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.
