Crown Media Holdings Announces 27% Increase in Revenues for Third Quarter 2003.Business Editors GREENWOOD Greenwood. 1 City (1990 pop. 26,265), Johnson co., central Ind.; settled 1822, inc. as a city 1960. A residential suburb of Indianapolis, Greenwood is in a retail shopping area. Manufactures include motor vehicle parts and metal products. VILLAGE, Colo.--(BUSINESS WIRE)--Nov. 6, 2003 Crown Media Holdings, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CRWN CRWN Composite Reconfigurable Wireless Network ) today reported its operating results for the three and nine months ended September September: see month. 30, 2003. Operating Highlights for the Quarter -- Crown Media's net revenue in the third quarter of 2003 increased 27% to $51.0 million, from $40.1 million in the prior year's third quarter. Advertising revenues for the quarter totaled $20.8 million, an increase of 15% from the third quarter of 2002. For the nine months ended September 30, 2003, revenues increased 16% to $138.4 million, from $118.9 million for the prior year period. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. advertising revenues increased 30% to $66.8 million, from $51.6 million in the first nine months of 2002. -- Hallmark hallmark, mark impressed on silverwork or goldwork to signify official approval of the standard of purity of the metal, also called plate mark. The hallmark was introduced by statute in England in 1300 and enforced by the Goldsmiths' Hall, London. Channel subscribers increased 16% to 111.2 million worldwide as of September 30, 2003, from 95.7 million subscribers as of September 30, 2002. The channel ended the quarter with 54.6 million subscribers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and 56.6 million international subscribers across 122 countries. Subscribers to our domestic channel increased 15%, and subscribers to our international channels increased 17% over the third quarter 2002. -- The U.S. channel continued to expand its reach in the third quarter with new launches in Phoenix, Arizona Phoenix /ˈfiːˌnɪks/ (English: Phoenix, Navajo: Hoozdo, lit. "the place is hot", Western Apache: Fiinigis) is the capital and the most populous city of the U.S. ; Cleveland Cleveland, former county, England Cleveland, former county, NE England, created under the Local Government Act of 1972 (effective 1974). It was composed of the county boroughs of Hartlepool and Teeside and parts of the former counties of Durham and and Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. ; and several markets in Hawaii Hawaii, island, United States Hawaii, island (1990 pop. 120,217), 4,037 sq mi (10,456 sq km), largest and southernmost island of the state of Hawaii and coextensive with Hawaii co.; known as the Big Island. . Since the beginning of 2003, the channel has added 1.4 million new subscribers on Time Warner systems alone. With the recent announcement of an affiliation agreement with Comcast Comcast Corporation, (NASDAQ: CMCSA) is the largest[1] cable television (CATV) company and the second largest Internet service provider in the United States. , the U.S. channel now has a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. agreement with every major cable and satellite distributor in the U.S., accounting for nearly 95% of domestic cable and satellite TV homes. -- For the quarter ended September 30, 2003, the U.S. channel posted its fifth consecutive quarter of record ratings in household delivery. Hallmark Channel U.S. again ranked number one in year-to-year growth in total day household delivery among the 50 ad-supported cable networks. The channel more than doubled its year-to-year delivery of households in total day and tied its all time high household rating in both total day and prime time for the third quarter of 2003 as compared to 2002. In addition, the channel hit new highs in the third quarter and the month of September in the delivery to adults 18-49 and adults 25-54 in total day. As a result, Hallmark Channel ranks twelfth at the end of September in total day among ad-supported cable networks, tied with 9 other channels. -- Original programming and the addition of several classic series in the U.S. drove these ratings successes and expanded the demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. of the viewing audience. August featured the "Sweet Days of Summer" month, with family movies such as The Parent Trap and Return to Snowy River
The Snowy River is a major river in south-eastern Australia. The Snowy River drains the eastern slopes of the Snowy Mountains in New South Wales. , delivering ratings of 1.0 or higher, and scoring year-to-year increases of 63% for kids 2-11 and 88% for teens 12-17. M*A*S*H joined Hallmark Channel's line-up line-up Noun 1. people or things assembled for a particular purpose: Christmas TV line-up 2. in two separate time periods, with episodes delivering as high as a 1.2 household rating. Matlock Matlock Town (pop., 1995 est.: 14,000), Derbyshire Dales district, administrative and historic county of Derbyshire, north-central England. It consists of a group of settlements built along the River Derwent, in a region noted for its beautiful valleys and rugged hills. was added to the "Mystery Sunday Sunday: see Sabbath; week. " programming block, with episodes generating as high as a 1.4 household delivery. The Matlock marathon combined with the Hallmark Entertainment original movie Mystery Woman to generate Hallmark Channel's highest rated day ever with a 1.0 total day household