Sinclair Reports Third Quarter 2020 Financial Results

BALTIMORE, Nov. 4, 2020 /PRNewswire/ -- Sinclair Broadcast Group, Inc. (Nasdaq: SBGI), the "Company" or "Sinclair," today reported financial results for the three and nine months ended September 30, 2020.

Third Quarter Highlights

    --  Consolidated total revenue increased 37% to $1,539 million as compared
        to the third quarter of 2019, with gains driven in large part by the
        Company's acquisition of 21 Regional Sports Networks (RSNs) and Fox
        College Sports in August 2019, as well as higher political advertising
        revenue. Included in the quarter is a $128 million accrual for rebates
        to distributors based on minimum game guarantees.


    --  Consolidated operating loss of $4,178 million included a $4,226 million
        impairment taken on the Local Sports segment relating to goodwill and
        definite-lived intangible assets, and $13 million of non-recurring costs
        for transaction, COVID, legal, litigation, and regulatory costs
        ("Adjustments"). Excluding the Adjustments, operating income of $61
        million decreased $147 million compared to the third quarter of 2019.


    --  Net loss attributable to the Company was $3,210 million versus net loss
        of $60 million in the prior year period. Excluding the Adjustments, the
        Company had net income of $161 million.
    --  Consolidated Adjusted EBITDA, which excludes the Adjustments, of $736
        million increased 97% versus the third quarter of 2019.

CEO Comment:

"Driven by stronger than expected political and sports advertising revenue, and stringent cost control measures during the pandemic, Sinclair's results for the quarter, excluding the impairment, exceeded our expectations and guidance," commented Chris Ripley, Sinclair's President and Chief Executive Officer. "While core advertising trends in our Broadcast segment continue to face challenges due to the pandemic, we did see improvement as we moved through the quarter, despite having to balance strong political demand that competed for inventory." Ripley continued, "COVID-19 has also exacerbated subscriber churn which has impacted results; however, Sinclair has numerous initiatives that are expected to be drivers of growth in the years ahead. These include a new sports app planned to launch by the beginning of the baseball season in the spring of 2021, the continued roll-out of NEXTGEN TV expected to be available in approximately 45 markets by the end of 2021, and the premier of The National Desk, our new headline news service launching in early 2021. We believe these initiatives, our free, over-the-top ad-supported digital platform STIRR, gamification and direct to consumer and legalized sports betting opportunities that the company is exploring, position Sinclair for continued success in the years ahead."

Recent Company Developments:

Content and Distribution:

    --  In September, the Company invested in Playfly Sports, a leading company
        in the management of exclusive college and high school sports and esport
        multi-media rights across the U.S.


    --  In August, the Kansas City Royals and the Company entered into a
        multi-year media rights agreement beginning with the 2020 baseball
        season for FOX Sports Kansas City to continue as the television home of
        the Royals.
    --  Year-to-date, Sinclair's newsrooms have won a total of 305 journalism
        awards, including a National RTDNA Edward R. Murrow award, 28 Regional
        RTDNA Edward R. Murrow awards and 72 regional Emmy awards.

Community:

    --  Since March, the Company has partnered with the Salvation Army on
        numerous Sinclair Cares relief initiatives, raising over $1.2 million
        for those impacted by the western wildfires, the Iowa derecho, and the
        COVID-19 pandemic.
    --  In September, the Company received the Award for Achievement in Local
        Broadcasting, part of the TV of Tomorrow annual awards for leadership in
        interactive and multi-platform television. The award honors Sinclair
        Broadcast Group as the company that has demonstrated the greatest
        achievement in local broadcasting over the past year, recognizing its
        wholly-owned subsidiary, ONE Media 3.0, as the broadcast industry's
        vanguard in advancing NEXTGEN TV from research and development to
        deployment.

ATSC 3.0:

    --  As of the end of October, the Company, in coordination with other
        broadcasters, has deployed NEXTGEN TV, powered by ATSC 3.0, in eight
        markets, with several more planned by year end.
    --  Other recent developments include the first mobile phone prototypes with
        full 3.0 functionality delivered to the Company, the development of
        enhanced content security capabilities, and progress on enabling
        datacasting, which would integrate broadcast and broadband delivery in
        the cloud.

