Sinclair Reports $0.19 Diluted Earnings Per Share In Second Quarter 2013; Declares $0.15 Quarterly Dividend Per Share

  Sinclair Reports $0.19 Diluted Earnings Per Share In Second Quarter 2013;
                 Declares $0.15 Quarterly Dividend Per Share

PR Newswire

BALTIMORE, Aug. 7, 2013

BALTIMORE, Aug. 7, 2013 /PRNewswire/ -- Sinclair Broadcast Group, Inc.
(Nasdaq: SBGI), the "Company" or "Sinclair," today reported financial results
for the three months and six months ended June 30, 2013.

(Logo: http://photos.prnewswire.com/prnh/20100119/PH39783LOGO )

"The first half of 2013 has been very successful for the Company, not only
with respect to the Company's results but on growing our platform through
additional acquisitions of broadcast assets, especially our most recently
announced planned acquisition of the Allbritton stations and their local news
cable/satellite channel," commented David Smith, President and CEO of
Sinclair. "Since April 1, 2013, we have announced definitive agreements for
the acquisition of 35 additional stations bringing the total number of
acquired or announced stations in the past two years to 91. The effect is to
not only grow our national footprint and reach, but to unlock operating
synergies, gain access to valuable spectrum, and build a platform whereby we
can expand content offerings and shape the future of the broadcast industry.
We are excited about the successes we have achieved and the additional value
that we have created and anticipate creating for our shareholders."

Financial Results:

Net broadcast revenues from continuing operations were $279.3 million for the
three months ended June 30, 2013, an increase of 28.4% versus the prior year
period result of $217.6 million. The Company had operating income of $84.3
million in the three-month period, as compared to operating income of $71.9
million in the prior year period. Net income attributable to the Company was
$17.8 million in the three-month period, which includes a $16.3 million
one-time loss from extinguishment of debt, versus net income of $30.1 million
in the prior year period.

The Company reported diluted earnings per common share of $0.19 for the
three-month period ended June 30, 2013 versus diluted earnings per common
share of $0.37 in the prior year period. Excluding the loss associated with
the extinguishment of debt, diluted earnings per share would have been $0.30.

Net broadcast revenues from continuing operations were $532.2 million for the
six months ended June 30, 2013, an increase of 30.3% versus the prior year
period result of $408.5 million. The Company had operating income of $147.9
million in the six-month period, as compared to operating income of $131.8
million in the prior year period. Net income attributable to the Company was
$34.8 million in the six-month period, versus net income of $59.4 million in
the prior year period.

The Company reported diluted earnings per common share of $0.40 in the
six-month period ended June 30, 2013 versus diluted earnings per common share
of $0.73 in the prior year period. Excluding the loss associated with the
extinguishment of debt, diluted earnings per share would have been $0.51.

"Discontinued Operations" accounting has been adopted in the financial
statements for all periods presented in this press release for the sale of
WLAJ-TV, our ABC affiliate in Lansing, Michigan which closed in March 2013,
and for the sale of WLWC-TV, our CW affiliate in the Providence, RI/New
Bedford, MA market which closed in April 2013. Therefore, the related results
from operations, net of related income taxes, have been reclassified from
income from continuing operations and reflected as net income from
discontinued operations. Prior current year amounts have been reclassified to
conform to current year GAAP presentation.

Operating Statistics and Income Statement Highlights:

  oPolitical revenues were $1.5 million in the second quarter 2013 versus
    $11.4 million in second quarter 2012.

  oLocal net broadcast revenues, which include local time sales,
    retransmission revenues, and other broadcast revenues, were up 35.9% in
    the second quarter 2013, while national net broadcast revenues, which
    include national time sales and other national broadcast revenues, were up
    7.0% versus the second quarter 2012. Excluding political revenues, local
    net broadcast revenues were up 37.3% and national net broadcast revenues
    were up 26.1% in the second quarter 2013 versus the second quarter of
    2012. On a same station basis, excluding political revenues, local net
    broadcast revenues were up 12.5%, while national net broadcast revenues
    were up 4.3%, versus the second quarter of 2012.