delivery. Little House on the Prairie prairie Level or rolling grassland, especially that found in central North America. Decreasing amounts of rainfall, from 40 in. (100 cm) at the forested eastern edge to less than 12 in. was added to the early evening schedule, with episodes delivering as high as 1.4 household ratings. September also saw the debut of the second season of Adoption, the award-winning Adj. 1. award-winning - having received awards; "this award-winning bridge spans a distance of five miles" reality series hosted by Jane Seymour Jane Seymour (born 1509?, England—died Oct. 24, 1537, Hampton Court, London) Third wife of Henry VIII of England. A lady-in-waiting to Henry's wives Catherine of Aragon and Anne Boleyn, she first attracted Henry's attention c. . -- International markets continued to sustain their positive momentum for 2003. The UK Channel delivered its highest ratings to date for the third quarter and September, with a 50% increase in ratings for September 2003 as compared to the prior year. The UK channel was the fourth most-watched channel among women and fifth among all adults. Hallmark Channel has moved up in its top ten ranking at the end of September in several other countries, including Poland Poland, Pol. Polska, officially Republic of Poland, republic (2005 est. pop. 38,635,000), 120,725 sq mi (312,677 sq km), central Europe. It borders on Germany in the west, on the Baltic Sea and the Kaliningrad region of Russia in the north, on Lithuania, , South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. and the Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. . -- During the third quarter, the Company placed a $400 million senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. note with a subsidiary of Hallmark Cards Hallmark Cards, a privately owned American company based in Kansas City, Missouri, is the largest manufacturer of greeting cards in the United States. Approximately 50% of greeting cards sent in the United States every year are manufactured by Hallmark. . The financing enabled Crown Media to simplify its capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. structure, improve its liquidity and reduce its interest costs. "We are very pleased to be able to deliver another consecutive quarter of record increases in distribution, ratings and revenues," stated David Evans David Evans may mean:
Financial Results Historical financial information is provided in tables at the end of this release. Operating Results Crown Media reported net revenue of $51.0 million for the third quarter of 2003, a 27% increase from $40.1 million for the third quarter of 2002. Subscriber fee revenue in the third quarter increased 4% to $17.5 million, from $16.9 million in the prior year's quarter, as a result of increased distribution of our channel internationally. Advertising revenue increased 15% to $20.8 million during the quarter, from $18.2 million in the third quarter of 2002, reflecting increased distribution, an enhanced programming schedule, higher ratings for our channels and higher advertising rates, specifically in our domestic market and the United Kingdom. Licensing fees for our library increased to $12.6 million during the quarter, from $5.0 million in the prior year's quarter, due to increased sales and the timing of license period start dates. Crown Media reported net revenue of $138.4 million for the nine months ended September 30, 2003, a 16% increase from $118.9 million in 2002. Subscriber fee revenue in the nine months decreased 1% to $51.4 million, from $51.8 million in the prior year's period, as a result primarily of increased marketing support costs associated with amendments to domestic long-term distribution agreements and reduced subscriber fee rates, partially offset by increased distribution of our channel internationally. Advertising revenue increased 30% to $66.8 million during the nine months ended September 30, 2003, from $51.6 million in the same period of 2002. Licensing fees for our library increased to $20.0 million during the nine months ended September 30, 2003, from $15.5 million in the prior year's period. For the third quarter of 2003, total cost of services increased to $60.5 million from $50.4 million during the same quarter of 2002. Within cost of services, programming expenses increased 27% quarter over quarter to $29.7 million. In September 2003, we added three series to our domestic programming schedule, M*A*S*H, Matlock, and Little House on the Prairie. For the three months ended September 30, 2003, amortization of film assets increased to $11.4 million from $7.0 million during the same quarter of 2002 primarily due to higher sales. We also expanded distribution and entered into amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. agreements in the U.S. in 2002, which called for an increase in subscriber acquisition fees. The resulting expense related to these fees was $6.5 million in 2003 versus $5.3 million in 2002. Operating costs operating costs npl → gastos mpl operacionales , which include playback Playback could mean:
