David B. Amy - Executive Vice President and Chief Operating Officer Lucy A. Rutishauser - Senior Vice President-Corporate Finance and Treasurer Christopher Ripley - Chief Financial Officer Steven M. Marks - Co-Chief Operating Officer & Vice President, Sinclair Television Group, Inc. Stephen J.

Pruett - Vice President, Co-Chief Operating Officer, Sinclair Television Group, Inc..

Aaron L. Watts - Deutsche Bank Securities, Inc. James G. Dix - Wedbush Securities, Inc. Marci L. Ryvicker - Wells Fargo Securities LLC Dan L. Kurnos - The Benchmark Co. LLC Kyle Evans - Stephens, Inc. Leo Kulp - RBC Capital Markets LLC Tracy Young - Evercore ISI.

Greetings and welcome to Sinclair Broadcast Group First Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

I would now like to turn the conference over to David Amy, Executive Vice President and Chief Operating Officer. Thank you. Please go ahead..

Thank you, operator. Good morning, everyone. Participating on the call with me today are David Smith, President and CEO; Steve Marks and Steve Pruett, our Co-Chief Operating Officers of Sinclair's Television Group; Chris Ripley, Chief Financial Officer; and Lucy Rutishauser, Senior Vice President, Corporate Finance and Treasurer.

Before we begin, Lucy will make our forward-looking statement disclaimer..

Thank you, Dave. Good morning, everyone. Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties.

Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most recent reports, as filed with the SEC, and included in our first quarter earnings release.

The company undertakes no obligation to update these forward-looking statements. The company uses its website as a key source of company information, which can be accessed at www.sbgi.net. In accordance with Reg FD, this call is being made available to the public.

A webcast replay will be available on our website later today and will remain available until our next quarterly earnings release. Included on the call will be a discussion of non-GAAP financial measures, specifically television broadcast cash flow, EBITDA, free cash flow and leverage.

These metrics are not meant to replace GAAP measurements, but are provided as supplemental detail to assist the public in their analysis and valuation of our company. A reconciliation of the non-GAAP financial measures to the GAAP measures in our financial statements is provided on our website under Investors' Reports and Filings..

Thanks, Lucy. Before we go through the results, let me review some of the more meaningful activities that have taken place since our last earnings call.

On the acquisition front, we closed on the Tennis Channel acquisition on March 1 for $350 million, or $290 million net of the present value of their NOLs; and on May 1, closed on the previously announced acquisition of the FOX and ABC stations in Lincoln, Nebraska for $31 million.

Upon closing, we have 172 primary stations in 81 markets, broadcasting 478 channels pro forma for pending transactions. On the content side, American Sports Network agreed to broadcast certain of the ARCA Racing Series events beginning in 2016, and Ring of Honor will be carried weekly on Canada's Fight Network.

Meanwhile, COMET has added syndication deals in multiple cities, adding 6 million households during the quarter, bringing the total household reach to 76 million or almost 70% of the country. We also expanded the local news in San Antonio and West Palm Beach in the first quarter.

And over the last 18 months, in preparation for this political election year, we have added 33 hours per week of local news. We're also proud to report that our local news have already received 79 news awards in 2016.

Following a successful NAB show, we plan to launch our Programmatic initiatives in Q4 of this year in partnership with other broadcasters and major advertising agencies. Last, but not least, much progress has been made on the ATSC 3.0 front. We just came back from a very successful NAB show featuring the Next Gen platform.

And some of you on the call today had the opportunity to stop by our NAB demo this week for a firsthand glimpse of Next Gen's extraordinary capabilities, consumer experience and potential business models.

Our ONE Media joint venture also began broadcasting using the first-ever Next Gen Single Frequency Network from experimental facilities covering the Washington D.C. and Baltimore markets.

And with the recent vote by the ATSC approving the Bootstrap as a Full Standard and the FCC's issuance of a request for public comment on us being an optional standard, the hard work of all the individuals who are laying the groundwork for Next Gen is becoming reality.