  oAdvertising categories, on a same station basis, that reported the largest
    spending increases in the second quarter 2013, as compared to the same
    period last year, were automotive, which was up 6.0%, telecommunications,
    furniture, grocery and direct response. Categories that declined were
    schools, paid programming, and restaurants.

  oOn May 1, 2013, the Company closed on the purchase of certain stock and/or
    broadcast assets of four television stations, located in four markets,
    owned by COX Media Group for $99.0 million, less working capital
    adjustments including $4.3 million of accounts receivable acquired, and an
    agreement to provide sales services to one other station.

  oOn June 3, 2013, the Company closed on the purchase of the non-license
    assets and entered into an agreement to provide sales services to WUTB-TV
    (MNT) in Baltimore from FOX Television Stations for $2.4 million.

  oIn June, the Company entered into a definitive merger agreement to acquire
    certain stock and broadcast assets of four television stations owned by
    TTBG LLC ("TTBG") for $115.35 million and to assume TTBG agreements to
    provide sales and other services to two stations. The transaction is
    expected to close late in the third quarter/early fourth quarter of 2013
    subject to the approval of the FCC and customary closing conditions.

  oIn June, the Company announced it entered into a definitive agreement to
    purchase the assets of Dielectric, a unit of SPX Corporation and the
    nation's largest manufacturer of broadcast television, radio and wireless
    antennas, transmission lines, and RF systems for $4.65 million.

  oEffective July 15, 2013, the Company terminated its contract with Inergize
    Digital, a digital management solutions company owned by Nexstar
    Broadcasting.

  oIn July, the Company announced it entered into a definitive agreement to
    purchase the stock of Perpetual Corporation and the equity interest of
    Charleston Television, LLC, both owned and controlled by the Allbritton
    family ("Allbritton") for an aggregate purchase price of $985.0 million.
    The Allbritton stations consist of seven ABC Network affiliates and
    NewsChannel 8, a 24-hour local cable/satellite news network covering the
    Washington D.C. metropolitan area. The Company expects the transaction to
    close in the fourth quarter of 2013, subject to the approval of the FCC,
    antitrust clearance, as applicable, and customary closing conditions. To
    comply with FCC local television ownership rules, Sinclair expects to sell
    the license and certain related assets of its existing stations in
    Birmingham, AL, Harrisburg/Lancaster/Lebanon/York, PA and Charleston, SC
    and to provide sales and other non-programming support services to each of
    these stations pursuant to customary shared services and joint sales
    agreements.

Balance Sheet and Cash Flow Highlights:

  oDebt on the balance sheet, net of $550.8 million in cash and cash
    equivalents, was $1,898.4 million at June 30, 2013 versus net debt of
    $2,245.0 million at March 31, 2013.

  oOn May 7, 2013, the Company closed on the issuance of 18.0 million primary
    shares of Class A common stock priced at $27.25 per share, and on May 15,
    2013, the Class B shareholders sold 2.4 million secondary shares in the
    overallotment process.

  oAs of June 30, 2013, 73.5 million Class A common shares and 26.3 million
    Class B common shares were outstanding, for a total of 99.8 million common
    shares outstanding.

  oOn June 14, 2013, the Company paid a $0.15 per share quarterly cash
    dividend to its shareholders.

  oCapital expenditures in the second quarter 2013 were $9.7 million.

  oProgram contract payments for continuing operations were $22.7 million in
    the second quarter 2013.

Notes:

Presentation of financial information for the prior year has been reclassified
to conform to the presentation of generally accepted accounting principles for
the current year.

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, but not limited to, the impact of
changes in national and regional economies, the volatility in the U.S. and
global economies and financial credit markets which impact our ability to
forecast, our ability to integrate acquired businesses and maximize operating
synergies, our ability to obtain necessary governmental approvals and
financing for announced acquisitions, successful execution of outsourcing
agreements, pricing and demand fluctuations in local and national advertising,
volatility in programming costs, the market's acceptance of new programming
and performance of, the CW Television Network and MyNetworkTV programming, our
news share strategy, our local sales initiatives, the execution of
retransmission consent agreements, our ability to identify and consummate
investments in attractive non-television assets and to achieve anticipated
returns on those investments once consummated, and any other risk factors set
forth in the Company's most recent reports on Form 10-Q, Form 10-K and Form
8-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.