removal of most of the comb of day-old chickens. See also decombing. and subtitling, transponder A receiver/transmitter on a communications satellite. It receives a microwave signal from earth (uplink), amplifies it and retransmits it back to earth at a different frequency (downlink). A satellite has several transponders. and interstitial In a separate window. See interstitial ad. (World-Wide Web) interstitial - A World-Wide Web page that appears before the expected content page. Interstitials can be used for advertising (intermercial, transition ad) or to confirm that the user is old enough to view the expenses, decreased 13% from $13.6 million to $11.7 million for the third quarter of 2003, as a result of lower salary, benefit, satellite and transponder expenses resulting from our 2002 reorganization. Selling, general and administrative expenses increased to $17.7 million for the three months ended September 30, 2003, from $14.0 million in the year earlier period primarily due to the recognition of expense related to the Company's restricted stock units Restricted stock units Similar to restricted stock. However, the unit represents a promise that employees will receive stock in the future. The units do not pay dividends until the stock is vested. . Marketing expenses decreased to $3.5 million for the three months ended September 30, 2003, from $8.7 million in the year earlier period primarily due to more efficient media buys and timing of promotions for our domestic channel in 2003 as compared to 2002. Crown Media expects marketing expenses will increase during the fourth quarter of 2003 due to the upcoming holiday campaign, Hollywood Hollywood. 1 Community within the city of Los Angeles, S Calif., on the slopes of the Santa Monica Mts.; inc. 1903, consolidated with Los Angeles 1910. Holiday Sweepstakes sweepstakes, contest or race, usually a horse race, on which a lottery is run. Prizes are awarded to the holders of winning tickets. In the case of a horse race, the draw is made from the names of all the horses entered in the race and vast numbers of blanks. , with Hallmark Cards. For the nine months ended September 30, 2003, total cost of services increased to $158.7 million from $150.5 million during the same period of 2002. Within cost of services, programming expenses increased 11% period over period to $77.2 million. For the nine months ended September 30, 2003, amortization of film assets increased to $25.0 million from $19.8 million during the same period of 2002. Subscriber acquisition fee expense was $19.1 million in 2003 versus $14.8 million in 2002. Operating costs, which include playback, dubbing and subtitling, transponder and interstitial expenses, decreased 22% from $43.1 million to $33.8 million during the nine months ended September 30, 2003. Selling, general and administrative expenses increased to $44.2 million for the nine months ended September 30, 2003, from $43.0 million in the year earlier period. These increases resulted from the increase in compensation expense related to the Company's restricted stock units and were partially offset by a reduction in salary, benefit, consulting and travel expenses. Marketing expenses decreased to $17.6 million for the nine months ended September 30, 2003, from $29.0 million in the year earlier period. The loss before interest, taxes, depreciation, and amortization including subscriber acquisition fee expense ("EBITDA") totaled $33.2 million for the third quarter of 2003, compared to an EBITDA loss of $17.6 million for the same period last year. Cash used in operating activities totaled $31.2 million for the third quarter of 2003 compared to $24.7 million for the same period last year. The net loss for the three month period ended September 30, 2003, totaled $72.7 million, or $0.70 per share, compared to $43.5 million, or $0.42 per share, in the third quarter of 2002. The third quarter 2003 EBITDA loss and net loss includes a $39.8 million loss from extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of our trust preferred securities and a $16.3 million gain from the cumulative effect of a change in accounting principle due to the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 150. The loss before interest, taxes, depreciation, and amortization including subscriber acquisition fee expense totaled $53.1 million for the nine months ended September 30, 2003, compared to an EBITDA loss of $59.8 million for the same period last year. Cash used in operating activities totaled $104.6 million for the nine months ended September 30, 2003, compared to $119.1 million for the same period last year. The net loss for the nine month period ended September 30, 2003, totaled $168.8 million, or $1.62 per share, compared to $143.6 million, or $1.38 per share, in the same period last year. The nine month EBITDA loss and net loss includes a $39.8 million loss from extinguishment of our trust preferred securities and a $16.3 million gain from the cumulative effect of a change in accounting principle due to the adoption of SFAS No. 150. Conference Call and Webcast to be Held November November: see month. 