, 2017
and
2016
and that Tennis
for the nine months ended September 30, 2016
, along with transactions necessary to finance the acquisition, occurred at the beginning of the year preceding the year of acquisition. The pro forma results exclude the other acquisitions discussed above, as they were deemed not material both individually and in the aggregate (in thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
2017
|
2016
|
|
2017
|
2016
|
Total revenues
|
$
|
685,382
|
|
$
|
714,451
|
|
|
$
|
2,056,790
|
|
$
|
2,014,195
|
|
Net Income
|
$
|
34,303
|
|
$
|
54,437
|
|
|
$
|
155,532
|
|
$
|
134,504
|
|
Net Income attributable to Sinclair Broadcast Group
|
$
|
32,374
|
|
$
|
53,249
|
|
|
$
|
138,712
|
|
$
|
130,646
|
|
Basic earnings per share attributable to Sinclair Broadcast Group
|
$
|
0.32
|
|
$
|
0.57
|
|
|
$
|
1.40
|
|
$
|
1.38
|
|
Diluted earnings per share attributable to Sinclair Broadcast Group
|
$
|
0.31
|
|
$
|
0.56
|
|
|
$
|
1.38
|
|
$
|
1.37
|
|
This pro forma financial information is based on historical results of operations, adjusted for the allocation of the purchase price and other acquisition accounting adjustments, and is not indicative of what our results would have been had we operated Bonten or Tennis for the periods presented because the pro forma results do not reflect expected synergies. The pro forma adjustments reflect depreciation expense and amortization of intangible assets related to the fair value adjustments of the assets acquired and any adjustments to interest expense to reflect the debt financing of the transactions, if applicable. Depreciation and amortization expense are higher than amounts recorded in the historical financial statements of the acquirees due to the fair value adjustments recorded for long-lived tangible and intangible assets in purchase accounting.
Pending Acquisitions.
In May 2017, we entered into a definitive agreement to acquire the stock of Tribune Media Company (Tribune) for
$43.50
per share, for an aggregate purchase price of approximately
$3.9 billion
, plus the assumption or refinancing of approximately
$2.7 billion
in net debt. Under the terms of the agreement, Tribune stockholders will receive
$35.00
in cash and
0.23
shares of Sinclair Class A common stock for each share of Tribune Class A common stock and Class B common stock they own. Tribune owns or operates
42
television stations in
33
markets, cable network WGN America, digital multicast network Antenna TV, minority stakes in the TV Food Network, ThisTV, and CareerBuilder, and a variety of real estate assets. Tribune’s stations consists of
14
FOX,
12
CW,
6
CBS,
3
ABC,
2
NBC,
3
MyNetworkTV affiliates and
2
independent stations. We expect the transaction will close during the first quarter of 2018, as well as customary closing conditions, including antitrust clearance and approval by the FCC. We expect to fund the purchase price through a combination of cash on hand, fully committed debt financing, and by accessing the capital markets. In October 2017, Tribune shareholders held a meeting and voted to approve the merger agreement. See
Note 3. Notes Payable and Commercial Bank Financing
for further discussion on debt financing.
2017 Dispositions
Alarm Funding Sale.
In March 2017, we sold Alarm Funding Associates LLC (Alarm) for
$200.0 million
less working capital and transaction costs of
$5.0 million
. We recognized a gain on the sale of Alarm of
$53.0 million
of which
$12.3 million
was attributable to noncontrolling interests which is included in the gain on asset dispositions and net income attributable to the noncontrolling interest, respectively, on the consolidated statement of operations.
3.
NOTES PAYABLE AND COMMERCIAL BANK FINANCING:
Bank Credit Agreement
On January 3, 2017, we amended our bank credit agreement. We extended the maturity date of the Term Loan B from April 9, 2020 and July 31, 2021 to January 3, 2024. In connection with the extension, we added additional operating flexibility, including a reduction in certain pricing terms related to Term Loan B and our existing revolving credit facility (Revolver) and revisions to certain covenant ratio requirements. The Term Loan B and Revolver bear interest at LIBOR plus
2.25%
and
2.00%
, respectively. We incurred approximately
$11.6 million
of financing costs in connection with the amendment, of which
$3.4 million
related to an original issuance discount,
$7.7 million
was expensed, and
$0.5 million
was capitalized as a deferred financing cost as of
September 30, 2017
. Additionally, unamortized deferred financing costs of
$1.4 million
were written off as loss on extinguishment in the consolidated statement of operations in the first quarter of
2017
related to this amendment. As of
September 30, 2017
and December 31, 2016, the Term Loan B balance net of deferred financing costs and debt discounts was
$1,346.7 million
and
$1,353.5 million
, respectively.
As of
September 30, 2017
and
December 31, 2016
, there was
no
outstanding balance under our revolving credit facility. As of
September 30, 2017
, we had
$484.4 million
of borrowing capacity under our revolving credit facility.
Commitment Letters and Incremental Term B Facility related to Tribune Acquisition
In connection with the pending acquisition of Tribune discussed in
Note 2. Acquisitions and Disposition of Assets
,
we entered into financing commitment letters (Commitment Letters) with certain financial institutions for (i) a
seven
-year senior secured incremental term loan B facility of up to
$3.747 billion
(Incremental Term Loan B Facility) and (ii) a
one
-year senior unsecured term loan bridge facility of up to
$785 million
(Bridge Facility) and, together with the Incremental Term B Facility, collectively the (Facilities), convertible into a
nine
-year extended term loan, for purposes of financing a portion of the cash consideration payable under the terms of the agreement of plan merger between the Company and Tribune (Merger Agreement) and to pay or redeem certain indebtedness of Tribune and its subsidiaries. The Commitment Letters also contemplate certain amendments to our existing credit agreement, as subsequently amended (Existing Credit Agreement) in connection with the Tribune Acquisition to permit the acquisition and to provide for the Incremental Term B Facility in accordance with the terms of the Existing Credit Agreement. The Commitment Letters also provide for the syndication of an incremental revolving credit loan facility commitment of up to
$225 million
(Incremental Revolving Commitments) to be provided in accordance with the terms of the Existing Credit Agreement. The provision of the Incremental Revolving Commitments is not a condition of the Incremental Term B Facility or the Bridge Facility.
The Incremental Term Loan B Facility will be subject to representations, warranties and covenants that, subject to certain agreed modifications, will be substantially similar to those in the Existing Credit Agreement. The documentation for the Bridge Facility shall, except as otherwise agreed, be based on and consistent with the indenture governing our
5.125%
Senior Notes due 2027, dated as of August 30, 2016, among STG and U.S. Bank National Association, as trustee (
5.125%
Notes Indenture), and shall in any case, except as expressly agreed, be no less favorable to us than the
5.125%
Notes Indenture.
The funding of the Facilities is subject to our compliance with customary terms and conditions precedent as set forth in
the Commitment Letters, including, among others, (i) the execution and delivery by us of definitive documentation consistent with the Commitment Letters and (ii) that the acquisition of Tribune shall have been, or substantially simultaneously with the funding under the Facilities shall be, consummated in accordance with the terms of the Merger Agreement without giving effect to any amendments or waivers that are material and adverse to the parties to the Commitment Letters.
In June 2017, Tribune commenced a consent solicitation, seeking consents from the holders of Tribune notes to amend certain provisions of the indenture governing Tribune's
5.875%
Senior Notes due 2022 (Tribune notes), to (i) eliminate any requirement for Tribune to make a "Change of Control Offer," to holders of Tribune notes in connection with the transactions, (ii) clarify the treatment under the Tribune notes of the proposed structure of the transactions and to facilitate the integration of Tribune and its subsidiaries and the Tribune notes with and into the Company's debt capital structure, and (iii) eliminate the expense associated with producing and filing with the SEC separate financial reports for STG, a wholly-owned subsidiary and the television operating subsidiary of the Company, as successor issuer of the Tribune notes, if the Company or any other parent entity of the successor issuer of the Tribune notes, in its sole discretion, provides an unconditional guarantee of the payment obligations of the successor issuer under the Tribune notes. Tribune received the requisite consent from the holders of the Notes and executed a supplemental indenture to amend these provisions of the Tribune indenture. The Company paid a consent fee of
$8.25 million
to the consenting holders of the Notes.
