Sinclair Broadcast Group(US:SBGI)2023-05-10 19:10Financial Performance - For the three months ended March 31, 2023, total revenues decreased to $773 million from $1,288 million in the same period of 2022, representing a decline of approximately 40%[156] - Media revenues for the broadcast segment fell to $676 million, down 6% from $721 million in the prior year[157] - Operating income for the quarter was $21 million, a significant decrease from $3,466 million in the same quarter of 2022[156] - Net income attributable to Sinclair Broadcast Group was $185 million, compared to $2,587 million in the same period last year, marking a decline of approximately 93%[156] - Distribution revenue decreased by $12 million for the three months ended March 31, 2023, compared to the same period in 2022, primarily due to a decrease in subscribers[159] - Advertising revenue decreased by $14 million for the three months ended March 31, 2023, compared to the same period in 2022, mainly due to a decrease in political advertising revenue[160] - Other media revenues decreased by $19 million for the three months ended March 31, 2023, compared to the same period in 2022, primarily due to a decrease in revenue from the local sports segment[162] - Media revenues decreased by $24 million for the three months ended March 31, 2023, compared to the same period in 2022, primarily due to a decrease in advertising revenue related to owned networks[174] Expenses and Costs - Media programming and production expenses increased by $8 million for the three months ended March 31, 2023, compared to the same period in 2022, primarily due to a $6 million increase in fees pursuant to network affiliation agreements[163] - Corporate general and administrative expenses increased by $11 million for the three months ended March 31, 2023, compared to the same period in 2022, primarily due to a $4 million increase in employee compensation costs[178] - The company experienced an increase in production and overhead costs, impacting cash flows from operating activities[190] Cash Flow and Liquidity - Net cash flows from operating activities decreased to $62 million in Q1 2023 from $70 million in Q1 2022, primarily due to decreased cash collections and increased production costs[189] - Net cash flows used in investing activities decreased to $(44) million in Q1 2023 from $(266) million in Q1 2022, mainly due to the removal of DSIH's cash balance following deconsolidation[189] - Net cash flows used in financing activities increased to $(279) million in Q1 2023 from $(102) million in Q1 2022, primarily due to the repurchase of Redeemable Subsidiary Preferred Equity[192] - Cash flows from distributions decreased significantly, with distributions from investments at $8 million in Q1 2023 compared to $70 million in Q1 2022[189] - The company anticipates sufficient liquidity for the next twelve months, relying on cash, cash equivalents, and borrowing capacity under the Bank Credit Agreement[188] - The company may consider issuing long-term debt or equity to meet long-term liquidity needs, although there are no assurances regarding the availability of financing[188] Shareholder Actions - The company repurchased approximately 3.6 million shares of Class A Common Stock for $53 million during the three months ended March 31, 2023, and an additional 5.2 million shares for $99 million since that date[153] - The company declared a quarterly cash dividend of $0.25 per share in February and May 2023[153] - The company declared a quarterly dividend of $0.25 per share in February and May 2023, with future dividends subject to the Board's discretion[193] Investments and Agreements - In February 2023, the company purchased the remaining 175,000 units of Redeemable Subsidiary Preferred Equity for $190 million, representing 95% of the remaining unreturned capital contribution[153] - The company entered into a distribution agreement with YouTube TV to add Tennis Channel and other networks, effective June 1, 2023[150] - The company has deployed NextGen TV, powered by ATSC 3.0, in 39 markets as of April 2023[151] - Income from equity method investments included a gain of $33 million on the sale of two real estate investments during the three months ended March 31, 2023[176] Tax and Interest - The effective tax rate for the three months ended March 31, 2023, was a benefit of 1870.7%, compared to a provision of 20.8% during the same period in 2022[182] - Interest expense decreased by $41 million for the three months ended March 31, 2023, compared to the same period in 2022, primarily due to a decrease in DSG interest expense of $72 million[180] Other Developments - The company announced that its multicast networks COMET, CHARGE!, and TBD will add 2.4 million households, increasing total new coverage to nearly 17 million households since the start of 2022[150] - The company entered into an interest rate swap with a notional amount of $600 million at a fixed interest rate of 3.9%, effective February 7, 2023[195] - The company reported a deconsolidation impact that affected both cash flows and financial performance metrics[191]