Outlook:

In accordance with Regulation FD, Sinclair is providing public dissemination
through this news release of its expectations for certain components of its
third quarter 2013 and full year 2013 financial performance. The Company
assumes no obligation to update its expectations. All matters discussed in
this "Outlook" section are forward-looking and, therefore, readers should not
place any undue reliance on this information and should refer to the
"Forward-Looking Statements" section above.

The term "Acquisition(s)" in this Outlook section refers to the inclusion of
the GoCom stations for the full year 2013; the COX stations beginning May 1,
2013; WUTB beginning June 1, 2013; and the Barrington, Fisher, and TTBG
stations beginning October 1, 2013. The Allbritton stations are not included
in the Outlook section. The term "same station basis" excludes the
Acquisitions defined above for the periods noted as well as the results of the
Newport stations and KBTV for the first 11 months of 2013.

"We continue to see growth in local and national advertising, excluding
political, in the third quarter, as well as continued advertising spending by
the automotive sector on our stations, which is estimated to be up high
single-digit percents," commented David Amy, EVP and CFO. "In addition, we
expect political revenues to benefit from the implementation of the Affordable
Care Act in the fourth quarter of 2013."

  oThe Company expects third quarter 2013 station net broadcast revenues from
    continuing operations, before barter, to be approximately $270.5 million
    to $275.5 million, up 20.2% to 22.4% as compared to third quarter 2012
    results of $225.0 million. This assumes approximately $1.6 million in
    political revenues in the third quarter 2013, as compared to $27.8 million
    in the third quarter 2012. The 2013 third quarter net broadcast revenue
    estimates assume $54.5 million related to the Acquisitions. Excluding the
    Acquisitions, same station net broadcast revenues in the third quarter
    2013 are estimated to be up 8.8% to 11.4%, excluding political revenues,
    versus the third quarter 2012. In total, same station net broadcast
    revenues are estimated to be down 1.8% to 4.0% versus the same period in
    2012 due to the absence of political as 2013 is a non-election year.

  oThe Company expects barter revenue to be approximately $22.7 million in
    the third quarter 2013.

  oThe Company expects barter expense to be approximately $22.7 million in
    the third quarter 2013.

  oThe Company expects continuing operations station production expenses and
    station selling, general and administrative expenses (together,
    "television expenses"), before barter expense, to be approximately $145.8
    million in the third quarter and $623.5 million for 2013, as compared to
    the 2012 actuals of $104.9 million and $426.8 million for the third
    quarter and year, respectively. The 2013 estimates assume $33.4 million
    and $172.3 million related to the Acquisitions for the quarter and year,
    respectively. The 2013 expense forecast includes $2.8 million of
    stock-based compensation expense for the year, as compared to $1.7 million
    for 2012. Excluding the Acquisitions, same station television expenses
    are expected to be up approximately 7.0% and 7.5% in the third quarter and
    full year 2013, respectively.

  oThe Company expects program contract amortization expense to be
    approximately $20.0 million in the third quarter and $84.5 million for
    2013, as compared to the 2012 actuals of $14.3 million and $61.0 million
    for the quarter and year, respectively. The 2013 estimates assume $3.2
    million and $14.2 million for the quarter and year respectively, related
    to the Acquisitions.

  oThe Company expects program contract payments to be approximately $22.6
    million in the third quarter and $92.2 million for 2013, as compared to
    the 2012 actuals of $16.9 million and $69.0 million for the quarter and
    year, respectively. The 2013 estimates assume $3.4 million and $12.9
    million for the quarter and year respectively, related to the
    Acquisitions.

  oThe Company expects corporate overhead to be approximately $12.2 million
    in the third quarter 2013, which includes $0.8 million of stock-based
    compensation, and $50.0 million for the full year, as compared to the 2012
    actuals of $8.3 million and $33.4 million for the quarter and year,
    respectively. The increase includes one-time costs associated with the
    acquisitions; additions to certain corporate functions as a result of the
    acquisition growth, including the acquisitions of stations in small
    markets through Chesapeake TV; and corporate overhead acquired in the
    fourth quarter of 2013, the synergies of which will not be realized until
    early 2014. Stock-based compensation expense for 2013 is expected to be
    approximately $6.9 million as compared to $4.2 million for 2012.

