Slide 1: Second Quarter 2023 Conference Call
SECOND QUARTER 2023 CONFERENCE CALL AUGUST 2, 2023 Chris Ripley Lucy Rutishauser Rob Weisbord President & Chief Executive Officer EVP, Chief Financial Officer Chief Operating Officer President of Local Media Published by: 1 Sinclair, Inc.
Slide 2: Non GAAP Financial Measures
NON GAAP FINANCIAL MEASURES This presentation contains certain financial measures of Sinclair, Inc. (the “Company”), including Adjusted EBITDA and Adjusted Free Cash Flow, which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") (collectively, the "non-GAAP fi
Slide 3: Forward Looking Statement
FORWARD LOOKING STATEMENT The matters discussed in this presentation, particularly those in the section labeled "Outlook," include forward-looking statements regarding, among other things, future operating results. When used in this presentation, the words "outlook," "intends to," "believes," "antic
Slide 4: Holding Company Reorganization
HOLDING COMPANY REORGANIZATION • Greater transactional flexibility for value creation 2nd Quarter 2023 Earnings Call Sinclair, Inc. • Simplifies corporate Organizational Chart structure As of June 30, 2023 • Improves transparency of financial results Sinclair, Inc. • Sinclair Broadcast Group (SBG) i
Slide 5: Sinclair Local Media (formerly Broadcast)
Sinclair Local Media (formerly Broadcast) • Remains Sinclair’s core business focused on local media (formerly broadcast) assets 2nd Quarter 2023 Earnings Call • Inclusion of Tennis Channel and Compulse in Ventures allows SBG to be the company’s pure-play local media business unit • Commitment remain
Slide 6: Regulatory Update
Regulatory Update • Senate Judiciary Committee passage of the Journalism Competition and Preservation 2nd Quarter 2023 Earnings Call Act in mid-June • Would allow broadcasters to negotiate directly with Big Tech platforms regarding widespread content distribution • Senator Cantwell expressed public
Slide 7: Sinclair Ventures
Sinclair Ventures 2nd Quarter 2023 Earnings Call • Consists of Tennis Channel, Compulse and Dielectric, as well as investment portfolio of real estate, venture capital, private equity and direct investments. Also holds technical and software services companies, intellectual property related to NextG
Slide 8: Tennis Channel 2Q23 Financial Results
Tennis Channel 2Q23 Financial Results • $60 million in total revenue • $8 million in Adjusted EBITDA • Expect FY2023 revenues in the range of $223- $226 million • Expect FY2023 Adjusted EBITDA in the range of $53-$56 million (1) (1) Includes $14 million of growth initiative Adjusted EBITDA impacts,
Slide 9: Ventures Investment Portfolio Value of $1.25 Billion
VENTURES INVESTMENT PORTFOLIO VALUE OF $1.25 BILLION (1) Private Equity & Strategic 2nd Quarter 2023 Earnings Call Cash Ventures $326 $236 Investments & Cash (June 30, 2023) Valuations Real Estate (in millions) $200 Bally's $181 Direct Investments $303 (1) Total Value includes cash positions and exc
Slide 10: Current Valuation at Significant Discount to Fair Market Value
Current Valuation at Significant Discount to Fair Market Value (1) Local Media Segment (in millions) Trailing 8Q Adjusted EBITDA Annualized (7x) $ 5,285 Local Media Segment Cash $ 368 Implied Local Media Segment Fair Market Value $ 5,653 2nd Quarter 2023 Earnings Call Ventures Segment (in millions)
Slide 11: Advancing NextGen Broadcast
ADVANCING NEXTGEN BROADCAST Data Distribution Core Network • Building and operating a NextGen Broadcast Data Distribution Core Network along with our partners CAST.ERA, SK Telecom and Saankhya Labs • Expect Data Distribution Core Network and Platform to go live in Q1 2024 • Will create an interconne
Slide 12: Advancing NextGen Broadcast (cont.)