4.
COMMITMENTS AND CONTINGENCIES:
Litigation
We are a party to lawsuits and claims from time to time in the ordinary course of business. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions. After reviewing developments to date with legal counsel, our management is of the opinion that none of our pending and threatened matters are material. The FCC has undertaken an investigation in response to a complaint it received alleging possible violations of the FCC’s sponsorship identification rules by the Company and certain of its subsidiaries. We cannot predict the outcome of any potential FCC action related to this matter but it is possible that such action could include fines and/or compliance programs.
Changes in the Rules of Television Ownership, Local Marketing Agreements, Joint Sales Agreements, Retransmission Consent Negotiations, and National Ownership Cap
Certain of our stations have entered into what have commonly been referred to as local marketing agreements or LMAs. One typical type of LMA is a programming agreement between
two
separately owned television stations serving the same market, whereby the licensee of
one
station programs substantial portions of the broadcast day and sells advertising time during such programming segments on the other licensee’s station subject to the latter licensee’s ultimate editorial and other controls. We believe these arrangements allow us to reduce our operating expenses and enhance profitability.
In 1999, the FCC established a new local television ownership rule which made LMAs attributable. However, the rule grandfathered LMAs that were entered into prior to November 5, 1996, and permitted the applicable stations to continue operations pursuant to the LMAs until the conclusion of the FCC’s 2004 biennial review. The FCC stated it would conduct a case-by-case review of grandfathered LMAs and assess the appropriateness of extending the grandfathering periods. The FCC did not initiate any review of grandfathered LMAs in 2004 or as part of its subsequent quadrennial reviews. We do not know when, or if, the FCC will conduct any such review of grandfathered LMAs. Currently, all of our LMAs are grandfathered under the local television ownership rule because they were entered into prior to November 5, 1996. If the FCC were to eliminate the grandfathering of these LMAs, we would have to terminate or modify these LMAs.
In February 2015, the FCC issued an order implementing certain statutorily required changes to its rules governing the duty to negotiate retransmission consent agreements in good faith. With these changes, a television broadcast station is prohibited from negotiating retransmission consent jointly with another television station in the same market unless the “stations are directly or indirectly under common de jure control permitted under the regulations of the Commission.” During a 2015 retransmission consent negotiation, an MVPD filed a complaint with the FCC accusing us of violating this rule. Although we reached agreement with the MVPD, the FCC initiated an investigation. In order to resolve the investigation and all other pending matters before the FCC's Media Bureau (including the grant of all outstanding renewals and dismissal or cancellation of all outstanding adversarial pleadings or forfeitures before the Media Bureau), the Company, on July 29, 2016, without any admission of liability, entered into a consent decree with the FCC pursuant to which the Company paid a settlement payment and agreed to be subject to ongoing compliance monitoring by the FCC for a period of
36 months
.
In September 2015, the FCC released a Notice of Proposed Rulemaking in response to a Congressional directive in STELAR to examine the “totality of the circumstances test” for good-faith negotiations of retransmission consent. The proposed rulemaking sought comment on new factors and evidence to consider in the FCC's evaluation of claims of bad faith negotiation, including service interruptions prior to a “marquee sports or entertainment event,” restrictions on online access to broadcast programming during negotiation impasses, broadcasters’ ability to offer bundles of broadcast signals with other broadcast stations or cable networks, and broadcasters’ ability to invoke the FCC’s exclusivity rules during service interruptions. On July 14, 2016, then-Chairman Wheeler announced that the FCC would not, at such time, proceed to adopt additional rules governing good faith negotiations of retransmission consent. No formal action has yet been taken on this Proposed Rulemaking, and we cannot predict if the full Commission will agree to terminate the Rulemaking without action.
In August 2016, the FCC completed both its 2010 and 2014 quadrennial reviews of its media ownership rules and issued an order (the "Ownership Order") which left most of the existing multiple ownership rules intact, but amended the rules to provide for the attribution of JSAs where two television stations are located in the same market, and a party with an attributable ownership interest in one station sells more than 15% of the advertising time per week of the second station. The Ownership Order also provides that JSAs that existed prior to March 31, 2014, will not be counted as attributable and may remain in place until October 1, 2025, at which point they must be terminated, amended or otherwise come into compliance with the rules. These "grandfathered" JSAs may be transferred or assigned without terminating the grandfathering status relief. Among other things, the television JSA attribution rule could limit our future ability to create duopolies or other two-station operations in certain markets. We cannot predict whether we will be able to terminate or restructure such arrangements prior to October 1, 2025, on terms that are as advantageous to us as the current arrangements. The revenues of these JSA arrangements we earned during the
three and nine months ended
September 30, 2017
were
$15.9 million
and
$45.1 million
, and
$16.0 million
and
$42.5 million
during the
three and nine months ended September 30, 2016
, respectively. The Ownership Order is the subject of an appeal to the U.S. Court of Appeals for the Third Circuit and Petitions for Reconsideration before the FCC. On October 26, 2017, the FCC announced plans to grant in part and deny in part the Petitions for Reconsideration and released a draft Order on Reconsideration to be voted on at the Commission’s November 16, 2017 monthly public meeting. The draft Order on Reconsideration includes, among other things, proposals to (1) eliminate the Newspaper/Broadcast and TV/Radio Cross-Ownership Rules; (2) permit certain TV duopolies in all markets by eliminating the Eight Voices Test and assessing proposed Big-4 station combinations on a case-by-case basis; (3) eliminate attribution of Joint Sales Agreements; and (4) create an incubator program to promote new entry and ownership diversity in the broadcast industry. The draft Order on Reconsideration is subject to change prior to adoption. If adopted, the Order on Reconsideration would be effective 30 days after publication in the Federal Register.
If we are required to terminate or modify our LMAs or JSAs, our business could be affected in the following ways:
Losses on investments
. In some cases, we own the non-license assets used by the stations we operate under LMAs and JSAs. If certain of these arrangements are no longer permitted, we could be forced to sell these assets, restructure our agreements or find another use for them. If this happens, the market for such assets may not be as good as when we purchased them and, therefore, we cannot be certain of a favorable return on our original investments.
Termination penalties
. If the FCC requires us to modify or terminate existing LMAs or JSAs before the terms of the agreements expire, or under certain circumstances, we elect not to extend the terms of the agreements, we may be forced to pay termination penalties under the terms of some of our agreements. Any such termination penalties could be material.
On September 6, 2016, the FCC released an order eliminating the UHF discount (the "UHF Discount Order"). The UHF discount allowed television station owners to recognize the limitation of coverage inherent with UHF stations when calculating compliance with the FCC’s national ownership cap, which prohibits a single entity from owning television stations that reach, in total, more than
39%
of all the television households in the nation. All but
34
of the stations we currently own and operate, or to which we provide programming services are UHF. On April 20, 2017, the FCC acted on a Petition for Reconsideration of the UHF Discount Order and adopted an Order on Reconsideration which reinstated the UHF Discount, which was to become effective June 5, 2017. The Order on Reconsideration also announced the FCC's plans to open a rulemaking proceeding later this year to consider whether to modify the national audience reach rule, including the UHF discount. A petition for judicial review of the Order on Reconsideration was filed at the U.S. Court of Appeals for the D.C. Circuit on May 12, 2017. Sinclair has filed to intervene in support of the FCC. Prior to the effective date, the petitioners in that case filed an emergency motion with the court seeking a stay of the Order on Reconsideration pending judicial review. The D.C. Circuit Court of Appeals entered an administrative stay of the Order on Reconsideration pending its review of the emergency stay motion. On June 15, 2017, the court issued an order dissolving the administrative stay and denying the emergency stay motion. The Order on Reconsideration became effective immediately upon release of the court's order, as a result of which the UHF discount remains in effect. The petitioners filed their brief in the D.C. Circuit Court of Appeals on September 25, 2017. The FCC's brief is currently due November 7, 2017, and the intervenor's brief is currently due November 14, 2017. Petitioners' reply brief is due December 5, 2017. We cannot predict the outcome of this proceeding. With the application of the UHF discount, counting all our present stations, we reach approximately
25%
of U.S. households. With the pending Tribune transaction, absent divestitures, we would exceed the
39%
cap, even with the application of the UHF discount. Changes to the national ownership cap could limit our ability to make television station acquisitions.