  oThe Company expects other operating division revenues less other operating
    division expenses to be $2.4 million of income in the third quarter and
    $9.6 million of income for 2013 (assuming current equity interests and the
    acquisition of Dielectric), as compared to the 2012 actuals of $2.1
    million of income in the quarter and $8.0 million of income for the
    year.

  oThe Company expects depreciation on property and equipment to be
    approximately $16.0 million in the third quarter and $69.2 million for
    2013 (assuming the capital expenditure assumptions below), as compared to
    the 2012 actuals of $12.6 million and $47.1 million for the quarter and
    year, respectively.

  oThe Company expects amortization of acquired intangibles to be
    approximately $15.4 million in the third quarter and $68.5 million for
    2013, as compared to the 2012 actuals of $10.6 million and $38.1 million
    for the quarter and year, respectively. 

  oThe Company expects net interest expense to be approximately $41.5 million
    in the third quarter and $169.5 million (approximately $159.1 million on a
    cash basis) for 2013, assuming no changes in the current interest rate
    yield curve and changes in debt levels based on the assumptions discussed
    in this "Outlook" section. The interest expense expectation compares to
    the 2012 actuals of $35.3 million and $128.4 million ($117.5 million on a
    cash basis) for the third quarter and year, respectively.

  oThe Company expects a current tax provision from continuing operations of
    approximately $3.4 million and $27.9 million in the third quarter and for
    the full year 2013, respectively, based on the assumptions discussed in
    this "Outlook" section. The Company expects the effective tax rate to be
    approximately 35.6% for the third quarter and 2013, respectively. The
    Company expects to pay cash taxes of $25.2 million for 2013.

  oThe Company expects to spend approximately $19.5 million in capital
    expenditures in the third quarter and approximately $58.0 million for
    2013. The 2013 estimate assumes $20.3 million related to the
    Acquisitions.

Sinclair Conference Call:

The senior management of Sinclair will hold a conference call to discuss its
second quarter 2013 results on Wednesday, August 7, 2013, at 9:30 a.m. ET.
After the call, an audio replay will be available at www.sbgi.net under
"Investor Information/Earnings Webcast." 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:

On a pro forma basis assuming consummation of all announced transactions,
Sinclair Broadcast Group, Inc., the largest and one of the most diversified
television broadcasting companies, will own and operate, program or provide
sales services to 149 television stations in 76 markets. Sinclair's
television group will reach approximately 38.2% of U.S. television households
and will be affiliated with all major networks. Sinclair's television
portfolio will include 33 FOX, 27 ABC, 25 CBS, 23 CW, 20 MNT, 14 NBC, 5
Univision, one Azteca and one independent station. Sinclair owns equity
interests in broadcast transmission-related companies and various
non-broadcast related companies. 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 thousands, except per share data)
                        Three Months Ended June     Six Months Ended June 30,
                        30,
                        2013          2012          2013          2012
REVENUES:
Station broadcast
revenues, net of agency $  279,270  $  217,582  $  532,195  $  408,470
commissions
Revenues realized from
station barter          22,047        21,343        40,277        38,881
arrangements
Other operating         12,837        12,149        24,300        26,097
divisions revenues
  Total revenues      314,154       251,074       596,772       473,448
OPERATING EXPENSES:
Station production      85,694        62,596        166,127       122,393
expenses
Station selling,
general and             53,297        41,581        105,235       77,293
administrative expenses
Expenses recognized
from station barter     19,382        19,695        35,396        35,819
arrangements
Amortization of program
contract costs and net
realizable              18,656        15,169        37,517        29,269

 value adjustments
Other operating         10,736        10,503        20,605        22,793
divisions expenses
Depreciation of         15,105        12,134        29,700        21,405
property and equipment
Corporate general and   11,447        7,513         22,697        16,880
administrative expenses
Amortization of
definite-lived          15,557        9,994         31,559        15,813
intangible and other
assets
 Total operating     229,874       179,185       448,836       341,665
expenses
 Operating income    84,280        71,889        147,936       131,783
OTHER INCOME (EXPENSE):
Interest expense and
amortization of debt
discount and            (45,465)      (29,320)      (83,162)      (56,707)

