Sinclair Reports Fourth Quarter 2007 Results

Sinclair Reports Fourth Quarter 2007 Results

Increases Annual Dividend by $0.10 to $0.80 Per Common Share

Renews $150.0 Million Share Repurchase Program

BALTIMORE, Feb. 6 /PRNewswire-FirstCall/ -- Sinclair Broadcast Group, Inc. (NASDAQ:SBGI), the "Company" or "Sinclair," today reported financial results for the three months and twelve months ended December 31, 2007.

Commenting on the fourth quarter 2007, David Smith, President and CEO of Sinclair, stated, "We finished 2007 on a very positive note. Our advertising time sales during the fourth quarter of 2007 were up on a local and national basis, excluding political revenues, while advertising spending by the automotive sector, which has been down for some time, posted a 1.9% increase in the quarter and a 1.2% increase in December. For the year, we grew our cash flow, which is an impressive result considering that 2007 was a non-political election year.

"As we enter 2008, we are eagerly looking forward to the revenue benefits that come with what may be record advertising spending levels in a presidential election year. The Super Bowl, which aired on our 19 FOX affiliates, generated an additional $4.9 million in revenues for us, while our CW and MyNetworkTV stations will likely show growth in their second year as new networks."

Mr. Smith continued, "In light of the momentum we have going into the first quarter, we are very pleased that our Board of Directors has once again decided to increase our annual common stock dividend by $0.10 per share. This brings the annual dividend rate to $0.80 per share. At an approximate $8.90 current stock price, this represents a 9.0% common stock dividend yield, one of the highest, not only in the broadcast sector, but in the country.

"In light of our high dividend yield and the continued disparity between public and private television broadcast trading multiples, and our view that our stock price does not reflect our significant cash flow, the Board of Directors has renewed its authorization for the purchase of up to $150.0 million worth of the Company's Class A common shares, which may be repurchased in the open market or through negotiated private transactions."

Financial Results:

Net broadcast revenues from continuing operations were $165.7 million for the three months ended December 31, 2007, a decrease of 2.1% versus the prior year period result of $169.2 million. Operating income was $47.0 million in the three-month period as compared to $38.2 million in the prior year period, an increase of 23.2%. The Company had net income available to common shareholders of $13.0 million in the three-month period versus net income available to common shareholders of $13.4 million in the prior year period. The Company reported diluted earnings per common share of $0.15 for the three-month period versus diluted earnings per common share of $0.16 in the prior year period.

Net broadcast revenues from continuing operations were $622.6 million for the twelve months ended December 31, 2007, down 0.7% versus the prior year period result of $627.1 million. Operating income was $159.2 million in the twelve-month period, an increase of 0.3% versus the prior year period result of $158.7 million. The Company had net income available to common shareholders of $22.7 million in the twelve-month period, which included a $30.7 million extinguishment of debt charge associated with the partial call of the Company's 8% senior subordinated notes due 2012 and full redemption of the Company's 8.75% senior subordinated notes due 2011. The Company had net income available to common shareholders of $54.0 million in the twelve-month period ended December 31, 2006. Diluted earnings per common share, including the extinguishment of debt charges, were $0.26 in the twelve-month period versus diluted earnings per common share of $0.63 in the prior year period.

Operating Statistics and Income Statement Highlights:

-- Political revenues were $2.2 million in the fourth quarter 2007 versus
$21.1 million in the fourth quarter 2006, which was an election year.

-- Local advertising revenues were up 1.1% in the quarter versus the
fourth quarter 2006, while national advertising revenues declined
18.6% primarily due to lower political revenues in a non-election
year. Excluding political revenues, local advertising revenues were up
8.0% and national advertising revenues were up 2.5%. Advertising
spending by the automotive, medical, services, and telecom categories
were up while retail and movies were down. Automotive, which
represents approximately 21% of time sales was up 1.9% in the quarter.
Local revenues, excluding political revenues, represented 66.2% of
advertising revenues.

-- Time sales on our FOX and CBS stations were up 0.4% and 10.6% in the
quarter, respectively. Stations affiliated with ABC, MyNetworkTV and
NBC were down 18.3%, 10.4% and 22.0%, respectively. Our CW stations
were flat. Excluding political revenues, our ABC stations were up
12.1%, our FOX stations were up 10.8%, our CBS stations were up 7.6%,
and our CW stations were up 2.2%. Our MyNetworkTV and NBC stations
were down 7.0% and 4.9%, respectively.