Employees:

    --  In September, the Company announced the hiring of J.R. McCabe in the
        newly-created role of Chief Business Officer of D2C/Gamification.
    --  Earlier this week, John Zeigler was announced as the Company's first
        Chief Marketing Officer who will be focused initially on re-branding of
        the FOX RSNs and marketing activities for the Company.

Three Months Ended September 30, 2020 Consolidated Financial Results:

    --  Total revenues increased 37% to $1,539 million versus $1,125 million in
        the prior year period. Media revenues increased 42% to $1,519 million
        versus $1,070 million in the third quarter of 2019. The increase was
        driven in large part by the Company's acquisition of the 21 RSNs and Fox
        College Sports in August 2019 and political advertising. Consolidated
        revenue was higher than the Company's quarterly guidance range, due to
        higher political and sports advertising.


    --  Political revenues were $109 million in the third quarter versus $6
        million in the third quarter of 2019 due to 2020 being a presidential
        election year. Distribution revenues were $1,003 million versus $679
        million in the third quarter of 2019 driven by the acquisition of the
        RSNs in August 2019.


    --  During the third quarter, the Company estimated an impairment loss on
        the Local Sports segment of $4,226 million relating to goodwill and
        definite-lived intangible assets of $2,615 million and $1,611 million,
        respectively. This was driven by a decline in distribution revenue
        brought on by a number of factors, including the recent loss of two
        virtual distributors, that together represented approximately 10% of the
        Local Sports gross distribution revenue for the month of September 2020,
        as well as elevated levels of subscriber erosion influenced by numerous
        factors including fragmentation of content distribution platforms,
        shifting consumer behaviors due to the current economic environment, the
        COVID-19 pandemic and related uncertainties. In addition, the Company
        estimated a deferred income tax benefit of $1,092 million in connection
        with the impairment loss. The Company is in the process of finalizing
        the impairment analysis and related tax impact which will be completed
        in time for the filing of the Form10-Q for the third quarter. The
        impairment loss and related tax impact do not affect the Company's cash
        position, cash flow from operating activities, or debt covenants.


    --  Operating loss of $4,178 million included a $4,226 million impairment
        taken on the Local Sports segment relating to goodwill and
        definite-lived intangible assets and $13 million of other Adjustments,
        versus an operating loss of $6 million in the prior year period, which
        included $214 million of Adjustments. Operating income when excluding
        the Adjustments, decreased to $61 million from $208 million for the same
        prior-year period.


    --  Net loss attributable to the Company was $3,210 million versus net loss
        of $60 million in the prior year period. Excluding the Adjustments, the
        Company had net income of $161 million. Adjusted EBITDA, which excludes
        Adjustments, increased 97% to $736 million from $374 million in the
        third quarter of 2019, and was $115 million higher than the high end of
        Company guidance, due to higher political and sports revenue, lower
        operating expenses and sports rights payments.
    --  Diluted loss per common share was $42.66 as compared to a loss of $0.64
        in the prior year period. The impact of Adjustments in the third quarter
        of 2020, on a diluted per-share basis, was $(44.79) and the impact of
        Adjustments in the third quarter of 2019 was $(1.79).

Nine Months Ended September 30, 2020 Consolidated Financial Results:

    --  Total revenues increased 69% to $4,431 million versus $2,618 million in
        the prior year period. Media revenues increased 77% to $4,353 million
        versus $2,465 million in the same period a year ago. Revenues benefited
        from the inclusion of the RSNs, which were not in the full period of
        prior year results, and higher political advertising in a presidential
        election year. Distribution revenues were $3,168 million versus $1,398
        million in the same period a year ago, also reflecting the impact of the
        inclusion of the RSNs.


    --  Operating loss of $3,359 million, included a $4,226 million impairment
        taken on the Local Sports segment relating to goodwill and
        definite-lived intangible assets and $42 million of other Adjustments,
        versus operating income of $193 million in the prior year period, which
        included $244 million of Adjustments. Operating income when excluding
        the Adjustments increased to $909 million from $437 million for the same
        prior-year period.


