Sinclair, Inc. (Nasdaq: SBGI), the "Company" or "Sinclair,"
today reported financial results for the three and nine months
ended September 30, 2023.
Third Quarter
Highlights:
- Met or exceeded guidance on all key financial metrics
- Repurchased approximately $64 million of principal value of
debt since early June
CEO Comment:
“Sinclair reported a strong third quarter with revenues
exceeding the high-end of our guidance ranges and Adjusted EBITDA
exceeding the mid-point of our guidance for the quarter by 40%,”
said Chris Ripley, Sinclair’s President and Chief Executive
Officer. “In addition, we have repurchased $64 million in face
value of our debt through open-market repurchases since the
beginning of June at a 24% average discount to par. Our priority
remains to strengthen our balance sheet while acting
opportunistically when market conditions permit. Year-to-date,
political advertising is at record levels for a non-election year,
and we expect that trend to continue in the fourth quarter as well
as the 2024 Presidential election year. And while we continue to
deal with elevated linear subscriber churn levels, Sinclair is
well-positioned for the near- and long-term with nearly all of our
Big 4 network traditional subscribers up for renewals by the end of
2024.”
Recent Company
Developments:
Content and Distribution:
- In August, the Company agreed to expand and extend its network
affiliation agreement with The CW. Under the terms of the
comprehensive multiyear agreement, Sinclair will continue carrying
The CW’s entertainment and sports programming in 35 of its owned
and/or operated markets across the country. In addition, beginning
September 1, Sinclair launched The CW on two new affiliate
stations, KOMO-TV/KUNS-TV, in Seattle, Washington, and WPNT-TV in
Pittsburgh, Pennsylvania. The agreement is a landmark deal in that
it includes the right to negotiate carriage agreements directly
with virtual multi-channel video programming distributors.
Financial terms of the agreements were not disclosed.
- In September, DIRECTV, LLC extended its distribution agreement
with the Company.
- In October, the Company reached an agreement with Comcast to
renew and extend its carriage agreements for all Sinclair
television stations, Tennis Channel, Marquee Sports Network and YES
Network.
- In October, the Company and Paramount reached comprehensive,
multi-year distribution agreements across all 21 CBS network
affiliations for Sinclair stations, including six top-50 market
affiliates, KUTV in Salt Lake City, UT, KEYE in Austin, TX, WKRC in
Cincinnati, OH, WPEC in West Palm Beach, FL, WWMT in Grand Rapids,
MI and WHP in Harrisburg, PA. Additionally, Paramount reached an
agreement to renew the affiliations of WTVH in Syracuse, NY and
WGFL in Gainesville, FL, stations to which Sinclair provides
services.
- In September, Tennis Channel and the Carvana Professional
Pickleball Association (PPA Tour) announced a commercial joint
venture to further grow pickleball in the US and worldwide. The
partnership will see the vast majority of PPA Tour matches appear
live on Tennis Channel platforms, integrated advertising-sales
efforts for media and tournaments, and the recent launch of a
24-hour pickleball channel. Tennis Channel will produce all events
for the PPA Tour.
- In October, the Company launched The Nest, a new, free
over-the-air national broadcast TV network with programming
comprised of home-improvement, true-crime, factual reality series,
and celebrity driven family shows. The Nest joins Sinclair’s lineup
of national broadcast networks, Comet, CHARGE!, and TBD. It
replaces Stadium network on broadcast stations across the country.
At launch, the network was available in more than 50% of all US
television households including the major markets of New York, Los
Angeles, Philadelphia, Dallas - Ft. Worth, Boston, San Francisco -
Oakland - San Jose and Seattle-Tacoma.
- Tennis Channel, recorded a 31% year-over-year increase in total
viewers in the third quarter of 2023.
- Year-to-date, Sinclair's newsrooms have won a total of 260
journalism awards, including a RTDNA National Edward R. Murrow
award won by Sinclair's Seattle station, KOMO-TV, for Sports
Reporting/Large Market Television category.
Community:
- In October, the Company launched Sinclair Cares: Humanitarian
Relief in Israel, a fundraising partnership in conjunction with
Magen David Adom (MDA), an affiliate of the International
Federation of Red Cross and Red Crescent Societies, to help with
their efforts providing humanitarian relief and emergency medical
services for all people in Israel, regardless of religious creed or
political belief.