-- On November 1, 2007, the Company sold the assets of WGGB-TV, its ABC
affiliate in Springfield, Massachusetts, to Gormally Broadcasting LLC
for $21.2 million in cash.

-- In December 2007, the Company expanded the news on WEAR-TV (ABC 3) in
Pensacola, Florida by adding a 1-hour, 4:00pm news program.

-- During the fourth quarter 2007, the Company invested $17.0 million in
various real estate ventures and acquired Alarm Funding for $6.0
million.

-- On February 1, 2008, the Company purchased the non-licensed assets of
KFXA-TV (FOX 28) in Cedar Rapids, Iowa for $17.1 million and obtained
the right to purchase the licensed assets, pending FCC approval, for
$1.9 million. The Company's CBS affiliate in Cedar Rapids, KGAN-TV
(CBS 2), will provide sales and other non-programming related services
to KFXA-TV pursuant to a joint sales agreement.

-- In the first quarter 2008 and through February 1, 2008, the Company
has invested $4.4 million in various real estate ventures and $3.0
million in the Patriot Capital II fund, which provides financing to
small businesses.

Balance Sheet and Cash Flow Highlights:

-- Debt on the balance sheet, net of $21.0 million in cash, was
$1,323.4 million at December 31, 2007 versus net debt of
$1,343.9 million at September 30, 2007.

-- In January 2008, the Company repurchased in the open market
$6.9 million face value of its 8% senior subordinated notes due 2012.

-- As of December 31, 2007, 52.8 million Class A common shares and
34.5 million Class B common shares were outstanding, for a total of
87.3 million common shares outstanding.

-- Capital expenditures in the fourth quarter were $9.3 million.

-- Common stock dividends paid in cash in the fourth quarter were
$13.0 million.

-- Program contract payments for continuing operations were $18.9 million
in the fourth quarter.

Forward-Looking Statements:

The matters discussed in this press release, particularly those in the section labeled "Outlook," include forward-looking statements regarding, among other things, future operating results. When used in this press release, the words "outlook," "intends to," "believes," "anticipates," "expects," "achieves," 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 identified in this release, the impact of changes in national and regional economies, 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 CW Television Network and MyNetworkTV programming, our news share strategy, our local sales initiatives, the execution of retransmission consent agreements and the other risk factors set forth in the Company's most recent reports on Form 10-Q and 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.

Outlook:

In accordance with Regulation FD, Sinclair is providing public dissemination through this press release of its expectations for certain of its first quarter 2008 and full year 2008 financial performance. The Company assumes no obligation to update its expectations. All matters discussed in the "Outlook" section are forward-looking and, as such, persons relying on this information should refer to the "Forward-Looking Statements" section above.

All assumptions and historical periods have been adjusted to exclude WGGB-TV, which was sold November 1, 2007, and which was accounted for under discontinued operations accounting. This Outlook section does not reflect the February 1, 2008 purchase of KFXA-TV and the resulting Joint Sales Agreement.

"We are off to a strong start in 2008 from a revenue, cash flow and programming basis," commented David Amy, EVP and CFO. "Our core time sales are currently reflecting increased spending by the telecommunication and service businesses, while automotive is currently pacing only slightly down to first quarter 2007. Our FOX stations should benefit from highly-rated programs such as American Idol and the Super Bowl, while our MyNetworkTV stations continue to improve. Additionally, we are expecting to generate record levels of political advertising revenues this year, most of which should be realized in the second half of the year. Our revenues from retransmission consent agreements will grow to just over $67.0 million this year from approximately $59.0 million in 2007. We will also benefit from our 2007 refinancings and the lower interest rate environment which should lower our net interest costs by approximately $19.0 million."

-- The Company expects first quarter 2008 station net broadcast revenues
from continuing operations, before barter, to be approximately $160.2
to $162.5 million as compared to first quarter 2007 station net
broadcast revenues, before barter, of $148.3 million. This assumes
$2.2 million in political revenues versus $0.6 million received in the
first quarter last year, $5.0 million in Super Bowl revenues as
compared to $0.1 million last year, and revenues from retransmission
consent agreements of $16.7 million versus $10.9 million in first
quarter last year.

-- The Company expects barter revenue and barter expense each to be
approximately $15.0 million in the first quarter.