6 at 11:00 a.m. ET Crown Media Holdings' management will conduct a conference call this morning at 11:00 a.m. Eastern Time to discuss the third quarter 2003 results. Investors and interested parties may listen to the call via a live webcast accessible through the investor relations Investor relations The process by which the corporation communicates with its investors. section of the Company's web site at www.hallmarkchannel.com or by dialing (888) 482-0024 (Domestic) or (617) 801-9702 (International) and requesting the "Third Quarter Earnings" call. For those listeners accessing the call through the Company's website, please register and download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. audio software at the site at least 15 minutes prior to the start time. The webcast will be archived on the site, while a telephone replay of the call is available for 7 days beginning at 1:00 p.m. Eastern Time, November 6, at 888-286-8010 or 617-801-6888 (international callers), using reservation number 55892009. About Crown Media Holdings Crown Media Holdings, Inc. (NASDAQ: CRWN) owns and operates cable television channels dedicated to high quality, broad appeal, entertainment programming. The Company currently operates and distributes the Hallmark Channel in the U.S. and more than 120 countries. The combined channels have over 110 million subscribers worldwide. Significant investors in Crown Media Holdings include: Hallmark Entertainment Investments Co.; Hallmark Entertainment Holdings, Inc., a subsidiary of Hallmark Cards, Incorporated, Liberty Media Corp., and J.P. Morgan Morgan, American family of financiers and philanthropists. Junius Spencer Morgan, 1813–90, b. West Springfield, Mass., prospered at investment banking. Partners (BHCA (Busy Hour Call Attempts) The number of times a telephone call is attempted during the busiest hour of the day. See busy hour. ), LP, each through their investments in Hallmark Entertainment Investments Co.; VISN VISN Veterans Integrated Service Network VISN Virtual Integrated Sky Network (Loral Orion) VISN Visual Interactive Support Network Management Corp., a for-profit for-prof·it adj. Established or operated with the intention of making a profit: a for-profit organization. subsidiary of the National Interfaith in·ter·faith adj. Of, relating to, or involving persons of different religious faiths: an interfaith marriage; an interfaith forum. Cable Coalition; and Hughes Electronics Corporation. Forward-looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements contained in this press release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and that are based on management's current expectations, estimates and projections. Words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Such risks and uncertainties include: competition for distribution of channels, viewers, advertisers, and the acquisition of programming; costs domestically to expand the distribution of our channel; fluctuations in the availability of programming; fluctuations in demand for the programming Crown Media airs on its channels; and other risks detailed in the Company's filings with the Securities and Exchange Commission, including the Risk Factors stated in the Company's 10-Q Report for the three and six months ended June 30, 2003. Crown Media Holdings is not undertaking any obligation to release publicly any updates to any forward looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of this release or to reflect the occurrence of unanticipated events. Use of EBITDA Crown Media evaluates operating performance based on several factors, including EBITDA. Crown Media considers EBITDA an important indicator of the operational strength and performance of its businesses, including the ability to provide cash flows to service debt and fund capital expenditures. We believe it is common practice in our industry for investment bankers Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. and other investors to use various multiples of current or projected EBITDA for purposes of estimating current or prospective enterprise value and as one of many measures of performance. Some investment analysts track the relationship of EBITDA to total debt as one measure of financial strength. Our EBITDA calculation eliminates the amount of non-cash depreciation of tangible assets Tangible Asset An asset that has a physical form such as machinery, buildings and land. Notes: This is the opposite of an intangible asset such as a patent or trademark. Whether an asset is tangible or intangible isn't inherently good or bad. , amortization of film assets (but not amortization of program license fees) and subscriber acquisition fees, interest expense and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the and income taxes. However, EBITDA should be considered in addition to, not as a substitute for, historical operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. or loss, net loss, cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses and other measures of financial performance reported in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States. EBITDA differs significantly from cash flows from operating activities reflected in the consolidated statement of cash flows. Cash flow from operating activities is net of interest and taxes paid and is a more comprehensive determination of periodic income on a cash basis, exclusive of non-cash items of income and expenses such as depreciation and amortization. In contrast, EBITDA is derived from accrual basis A method of accounting that reflects expenses incurred and income earned for Income Tax purposes for any one year. Taxpayers who use the accrual method must include in their taxable income any money that they have the right to receive as payment for services, once it income and is not reduced for cash invested in working capital. Consequently, EBITDA is not affected by the timing of receivable collections or when accrued expenses Accrued Expense An accounting expense recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented upon a company's balance sheet due to the high probability of collection. are paid. We are not aware of any uniform standards for determining EBITDA and believe presentations of EBITDA may not be calculated consistently by different entities in the same or similar businesses.