5.
EARNINGS PER SHARE:
The following table reconciles income (numerator) and shares (denominator) used in our computations of basic and diluted earnings per share for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Income (Numerator)
|
|
|
|
|
|
|
|
|
Net income
|
$
|
32,566
|
|
|
$
|
52,033
|
|
|
$
|
149,303
|
|
|
$
|
128,262
|
|
|
Net income attributable to noncontrolling interests
|
(1,929
|
)
|
|
(1,188
|
)
|
|
(16,820
|
)
|
|
(3,858
|
)
|
|
Numerator for basic and diluted earnings per common share available to common shareholders
|
$
|
30,637
|
|
|
$
|
50,845
|
|
|
$
|
132,483
|
|
|
$
|
124,404
|
|
|
|
|
|
|
|
|
|
|
|
Shares (Denominator)
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
102,245
|
|
|
93,948
|
|
|
99,210
|
|
|
94,595
|
|
|
Dilutive effect of stock-settled appreciation rights and outstanding stock options
|
810
|
|
|
818
|
|
|
963
|
|
|
870
|
|
|
Weighted-average common and common equivalent shares outstanding
|
103,055
|
|
|
94,766
|
|
|
100,173
|
|
|
95,465
|
|
|
The following table shows the weighted-average stock-settled appreciation rights and outstanding stock options (in thousands) that are excluded from the calculation of diluted earnings per common share as the inclusion of such shares would be anti-dilutive:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Weighted-average stock-settled appreciation rights and outstanding stock options excluded
|
1,150
|
|
|
525
|
|
|
383
|
|
|
525
|
|
|
6.
SEGMENT DATA:
We measure segment performance based on operating income (loss). Our broadcast segment includes stations in
89
markets located throughout the continental United States. Other primarily consists of original networks and content, digital and internet solutions, technical services and other non-media investments. All of our businesses are located within the United States. Corporate costs primarily include our costs to operate as a public company and to operate our corporate headquarters location. Other and Corporate are not reportable segments but are included for reconciliation purposes.
We had approximately
$172.7 million
and
$226.5 million
of intercompany loans between the broadcast segment, other, and corporate as of
September 30, 2017
and
2016
, respectively. We had
$4.3 million
and
$6.1 million
in intercompany interest expense related to intercompany loans between the broadcast segment, other, and corporate for the
three months ended
September 30, 2017
and
2016
, respectively. We had
$14.2 million
and
$18.3 million
in intercompany interest expense for the the
nine months ended
September 30, 2017
and
2016
, respectively. All other intercompany transactions are immaterial.
Segment financial information is included in the following tables for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended September 30, 2017
|
|
Broadcast
|
|
Other
|
|
Corporate
|
|
Consolidated
|
Revenue
|
|
$
|
610,840
|
|
|
$
|
60,051
|
|
|
$
|
—
|
|
|
$
|
670,891
|
|
Depreciation of property and equipment
|
|
22,344
|
|
|
1,851
|
|
|
247
|
|
|
24,442
|
|
Amortization of definite-lived intangible assets and other assets
|
|
38,186
|
|
|
5,182
|
|
|
—
|
|
|
43,368
|
|
Amortization of program contract costs and net realizable value adjustments
|
|
28,047
|
|
|
—
|
|
|
—
|
|
|
28,047
|
|
General and administrative overhead expenses
|
|
23,582
|
|
|
224
|
|
|
2,025
|
|
|
25,831
|
|
Research and development
|
|
—
|
|
|
2,551
|
|
|
—
|
|
|
2,551
|
|
Operating income (loss)
|
|
115,571
|
|
|
(9,852
|
)
|
|
(2,272
|
)
|
|
103,447
|
|
Interest expense
|
|
1,281
|
|
|
204
|
|
|
50,258
|
|
|
51,743
|
|
Loss from equity and cost method investments
|
|
—
|
|
|
(4,362
|
)
|
|
—
|
|
|
(4,362
|
)
|
Assets
|
|
5,274,895
|
|
|
762,751
|
|
|
649,423
|
|
|
6,687,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended September 30, 2016
|
|
Broadcast
|
|
Other
|
|
Corporate
|
|
Consolidated
|
Revenue
|
|
$
|
635,559
|
|
|
$
|
58,276
|
|
|
$
|
—
|
|
|
$
|
693,835
|
|
Depreciation of property and equipment
|
|
24,195
|
|
|
1,425
|
|
|
266
|
|
|
25,886
|
|
Amortization of definite-lived intangible assets and other assets
|
|
38,717
|
|
|
9,090
|
|
|
—
|
|
|
47,807
|
|
Amortization of program contract costs and net realizable value adjustments
|
|
32,441
|
|
|
—
|
|
|
—
|
|
|
32,441
|
|
General and administrative overhead expenses
|
|
17,530
|
|
|
247
|
|
|
1,275
|
|
|
19,052
|
|
Research and development
|
|
—
|
|
|
745
|
|
|
—
|
|
|
745
|
|
Operating income (loss)
|
|
158,666
|
|
|
(3,077
|
)
|
|
(1,595
|
)
|
|
153,994
|
|
Interest expense
|
|
1,404
|
|
|
1,664
|
|
|
50,420
|
|
|
53,488
|
|
Income from equity and cost method investments
|
|
—
|
|
|
611
|
|
|
812
|
|
|
1,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2017
|
|
Broadcast
|
|
Other
|
|
Corporate
|
|
Consolidated
|
Revenue
|
|
$
|
1,821,248
|
|
|
$
|
178,867
|
|
|
$
|
—
|
|
|
$
|
2,000,115
|
|
Depreciation of property and equipment
|
|
65,850
|
|
|
5,438
|
|
|
738
|
|
|
72,026
|
|
Amortization of definite-lived intangible assets and other assets
|
|
114,810
|
|
|
17,489
|
|
|
—
|
|
|
132,299
|
|
Amortization of program contract costs and net realizable value adjustments
|
|
87,962
|
|
|
—
|
|
|
—
|
|
|
87,962
|
|
General and administrative overhead expenses
|
|
65,059
|
|
|
785
|
|
|
5,614
|
|
|
71,458
|
|
Research and development
|
|
—
|
|
|
5,053
|
|
|
—
|
|
|
5,053
|
|
Operating income (loss)
|
|
361,259
|
|
|
25,016
|
|
(a)
|
(6,351
|
)
|
|
379,924
|
|
Interest expense
|
|
3,976
|
|
|
1,633
|
|
|
154,411
|
|
|
160,020
|
|
Loss from equity and cost method investments
|
|
—
|
|
|
(4,221
|
)
|
|
—
|
|
|
(4,221
|
)
|
(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 Disposition of Assets
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended September 30, 2016
|
|
Broadcast
|
|
Other
|
|
Corporate
|
|
Consolidated
|
Revenue
|
|
$
|
1,790,561
|
|
|
$
|
148,697
|
|
|
$
|
—
|
|
|
$
|
1,939,258
|
|
Depreciation of property and equipment
|
|
69,469
|
|
|
4,063
|
|
|
798
|
|
|
74,330
|
|
Amortization of definite-lived intangible assets and other assets
|
|
117,038
|
|
|
20,159
|
|
|
—
|
|
|
137,197
|
|
Amortization of program contract costs and net realizable value adjustments
|
|
96,722
|
|
|
—
|
|
|
—
|
|
|
96,722
|
|
General and administrative overhead expenses
|
|
50,320
|
|
|
1,075
|
|
|
3,277
|
|
|
54,672
|
|
Research and development
|
|
—
|
|
|
3,055
|
|
|
—
|
|
|
3,055
|
|
Operating income (loss)
|
|
402,236
|
|
|
(28,699
|
)
|
|
(4,130
|
)
|
|
369,407
|
|
Interest expense
|
|
4,297
|
|
|
4,695
|
|
|
147,827
|
|
|
156,819
|
|
Income from equity and cost method investments
|
|
—
|
|
|
414
|
|
|
2,375
|
|
|
2,789
|
|
7.