 deferred financing
costs
Loss from               (16,283)      —             (16,283)      (335)
extinguishment of debt
Income from equity and  (404)         5,148         (1,456)       6,424
cost method investments
Other income, net       482           715           939           1,186
 Total other expense (61,670)      (23,457)      (99,962)      (49,432)
 Income from
continuing operations   22,610        48,432        47,974        82,351
before income taxes
INCOME TAX PROVISION    (9,654)       (18,298)      (18,503)      (23,092)
 Income from         12,956        30,134        29,471        59,259
continuing operations
DISCONTINUED
OPERATIONS:
Income (loss) from
discontinued
operations, includes
income

 tax benefit         5,103         (2)           5,458         (53)
(provision) of $4,973,
($67), $4,682 and
($134),

 respectively
NET INCOME              18,059        30,132        34,929        59,206
Net (income) loss
attributable to the     (233)         (72)          (106)         213
noncontrolling
interests
NET INCOME ATTRIBUTABLE
TO SINCLAIR             $          $          $           $   
                        17,826        30,060        34,823       59,419
 BROADCAST GROUP
Dividends declared per  $        $        $         $     
share                   0.15          0.12          0.30         0.24
EARNINGS PER COMMON
SHARE ATTRIBUTABLE TO

 SINCLAIR BROADCAST
GROUP:
Basic earnings per      $        $        $         $     
share from continuing   0.14          0.37         0.34         0.73
operations
Basic earnings per      $        $        $         $     
share from discontinued 0.06            —         0.06          —
operations
Basic earnings per      $        $        $         $     
share                   0.19          0.37         0.40         0.73
Diluted earnings per    $        $        $         $     
share from continuing   0.14          0.37         0.34         0.73
operations
Diluted earnings per    $        $        $         $     
share from discontinued 0.05            —         0.06          —
operations
Diluted earnings per    $        $        $         $     
share                   0.19          0.37         0.40         0.73
Weighted average common 92,083        81,036        86,667        80,944
shares outstanding
Weighted average common
and common equivalent
shares                  93,604        81,294        87,864        81,211

 outstanding
AMOUNTS ATTRIBUTABLE TO
SINCLAIR BROADCAST

 GROUP COMMON
SHAREHOLDERS:
Income from continuing  $          $          $           $  
operations, net of tax  12,723        30,062        29,365       59,472
Loss from discontinued  5,103         (2)           5,458         (53)
operations, net of tax
Net income              $          $          $           $  
                        17,826        30,060        34,823       59,419





Preliminary Unaudited Consolidated Historical Selected Balance Sheet Data:

(In thousands)
                                           June 30,        December 31,

                                           2013            2013
Cash & cash equivalents                    $   550,812  $    22,865
Total current assets                       806,921         304,448
Total long term assets ^                   2,536,472       2,425,249
Total assets                               $  3,343,393   $  2,729,697
Current portion of debt                    21,272          49,326
Total current liabilities                  226,288         307,600
Long term portion of debt                  2,427,900       2,224,053
Total long term liabilities                2,731,097       2,522,150
Total liabilities                          2,957,385       2,829,750
Total stockholders' deficit                386,008         (100,053)
Total liabilities & stockholders' deficit  $  3,343,393  $  2,729,697



Unaudited Consolidated Historical Selected Statement of Cash Flows Data:

(In thousands)
                                            Three Months    Six Months
                                            Ended           Ended
                                            June 30,        June 30,
                                            2013            2013
Net cash flow from operating activities     $     3,668 $      53,370
Net cash flow used in investing activities  (111,694)       (126,636)
Net cash flow from financing activities     633,013         601,213
Net increase in cash & cash equivalents     524,987         527,947
Cash & cash equivalents, beginning of       25,825          22,865
period
Cash & cash equivalents, end of period      $  550,812    550,812

SOURCE Sinclair Broadcast Group, Inc.

Website: http://www.sbgi.net
Contact: David Amy, EVP & Chief Financial Officer, or Lucy Rutishauser,
VP-Corporate Finance & Treasurer, (410) 568-1500
 
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