In anticipation of Next Gen, we announced the formation of a new subsidiary; ONE Media 3.0, which will focus on building a national footprint through local SFN's network infrastructure and data measurement. This is a historic moment for broadcast television, and we are now one step closer to a platform that will revolutionize our industry.

Chris will now take you through the first quarter results..

Thank you, David. For the first quarter, and adjusting for timing of transactions, we exceeded our guidance in all key financial metrics of revenue, EBITDA and free cash flow. Media revenues for the first quarter were $531 million, an increase of 14% or $67 million higher than the first quarter 2015, and higher than our guidance.

On a pro forma basis, first quarter 2016 media revenues were 11% higher on a pro forma first quarter 2015, primarily due to the increase in political advertising, retransmission fees and digital revenues.

Media operating expenses in the first quarter, defined as media production and media SG&A expenses before barter, were $331 million, up 21% from first quarter last year, and up 18% on a pro forma basis.

As discussed on last quarter's call, the increase was primarily due to higher reverse retrans fees, production cost on over 100 more ASN games produced, a music license settlement received in Q1 2015 that reduced our music license fees, and start-up costs related to our revenue generating initiatives COMET, Circa and Programmatic, and news expansions as well.

Corporate overhead for the quarter was $21 million, $5 million higher than the same period last year, primarily due to higher compensation, employee benefit, acquisition and consulting costs, offset by a lower stock-based compensation cost.

Research and development costs related to ONE Media's work on the Next Gen broadcast platform were $1 million in the first quarter. EBITDA was $163 million in the quarter, an increase of 2% or $3 million higher than the same period last year, and $4 million higher than our guidance. EBITDA margin on total revenues was 28% for the quarter.

Net interest expense for the quarter was $49 million, up $2 million versus first quarter last year on additional acquisition volumes, and our weighted average cost of debt for the company is now approximately 4.7%. Diluted earnings per share on 96 million weighted average common shares was $0.25 in the quarter.

We generated $88 million of free cash flow in the quarter and converted 51% of our EBITDA into free cash during the trailing 12 months ended March 31, 2016. Our 2016-2017 free cash flow yield is approximately 16% and our dividend yield is over 2% based on our current share price.

Now, Lucy will take you through the balance sheet and cash flow highlights..

Thank you, Chris. Capital expenditures in the first quarter were $26 million and cash programming payments were $29 million. Cash taxes paid in the first quarter were $3 million, and for 2016, we expect to pay approximately 70% to 75% of the tax provision in cash.

At March 31, total debt was $4.187 billion, including $124 million of non-guaranteed and VIE debt. In March, we completed a private offering of $350 million aggregate principle amount of senior unsecured notes due 2026.

The notes were priced at 100% of their par value and bear interest at a rate of 5.875% per year, and that's payable semi-annually on March 15 and September 15, beginning with September 15, 2016. We ended the quarter with $142 million of cash on hand and $483 million available on our revolver for total liquidity of $625 million.

During the quarter, we repaid $17 million of scheduled debt amortization and $16 million in dividends. For the year, we expect $144 million of the free cash flow to be used for scheduled debt repayment and quarterly dividends.

Total net leverage through the holding company at quarter-end was five times, which excludes the VIE and non-guarantor debt and is net of cash. The first lien indebtedness ratio was 2.1 times on a covenant of four times.

Our 2015-2016 two-year average net leverage is expected to decline significantly to approximately 3.9 times to 4 times by year-end, assuming our current portfolio and pending transactions. Now David Amy will now take you through our operating performance..

Thanks again, Lucy. For the first quarter, political revenues more than exceeded our expectations. At $24 million, this not only beat our guidance of $16 million to $18 million, but was almost 2.5 times more than the pro forma $10 million generated in the first quarter of 2012.

As we mentioned, we have been making investments in anticipation of this presidential election year, and we are seeing the positive results. Our share of political dollars grew by over 100 basis points from Q1 of 2012 to Q1 of 2016 on a pro forma comparable basis.