RELATED PERSON TRANSACTIONS:
Transactions with our controlling shareholders
David, Frederick, J. Duncan and Robert Smith (collectively, the controlling shareholders) are brothers and hold substantially all of the Class B Common Stock and some of our Class A Common Stock. We engaged in the following transactions with them and/or entities in which they have substantial interests.
Leases.
Certain assets used by us and our operating subsidiaries are leased from Cunningham Communications Inc., Keyser Investment Group, Gerstell Development Limited Partnership and Beaver Dam, LLC (entities owned by the controlling shareholders). Lease payments made to these entities were
$1.3 million
for both the
three months ended
September 30, 2017
and
2016
, and
$3.9 million
and
$3.8 million
for the nine months ended September 30, 2017
and
2016
, respectively.
Charter Aircraft.
We lease aircraft owned by certain controlling shareholders. For all leases, we incurred expenses of
$0.4 million
and
$0.3 million
for the
three months ended
September 30, 2017
and
2016
, and
$1.3 million
and
$1.0 million
for the
for the nine months ended September 30, 2017
and
2016
, respectively.
Cunningham Broadcasting Corporation
Cunningham owns a portfolio of television stations including: WNUV-TV Baltimore, Maryland; WRGT-TV Dayton, Ohio; WVAH-TV Charleston, West Virginia; WMYA-TV Anderson, South Carolina; WTTE-TV Columbus, Ohio; WDBB-TV Birmingham, Alabama; WBSF-TV Flint, Michigan; WGTU-TV/WGTQ-TV Traverse City/Cadillac, Michigan, and beginning in September 2017, WEMT-TV Tri-Cities, Tennessee, WYDO-TV Greenville, North Carolina, KBVU-TV Eureka, California, KCVU-TV Chico-Redding, California, and WPFO-TV Portland, Maine (collectively, the Cunningham Stations). Certain of our stations provide services to these Cunningham Stations pursuant to LMAs or JSAs and SSAs. See
Note 1. Nature of Operations and Summary of Significant Accounting Policies
, for further discussion of the scope of services provided under these types of arrangements.
The estate of Carolyn C. Smith, the mother of our controlling shareholders, currently owns all of the voting stock of the Cunningham Stations. The sale of the voting stock by the estate to an unrelated party is pending approval of the FCC. All of the non-voting stock is owned by trusts for the benefit of the children of our controlling shareholders. We consolidate certain subsidiaries of Cunningham, with which we have variable interests through various arrangements related to the Cunningham Stations discussed further below.
The services provided to WNUV-TV, WMYA-TV, WTTE-TV, WRGT-TV and WVAH-TV are governed by a master agreement which has a current term that expires on July 1, 2023 and there are
two
additional
5
- year renewal terms remaining with final expiration on July 1, 2033. We also executed purchase agreements to acquire the license related assets of these stations from Cunningham, which grant us the right to acquire, and grant Cunningham the right to require us to acquire, subject to applicable FCC rules and regulations,
100%
of the capital stock or the assets of these individual subsidiaries of Cunningham. Pursuant to the terms of this agreement we are obligated to pay Cunningham an annual fee for the television stations equal to the greater of (i)
3%
of each station’s annual net broadcast revenue and (ii)
$4.7 million
. The aggregate purchase price of these television stations increases by
6%
annually. A portion of the fee is required to be applied to the purchase price to the extent of the
6%
increase. The remaining aggregate purchase price of these stations as of
September 30, 2017
was approximately $
53.6 million
. Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and own a purchase option to acquire for
$0.2 million
. We paid Cunningham under these agreements,
$2.4 million
and
$2.1 million
for the
three months ended
September 30, 2017
and
2016
, and
$6.4 million
and
$6.6 million
for the nine months ended September 30, 2017
and
2016
, respectively.
In September 2017, Cunningham acquired the membership interest of Esteem Broadcasting in connection with our acquisition of Bonten Media Group, as discussed in
Note 2. Acquisitions and Disposition of Assets
. As a result of the transaction, Cunningham assumed the joint sales agreement under which we will provide services to four stations; WEMT-TV, WYDO-TV, and KBVU-TV/KCVU-TV.
The agreements with KBVU-TV/KCVU-TV, WBSF-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire in December 2020, November 2021, May 2023, August 2023, December 2023, and August 2025 respectively, and each has renewal provisions for successive
eight
year periods. We earned
$6.6 million
and
$1.4 million
from the services we performed for these stations for both the
three months ended
September 30, 2017
and
2016
, and
$10.9 million
and
$3.9 million
for the
nine months ended
September 30, 2017
and
2016
, respectively.
As we consolidate the licensees as VIEs, the amounts we earn or pay under the arrangements are eliminated in consolidation and the gross revenues of the stations are reported within our consolidated statement of operations. Our consolidated revenues related to the Cunningham Stations include
$31.4 million
and
$29.4 million
for the three and nine months ended September 30, 2017
and
2016
, and
$84.5 million
and
$83.8 million
for the nine months ended September 30, 2017
and
2016
, respectively.
During January 2016, Cunningham entered into a promissory note to borrow
$19.5 million
from us. The note bears interest at a fixed rate of
5.0%
per annum (the
5.0%
Notes), which is payable quarterly, commencing March 31, 2016. The note matures in January 2021, with additional
one
year renewal periods upon our approval. Interest income was
$0.2 million
for both the
three months ended
September 30, 2017
and
2016
and
$0.7 million
for both the
for the nine months ended September 30, 2017
and
2016
, respectively.
In April 2016, we entered into an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which they have a time brokerage agreement that expires in April
2019
. Under the agreement, Cunningham will pay us an initial fee of
$0.7 million
and
$0.2 million
annually for master control services plus the cost to maintain and repair the equipment. Also, in August 2016, we entered into an agreement, expiring October 2021, with Cunningham to provide a news share service with their station in Johnstown, PA beginning in October 2016 for an annual fee of
$1.0 million
per year.
Atlantic Automotive Corporation
We sell advertising time to Atlantic Automotive Corporation (Atlantic Automotive), a holding company that owns automobile dealerships and an automobile leasing company. David D. Smith, our Executive Chairman, has a controlling interest in, and is a member of the Board of Directors of Atlantic Automotive. We received payments for advertising totaling
$0.1 million
and
$0.3 million
for the
three months ended
September 30, 2017
and
2016
, and
$0.4 million
and
$0.6 million
,
for the nine months ended September 30, 2017
and
2016
, respectively. Additionally, Atlantic Automotive leases office space owned by
one
of our consolidated real estate ventures in Towson, Maryland. In May 2017, our consolidated real estate ventures sold their investment. See
Leased property by real estate ventures
below for discussion on the sale our consolidated real estate ventures' investment.
Atlantic Automotive paid
$0.4 million
and
$0.8 million
in rent
for the nine months ended September 30, 2017
and
2016
, respectively.
Leased property by real estate ventures
Certain of our real estate ventures have entered into leases with entities owned by David D. Smith to lease space. There are leases for space in a building owned by
one
of our consolidated real estate ventures in Baltimore, MD. Total rent received under these leases was
$0.1 million
and
$0.2 million
for the
three months ended
September 30, 2017
and
2016
, and
$0.3 million
and
$0.5 million
for the nine months ended September 30, 2017
and
2016
, respectively.
One
of our real estate ventures, accounted for under the equity method, owned a building in Towson, MD, which leased restaurant space to entities owned by David D. Smith up until May 2017, when the property was sold to an unrelated party. This investment received less than
$0.1 million
and
$0.2 million
in rent pursuant to the lease for the
for the nine months ended September 30, 2017
and
2016
, respectively.
Payments for services provided by the restaurants to us was less than
$0.1 million
for both the
three months ended
September 30, 2017
and
2016
, and
nine months ended
September 30, 2017
and
2016
.