- In October, the Company announced the return of Sinclair’s News
Reporter and Producer Academies, a series of interactive, virtual
workshops for college students interested in pursuing careers in
journalism. This year, the Company also added Weather Academy, a
workshop for students interested in a career in weather. The
90-minute sessions will run throughout November and assist students
seeking to build a career in reporting, producing or weather.
Investment Portfolio:
- As of September 30, 2023, the fair market value of Ventures'
minority investment portfolio, which includes Ventures' cash and
investments in real estate, private equity, and venture capital
funds, as well as direct investments in companies, was
approximately $1.2 billion, or approximately $19 per share.
- During the third quarter, the Company made capital investments
of approximately $5 million in minority investments and received
distributions, including exit payments, of approximately $4
million.
NextGen Broadcasting (ATSC 3.0):
- As of the end of October, the Company launched NextGen
Broadcast in 42 markets, including the recent launch of
Minneapolis, MN. To date, NextGen Broadcast is available in 74% of
the TV households in Sinclair's licensed footprint.
- Also in October, the Company announced an agreement to expand
development of and promote NextGen services in South Korea with the
Korea Radio Promotion Association. We continue to play a leading
role in accelerating the adoption of the DDaaS (Data Distribution
as a Service) business model and the continued transformation of
local broadcast capabilities not only in the US, but globally.
Financial Results:
The results below reflect the deconsolidation of the Local
Sports segment comprised of the regional sports networks (RSNs),
which are owned and operated by Diamond Sports Group ("DSG") and
its direct and indirect subsidiaries, from the Company's financial
statements and accounted for under equity method of accounting,
effective March 1, 2022 (the “Deconsolidation”). As such, the
quarter-to-date and year-to-date 2023 consolidated financial
results do not include any results of operations of the Local
Sports segment, while the consolidated financial results for the
comparable year-to-date 2022 period include two months results of
operations of the Local Sports segment.
Three Months Ended September 30, 2023
Consolidated Financial Results:
- Total revenues decreased 9% to $767 million versus $843 million
in the prior year period. Media revenues also decreased 9% to $758
million versus $836 million in the prior year period.
- Total advertising revenues of $304 million decreased 19% versus
$374 million in the prior year period. Core advertising revenues,
which exclude political revenues, were up 2% in the third quarter
to $293 million versus $286 million in the prior year period.
- Distribution revenues of $414 million decreased versus $425
million in the prior year period.
- Operating income of $37 million, including non-recurring
transaction and transition services, implementation, COVID, legal,
litigation and regulatory costs ("Adjustments") of $25 million and
an adjustment for the loss on deconsolidation of $10 million
("Deconsolidation Loss"), declined versus an operating income of
$154 million in the prior year period, which included Adjustments
of $4 million. Operating income, when excluding the Adjustments and
the Deconsolidation Loss, was $72 million compared to an operating
income, excluding the Adjustments, of $158 million in the prior
year period.
- Net loss attributable to the Company was $46 million versus net
income of $21 million in the prior year period. Excluding
Adjustments and the Deconsolidation Loss, the Company had net loss
of $19 million.
- Adjusted EBITDA decreased 29% to $141 million from $198 million
in the prior year period.
- Diluted loss per common share was $0.74 as compared to diluted
earnings per common share of $0.32 in the prior year period. On a
per-diluted-share basis, the impact of Adjustments and the
Deconsolidation Loss was $(0.44), and the impact of Adjustments in
the prior year period was $(0.04).
Nine Months Ended September 30, 2023
Consolidated Financial Results:
- Total revenues decreased 22% to $2,308 million versus $2,968
million in the prior year period. Media revenues decreased 22% to
$2,285 million versus $2,942 million in the prior year period.
Excluding DSG, total revenues decreased 8% from $2,512 million in
the prior year period and media revenues decreased 8% from $2,486
million in the prior year period.
- Total advertising revenues of $922 million decreased 17% versus
$1,111 million in the prior year period. Excluding DSG, total
advertising revenues decreased 14% from $1,067 million in the prior
year period. Core advertising revenues, which excludes political
revenues, of $902 million were down 5% versus $952 million in the
prior year period. Excluding DSG, core advertising revenues
decreased less than 1% from $907 million in the prior year
period.
- Distribution revenues of $1,258 million decreased versus $1,728
million in the prior year period. Excluding DSG, distribution
revenues decreased 3% from $1,295 million in the prior year
period.