    --  Net loss attributable to the Company was $2,835 million versus net
        income of $4 million in the prior year period. Excluding Adjustments,
        the Company had net income of $475 million. Adjusted EBITDA, which
        excludes Adjustments, increased 73% to $1,271 million from $734 million
        for the nine-month period ending September 30, 2020.
    --  Diluted loss per common share was $34.42 as compared to diluted earnings
        per common share of $0.05 in the prior year period. The impact of
        Adjustments in the nine months ending September 30, 2020, on a diluted
        per-share basis, was $(40.18) and the impact of Adjustments in the nine
        months ending September 30, 2019 was $(2.02).

Consolidated and Segment Highlights

The below highlights include the acquisition of RSNs and Fox College Sports (August 23, 2019), the 20% ownership investment in the YES Network (August 29, 2019), an increased investment in Stadium which is now consolidated (December 2, 2019), the launch of the Marquee RSN (February 22, 2020), the divestiture of the non-license assets in Harlingen, TX (January 27, 2020), and the divestiture of WDKY in Lexington, KY (September 17, 2020).

Segment financial information is included in the following tables for the periods presented. The Broadcast segment, previously referred to as the Local News and Marketing Services segment, consists primarily of broadcast television stations, which the Company owns, operates or to which the Company provides services. The Local Sports segment, previously referred to as the Sports segment, consists primarily of the RSNs, Marquee, and a 20% equity interest in the YES Network. The Other segment includes corporate, original networks and content, including Tennis Channel, non-broadcast digital and internet solutions, technical services, and other non-media investments.



       
              For the three months ended September 30, 2020                        Local Sports               Corporate,            Consolidated
                                                                                                            Other &
                                                                                                              Elimination





                                ($ in millions)                  Broadcast

    ---

                                Revenue Highlights:


        Distribution revenue                                               $
     356                    $
     597                              $
            50      $
     1,003


        Advertising revenue                                            344          124                                           32               500


        Other media revenue                                             34     (a)    6                                         (24)               16



        Media revenues                                                     $
     734                    $
     727                              $
            58  (a) $
     1,519


        Non-media revenue                                                                                                       20                20



        Total revenues                                                     $
     734                    $
     727                              $
            78      $
     1,539





                                Expense Highlights:


        Media programming &
         production expenses
         and media selling,
         general and
         administrative
         expenses                                                      450          801        (a)                                38 (a)         1,289


        Sports rights
         amortization
         included in media
         production expenses                                                       630                                                           630


        Non-media expenses                                                                                                      18                18


        Corporate general and
         administrative
         expenses                                                       25            3                                            2                30




                                Other Highlights:


        Sports rights
         payments                                                                   99                                                            99


        Program contract
         payments                                                       22                                                        1                23


        Capital
         expenditures(b)                                                 9            5                                            5                19


        Interest expense
         (net) (c)                                                       1          101                                           42               144



       Adjusted EBITDA(d)                                                                                                   736




     (a) For the quarter ended September 30,
           2020 Broadcast includes $26 million
           of revenue for services provided by
           the Broadcast segment to the Local
           Sports and Other segments; the
           Local Sports segment includes $25
           million of selling, general, and
           administrative expenses for
           services provided by the Broadcast
           segment to the Local Sports
           segment, and the Other segment
           includes $1 million of selling,
           general, and administrative
           expenses for services provided by
           the Broadcast segment to the Other
           segment.  Such amounts are
           eliminated in consolidation.





     (b) Capital expenditures exclude $13
           million of repack capital
           expenditures expected to be
           reimbursed in the future from the
           TV Broadcaster Relocation Fund
           administered by the FCC.





     (c) Interest expense excludes deferred
           financing costs, original issue
           discount amortization, and other
           non-cash interest expense, and is
           net of interest income.





     (d)              Adjusted EBITDA is defined as
                        earnings before interest, tax,
                        depreciation and amortization, plus
                        impairment loss and non-recurring
                        transaction, COVID, legal,
                        litigation and regulatory costs, as
                        well as certain non-cash items
                        such as stock-based compensation
                        expense and sports rights
                        amortization; less sports rights
                        payments and program contract
                        payments. Refer to the
                        reconciliation on the last page of
                        this press release and the
                        Company's website.




