Sinclair Broadcast Group(US:SBGI)2024-11-08 20:11Financial Performance - In Q3 2024, Sinclair's total revenues increased to $917 million, up 19.5% from $767 million in Q3 2023[278] - Media revenues rose to $845 million in Q3 2024, a 21% increase compared to $697 million in Q3 2023[280] - Political advertising revenue surged by $127 million in Q3 2024, reflecting a significant increase due to the presidential election year[283] - Operating income for Q3 2024 was $179 million, compared to $37 million in Q3 2023, marking a substantial improvement[278] - Net income attributable to Sinclair reached $94 million in Q3 2024, a recovery from a loss of $46 million in Q3 2023[278] - Media revenues for the three months ended September 30, 2024, increased to $845 million, up 21.3% from $697 million in the same period of 2023[307] - Total revenues for the nine months ended September 30, 2024, were $2,322 million, compared to $2,213 million for the same period in 2023, reflecting a growth of 4.9%[307] - Operating income for the three months ended September 30, 2024, was $182 million, significantly higher than $44 million in the same period of 2023[307] - Net income attributable to SBG for the three months ended September 30, 2024, was $80 million, compared to a loss of $22 million in the same period of 2023[307] Revenue Breakdown - Distribution revenue grew by $18 million or 5% in Q3 2024, driven by contractual rate increases despite a decrease in subscribers[281] - Distribution revenue increased by $2 million (4%) and $14 million (10%) for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[292] - Core advertising revenue decreased by $1 million (11%) for the three months ended September 30, 2024, while remaining flat for the nine months compared to the same period in 2023[293] - Media programming and production expenses increased by $13 million (approximately 8.5%) and $38 million (approximately 10.5%) for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023[286] - Media selling, general and administrative expenses rose by $24 million (approximately 10.5%) for the three months and $35 million (approximately 11.5%) for the nine months ended September 30, 2024, compared to the same periods in 2023[287] - Non-media revenues increased by $3 million (approximately 14%) for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to an increase in broadcast equipment sales[298] Cash Flow and Capital Management - As of September 30, 2024, SBG had net working capital of approximately $238 million, including $202 million in cash and cash equivalents[317] - Sinclair anticipates that existing cash and cash equivalents and cash flow from operations will be sufficient to meet debt service obligations and working capital needs for the next twelve months[321] - Net cash flows from Sinclair's operating activities increased to $226 million for the three months ended September 30, 2024, compared to $50 million in the same period in 2023, driven by higher cash collections related to political revenue and Distributors[325] - For the nine months ended September 30, 2024, net cash flows used in operating activities increased to $(86) million, primarily due to the DSG settlement payment and increased production costs, despite higher cash collections[326] - Net cash flows used in financing activities decreased to $(74) million for the three months ended September 30, 2024, compared to $(111) million in the same period in 2023, primarily due to reduced debt repayment[329] - For the nine months ended September 30, 2024, net cash flows used in financing activities decreased to $(11) million, influenced by the repurchase of outstanding Common Stock and a decrease in debt repayment[330] Corporate Actions and Developments - Sinclair expanded its podcast division with new sports programming in August and September 2024[268] - The company launched the Rip City Television Network in October 2024, enhancing its market presence in the Pacific Northwest[268] - Sinclair declared a quarterly dividend of $0.25 per share in August and November 2024[273] - Sinclair declared a quarterly dividend of $0.25 per share in August 2024 and November 2024, with future dividends subject to the Board's discretion based on various financial factors[331] - Sinclair agreed to a global settlement involving a cash payment of $495 million related to litigation, with $445 million paid in the second quarter of 2024[322] Tax and Accounting - The effective tax rate for the three months ended September 30, 2024, was a provision of 23.0%, compared to a benefit of 20.7% during the same period in 2023[302] - The effective tax rate for the nine months ended September 30, 2024, was a provision of 17.4%, compared to a benefit of 134.3% during the same period in 2023[303] - The effective tax rate for the three months ended September 30, 2024, was a provision of 22.8%, compared to a benefit of 18.9% in the same period of 2023[313] - There were no changes to critical accounting policies and estimates from those disclosed in the previous annual report[339] Investments and Equity - Income from equity method investments recognized a gain of $93 million during the nine months ended September 30, 2024, compared to a gain of $33 million in the same period of 2023[300] - Sinclair and SBG increased estimated contractual amounts owed for network programming rights by $1,592 million, with terms extending into 2027[320]