Crown Media Holdings, Inc.
Selected Unaudited Third Quarter Financial Information
($ in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
--------- --------- ---------- ----------
Subscriber fees $17,543 $16,916 $51,433 $51,784
Advertising 20,468 16,649 65,798 47,362
Advertising from Hallmark
Cards 347 1,511 1,047 4,221
Film asset license fees 12,606 5,034 20,010 15,485
Other 22 23 79 57
--------- --------- ---------- ----------
Net revenues 50,986 40,133 138,367 118,909
Cost of services:
Affiliate programming 10,010 9,881 28,734 29,643
Non-affiliate programming 19,717 13,469 48,510 39,693
Amortization of film assets 11,371 7,042 24,957 19,757
Subscriber acquisition
fee expense 6,468 5,280 19,074 14,792
Depreciation and
amortization 1,185 1,185 3,556 3,557
Operating costs 11,736 13,564 33,819 43,094
--------- --------- ---------- ----------
Total cost of services 60,487 50,421 158,650 150,536
Selling, gen. &
admin.expenses 17,743 14,035 44,193 43,016
Marketing expenses 3,474 8,657 17,645 29,020
Depreciation and amortization 2,548 2,523 7,619 7,164
--------- --------- ---------- ----------
Loss from operations $(33,266) $(35,503) $(89,740) $(110,827)
========= ========= ========== ==========
Net loss $(72,717) $(43,507) $(168,804) $(143,564)
========= ========= ========== ==========
Net loss per share $(0.70) $(0.42) $(1.62) $(1.38)
========= ========= ========== ==========
Weighted avg. shares
outstanding 104,473 104,341 104,468 104,231
Crown Media Holdings, Inc.
Unaudited Consolidated Balance Sheet Data
(In thousands)
As of As of
September December
30, 31,
2003 2002
----------------------
(Unaudited)
ASSETS
Cash and cash equivalents $3,123 $335
Accounts receivable, less allowance for
doubtful accounts
of $8,681 and $7,516, respectively 48,611 41,629
Program license fees -- affiliates, net of
accumulated amortization 23,510 12,632
Program license fees -- non-affiliates,
net of accumulated amortization 71,045 46,557
Subtitling and dubbing, net of accumulated
amortization 2,660 3,265
Receivable from affiliate 7,977 -
Prepaids and other assets 10,894 12,837
----------------------
Total current assets 167,820 117,255
Restricted cash 340 340
Program license fees -- affiliates, net of
current portion 32,434 37,318
Program license fees -- non-affiliates, net of
current portion 121,168 51,470
Subtitling and dubbing, net of current portion 1,324 1,051
Film assets, net of accumulated amortization 764,313 786,826
Subscriber acquisition fees, net of accumulated
amortization 118,328 140,265
Property and equipment, net of accumulated
depreciation 30,275 35,612
Goodwill 314,033 314,033
Debt issuance costs, net of accumulated
amortization 6,882 6,309
Prepaids and other assets, net of current
portion 1,310 1,783
----------------------
Total assets $1,558,227 $1,492,262
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued liabilities $38,485 $47,425
Subscriber acquisition fees payable 14,798 45,930
License fees payable to affiliates 33,972 8,104
License fees payable to non-affiliates 77,659 50,652
Payables to affiliates 7,445 6,680
Interest payable to HC Crown 1,858 10
Credit facility and other interest payable 441 871
Capital lease obligation 1,526 1,433
Deferred film asset license fees 2,659 599
----------------------
Total current liabilities 178,843 161,704