                                                        Broadcast         Local Sports                  Corporate,        Consolidated
                                                                                              Other &
                     For the three months
                      ended September 30,
                      2019                                                                  Elimination



                                    ($ in millions)

    ---

                                    Revenue Highlights:


        Distribution revenue                                      $
     340                                           $
     306                      $
       33    $
       679


        Advertising revenue                                   302                        43                                           31            376


        Other media revenue                                    19     (a)                 3                                          (7) (a)        15



        Media revenues                                            $
     661                                           $
     352                      $
       57  $
       1,070


        Non-media revenue                                                                                                           55             55



        Total revenues                                            $
     661                                           $
     352                     $
       112  $
       1,125





                                    Expense Highlights:


        Media programming &
         production expenses
         and media selling,
         general and
         administrative
         expenses                                             430                       262               (a)                         53  (a)       745


        Sports rights
         amortization
         included in Media
         production expenses                                                           193                                                        193


        Non-media expenses                                                                                                          42             42


        Corporate general and
         administrative
         expenses                                              23                        92                                          122            237




                                    Other Highlights:


        Sports rights
         payments                                                                      118                                                        118


        Program contract
         payments                                              23                                                                                  23


        Capital
         expenditures(b)                                       16                         2                                            1             19


        Interest expense
         (net)(c)                                               1                        59                                           50            110


        Adjusted EBITDA(d)                                                                                                         374




              (a)                   For the quarter ended September 30,
                                      2019, Broadcast includes $9 million
                                      of revenue and the Local Sports
                                      segment includes $9 million of
                                      selling, general, and
                                      administrative expenses for
                                      services provided by the Broadcast
                                      segment to the Local Sports
                                      segment.  Such amounts are
                                      eliminated in consolidation.





              (b)                   Capital expenditures exclude $16
                                      million of repack capital
                                      expenditures expected to be
                                      reimbursed in the future from the
                                      TV Broadcaster Relocation Fund
                                      administered by the FCC.





              (c)                   Interest expense excludes deferred
                                      financing costs, original issue
                                      discount amortization, and other
                                      non-cash interest expense, and is
                                      net of interest income.





              (d)                   Adjusted EBITDA is defined as
                                      earnings before interest, tax,
                                      depreciation and amortization, plus
                                      impairment loss and non-recurring
                                      transaction, legal, litigation and
                                      regulatory costs, as well as
                                      certain non-cash items such as
                                      stock-based compensation expense
                                      and sports rights amortization;
                                      less sports rights payments and
                                      programming payments. Refer to the
                                      reconciliation on the last page of
                                      this press release and the
                                      Company's website.

Consolidated Balance Sheet and Cash Flow Highlights:

    --  Total Company debt as of September 30, 2020, was $12,463 million, which
        includes Diamond Sports Group LLC (DSG) debt of $8,030 million.


    --  Cash and cash equivalents for the Company as of September 30, 2020 was
        $632 million, which includes $346 million held at DSG.


    --  In August, Diamond Sports Holdings LLC (DSH), an indirect subsidiary of
        the Company, redeemed 350,000 of its Preferred Units (such units, the
        "Redeemed Preferred Units") using cash dividends from DSG. In accordance
        with the terms of the Amended and Restated Limited Liability Company
        Agreement of DSH, the Redeemed Preferred Units were redeemed for an
        aggregate redemption price equal to $350,000,000, representing 100% of
        the unreturned capital contribution with respect to such Redeemed
        Preferred Units, plus $3,850,000 in accrued and unpaid dividends, with
        respect to such Redeemed Preferred Units up to, but not including, the
        redemption date, for a total redemption amount of $353,850,000. After
        giving effect to the partial redemption, 175,000 Preferred Units of DSH.


    --  In September, DSG's indirect subsidiary, Diamond Sports Finance SPV, LLC
        ("Diamond SPV"), entered into a $250 million accounts receivable
        securitization facility. The facility has a term of three years and
        enables DSG to raise incremental, low-cost funding by selling certain
        receivables on a revolving basis to Diamond SPV, which will in turn
        borrow money from third-party financial institutions.