Other transactions with equity method investees
In April 2017, we made a
$15.0 million
investment in 120 Sports LLC, a multi-platform sports network branded as Stadium, which we account for under the equity method. We entered into a services agreement with the entity to provide certain linear distribution, engineering advertising, traffic, sales, and promotional services. For the
three months ended
September 30, 2017
, we did not receive any consideration pursuant to the services agreement.
8.
FAIR VALUE MEASUREMENTS:
Accounting guidance provides for valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). A fair value hierarchy using three broad levels prioritizes the inputs to valuation techniques used to measure fair value. The following is a brief description of those three levels:
|
|
•
|
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.
|
The fair value of our notes payable, capital leases, and commercial bank financing are considered Level 2 measurements within the fair value hierarchy. The carrying value and fair value of our notes and debentures for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2017
|
|
As of December 31, 2016
|
|
Carrying Value (a)
|
|
Fair Value
|
|
Carrying Value (a)
|
|
Fair Value
|
6.125% Senior Unsecured Notes due 2022
|
500,000
|
|
|
516,170
|
|
|
500,000
|
|
|
521,240
|
|
5.875% Senior Unsecured Notes due 2026
|
350,000
|
|
|
359,342
|
|
|
350,000
|
|
|
351,456
|
|
5.625% Senior Unsecured Notes due 2024
|
550,000
|
|
|
565,637
|
|
|
550,000
|
|
|
562,755
|
|
5.375% Senior Unsecured Notes due 2021
|
600,000
|
|
|
615,714
|
|
|
600,000
|
|
|
617,892
|
|
5.125% Senior Unsecured Notes due 2027
|
400,000
|
|
|
389,156
|
|
|
400,000
|
|
|
382,028
|
|
Term Loan A
|
241,073
|
|
|
241,374
|
|
|
272,198
|
|
|
271,517
|
|
Term Loan B
|
1,359,725
|
|
|
1,361,425
|
|
|
1,365,625
|
|
|
1,364,841
|
|
Debt of variable interest entities
|
20,585
|
|
|
20,585
|
|
|
23,198
|
|
|
23,198
|
|
Debt of other operating divisions
|
27,470
|
|
|
27,470
|
|
|
135,211
|
|
|
135,211
|
|
(a) Amounts are carried net of debt discount and deferred financing cost, which are excluded in the above table, of
$40.7 million
as of
September 30, 2017
and
$43.4 million
as of December 31, 2016.
9.
CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:
STG, a wholly-owned subsidiary and the television operating subsidiary of Sinclair Broadcast Group, Inc. (SBG), is the primary obligor under the Bank Credit Agreement, the
5.375%
Notes,
5.625%
Notes,
6.125%
Notes,
5.875%
Notes,
5.125%
Notes, and until they were redeemed, the
6.375%
Notes. Our Class A Common Stock and Class B Common Stock as of
September 30, 2017
, were obligations or securities of SBG and not obligations or securities of STG. SBG is a guarantor under the Bank Credit Agreement, the
5.375%
Notes,
5.625%
Notes,
6.125%
Notes,
5.875%
Notes,
6.125%
Notes, and
5.125%
Notes, and until they were redeemed, the
6.375%
Notes. As of
September 30, 2017
, our consolidated total debt, net of deferred financing costs and debt discounts, of
$4,055.6 million
included
$4,027.1 million
related to STG and its subsidiaries of which SBG guaranteed
$3,980.9 million
.
SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG’s wholly-owned subsidiaries (guarantor subsidiaries), have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’s obligations. Those guarantees are joint and several. There are certain contractual restrictions on the ability of SBG, STG or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.
The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and consolidated statements of cash flows of SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG and the eliminations necessary to arrive at our information on a consolidated basis. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.
These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10.
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF
SEPTEMBER 30, 2017
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinclair
Broadcast
Group, Inc.
|
|
Sinclair
Television
Group, Inc.
|
|
Guarantor
Subsidiaries
and KDSM,
LLC
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Sinclair
Consolidated
|
Cash
|
$
|
—
|
|
|
$
|
551,349
|
|
|
$
|
22,161
|
|
|
$
|
28,683
|
|
|
$
|
—
|
|
|
$
|
602,193
|
|
Restricted cash
|
—
|
|
|
—
|
|
|
187,854
|
|
|
124,948
|
|
|
—
|
|
|
312,802
|
|
Accounts receivable
|
—
|
|
|
—
|
|
|
488,553
|
|
|
34,558
|
|
|
—
|
|
|
523,111
|
|
Other current assets
|
4,063
|
|
|
4,843
|
|
|
139,838
|
|
|
25,511
|
|
|
(22,930
|
)
|
|
151,325
|
|
Total current assets
|
4,063
|
|
|
556,192
|
|
|
838,406
|
|
|
213,700
|
|
|
(22,930
|
)
|
|
1,589,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
1,075
|
|
|
17,814
|
|
|
584,699
|
|
|
133,155
|
|
|
(12,618
|
)
|
|
724,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in consolidated subsidiaries
|
1,109,617
|
|
|
3,759,217
|
|
|
4,179
|
|
|
—
|
|
|
(4,873,013
|
)
|
|
—
|
|
Goodwill
|
—
|
|
|
—
|
|
|
2,109,784
|
|
|
3,867
|
|
|
—
|
|
|
2,113,651
|
|
Indefinite-lived intangible assets
|
—
|
|
|
—
|
|
|
153,011
|
|
|
15,709
|
|
|
—
|
|
|
168,720
|
|
Definite-lived intangible assets
|
—
|
|
|
—
|
|
|
1,820,369
|
|
|
80,168
|
|
|
(58,599
|
)
|
|
1,841,938
|
|
Other long-term assets
|
36,255
|
|
|
836,081
|
|
|
102,107
|
|
|
157,903
|
|
|
(883,142
|
)
|
|
249,204
|
|
Total assets
|
$
|
1,151,010
|
|
|
$
|
5,169,304
|
|
|
$
|
5,612,555
|
|
|
$
|
604,502
|
|
|
$
|
(5,850,302
|
)
|
|
$
|
6,687,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
|
207
|
|
|
$
|
68,816
|
|
|
$
|
204,821
|
|
|
$
|
42,129
|
|
|
$
|
(25,125
|
)
|
|
$
|
290,848
|
|
Deferred spectrum auction proceeds
|
—
|
|
|
—
|
|
|
187,854
|
|
|
122,948
|
|
|
—
|
|
|
310,802
|
|
Current portion of long-term debt
|
—
|
|
|
154,521
|
|
|
2,357
|
|
|
7,607
|
|
|
—
|
|
|
164,485
|
|
Current portion of affiliate long-term debt
|
479
|
|
|
—
|
|
|
1,388
|
|
|
765
|
|
|
(449
|
)
|
|
2,183
|
|
Other current liabilities
|
—
|
|
|
—
|
|
|
127,097
|
|
|
15,808
|
|
|
|
|
|
142,905
|
|
Total current liabilities
|
686
|
|
|
223,337
|
|
|
523,517
|
|
|
189,257
|
|
|
(25,574
|
)
|
|
911,223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
—
|
|
|
3,806,135
|
|
|
28,954
|
|
|
41,045
|
|
|
—
|
|
|
3,876,134
|
|
Affiliate long-term debt
|
—
|
|
|
—
|
|
|
11,505
|
|
|
343,517
|
|
|
(342,198
|
)
|
|
12,824
|
|
Other liabilities
|
8,329
|
|
|
36,524
|
|
|
1,289,220
|
|
|
181,505
|
|
|
(736,989
|
)
|
|
778,589
|
|
Total liabilities
|
9,015
|
|
|
4,065,996
|
|
|
1,853,196
|
|
|
755,324
|
|
|
(1,104,761
|
)
|
|
5,578,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sinclair Broadcast Group equity (deficit)
|
1,141,995
|
|
|
1,103,308
|
|
|
3,759,359
|
|
|
(112,439
|
)
|
|
(4,750,228
|
)
|
|
1,141,995
|
|
Noncontrolling interests in consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,383
|
)
|
|
4,687
|
|
|
(33,696
|
)
|
Total liabilities and equity (deficit)
|
$
|
1,151,010
|
|
|
$
|
5,169,304
|
|
|
$
|
5,612,555
|
|
|
$
|
604,502
|
|
|
$
|
(5,850,302
|
)
|
|
$
|
6,687,069
|
|
CONDENSED CONSOLIDATING BALANCE SHEET
AS OF
DECEMBER 31, 2016
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinclair
Broadcast
Group, Inc.