Accrued liabilities, net of current portion 23,434 31,385
Subscriber acquisition fees payable, net of
current portion 1,500 2,624
License fees payable to affiliates, net of
current portion 60,229 60,229
License fees payable to non-affiliates, net of
current portion 100,844 39,206
Demand note payable to HC Crown 75,000 5,000
Senior unsecured note to HC Crown, including
accretion 406,833 -
Payable to Hallmark Entertainment Holdings,
Inc. 52,052 52,052
Payable to Hallmark Entertainment, Inc. 47,948 47,948
Credit facility 263,750 320,000
Capital lease obligation, net of current
portion 8,133 9,290
Redeemable preferred interest 8,536 -
Convertible debt - 47,916
Derivative liability - 762
----------------------
Total liabilities 1,227,102 778,116
COMMITMENTS AND CONTINGENCIES
GUARANTEED PREFERRED BENEFICIAL INTEREST
IN CROWN MEDIA TRUST'S DEBENTURES - 221,551
REDEEMABLE PREFERRED INTEREST - 25,000
STOCKHOLDERS' EQUITY:
Class A common stock, $.01 par value;
200,000,000 shares
authorized; 73,863,037 and 73,794,606 shares
issued and
outstanding as of September 30, 2003 and
December 31, 2002 739 738
Class B common stock, $.01 par value;
120,000,000 shares
authorized; 30,670,422 shares issued and
outstanding as
of September 30, 2003 and December 31, 2002 307 307
Paid-in capital 1,291,480 1,259,242
Accumulated other comprehensive income 742 647
Accumulated deficit (962,143) (793,339)
----------------------
Total stockholders' equity 331,125 467,595
----------------------
Total liabilities and stockholders'
equity $1,558,227 $1,492,262
======================
Crown Media Holdings, Inc.
Selected Unaudited Third Quarter Financial Information
($ in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
--------- --------- ---------- ----------
Net loss $(72,717) $(43,507) $(168,804) $(143,564)
Amortization of film assets 11,371 7,042 24,957 19,757
Subscriber acquisition fee
expense 8,460 7,188 23,968 20,539
Depreciation and
amortization 3,733 3,708 11,175 10,721
Guaranteed Preferred
Beneficial Interest
Expense - 2,987 23,218 14,765
Interest expense and
accretion 15,374 4,547 30,230 16,310
Income tax provision 593 470 2,132 1,662
--------- --------- ---------- ----------
Earnings before interest,
taxes,
depreciation and
amortization $(33,186) $(17,565) $(53,124) $(59,810)
--------- --------- ---------- ----------
Loss on extinguishment of
debt 39,812 39,812
Cumulative effect of change
in accounting principle (16,328) (16,328)
Restricted stock unit and
stock option compensation 3,044 4 3,367 16
Programming, subtitling and
dubbing amortization 29,505 25,442 77,764 71,238
Provision for allowance for
doubtful account 980 (352) 2,546 2,958
Changes in operating assets
and liabilities:
Additions to program
license fees (112,016) (60,098) (177,829) (119,426)
Additions to subscriber
acquisition fees (807) (2,655) (2,031) (8,503)
Decrease in subscriber
acquisition fees payable (9,231) (1,103) (32,255) (15,720)
Interest paid (4,906) (4,265) (15,022) (13,837)
Income taxes paid (593) (470) (2,132) (1,662)
Changes in other operating
assets and
liabilities, net of
adjustments above 72,544 36,374 70,603 25,625
--------- --------- ---------- ----------
Operating cash flow $(31,182) $(24,688) $(104,629) $(119,121)
========= ========= ========== ==========
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