    --  As of September 30, 2020, 49.2 million Class A common shares and 24.7
        million Class B common shares were outstanding, for a total of 73.9
        million common shares. During the third quarter 2020, the Company
        repurchased approximately 4.3 million shares. Since December 31, 2019,
        the Company repurchased approximately 29% of its Class A common shares
        outstanding and 21% of the total shares outstanding at that time.


    --  In September, the Company paid a $0.20 per share quarterly cash dividend
        to its shareholders.


    --  Routine capital expenditures in the third quarter of 2020 were $19
        million with another $13 million related to the spectrum repack.
    --  The Local Sports segment's media production expense included $630
        million of sports rights amortization, while sports rights payments in
        the quarter were $99 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 and twelve months ending December 31, 2020.

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including how it has and will continue to impact its advertisers, distributors, and professional sports leagues. The Company is currently unable to predict the extent of the impact that the COVID-19 pandemic will have on its financial condition, results of operations and cash flows in future periods due to numerous uncertainties. For additional discussion of how the COVID-19 pandemic has impacted the Company's business, please see the section titled The Impact of COVID-19 on our Results of Operations in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.


                            For the three months                   Broadcast         Local Sports                       Corporate
                             ending December                                                                                and                           Consolidated
    31, 2020 ($in millions)                                                                                 Other and
                                                                                                            Elimination

    ---

                                           Revenue Highlights:


               Core advertising
                revenue                                                                                                                            
              $310 to 326


               Political revenue                                                                                                                                      194



               Advertising revenue                             
     $457 to 473       
          $8 to 9                             $37                   
              $503 to 520


               Distribution revenue                               359 to 362           545 to 550  (a)                         49                    
              952 to 960


               Other media revenue                                        38 (b)                 4                             (23) (b)                                  19



                 Media revenues                                   854 to 873           557 to 563                              64                
              1,475 to 1,499


               Non-media revenue                                                                                               16                                       16



                 Total revenues                                
     $854 to 873     
        $557 to 563                             $80               
              $1,491 to 1,515





                                           Expense Highlights:


               Media programming &
                production expenses
                and media selling,
                general and
                administrative
                expenses                                       
     $478 to 482                 $153   (b) (c)                    $49  (b)              
              $680 to 684


               Sports rights
                amortization included
                in media production
                expenses                                                                       23   (c)                                                                 23


               Non-media expenses                                                                                              20                                       20


               Corporate overhead                                                                                                                                      31


               Stock-based
                compensation and non-
                recurring costs for
                transaction, legal,
                litigation and
                regulatory fees
                included in corporate
                and media expenses
                above                                                                                                                                                  24


               Depreciation,
                intangible &
                programming
                amortization                                                                                                                                          171




                                           Other Highlights:


               Sports rights payments                                                        $196                                                                     $196


               Program contract
                payments                                                                                                                                               25


               Interest expense
                (net)(d)                                                                                                                                              146


               Income tax expense                                                                                                         Approximately 21% effective tax
                                                                                                                                                                     rate


               Net cash tax refunds                                                                                                     
            Approximately $7 million


               Payments to
                noncontrolling
                interest holders,
                including preferred
                dividend                                                                                                                                               26


               Total capital
                expenditures,
                including repack                                                                                                                      
              38 to 43


               Repack capital
                expenditures                                                                                                                                           17


                            Adjusted EBITDA(e
                                    )                                            
        $235 to 241                                                  
              $586 to 608




              Note:                 Certain amounts may not summarize
                                      to totals due to rounding
                                      differences.





              (a)                   Reflects $119 million of accrued
                                      rebates to distributors tied to
                                      minimum game guarantees.





              (b)                   The Broadcast segment includes $25
                                      million of revenue for services
                                      provided by the Broadcast segment
                                      to the Local Sports and Other
                                      segments and the Local Sports
                                      segment includes $25 million of
                                      selling, general, and
                                      administrative expenses for
                                      services provided by the Broadcast
                                      segment to the Local Sports
                                      segment.  Such amounts are
                                      eliminated in the Consolidated
                                      column.





              (c)                   Reflects rebates from teams of
                                      sports rights overpayments tied to
                                      minimum game guarantees.