- Operating income of $55 million, including $55 million of
Adjustments and the $10 million Deconsolidation Loss, declined
versus operating income of $3,727 million in the prior year period,
which included Adjustments of $23 million and a $3,357 million gain
related to the Deconsolidation. Operating income, when excluding
the Adjustments and the Deconsolidation Loss, was $120 million
compared to operating income of $393 million in the prior year
period. Excluding DSG, operating income excluding the Adjustments
and the Deconsolidation Loss decreased 70% from $395 million in the
prior year period.
- Net income attributable to the Company was $50 million versus
net income of $2,597 million in the prior year period. Excluding
Adjustments and the Deconsolidation Loss, the Company had net
income of $101 million. Net loss from DSG in the prior year period
was $94 million.
- Adjusted EBITDA decreased 42% to $368 million from $635 million
in the prior year period. Adjusted EBITDA from DSG in the first two
months of 2022 was $54 million.
- Diluted earnings per common share was $0.75 as compared to
diluted earnings per common share of $36.59 in the prior year
period. On a per-diluted-share basis, the impact of Adjustments and
the Deconsolidation Loss was $(0.78) and the impact of Adjustments
and the Deconsolidation in the prior year period was $35.91.
Segment financial information is included in the following
tables for the periods presented. The Local Media segment consists
primarily of broadcast television stations, which the Company owns,
operates or to which the Company provides services, and includes
multicast networks and original content. The Local Media segment
assets are owned and operated by SBG. The Tennis segment consists
primarily of Tennis Channel, a cable network which includes
coverage of most of tennis' top tournaments and original
professional sport and tennis lifestyle shows; the Tennis Channel
International subscription and streaming service; Tennis Channel
Plus streaming service; T2 FAST, a 24-hours a day free ad-supported
streaming television channel; and Tennis.com. Other includes
non-broadcast digital and internet solutions, technical services,
and other non-media investments. The assets of the Tennis segment
and Other are owned and operated by Ventures. The highlights below
include the divestiture of Ring of Honor (May 3, 2022) and Stadium
(May 2, 2023).
Three months ended September 30,
2023
Local Media
Tennis
Other
Corporate and
Eliminations
Consolidated
($ in millions)
Distribution revenue
$
365
$
49
$
—
$
—
$
414
Advertising revenue
292
(a)
9
6
(3
)
304
Other media revenue
40
(b)
1
—
(1
)
40
Media revenues
$
697
$
59
$
6
$
(4
)
$
758
Non-media revenue
—
—
11
(2
)
9
Total revenues
$
697
$
59
$
17
$
(6
)
$
767
Media programming and production
expenses
$
371
$
29
$
—
$
—
$
400
Media selling, general and administrative
expenses
164
11
5
(4
)
176
Non-media expenses
3
—
13
(1
)
15
Program contract payments
22
—
—
—
22
Corporate general and administrative
expenses
31
1
1
12
45
Stock-based compensation
6
—
—
1
7
Non-recurring transaction and transition
services, implementation, legal, and regulatory costs
22
—
2
1
25
Adjusted EBITDA(c)
$
134
$
18
$
—
(11
)
$
141
Interest expense (net) (d)
$
71
$
—
$
(4
)
$
—
$
67
Capital expenditures
30
—
—
—
30
Distributions to the noncontrolling
interests
1
—
—
—
1
Cash distributions from equity
investments
—
—
3
—
3
Cash taxes paid
—
Adjusted Free Cash Flow (e)
$
47
Note: Certain amounts may not summarize to totals due to rounding
differences.
(a)
Includes political advertising revenue of
$11 million.
(b)
Local Media segment other media revenue
includes $15 million of management and incentive fees for services
provided by the Local Media segment to DSG and Marquee under
management services agreements which are not eliminated due to the
deconsolidation of the Local Sports segment as of March 1,
2022.
(c)
Adjusted EBITDA is defined as earnings
before interest, tax, depreciation and amortization, and
non-recurring transaction and transition services, implementation,
legal, and regulatory costs, as well as certain non-cash items such
as stock-based compensation expense and other gains and losses;
less program contract payments. Refer to the reconciliation on the
last page of this press release and the Company's website. In the
above table, Adjusted EBITDA equals total revenues minus media
programming and production expenses, media selling, general and
administrative expenses, non-media expenses, program contract
payments, and corporate general and administrative expenses; plus
stock-based compensation and non-recurring transaction and
transition services, implementation, legal, and regulatory
costs.