-- The Company expects continuing operations station production expenses
and station selling, general and administrative expenses (together,
"television expenses"), before barter expense, and including
stock-based compensation expense, in the quarter to be approximately
$75.0 million, a 8.5% increase from first quarter 2007 television
expenses of $69.2 million. On a full year basis, television expenses
are expected to be approximately $299.8 million, or up a nominal 3.8%,
as compared to 2007 television expenses of $288.7 million. The 2008
television expense forecast includes $0.4 million of stock-based
compensation expense for the quarter and $1.5 million for the year, as
compared to the 2007 actuals of $0.3 and $1.5 million for the quarter
and year, respectively.

-- The Company expects program contract amortization expense to be
approximately $19.7 million in the quarter and $85.1 million for the
year, as compared to the 2007 actuals of $21.3 million and $96.4
million for the quarter and year, respectively.

-- The Company expects program contract payments to be approximately
$21.2 million in the quarter and $82.0 million for the year, as
compared to the 2007 actuals of $20.5 million and $77.7 million for
the quarter and year, respectively.

-- The Company expects corporate overhead, including stock-based
compensation expense, to be approximately $7.1 million in the quarter
and $28.4 million for the year, as compared to the 2007 actuals of
$6.0 million and $24.3 million for the quarter and year, respectively.
The 2008 corporate overhead forecast includes $0.4 million of
stock-based compensation expense for the quarter and $2.2 million for
the year, as compared to the 2007 actuals of $0.3 million and $2.2
million for the quarter and year, respectively.

-- The Company expects other operating division revenues less other
operating division expenses to be approximately $0.4 million in the
first quarter, assuming current equity interests.

-- The Company expects depreciation on property and equipment to be
approximately $11.0 million in the quarter and $44.3 million for the
year, assuming the capital expenditure assumptions below, and as
compared to the 2007 actuals of $10.7 million and $43.1 million for
the quarter and year, respectively.

-- The Company expects amortization of acquired intangibles to be
approximately $4.5 million in the quarter and $18.8 million for the
year, as compared to the 2007 actuals of $4.2 million and $17.6
million for the quarter and year, respectively.

-- The Company expects net interest expense to be approximately $20.2
million in the quarter and $74.5 million for the year, assuming no
changes in the current interest rate yield curve, and changes in debt
levels based on the assumptions discussed in this "Outlook" section.
This is compared to the 2007 actuals of $26.0 million and $93.6
million for the quarter and year, respectively.

-- The Company expects the first quarter effective tax rate for
continuing operations to be approximately 41%, including a current tax
provision from continuing operations of approximately $3.2 million in
the quarter based on the assumptions discussed in this "Outlook"
section. For the year, the effective tax rate on continuing operations
is expected to be approximately 40.5%, including a current tax
provision of $16.8 million.

-- The Company expects dividends paid on the Class A and Class B common
shares to be approximately $15.3 million in the first quarter and
$67.8 million for the year, assuming current shares outstanding and an
$0.80 per share annual dividend rate. This is compared to total
dividends paid in 2007 of $49.5 million. The increased dividend rate
will go into effect with the dividend paid in April 2008.

-- The Company expects to spend approximately $12.3 million in capital
expenditures in the quarter and approximately $33.0 million for the
year. Of this amount, approximately $6.8 million represents projects
that were budgeted in 2007, but will roll into 2008.

Sinclair Conference Call:

The senior management of Sinclair will hold a conference call to discuss its fourth quarter 2007 results on Wednesday, February 6, 2008, at 8:30 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) 407-9205.

About Sinclair:

Sinclair Broadcast Group, Inc., one of the largest and most diversified television broadcasting companies, owns and operates, programs or provides sales services to 58 television stations in 35 markets. Sinclair's television group reaches approximately 22% of U.S. television households and is affiliated with all major networks. Sinclair owns equity interests in various non-broadcast related companies.

Notes:

"Discontinued Operations" accounting has been adopted in the financial statements for all periods presented in this press release. As such, the 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 year amounts have been reclassified to conform to current year GAAP presentation.