              (d)                   Interest expense excludes deferred
                                      financing costs, original issue
                                      discount amortization, and other
                                      non-cash interest expense, and is
                                      net of interest income





              (e)                   Adjusted EBITDA is defined as
                                      earnings before interest, tax,
                                      depreciation and amortization,
                                      plus impairment loss and non-
                                      recurring transaction, COVID,
                                      legal, litigation and regulatory
                                      costs, as well as certain non-
                                      cash items such as stock-based
                                      compensation expense and sports
                                      rights amortization; less sports
                                      rights payments and programming
                                      payments. Refer to the
                                      reconciliation on the last page of
                                      this release and the Company's
                                      website.


                            For the twelve months                      Broadcast            Local Sports                   Corporate
                             ending                                                                                            and                Consolidated
    December 31, 2020 ($                                                                                        Other and
     in millions)                                                                                              Elimination

    ---

                                           Revenue Highlights:


               Core advertising
                revenue                                                                                                                    
       $1,275 to 1,292


               Political revenue                                                                                                                           363



               Advertising revenue                             
     $1,319 to 1,335       
         $191 to 192                        $128        
       $1,638 to 1,655


               Distribution revenue                               1,418 to 1,421          2,504 to 2,509  (a)                    199             4,121 to 4,129


               Other media revenue                                           144 (b)                   18                         (93) (b)                    70



                 Media revenues                                   2,881 to 2,900     
       $2,713 to 2,719                         234             5,828 to 5,853


               Non-media revenue                                                                                                  94                         94



                 Total revenues                                
     $2,881 to 2,900     
       $2,713 to 2,719                        $328        
       $5,922 to 5,947





                                           Expense Highlights:


               Media programming &
                production expenses
                and media selling,
                general and
                administrative
                expenses                                       
     $1,815 to 1,818                  $1,594   (b)                   $168  (b)   
       $3,576 to 3,580


               Sports rights
                amortization included
                in media production
                expenses                                                                           1,051   (c)                                            1,051


               Non-media expenses                                                                                                 89                         89


               Corporate overhead                                                                                                                          142


               Stock-based
                compensation and non-
                recurring costs for
                transaction, legal,
                litigation and
                regulatory fees
                included in corporate
                and media expenses
                above                                                                                                                                      105


               Depreciation,
                intangible &
                programming
                amortization                                                                                                                               759




                                           Other Highlights:


               Sports rights payments                                                              1,320                                                  1,320


               Program contract
                payments                                                                                                                                    95


               Interest expense
                (net)(d)                                                                                                                                   606


               Income tax benefit                                                                                                                Approximately
                                                                                                                                                 22% effective
                                                                                                                                                      tax rate


               Net cash tax refunds                                                                                                              Approximately
                                                                                                                                                    $7 million


               Payments to
                noncontrolling
                interest holders,
                including preferred
                dividend                                                                                                                                    96


               Total capital
                expenditures,
                including repack                                                                                                                    168 to 173


               Repack capital
                expenditures                                                                                                                                71


                            Adjusted EBITDA(e
                                    )                                                  
         $867 to 873                                   
       $1,857 to 1,878




              Note:                 Certain amounts may not summarize
                                      to totals due to rounding
                                      differences.





              (a)                   Reflects $371 million of accrued
                                      rebates to distributors tied to
                                      minimum game guarantees.





              (b)                   The Broadcast segment includes $100
                                      million of revenue for services
                                      provided by the Broadcast segment
                                      to the Local Sports and Other
                                      segments, the Local Sports segment
                                      includes $98 million of selling,
                                      general, and administrative
                                      expenses for services provided by
                                      the Broadcast segment to the Local
                                      Sports segment, and the Other
                                      segment includes $2 million of
                                      selling, general, and
                                      administrative expenses for
                                      services provided by the Broadcast
                                      segment to the Other segment.
                                      Such amounts are eliminated in the
                                      Consolidated column.





              (c)                   Reflects lower payments to and
                                      rebates from teams of sports
                                      rights payments tied to minimum
                                      game guarantees.





              (d)                   Interest expense excludes deferred
                                      financing costs, original issue
                                      discount amortization, and other
                                      non-cash interest expense, and is
                                      net of interest income.