(d)
Interest expense (net) excludes deferred
financing costs, original issue discount amortization, and other
non-cash interest expense, and is net of interest income.
(e)
Adjusted Free Cash Flow is defined as
Adjusted EBITDA less interest expense (net), distributions to
non-controlling interest holders, cash taxes paid, and capital
expenditures; plus cash distributions received from equity
investments. Refer to the reconciliation on the last page of this
press release and the Company's website.
Three months ended September 30, 2022
Local Media
Tennis
Other
Corporate and
Eliminations
Consolidated
($ in millions)
Distribution revenue
$
381
$
44
$
—
$
—
$
425
Advertising revenue
367
(a)
9
6
(8
)
374
Other media revenue
33
(b)
1
3
—
37
Media revenues
$
781
$
54
$
9
$
(8
)
$
836
Non-media revenue
—
—
8
(1
)
7
Total revenues
$
781
$
54
$
17
$
(9
)
$
843
Media programming and production
expenses
$
365
$
26
$
8
(3
)
$
396
Media selling, general and administrative
expenses
175
11
7
(3
)
190
Non-media expenses
6
—
8
(2
)
12
Program contract payments
26
—
—
—
26
Corporate general and administrative
expenses
16
—
—
14
30
Stock-based compensation
4
—
—
2
6
Non-recurring transaction and transition
services, implementation, COVID, legal, and regulatory costs
4
—
—
—
4
Adjusted EBITDA(c)
201
17
(6
)
(14
)
198
Interest expense (net) (d)
$
55
$
—
$
(4
)
$
—
$
51
Capital expenditures
27
—
—
2
29
Distributions to the noncontrolling
interests
2
—
—
—
2
Cash distributions from equity
investments
—
—
52
—
52
Cash taxes paid
1
Adjusted Free Cash Flow (e)
$
170
Note: Certain amounts may not summarize to totals due to rounding
differences.
(a)
Includes political advertising revenue of
$88 million.
(b)
Local Media segment other media revenue
includes $12 million of management and incentive fees for services
provided by the Local Media segment to DSG and Marquee under
management services agreements which are not eliminated due to the
deconsolidation of the Local Sports segment as of March 1,
2022.
(c)
Adjusted EBITDA is defined as earnings
before interest, tax, depreciation and amortization, and
non-recurring transaction and transition services, implementation,
COVID, legal, and regulatory costs, as well as certain non-cash
items such as stock-based compensation expense and other gains and
losses; less program contract payments. Refer to the reconciliation
on the last page of this press release and the Company's website.
In the above table, Adjusted EBITDA equals total revenues minus
media programming and production expenses, media selling, general
and administrative expenses, non-media expenses, program contract
payments, and corporate general and administrative expenses; plus
stock-based compensation and non-recurring transaction and
transition services, implementation, COVID, legal, and regulatory
costs.
(d)
Interest expense (net) excludes deferred
financing costs, original issue discount amortization, and other
non-cash interest expense, and is net of interest income.
(e)
Adjusted Free Cash Flow is defined as
Adjusted EBITDA less interest expense (net), distributions to
non-controlling interest holders, cash taxes paid, and capital
expenditures; plus cash distributions received from equity
investments. Refer to the reconciliation on the last page of this
press release and the Company's website.
Consolidated Balance Sheet and Cash
Flow Highlights of the Company:
- Total Company debt as of September 30, 2023 was $4,182 million,
of which $4,166 million is SBG debt and $16 million is Ventures
debt.
- Since the beginning of June, the Company purchased
approximately $64 million of principal across multiple tranches of
debt, $30 million in the second quarter and $34 million in the
third quarter, in the open market for $49 million, representing a
weighted average discount of 24% to par and a weighted average
yield to maturity of 13%.
- Cash and cash equivalents for the Company as of September 30,
2023 was $643 million, of which $279 million is SBG cash and $364
million is Ventures cash.
- As of September 30, 2023, 39.6 million Class A common shares
and 23.8 million Class B common shares were outstanding, for a
total of 63.4 million common shares.
- In September, the Company paid a quarterly cash dividend of
$0.25 per share.
- Capital expenditures for the third quarter of 2023 were $30
million.
Notes:
Certain reclassifications have been made to prior years'
financial information to conform to the presentation in the current
year.
Outlook:
The Company currently expects to achieve the following results
for the three months ending December 31, 2023 and the twelve months
ending December 31, 2023.