Sinclair Broadcast Group, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(in thousands, except per share data)

Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
REVENUES:
Station broadcast
revenues, net of
agency commissions $165,671 $169,212 $622,643 $627,075
Revenues realized from
station barter
arrangements 17,572 16,425 61,790 54,537
Other operating
divisions' revenues 14,826 9,857 33,667 24,610
Total revenues 198,069 195,494 718,100 706,222

OPERATING EXPENSES:
Station production
expenses 39,151 35,938 148,707 144,236
Station selling,
general and
administrative
expenses 38,669 36,241 140,026 137,995
Expenses recognized
from station barter
arrangements 15,667 14,672 55,662 49,358
Amortization of program
contract costs and net
realizable value
adjustments 22,908 25,251 96,436 90,551
Other operating
divisions' expenses 14,171 9,085 33,023 24,193
Depreciation of
property and
equipment 10,487 10,129 43,147 45,319
Corporate general
and administrative
expenses 5,446 5,736 24,334 22,795
Amortization of
definite-lived
intangible assets
and other assets 4,563 4,703 17,595 17,529
Impairment of
intangibles - 15,589 - 15,589
Total operating
expenses 151,062 157,344 558,930 547,565
Operating income 47,007 38,150 159,170 158,657
OTHER INCOME (EXPENSE):
Interest expense
and amortization of
debt discount
and deferred
financing costs (21,700) (28,434) (95,866) (115,217)
Interest income 50 745 2,228 2,008
Gain (loss) from sale
of assets 17 408 (21) 143
Loss from extinguishment
of debt - - (30,716) (904)
Gain from derivative
instruments 1,292 - 2,592 2,907
Income from equity and
cost method investments 782 146 601 6,338
Other income, net 283 711 1,227 1,159
Total other expense (19,276) (26,424) (119,955) (103,566)
Income from continuing
operations before
income taxes 27,731 11,726 39,215 55,091

INCOME TAX PROVISION (16,483) (1,661) (18,800) (6,589)

Income from continuing
operations 11,248 10,065 20,415 48,502
DISCONTINUED OPERATIONS:
Income from discontinued
operations, net of related
income tax benefit of
$445, $2,939, $270 and
$3,121, respectively 677 3,380 1,219 3,701
Gain from discontinued
operations, net of related
income tax provision of
$489, $0, $489, and $885,
respectively 1,065 - 1,065 1,774
NET INCOME $12,990 $13,445 $22,699 $53,977

EARNINGS PER COMMON SHARE:
Basic and diluted earnings
per common share from
continuing operations $0.13 $0.12 $0.23 $0.57
Basic and diluted earnings
per common share from
discontinued operations $0.02 $0.04 $0.03 $0.06
Basic and diluted earnings
per common share $0.15 $0.16 $0.26 $0.63
Weighted average common
shares outstanding 87,187 85,680 86,910 85,680
Weighted average common
and common equivalent
shares outstanding 87,212 85,694 87,015 85,694
Dividends declared per
common share $0.175 $0.125 $0.625 $0.45

Unaudited Consolidated Historical Selected Balance Sheet Data:
(In thousands)

December 31, December 31,
2007 2006

Cash & cash equivalents $20,980 $67,408
Total current assets 238,616 311,118
Total long term assets 1,986,039 1,960,462
Total assets 2,224,655 2,271,580

Current portion of debt 46,789 102,250
Total current liabilities 225,246 284,928
Long term portion of debt 1,297,560 1,311,373
Total long term liabilities 1,743,568 1,719,322
Total liabilities 1,968,814 2,004,250

Minority interest in consolidated
subsidiaries 3,067 685

Total stockholders' equity 252,774 266,645
Total liabilities & stockholders' equity $2,224,655 $2,271,580

Unaudited Consolidated Historical Selected Statement of Cash Flows Data:
(In thousands)

Three Months Twelve Months
Ended Ended
December 31, December 31,
2007 2007

Net cash flow from operating activities $55,088 $146,214
Net cash flow used in investing activities (9,567) (56,373)
Net cash flow used in financing activities (34,984) (136,269)

Net increase (decrease) in cash & cash
equivalents 10,537 (46,428)
Cash & cash equivalents, beginning of
period 10,443 67,408
Cash & cash equivalents, end of period $20,980 $20,980

First Call Analyst:
FCMN Contact:

Source: Sinclair Broadcast Group, Inc.

CONTACT: David Amy, EVP & Chief Financial Officer, or Lucy Rutishauser,
VP-Corporate Finance & Treasurer, +1-410-568-1500, both of Sinclair Broadcast
Group, Inc.

Web site:

http://www.sbgi.net/

Company News On-Call:

http://www.prnewswire.com/comp/110203.html

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