              (e)                   Adjusted EBITDA is defined as
                                      earnings before interest, tax,
                                      depreciation and amortization,
                                      plus impairment loss and non-
                                      recurring transaction, COVID,
                                      legal, litigation and regulatory
                                      costs, as well as certain non-
                                      cash items such as stock-based
                                      compensation expense and sports
                                      rights amortization; less sports
                                      rights payments and programming
                                      payments. Refer to the
                                      reconciliation on the last page of
                                      this release and the Company's
                                      website.

Sinclair Conference Call:

The senior management of Sinclair will hold a conference call to discuss its third quarter 2020 results on Wednesday, November 4, 2020, at 9:00 a.m. ET. The call will be webcast live and can be accessed at www.sbgi.net under "Investors/ Webcasts." 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 (877) 407-8033.

About Sinclair:
Sinclair is a diversified media company and leading provider of local sports and news. The Company owns and/or operates 23 regional sports network brands; owns, operates and/or provides services to 190 television stations in 88 markets; is a leading local news provider in the country; owns multiple national networks; and has TV stations affiliated with all the major broadcast networks. Sinclair's content is delivered via multiple platforms, including over-the-air, multi-channel video program distributors, and digital platforms. The Company regularly uses its website as a key source of Company information which can be accessed at www.sbgi.net.



     
                Sinclair Broadcast Group, Inc. and Subsidiaries

       Preliminary Unaudited Consolidated Statements of Operations

       (In millions, except share and per share data)




                                                               Three Months Ended                         Nine Months Ended
                                                      September 30,                           September 30,


                                             2020                               2019        2020                              2019

                                                                                                                            ---


     REVENUES:



     Media revenues                                  $
              1,519                            $
              1,070                  $
         4,353    $
        2,465


      Non-media revenues                       20                                        55                                    78               153




     Total revenues                        1,539                                     1,125                                 4,431             2,618





     OPERATING EXPENSES:


      Media programming and
       production expenses                  1,077                                       560                                 2,288             1,215


      Media selling, general
       and administrative
       expenses                               212                                       185                                   608               510


      Amortization of program
       contract costs                          19                                        22                                    63                68


      Non-media expenses                       18                                        42                                    69               120


      Depreciation of property
       and equipment                           25                                        24                                    75                69


      Corporate general and
       administrative expenses                 30                                       237                                   111               317


      Amortization of definite-
       lived intangible and
       other assets                           149                                        96                                   449               183


      Impairment of goodwill
       and definite-lived
       intangible assets                    4,226                                                                          4,226


      Gain on asset
       dispositions and other,
       net of impairment                     (39)                                     (35)                                 (99)             (57)


      Total operating expenses              5,717                                     1,131                                 7,790             2,425



      Operating (loss) income             (4,178)                                      (6)                              (3,359)              193





     OTHER INCOME (EXPENSE):


      Interest expense
       including amortization
       of debt discount and
       deferred financing costs             (157)                                    (129)                                (502)            (237)


      Gain on extinguishment of
       debt                                     -                                                                             5


      Loss from equity method
       investments                           (10)                                     (12)                                 (23)             (38)


      Other income, net                       169                                         3                                   169                12



      Total other income
       (expense), net                           2                                     (138)                                (351)            (263)


      Loss before income tax              (4,176)                                    (144)                              (3,710)             (70)


      INCOME TAX BENEFIT                      855                                        95                                   813                88



      NET (LOSS) INCOME                   (3,321)                                     (49)                              (2,897)               18



      Net income attributable
       to the redeemable
       noncontrolling interests              (19)                                     (11)                                 (51)             (11)


      Net loss (income)
       attributable to the
       noncontrolling interests               130                                                                            113               (3)



      NET (LOSS) INCOME
       ATTRIBUTABLE TO SINCLAIR
       BROADCAST GROUP                              $
              (3,210)                            $
              (60)                $
        (2,835)       $
        4



      EARNINGS PER COMMON SHARE ATTRIBUTABLE TO
       SINCLAIR BROADCAST GROUP:


      Basic earnings per share                      $
              (42.91)                          $
              (0.65)                $
        (34.61)    $
        0.05



      Diluted earnings per
       share                                        $
              (42.66)                          $
              (0.64)                $
        (34.42)    $
        0.05



      Weighted average common
       shares outstanding (in
       thousands)                          74,810                                    92,086                                81,922            92,050



      Weighted average common
       and common equivalent
       shares outstanding (in
       thousands)                          75,247                                    93,435                                82,377            93,271

The Company considers Adjusted EBITDA to be an indicator of the operating performance of its assets. The Company also believes that Adjusted EBITDA is frequently used by industry analysts, investors and lenders as a measure of valuation.