|
|
Sinclair
Television
Group, Inc.
|
|
Guarantor
Subsidiaries
and KDSM,
LLC
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Sinclair
Consolidated
|
Cash
|
$
|
—
|
|
|
$
|
232,297
|
|
|
$
|
10,675
|
|
|
$
|
17,012
|
|
|
$
|
—
|
|
|
$
|
259,984
|
|
Restricted Cash
|
—
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
Accounts receivable
|
—
|
|
|
—
|
|
|
478,190
|
|
|
37,024
|
|
|
(1,260
|
)
|
|
513,954
|
|
Other current assets
|
5,561
|
|
|
3,143
|
|
|
124,113
|
|
|
25,406
|
|
|
(27,273
|
)
|
|
130,950
|
|
Total current assets
|
5,561
|
|
|
235,440
|
|
|
613,178
|
|
|
79,442
|
|
|
(28,533
|
)
|
|
905,088
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
1,820
|
|
|
17,925
|
|
|
570,289
|
|
|
131,326
|
|
|
(3,784
|
)
|
|
717,576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in consolidated subsidiaries
|
551,250
|
|
|
3,614,605
|
|
|
4,179
|
|
|
—
|
|
|
(4,170,034
|
)
|
|
—
|
|
Goodwill
|
—
|
|
|
—
|
|
|
1,986,467
|
|
|
4,279
|
|
|
—
|
|
|
1,990,746
|
|
Indefinite-lived intangible assets
|
—
|
|
|
—
|
|
|
140,597
|
|
|
15,709
|
|
|
—
|
|
|
156,306
|
|
Definite-lived intangible assets
|
—
|
|
|
—
|
|
|
1,770,512
|
|
|
233,368
|
|
|
(59,477
|
)
|
|
1,944,403
|
|
Other long-term assets
|
$
|
46,586
|
|
|
$
|
819,506
|
|
|
$
|
103,808
|
|
|
$
|
169,817
|
|
|
$
|
(890,668
|
)
|
|
$
|
249,049
|
|
Total assets
|
$
|
605,217
|
|
|
$
|
4,687,476
|
|
|
$
|
5,189,030
|
|
|
$
|
633,941
|
|
|
$
|
(5,152,496
|
)
|
|
$
|
5,963,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
$
|
100
|
|
|
$
|
69,118
|
|
|
$
|
225,645
|
|
|
$
|
48,815
|
|
|
$
|
(21,173
|
)
|
|
$
|
322,505
|
|
Current portion of long-term debt
|
—
|
|
|
55,501
|
|
|
1,851
|
|
|
113,779
|
|
|
—
|
|
|
171,131
|
|
Current portion of affiliate long-term debt
|
1,857
|
|
|
—
|
|
|
1,514
|
|
|
2,336
|
|
|
(2,103
|
)
|
|
3,604
|
|
Other current liabilities
|
—
|
|
|
—
|
|
|
127,967
|
|
|
13,590
|
|
|
(2,324
|
)
|
|
139,233
|
|
Total current liabilities
|
1,957
|
|
|
124,619
|
|
|
356,977
|
|
|
178,520
|
|
|
(25,600
|
)
|
|
636,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
—
|
|
|
3,939,463
|
|
|
31,014
|
|
|
44,455
|
|
|
—
|
|
|
4,014,932
|
|
Affiliate long-term debt
|
—
|
|
|
—
|
|
|
12,663
|
|
|
396,957
|
|
|
(395,439
|
)
|
|
14,181
|
|
Other liabilities
|
15,277
|
|
|
31,817
|
|
|
1,190,717
|
|
|
183,418
|
|
|
(681,583
|
)
|
|
739,646
|
|
Total liabilities
|
17,234
|
|
|
4,095,899
|
|
|
1,591,371
|
|
|
803,350
|
|
|
(1,102,622
|
)
|
|
5,405,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sinclair Broadcast Group equity (deficit)
|
587,983
|
|
|
591,577
|
|
|
3,597,659
|
|
|
(134,991
|
)
|
|
(4,054,245
|
)
|
|
587,983
|
|
Noncontrolling interests in consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,418
|
)
|
|
4,371
|
|
|
(30,047
|
)
|
Total liabilities and equity (deficit)
|
$
|
605,217
|
|
|
$
|
4,687,476
|
|
|
$
|
5,189,030
|
|
|
$
|
633,941
|
|
|
$
|
(5,152,496
|
)
|
|
$
|
5,963,168
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2017
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinclair
Broadcast
Group, Inc.
|
|
Sinclair
Television
Group, Inc.
|
|
Guarantor
Subsidiaries
and KDSM,
LLC
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Sinclair
Consolidated
|
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
638,100
|
|
|
$
|
50,816
|
|
|
$
|
(18,025
|
)
|
|
$
|
670,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media program and production expenses
|
—
|
|
|
—
|
|
|
254,956
|
|
|
29,376
|
|
|
(16,339
|
)
|
|
267,993
|
|
Selling, general and administrative
|
2,027
|
|
|
23,534
|
|
|
130,289
|
|
|
3,582
|
|
|
4
|
|
|
159,436
|
|
Depreciation, amortization and other operating expenses
|
247
|
|
|
1,591
|
|
|
111,849
|
|
|
27,158
|
|
|
(830
|
)
|
|
140,015
|
|
Total operating expenses
|
2,274
|
|
|
25,125
|
|
|
497,094
|
|
|
60,116
|
|
|
(17,165
|
)
|
|
567,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
(2,274
|
)
|
|
(25,125
|
)
|
|
141,006
|
|
|
(9,300
|
)
|
|
(860
|
)
|
|
103,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of consolidated subsidiaries
|
32,196
|
|
|
90,445
|
|
|
114
|
|
|
—
|
|
|
(122,755
|
)
|
|
—
|
|
Interest expense
|
(10
|
)
|
|
(50,247
|
)
|
|
(1,013
|
)
|
|
(4,968
|
)
|
|
4,495
|
|
|
(51,743
|
)
|
Other income (expense)
|
(92
|
)
|
|
1,869
|
|
|
(2,673
|
)
|
|
(1,124
|
)
|
|
—
|
|
|
(2,020
|
)
|
Total other income (expense)
|
32,094
|
|
|
42,067
|
|
|
(3,572
|
)
|
|
(6,092
|
)
|
|
(118,260
|
)
|
|
(53,763
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (provision)
|
817
|
|
|
25,364
|
|
|
(46,987
|
)
|
|
3,688
|
|
|
—
|
|
|
(17,118
|
)
|
Net income (loss)
|
30,637
|
|
|
42,306
|
|
|
90,447
|
|
|
(11,704
|
)
|
|
(119,120
|
)
|
|
32,566
|
|
Net income attributable to the noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,730
|
)
|
|
(199
|
)
|
|
(1,929
|
)
|
Net income (loss) attributable to Sinclair Broadcast Group
|
$
|
30,637
|
|
|
$
|
42,306
|
|
|
$
|
90,447
|
|
|
$
|
(13,434
|
)
|
|
$
|
(119,319
|
)
|
|
$
|
30,637
|
|
Comprehensive income (loss)
|
$
|
30,637
|
|
|
$
|
42,306
|
|
|
$
|
90,447
|
|
|
$
|
(11,704
|
)
|
|
$
|
(119,120
|
)
|
|
$
|
32,566
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2016
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinclair
Broadcast
Group, Inc.
|
|
Sinclair
Television
Group, Inc.