For the three months ending December
31, 2023 ($ in millions)
Local Media
Tennis
Other
Corporate and
Eliminations
Consolidated
Core advertising revenue
$336 to $354
Political revenue
25 to 30
25 to 30
Advertising revenue
$354 to $377
$4
$7
$(4) to $(5
)
$361 to $384
Distribution revenue
370 to 372
46 to 47
—
—
416 to 419
Other media revenue
35
1
—
(1
)
36
Media revenues
$760 to $784
$51 to $52
$7
$(5) to $(6
)
$812 to $838
Non-media revenue
—
—
10
(2
)
8
Total revenues
$760 to $784
$51 to $52
$17
$(7
)
$821 to $847
Media programming & production
expenses and media selling, general and administrative expenses
$551 to $557
$40 to $41
$5
$(5
)
$591 to $598
Non-media expenses
2
—
14
(1
)
15
Program contract payments
21
—
—
—
21
Corporate overhead
20
—
1
12
34
Stock-based compensation
6
—
—
—
6
Non-recurring transaction and transition
services, implementation, legal, and regulatory costs
8
—
3
—
11
Adjusted EBITDA(a)
$179 to $198
$11
$0
(13
)
$176 to $196
Interest expense (net)(b)
71
—
(4
)
—
67
Total capital expenditures
27 to 29
—
1
—
28 to 30
Distributions to the noncontrolling
interests
3
—
—
—
3
Cash distributions from equity
investments
—
—
1
—
1
Net cash tax payments
1
Adjusted Free Cash Flow(c)
$77 to $99
Note: Certain amounts may not summarize to totals due to rounding
differences.
(a)
Adjusted EBITDA is defined as earnings
before interest, tax, depreciation and amortization, and
non-recurring transaction and transition services, implementation,
legal, and regulatory costs, as well as certain non-cash items such
as stock-based compensation expense and other gains and losses;
less program contract payments. In the above table, Adjusted EBITDA
equals total revenues minus media programming and production
expenses, media selling, general and administrative expenses,
non-media expenses, program contract payments, and corporate
general and administrative expenses; plus stock-based compensation
and non-recurring transaction and transition services,
implementation, legal, and regulatory costs.
(b)
Interest expense (net) excludes deferred
financing costs, original issue discount amortization, and other
non-cash interest expense, and is net of interest income.
(c)
Adjusted Free Cash Flow is defined as
Adjusted EBITDA less interest expense (net), distributions to
non-controlling interest holders, cash taxes paid, and capital
expenditures; plus cash distributions received from equity
investments.
For the twelve months ending December 31, 2023 ($ in
millions)
Consolidated
Core advertising revenue
$1,239 to $1,257
Political revenue
46 to 51
Advertising revenue
$1,284 to $1,307
Distribution revenue
1,673 to 1,676
Other media revenue
140
Media revenues
$3,097 to $3,123
Non-media revenue
31
Total revenues
$3,129 to $3,154
Media programming & production
expenses and media selling, general and administrative expenses
$2,359 to $2,365
Non-media expenses
51
Program contract payments
89
Corporate overhead
199
Stock based compensation included in
corporate, media, and non-media expenses above
48
Non-recurring transaction, implementation,
legal, and regulatory costs included in corporate, media, and
non-media expenses above
66
Adjusted EBITDA(a)
$545 to $564
Interest expense (net)(b)
254
Total capital expenditures
98 to 100
Distributions to noncontrolling
interests
11
Cash distributions from equity
investments
45
Net cash tax payments
5
Adjusted Free Cash Flow(c)
$220 to $242
Note: Certain amounts may not summarize to totals due to rounding
differences.
(a)
Adjusted EBITDA is defined as earnings
before interest, tax, depreciation and amortization, and
non-recurring transaction, implementation, legal, and regulatory
costs, as well as certain non-cash items such as stock-based
compensation expense and other gains and losses; less program
contract payments. In the above table, Adjusted EBITDA equals total
revenues minus media programming and production expenses, media
selling, general and administrative expenses, non-media expenses,
program contract payments, and corporate general and administrative
expenses; plus stock-based compensation and non-recurring
transaction, implementation, legal, and regulatory costs.
(b)
Interest expense (net) excludes deferred
financing costs, original issue discount amortization, and other
non-cash interest expense, and is net of interest income.