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 Broadcast Group, Inc. and Subsidiaries

       Reconciliation of Non-GAAP Measurements - Unaudited

       
                  All periods reclassified to conform with current year GAAP presentation

       
                (in millions)




                                                                  Three Months Ended                                 Nine Months Ended
                                                         September 30,                                      September 30,


                                            2020                                        2019          2020                                    2019

                                                                                                                                            ---

                   Adjusted EBITDA


          Net (loss) income
           attributable to
           Sinclair Broadcast
           Group                                            $
              (3,210)                                       $
              (60)                $
       (2,835)       $
     4


          Add:   Income from
           redeemable
           noncontrolling
           interests                          19                                                   11                                          51                  11


          Add:   (Loss) income
           from noncontrolling
           interests                       (130)                                                                                          (113)                  3


          Add:   Provision for
           income taxes                    (855)                                                (95)                                      (813)               (88)


          Add:   Other (income)
           expense                         (170)                                                   5                                       (169)                  7


          Add:   Loss from
           equity method
           investments                        10                                                   12                                          23                  38


          Add:   (Income) loss
           from other
           investments and
           impairments                         -                                                 (1)                                          3


          Add:   Loss (gain) on
           extinguishment of
           debt/insurance
           proceeds                            -                                                   3                                         (6)                  3


          Add:   Interest
           expense                           157                                                  129                                         502                 237


          Less:  Interest income               -                                                (10)                                        (2)               (21)


         Less:  Gain on asset
          dispositions and
          other, net of
          impairment                        (39)                                                (35)                                       (99)               (57)


          Add:   Amortization of
           intangible assets &
           other assets                      149                                                   96                                         449                 183


          Add:   Impairment of
           goodwill and
           definite-lived
           intangible assets               4,226                                                                                           4,226


          Add:   Depreciation of
           property & equipment               25                                                   24                                          75                  69


          Add:   Stock-based
           compensation                       12                                                    8                                          40                  30


          Add:   Amortization of
           program contract
           costs                              19                                                   22                                          63                  68


          Less:  Cash film
           payments                         (23)                                                (24)                                       (70)               (72)


          Add:   Amortization of
           sports programming
           rights                            632                                                  193                                       1,028                 193


          Less:  Cash sports
           programming rights
           payments                         (99)                                               (118)                                    (1,124)              (118)


          Add: Transaction,
           COVID, legal and
           other non-recurring
           expense                            13                                                  214                                          42                 244


                   Adjusted EBITDA                 $
              
                736                            $
              
                374            $
        
         1,271  $
     
       734

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 potential impacts of the COVID-19 pandemic on our business operations, financial results and financial position and on the world economy, the impact of changes in national and regional economies, the significant disruption to the operations of the professional sports leagues and the macroeconomy caused by COVID-19 may result in the recognition of further impairment charges on our goodwill and definite-lived intangible assets, our ability to generate cash to service our substantial indebtedness, the completion of the FCC spectrum repack, successful execution of outsourcing agreements, pricing and demand fluctuations in local and national advertising, volatility in programming costs, the market acceptance of new programming, the successful execution of retransmission consent agreements, the successful execution of network and MVPD affiliation agreements, the successful execution of media rights agreements with professional sports teams, the impact of OTT and other emerging technologies and their potential impact on cord-cutting, the impact of MVPDs, vMVPDs, and OTT distributors offering "skinny" programming bundles that may not include all programming of our networks, our ability to identify and consummate acquisitions and investments and to achieve anticipated returns on those investments once consummated, the impact of pending and future litigation claims against the Company, the impact of FCC and other regulatory proceedings against the Company, uncertainties associated with potential changes in the regulatory environment affecting our 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.

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SOURCE Sinclair Broadcast Group, Inc.