|
|
Guarantor
Subsidiaries
and KDSM,
LLC
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Sinclair
Consolidated
|
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
655,778
|
|
|
$
|
63,877
|
|
|
$
|
(25,820
|
)
|
|
$
|
693,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media program and production expenses
|
—
|
|
|
—
|
|
|
234,474
|
|
|
33,556
|
|
|
(25,150
|
)
|
|
242,880
|
|
Selling, general and administrative
|
1,275
|
|
|
16,969
|
|
|
124,352
|
|
|
3,153
|
|
|
(25
|
)
|
|
145,724
|
|
Depreciation, amortization and other operating expenses
|
266
|
|
|
3,257
|
|
|
115,527
|
|
|
32,571
|
|
|
(384
|
)
|
|
151,237
|
|
Total operating expenses
|
1,541
|
|
|
20,226
|
|
|
474,353
|
|
|
69,280
|
|
|
(25,559
|
)
|
|
539,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
(1,541
|
)
|
|
(20,226
|
)
|
|
181,425
|
|
|
(5,403
|
)
|
|
(261
|
)
|
|
153,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of consolidated subsidiaries
|
51,113
|
|
|
114,060
|
|
|
51
|
|
|
—
|
|
|
(165,224
|
)
|
|
—
|
|
Interest expense
|
(56
|
)
|
|
(50,364
|
)
|
|
(1,117
|
)
|
|
(8,256
|
)
|
|
6,305
|
|
|
(53,488
|
)
|
Loss from extinguishment of debt
|
—
|
|
|
(23,699
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,699
|
)
|
Other income (expense)
|
1,157
|
|
|
469
|
|
|
(27
|
)
|
|
613
|
|
|
—
|
|
|
2,212
|
|
Total other income (expense)
|
52,214
|
|
|
40,466
|
|
|
(1,093
|
)
|
|
(7,643
|
)
|
|
(158,919
|
)
|
|
(74,975
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (provision)
|
172
|
|
|
34,334
|
|
|
(64,535
|
)
|
|
3,043
|
|
|
—
|
|
|
(26,986
|
)
|
Net income (loss)
|
50,845
|
|
|
54,574
|
|
|
115,797
|
|
|
(10,003
|
)
|
|
(159,180
|
)
|
|
52,033
|
|
Net income attributable to the noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,180
|
)
|
|
(8
|
)
|
|
(1,188
|
)
|
Net income (loss) attributable to Sinclair Broadcast Group
|
$
|
50,845
|
|
|
$
|
54,574
|
|
|
$
|
115,797
|
|
|
$
|
(11,183
|
)
|
|
$
|
(159,188
|
)
|
|
$
|
50,845
|
|
Comprehensive income (loss)
|
$
|
50,845
|
|
|
$
|
54,574
|
|
|
$
|
115,797
|
|
|
$
|
(10,003
|
)
|
|
$
|
(159,180
|
)
|
|
$
|
52,033
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE
NINE
MONTHS ENDED
SEPTEMBER 30, 2017
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinclair
Broadcast
Group, Inc.
|
|
Sinclair
Television
Group, Inc.
|
|
Guarantor
Subsidiaries
and KDSM,
LLC
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Sinclair
Consolidated
|
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,901,075
|
|
|
$
|
157,236
|
|
|
$
|
(58,196
|
)
|
|
$
|
2,000,115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media program and production expenses
|
—
|
|
|
—
|
|
|
760,642
|
|
|
88,296
|
|
|
(53,798
|
)
|
|
795,140
|
|
Selling, general and administrative
|
5,615
|
|
|
64,903
|
|
|
377,177
|
|
|
9,135
|
|
|
—
|
|
|
456,830
|
|
Depreciation, amortization and other operating expenses
|
738
|
|
|
4,967
|
|
|
335,316
|
|
|
29,248
|
|
|
(2,048
|
)
|
|
368,221
|
|
Total operating expenses
|
6,353
|
|
|
69,870
|
|
|
1,473,135
|
|
|
126,679
|
|
|
(55,846
|
)
|
|
1,620,191
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
(6,353
|
)
|
|
(69,870
|
)
|
|
427,940
|
|
|
30,557
|
|
|
(2,350
|
)
|
|
379,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of consolidated subsidiaries
|
136,311
|
|
|
274,850
|
|
|
257
|
|
|
—
|
|
|
(411,418
|
)
|
|
—
|
|
Interest expense
|
(81
|
)
|
|
(154,330
|
)
|
|
(3,557
|
)
|
|
(16,740
|
)
|
|
14,688
|
|
|
(160,020
|
)
|
Loss from the extinguishment of debt
|
—
|
|
|
(1,404
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,404
|
)
|
Other income
|
731
|
|
|
3,796
|
|
|
(4,071
|
)
|
|
924
|
|
|
—
|
|
|
1,380
|
|
Total other income (expense)
|
136,961
|
|
|
122,912
|
|
|
(7,371
|
)
|
|
(15,816
|
)
|
|
(396,730
|
)
|
|
(160,044
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (provision)
|
1,875
|
|
|
75,105
|
|
|
(143,059
|
)
|
|
(4,498
|
)
|
|
—
|
|
|
(70,577
|
)
|
Net income (loss)
|
132,483
|
|
|
128,147
|
|
|
277,510
|
|
|
10,243
|
|
|
(399,080
|
)
|
|
149,303
|
|
Net income attributable to the noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,608
|
)
|
|
(212
|
)
|
|
(16,820
|
)
|
Net income (loss) attributable to Sinclair Broadcast Group
|
$
|
132,483
|
|
|
$
|
128,147
|
|
|
$
|
277,510
|
|
|
$
|
(6,365
|
)
|
|
$
|
(399,292
|
)
|
|
$
|
132,483
|
|
Comprehensive income (loss)
|
$
|
132,483
|
|
|
$
|
128,147
|
|
|
$
|
277,510
|
|
|
$
|
10,243
|
|
|
$
|
(399,080
|
)
|
|
$
|
149,303
|
|
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME
FOR THE
NINE
MONTHS ENDED
SEPTEMBER 30, 2016
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinclair
Broadcast
Group, Inc.
|
|
Sinclair
Television
Group, Inc.
|
|
Guarantor
Subsidiaries
and KDSM,
LLC
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Sinclair
Consolidated
|
Net revenue
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,828,407
|
|
|
$
|
178,164
|
|
|
$
|
(67,313
|
)
|
|
$
|
1,939,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media program and production expenses
|
—
|
|
|
—
|
|
|
679,337
|
|
|
88,378
|
|
|
(65,338
|
)
|
|
702,377
|
|
Selling, general and administrative
|
3,277
|
|
|
53,189
|
|
|
360,793
|
|
|
7,641
|
|
|
(59
|
)
|
|
424,841
|
|
Depreciation, amortization and other operating expenses
|
798
|
|
|
5,666
|
|
|
340,974
|
|
|
96,560
|
|
|
(1,365
|
)
|
|
442,633
|
|
Total operating expenses
|
4,075
|
|
|
58,855
|
|
|
1,381,104
|
|
|
192,579
|
|
|
(66,762
|
)
|
|
1,569,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
(4,075
|
)
|
|
(58,855
|
)
|
|
447,303
|
|
|
(14,415
|
)
|
|
(551
|
)
|
|
369,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in earnings of consolidated subsidiaries
|
124,536
|
|
|
289,593
|
|
|
170
|
|
|
—
|
|
|
(414,299
|
)
|
|
—
|
|
Interest expense
|
(192
|
)
|
|
(147,635
|
)
|
|
(3,417
|
)
|
|
(24,258
|
)
|
|
18,683
|
|
|
(156,819
|
)
|
Loss from extinguishment of debt
|
—
|
|
|
(23,699
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,699
|
)
|
Other income (expense)
|
3,386
|
|
|
736
|
|
|
583
|
|
|
439
|
|
|
—
|
|
|
5,144
|
|
Total other income (expense)
|
127,730
|
|
|
118,995
|
|
|
(2,664
|
)
|
|
(23,819
|
)
|
|
(395,616
|
)
|
|
(175,374
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (provision)
|
749
|
|
|
75,470
|
|
|
(150,436
|
)
|
|
8,446
|
|
|
—
|
|
|
(65,771
|
)
|
Net income (loss)
|
124,404
|
|
|
135,610
|
|
|
294,203
|
|
|
(29,788
|
)
|
|
(396,167
|
)
|
|
128,262
|
|
Net income attributable to the noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,341
|
)
|
|
(517
|
)
|
|
(3,858
|
)
|
Net income (loss) attributable to Sinclair Broadcast Group
|
$
|
124,404
|
|
|
$
|
135,610
|
|
|
$
|
294,203
|
|
|
$
|
(33,129
|
)
|
|
$
|
(396,684
|
)
|
|
$
|
124,404
|
|
Comprehensive income (loss)
|
$
|
124,404
|
|
|
$
|
135,610
|
|
|
$
|
294,203
|
|
|
$
|
(29,788
|
)
|
|
$
|
(396,167
|
)
|
|
$
|
128,262
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE
NINE MONTHS ENDED
SEPTEMBER 30, 2017
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinclair
Broadcast
Group, Inc.