(c)
Adjusted Free Cash Flow is defined as
Adjusted EBITDA less interest expense (net), distributions to
non-controlling interest holders, cash taxes paid, and capital
expenditures; plus cash distributions received from equity
investments.
Sinclair Conference Call:
The senior management of Sinclair will hold a conference call to
discuss the Company's third quarter 2023 results on Wednesday,
November 1, 2023, at 4:30 p.m. ET. The call will be webcast live
and can be accessed at www.sbgi.net under "Investor
Relations/Events and Presentations." After the call, an audio
replay will remain available at www.sbgi.net. The press and the
public will be welcome on the call in a listen-only mode. The
dial-in number is (888) 506-0062, with entry code 433619.
About Sinclair:
Sinclair, Inc. is a diversified media company and a leading
provider of local news and sports. The Company owns, operates
and/or provides services to 185 television stations in 86 markets
affiliated with all the major broadcast networks; owns Tennis
Channel and multicast networks Comet, CHARGE!, TBD and The Nest;
and owns and provides services to 21 regional sports network
brands. Sinclair’s content is delivered via multiple platforms,
including over-the-air, multi-channel video program distributors,
and the nation’s largest streaming aggregator of local news
content, NewsON. The Company regularly uses its website as a key
source of Company information which can be accessed at
www.sbgi.net.
Sinclair, Inc. and Subsidiaries
Preliminary Unaudited Consolidated
Statements of Operations
(In millions, except share and per
share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
REVENUES:
Media revenues
$
758
$
836
$
2,285
$
2,942
Non-media revenues
9
7
23
26
Total revenues
767
843
2,308
2,968
OPERATING EXPENSES:
Media programming and production
expenses
400
396
1,211
1,557
Media selling, general and administrative
expenses
176
190
557
605
Amortization of program contract costs
18
22
59
68
Non-media expenses
15
12
36
35
Depreciation of property and equipment
24
24
80
76
Corporate general and administrative
expenses
45
30
165
115
Amortization of definite-lived intangible
assets
42
43
124
179
Loss (gain) on deconsolidation of
subsidiary
10
—
10
(3,357
)
(Gain) loss on asset dispositions and
other, net of impairment
—
(28
)
11
(37
)
Total operating expenses (gains)
730
689
2,253
(759
)
Operating income
37
154
55
3,727
OTHER INCOME (EXPENSE):
Interest expense including amortization of
debt discount and deferred financing costs
(77
)
(59
)
(227
)
(228
)
Gain on extinguishment of debt
4
—
15
3
Income from equity method investments
—
33
30
48
Other (expense) income, net
(21
)
10
(48
)
(155
)
Total other expense, net
(94
)
(16
)
(230
)
(332
)
(Loss) income before income taxes
(57
)
138
(175
)
3,395
INCOME TAX BENEFIT (PROVISION)
12
(109
)
236
(756
)
NET (LOSS) INCOME
(45
)
29
61
2,639
Net (income) loss attributable to the
redeemable noncontrolling interests
—
(5
)
4
(14
)
Net income attributable to the
noncontrolling interests
(1
)
(3
)
(15
)
(28
)
NET (LOSS) INCOME ATTRIBUTABLE TO
SINCLAIR
$
(46
)
$
21
$
50
$
2,597
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO
SINCLAIR:
Basic earnings per share
$
(0.74
)
$
0.32
$
0.75
$
36.59
Diluted earnings per share
$
(0.74
)
$
0.32
$
0.75
$
36.59
Basic weighted average common shares
outstanding (in thousands)
63,325
69,907
65,670
70,981
Diluted weighted average common and common
equivalent shares outstanding (in thousands)
63,325
69,907
65,727
70,985
The Company considers Adjusted EBITDA to be an indicator of the
Company's operating performance and the ability to service its
debt. The Company also believes that Adjusted EBITDA is frequently
used by industry analysts, investors and lenders as a measure of
valuation and ability to service its debt. The Company also
discloses segment Adjusted EBITDA as an indicator of the operating
performance of its segments in accordance with ASC 280, Segment
Reporting.
The Company considers Adjusted Free Cash Flow to be an indicator
of the Company's operating performance. The Company also believes
that Free Cash Flow is a commonly used measure of valuation for
companies in the local media industry. In addition, this measure is
frequently used by industry analysts, investors and lenders as a
measure of valuation for local media companies.