ADVANCING NEXTGEN BROADCAST (cont.) Other Advancements • Continue to deploy NextGen Broadcast technology in additional markets • NextGen Broadcast now in in 41 Sinclair markets, covering 69% of TV households in our licensed footprint • By year-end, Sinclair will have deployed NextGen in over half of
Slide 13: Distribution Updates
DISTRIBUTION UPDATES • Announced distribution agreement with Hulu to add carriage of Tennis Channel, T2, 2nd Quarter 2023 Earnings Call Comet and CHARGE! to Hulu + Live TV, beginning in January • Agreement with YouTube TV to add carriage of Tennis Channel, T2, CHARGE! and TBD began on June 1; also e
Slide 14: Value of Local Media
VALUE OF LOCAL MEDIA Local Broadcast News Has 8-12x The Daily Impressions with a Fraction of the Programs of Major Streaming Platforms 2nd Quarter 2023 Earnings Call Source: Television Bureau of Advertising; Nielsen NLTV & NPOWER 2/15/23 Persons 18+ Live+1 Impressions. Local News for the 7 Broadcast
Slide 15: 2Q23 Core Advertising Trends – Local Media
2Q23 CORE ADVERTISING TRENDS – LOCAL MEDIA • Core advertising excluding political fell by less than 1% during 2Q23 on a year-over- 2ND Quarter 2023 Earnings Call year basis • Auto continues to see improving trends, with the category up over 6% year-over-year, on strong industry trends as well as Dri
Slide 16: Political
POLITICAL 23 of 34 Senate races in 2024 in states with Sinclair markets 7 of 11 Gubernatorial races in 2024 in states with Sinclair markets 10 of 12 Presidential battleground states (as defined by 2020 election results of a less than 5% popular vote difference) with Sinclair markets Fundraising and
Slide 17: Media Awards for News Journalism
MEDIA AWARDS FOR NEWS JOURNALISM 2nd Quarter 2023 Earnings Call 223 Total Awards YTD in 2023 14 Owned or Operated content centers take home Edward R. Murrow Awards for Outstanding Journalism & 4 Sports Emmy Award for awards for podcasts totaling Writing – Long Form for 23 awards feature on Michigan-
Slide 18: Tennis Channel 2Q23 average audience up 20% y-o-y
• Despite Wimbledon shifting a week later this year, 2Q23 average audience up 20% y-o-y in total viewers; outpacing all other English-language sports networks • Live coverage of Roland Garros saw total viewership increase by 13% over 2022 levels • Djokovic-Alcaraz Roland Garros semifinal match was t
Slide 19: 2Q23 Media Revenue (Consolidated)
2Q23 MEDIA REVENUE (Consolidated) Media Revenue vs Guidance 2nd Quarter 2023 Earnings Call ($ in millions) $780 $768 $770 $762² $760 $761 $750 $740 $749 $730 $720 $710 $700 2Q 2023 2Q 2023 1 Guidance Actual & PF Results Decreased 8% vs prior year period driven by: Media revenues near high end of gui
Slide 20: 2Q23 Adjusted EBITDA (Consolidated)
2Q23 ADJUSTED EBITDA (Consolidated) Adjusted EBITDA vs Guidance 2nd Quarter 2023 Earnings Call ($ in millions) $115 $110 $109² $104 $105 $107 $100 $95 $90 $85 $84 $80 2Q 2023 2Q 2023 Guidance 1 Actual & PF Results Adj EBITDA decreased 42% vs prior year period driven by: ▪ Lower Media Revenues in a n
Slide 21: 2Q23 Results – Adjusted Free Cash Flow
2Q23 RESULTS – ADJUSTED FREE CASH FLOW (Consolidated) $40 Adjusted Free Cash Flow vs Guidance 2nd Quarter 2023 Earnings Call $35 $30 ($ in millions) $27² $25 $103 -$78 $20 $25 $16 $15 $10 $5 $0 -$6 -$14 $13 $4 -$1 $27 -$5 -$10 2Q 2023 $749 2Q 2023 Guidance 1 Actual & PF Results Adjusted FCF Exceeded
Slide 22: 2Q23 Financial Results
Three months ended June 30, 2023 Corporate Local and 2Q23 ($ in millions) Media Tennis Other Eliminations Consolidated Distribution revenue $ 372 $ 46 $ — $ — $ 418 Advertising revenue 293 (a) 14 6 (4) 309 Other media revenue 34 (b) — — — 34 FINANCIAL Media revenues $ 699 $ 60 $ 6 $ (4) $ 761 Non-me
Slide 23: 2Q23 Balance Sheet (Consolidated)
2Q23 BALANCE SHEET (Consolidated) • Total debt at the end of the second DEBT MATURITY SCHEDULE quarter was $4.2 billion 2nd Quarter 2023 Earnings Call • Sinclair Television Group’s (STG) first lien $1,400.0 indebtedness ratio was 4.1x • STG Total Leverage was 5.1x $1,200.0 • STG Interest Coverage wa
Slide 24: Third Quarter 2023 Guidance
THIRD QUARTER 2023 GUIDANCE MEDIA REVENUE 3Q 2023 media revenue range of $733M to $752M, down 10% to Corporate 12%, vs. pro forma 3Q 2022 of $832M: For the three months ending September and 30, 2023 ($ in millions) Local Media Tennis Other Elimination Consolidated Advertising revenue $281 to $295 $9
Slide 25: Full-year 2023 Guidance (Consolidated)
Full-year 2023 Guidance (Consolidated) For the twelve months ending December 31, 2023 ($ in millions) Consolidated Expense Highlights: 2nd Quarter 2023 Earnings Call Media programming & production expenses and media selling, general and administrative expenses $2,377 to $2,383 Non-media expenses 68
Slide 26: Key Takeaways
KEY TAKEAWAYS • 2023 expected to be a year of investments focusing on technology, NextGen Broadcasting, Cloud transformation, 2nd Quarter 2023 Earnings Call and sales platforms • Sinclair reorganization to provide greater flexibility for creating value within the company • Management’s estimate of S