|
|
Sinclair
Television
Group, Inc.
|
|
Guarantor
Subsidiaries
and KDSM,
LLC
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Sinclair
Consolidated
|
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
|
$
|
(5,605
|
)
|
|
$
|
(141,239
|
)
|
|
$
|
433,435
|
|
|
$
|
(12,959
|
)
|
|
$
|
4,779
|
|
|
$
|
278,411
|
|
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
(131
|
)
|
|
(6,088
|
)
|
|
(47,564
|
)
|
|
(2,677
|
)
|
|
997
|
|
|
(55,463
|
)
|
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(8,308
|
)
|
|
(261,491
|
)
|
|
—
|
|
|
—
|
|
|
(269,799
|
)
|
Purchase of alarm monitoring contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,682
|
)
|
|
—
|
|
|
(5,682
|
)
|
Proceeds from sale of non-media business
|
—
|
|
|
—
|
|
|
—
|
|
|
192,634
|
|
|
—
|
|
|
192,634
|
|
Investments in equity and cost method investees
|
(945
|
)
|
|
(1,101
|
)
|
|
(15,469
|
)
|
|
(4,787
|
)
|
|
—
|
|
|
(22,302
|
)
|
Other, net
|
3,903
|
|
|
(7,733
|
)
|
|
541
|
|
|
2,739
|
|
|
—
|
|
|
(550
|
)
|
Net cash flows from (used in) investing activities
|
2,827
|
|
|
(23,230
|
)
|
|
(323,983
|
)
|
|
182,227
|
|
|
997
|
|
|
(161,162
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from notes payable, commercial bank financing and capital leases
|
—
|
|
|
159,669
|
|
|
—
|
|
|
6,372
|
|
|
—
|
|
|
166,041
|
|
Repayments of notes payable, commercial bank financing and capital leases
|
—
|
|
|
(200,119
|
)
|
|
(1,367
|
)
|
|
(116,823
|
)
|
|
—
|
|
|
(318,309
|
)
|
Proceeds from the issuance of Class A Common Stock
|
487,883
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
487,883
|
|
Dividends paid on Class A and Class B Common Stock
|
(53,049
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,049
|
)
|
Repurchase of outstanding Class A Common Stock
|
(30,287
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30,287
|
)
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,469
|
)
|
|
—
|
|
|
(20,469
|
)
|
Increase (decrease) in intercompany payables
|
(400,451
|
)
|
|
524,016
|
|
|
(92,993
|
)
|
|
(24,750
|
)
|
|
(5,822
|
)
|
|
—
|
|
Other, net
|
(1,318
|
)
|
|
(45
|
)
|
|
(3,606
|
)
|
|
(1,927
|
)
|
|
46
|
|
|
(6,850
|
)
|
Net cash flows (used in) from financing activities
|
2,778
|
|
|
483,521
|
|
|
(97,966
|
)
|
|
(157,597
|
)
|
|
(5,776
|
)
|
|
224,960
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
—
|
|
|
319,052
|
|
|
11,486
|
|
|
11,671
|
|
|
—
|
|
|
342,209
|
|
CASH AND CASH EQUIVALENTS, beginning of period
|
—
|
|
|
232,297
|
|
|
10,675
|
|
|
17,012
|
|
|
—
|
|
|
259,984
|
|
CASH AND CASH EQUIVALENTS, end of period
|
$
|
—
|
|
|
$
|
551,349
|
|
|
$
|
22,161
|
|
|
$
|
28,683
|
|
|
$
|
—
|
|
|
$
|
602,193
|
|
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE
NINE MONTHS ENDED
SEPTEMBER 30, 2016
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinclair
Broadcast
Group, Inc.
|
|
Sinclair
Television
Group, Inc.
|
|
Guarantor
Subsidiaries
and KDSM,
LLC
|
|
Non-
Guarantor
Subsidiaries
|
|
Eliminations
|
|
Sinclair
Consolidated
|
NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES
|
$
|
(4,060
|
)
|
|
$
|
(152,724
|
)
|
|
$
|
451,804
|
|
|
$
|
17,138
|
|
|
$
|
18,102
|
|
|
$
|
330,260
|
|
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
(7
|
)
|
|
(3,626
|
)
|
|
(61,758
|
)
|
|
(3,842
|
)
|
|
632
|
|
|
(68,601
|
)
|
Acquisition of businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
(415,481
|
)
|
|
(10,375
|
)
|
|
—
|
|
|
(425,856
|
)
|
Purchase of alarm monitoring contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,143
|
)
|
|
—
|
|
|
(29,143
|
)
|
Investments in equity and cost method investees
|
(2,945
|
)
|
|
(10,840
|
)
|
|
(34
|
)
|
|
(20,405
|
)
|
|
—
|
|
|
(34,224
|
)
|
Proceeds from sale of non-media business
|
—
|
|
|
—
|
|
|
7,263
|
|
|
9,133
|
|
|
—
|
|
|
16,396
|
|
Loans to affiliates
|
—
|
|
|
(19,500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,500
|
)
|
Other, net
|
1,714
|
|
|
(1,828
|
)
|
|
(86
|
)
|
|
3,601
|
|
|
—
|
|
|
3,401
|
|
Net cash flows from (used in) investing activities
|
(1,238
|
)
|
|
(35,794
|
)
|
|
(470,096
|
)
|
|
(51,031
|
)
|
|
632
|
|
|
(557,527
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS (USED IN) FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from notes payable, commercial bank financing and capital leases
|
—
|
|
|
995,000
|
|
|
—
|
|
|
16,312
|
|
|
—
|
|
|
1,011,312
|
|
Repayments of notes payable, commercial bank financing and capital leases
|
—
|
|
|
(636,547
|
)
|
|
(1,171
|
)
|
|
(16,269
|
)
|
|
—
|
|
|
(653,987
|
)
|
Dividends paid on Class A and Class B Common Stock
|
(49,667
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49,667
|
)
|
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,363
|
)
|
|
—
|
|
|
(8,363
|
)
|
Repurchase of outstanding Class A Common Stock
|
(101,164
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(101,164
|
)
|
Increase (decrease) in intercompany payables
|
158,574
|
|
|
(189,022
|
)
|
|
22,603
|
|
|
26,764
|
|
|
(18,919
|
)
|
|
—
|
|
Other, net
|
(2,445
|
)
|
|
(15,013
|
)
|
|
1,175
|
|
|
(193
|
)
|
|
185
|
|
|
(16,291
|
)
|
Net cash flows (used in) from financing activities
|
5,298
|
|
|
154,418
|
|
|
22,607
|
|
|
18,251
|
|
|
(18,734
|
)
|
|
181,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
—
|
|
|
(34,100
|
)
|
|
4,315
|
|
|
(15,642
|
)
|
|
—
|
|
|
(45,427
|
)
|
CASH AND CASH EQUIVALENTS, beginning of period
|
—
|
|
|
115,771
|
|
|
235
|
|
|
33,966
|
|
|
—
|
|
|
149,972
|
|
CASH AND CASH EQUIVALENTS, end of period
|
$
|
—
|
|
|
$
|
81,671
|
|
|
$
|
4,550
|
|
|
$
|
18,324
|
|
|
$
|
—
|
|
|
$
|
104,545
|
|