Non-GAAP measures are not formulated in accordance with GAAP,
are not meant to replace GAAP financial measures and may differ
from other companies’ uses or formulations. The Company does not
provide reconciliations on a forward-looking basis. Further
discussions and reconciliations of the Company's non-GAAP financial
measures to comparable GAAP financial measures can be found on its
website www.SBGI.net.
Sinclair, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measurements
- Unaudited
All periods reclassified to conform
with current year GAAP presentation
(in millions)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of Net Income to
Adjusted EBITDA
Net (loss) income attributable to
Sinclair
$
(46
)
$
21
$
50
$
2,597
Add: Income (loss) from redeemable
noncontrolling interests
—
5
(4
)
14
Add: Income from noncontrolling
interests
1
3
15
28
Add: Income tax (benefit) provision
(12
)
109
(236
)
756
Add: Other expense
6
—
3
11
Add: Income from equity method
investments
—
(33
)
(30
)
(48
)
Add: Loss (income) from other investments
and impairments
25
(5
)
78
154
Add: Gain on extinguishment of
debt/insurance proceeds
(4
)
—
(15
)
(3
)
Add: Interest expense
77
59
227
228
Less: Interest income
(10
)
(5
)
(33
)
(10
)
Less: Loss (gain) on deconsolidation of
subsidiary
10
—
10
(3,357
)
Less: (Gain) loss on asset dispositions
and other, net of impairment
—
(28
)
11
(37
)
Add: Amortization of intangible assets
& other assets
42
43
124
179
Add: Depreciation of property &
equipment
24
24
80
76
Add: Stock-based compensation
7
5
42
33
Add: Amortization of program contract
costs
18
22
59
68
Less: Cash film payments
(22
)
(26
)
(68
)
(78
)
Add: Amortization of sports programming
rights
—
—
—
326
Less: Cash sports programming rights
payments
—
—
—
(325
)
Add: Transaction and transition service,
COVID, legal and other non-recurring expense
25
4
55
23
Adjusted EBITDA
$
141
$
198
$
368
$
635
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Reconciliation of Net Income to
Adjusted Free Cash Flow
Net (loss) income attributable to
Sinclair
$
(46
)
$
21
$
50
$
2,597
Add: Income (loss) from redeemable
noncontrolling interests
—
5
(4
)
14
Add: Income from noncontrolling
interests
1
3
15
28
Less: Distributions to noncontrolling
interests
(1
)
(2
)
(9
)
(8
)
Add: Cash distributions from equity
investments
3
52
44
103
Add: Income tax (benefit) provision
(12
)
109
(236
)
756
Add: Other non-cash expense
6
3
3
14
Add: Income from equity method
investments
—
(33
)
(30
)
(48
)
Add: Loss (income) from other investments
and impairments
25
(5
)
78
154
Add: Gain on extinguishment of
debt/insurance proceeds
(4
)
—
(15
)
(3
)
Add: Amortization of deferred financing
and bond discounts/premiums
1
2
8
10
Less: Loss (gain) on deconsolidation of
subsidiary
10
—
10
(3,357
)
Less: (Gain) loss on asset dispositions
and other, net of impairment
—
(28
)
11
(37
)
Add: Amortization of intangible assets
& other assets
42
43
124
179
Add: Depreciation of property &
equipment
24
24
80
76
Add: Stock-based compensation
7
5
42
33
Add: Amortization of program contract
costs
18
22
59
68
Less: Cash film payments
(22
)
(26
)
(68
)
(78
)
Less: Capital expenditures
(30
)
(28
)
(70
)
(72
)
Less: Cash taxes paid
—
(1
)
(4
)
(16
)
Add: Amortization of sports programming
rights
—
—
—
326
Less: Cash sports programming rights
payments
—
—
—
(325
)
Add: Transaction and transition service,
COVID, legal and other non-recurring expense
25
4
55
23
Adjusted Free Cash Flow
$
47
$
170
$
143
$
437
Three months ended September 30,
2023
Local Media
Tennis
Other
Corporate and
Eliminations
Consolidated
($ in millions)
Total revenues
$
697
$
59
$
17
$
(6
)
$
767
Media programming and production
expenses
371
29
—
—
400
Media selling, general and administrative
expenses
164
11
5
(4
)
176
Depreciation and amortization expenses
59
5
3
(1
)
66
Amortization of program contract costs
18
—
—
—
18
Corporate general and administrative
expenses
31
1
1
12
45
Non-media expenses
3
—
13
(1
)
15
Loss on deconsolidation
—
—
—
10
10
(Gain) loss on asset dispositions and
other, net of impairment
(2
)
—
2
—
—
Operating income
53
13
(7
)
(22
)
37
Reconciliation of GAAP Operating Income
to Adjusted EBITDA:
Operating income
$
53
$
13
$
(7
)
$
(22
)
$
37
Depreciation and amortization expenses
59
5
3
(1
)
66
Amortization of program contract costs
18
—
—
—
18
Loss on deconsolidation
—
—
—
10
10
(Gain) loss on asset dispositions and
other, net of impairment
(2
)
—
2
—
—
Program contract payments
(22
)
—
—
—
(22
)
Stock-based compensation
6
—
—
1
7
Adjustments
22
—
2
1
25
Adjusted EBITDA
134
18
—
(11
)
141
Three months ended September 30,
2022
Local Media
Tennis
Other
Corporate and
Eliminations
Consolidated
($ in millions)
Total revenues
$
781
$
54
$
17
$
(9
)
$
843
Media programming and production
expenses
365
26
8
(3
)
396
Media selling, general and administrative
expenses
175
11
7
(3
)
190
Depreciation and amortization expenses
61
6
1
(1
)
67
Amortization of program contract costs
22
—
—
—
22
Corporate general and administrative
expenses
16
—
—
14
30
Non-media expenses
6
—
8
(2
)
12
Gain on asset dispositions and other, net
of impairment
(7
)
—
(11
)
(10
)
(28
)
Operating income
143
11
4
(4
)
154
Reconciliation of GAAP Operating Income
to Adjusted EBITDA:
Operating income
$
143
$
11
$
4
$
(4
)
$
154
Depreciation and amortization expenses
61
6
1
(1
)
67
Amortization of program contract costs
22
—
—
—
22
Gain on asset dispositions and other, net
of impairment
(7
)
—
(11
)
(10
)
(28
)
Program contract payments
(26
)
—
—
—
(26
)
Stock-based compensation
4
—
—
2
6
Adjustments
4
—
—
—
4
Adjusted EBITDA
201
17
(6
)
(14
)
198
Forward-Looking
Statements:
The matters discussed in this news release, particularly those
in the section labeled "Outlook," include forward-looking
statements regarding, among other things, future operating results.
When used in this news release, the words "outlook," "intends to,"
"believes," "anticipates," "expects," "achieves," "estimates," and
similar expressions are intended to identify forward-looking
statements. Such statements are subject to a number of risks and
uncertainties. Actual results in the future could differ materially
and adversely from those described in the forward-looking
statements as a result of various important factors, including and
in addition to the assumptions set forth therein, but not limited
to, the rate of decline in the number of subscribers to services
provided by traditional multi-channel video programming
distributors ("MVPDs"); the Company’s ability to generate cash to
service its substantial indebtedness; the successful execution of
outsourcing agreements; the successful execution of retransmission
consent agreements; the successful execution of network and MVPD
affiliation agreements; the Company’s ability to compete for
viewers and advertisers; pricing and demand fluctuations in local
and national advertising; volatility in programming costs; the
impact of pending and future litigation claims against the Company;
the potential impacts of the war in Ukraine, the COVID -19
pandemic, and conflict in the Middle East on the Company’s business
operations, financial results and financial position and on the
world economy; the market acceptance of new programming; the
Company’s ability to identify and consummate acquisitions and
investments, to manage increased leverage resulting from
acquisitions and investments, and to achieve anticipated returns on
those investments once consummated; the impact of any loss of key
personnel, including talent; material legal, financial and
reputational risks and operational disruptions resulting from a
breach of the Company’s information systems, including due to the
cybersecurity event in October 2021; the impact of FCC and other
regulatory proceedings against the Company; uncertainties
associated with potential changes in the regulatory environment
affecting the Company’s business and growth strategy, and any risk
factors set forth in the Company's recent reports on Form 10-Q
and/or Form 10-K, as filed with the Securities and Exchange
Commission. There can be no assurances that the assumptions and
other factors referred to in this release will occur. The Company
undertakes no obligation to publicly release the result of any
revisions to these forward-looking statements except as required by
law.
Category: Financial
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101085817/en/
Investor Contacts: Christopher C. King, VP, Investor Relations
Billie-Jo McIntire, AVP, Investor Relations (410) 568-1500
Media Contact: Sinclair@5wpr.com
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