Core advertising revenues, excluding political, on a pro forma basis also grew and were up 2% in the first quarter, in line with our guidance, while pro-forma digital revenues grew 27% in the first quarter. Now turning to our outlook for 2016. For second quarter of 2016, we're expecting media revenues to be approximately $598 million to $603 million.

That's up 19% to 20%, as compared to second quarter of last year. With fewer primaries in the second quarter and a larger March than expected, political revenues in the second quarter are expected to be $15 million to $17 million.

Including the Lincoln stations, second quarter core advertising revenue growth on a pro forma basis, excluding political, are estimated to be up low-single-digit percent versus the same period last year. Now on the expense side.

We are forecasting media expenses in the second quarter to be approximately $366 million versus $285 million in the second quarter of 2015 on new acquisitions and investment initiatives. For the year, pro forma 2016 media expenses are forecasted at $1.454 billion versus 2015 pro forma media expenses of $1.258 billion, and that's a 16% increase.

But when excluding reverse retrans and investments in future revenue generating initiatives, normal operating expenses are expected to be up 5% for the year, primarily on high sales commissions on the higher revenue and compensation. For the year, corporate overhead is estimated to be up 2%.

Excluding stock-based compensation, increases are primarily due to higher compensation and benefit costs, and legal and consulting fees related to acquisitions and the spectrum auction. EBITDA in the second quarter is expected to be approximately $198 million to $203 million.

That's up 7% to 9% versus as-reported second quarter 2015 EBITDA of $185 million. Free cash flow in the second quarter is expected to be approximately $92 million to $96 million. We are reconfirming our combined free cash flow guidance for 2016 and 2017 of approximately $975 million to $1.50 billion. That's averaging $5.33 per share per year.

Given the magnitude of the free cash flow and our continued confidence in the core business, our board increased our quarterly dividend by 9% to $0.18 per share or $0.72 annualized and representing an approximate 13% payout of our 2016-2017 average free cash flow. And with that, I would like to open it up for questions..

Thank you. We will now be conducting a question-and-answer session. Our first question comes from the line of Aaron Watts with Deutsche Bank. Please go ahead with your questions..

Thanks. Lucy, one clarifier question first. I think you said, by the end of the year, you expect leverage on a two-year basis to be 3.9 times to 4 times.

What's the leverage at 3.31 times that compares to that, the two-year average?.

At 3.31 times, that would be about 4.75 times, so about 4.75 times on the rolling two-year basis..

Okay. Great.

And I'm sorry if I missed this in your comments, but can you talk about how the auto category trended in the first quarter and also maybe how it's looking in the second quarter? And whether you're seeing any pressure kind of on the local regional dealers and their television spending, given some directors, some of the OEMs on potentially directing some of the budgets towards digital?.

A very healthy first quarter, Aaron, on automotive, which was great to see at the start of the year roll off. And interestingly enough, our pace for second quarter on automotive is better than first quarter. So, for this category, we have and we're off to a great start.

First quarter obviously in the books and on the plus side of that category, and we will be on the plus side of that category in second quarter as well.

In terms of the digital, it's important to point out that we sell digital as well to automotive and we have products that we're pitching specifically to local dealers on digital with a great deal of success. And Steve could expand on that a little bit..

Well, it's a good question. And I know that people look at this money moving around in the Tier 2. This is a fairly common occurrence. It happens year-to-year. Money gets moved around. Manufacturers make dictates of certain kind. However, dealers ultimately make their own decisions about how they spend their money.

We're deeply involved at the dealer-owner and GM level and understand all their factory co-op. We do play for factory co-op to ours with our digital products, as Steve mentioned, plus we've become very insightful as to how the dealer marketing chain works and have built products that compete in that chain.

So we're very comfortable at this point with where that money is going..

Okay. Great. That's helpful. And one last one for me. I just wanted to clarify that when we read about Hulu or other parties of the like launching skinny bundles or plans to do so, that Sinclair can benefit from that in so much as those parties have to come to you to reach an agreement on streaming into homes within your kind of markets? Thanks..

Sure. So we view the Hulu announcement as no different than any of these other over-the-top distributors that have come out recently, like a Sony deal for instance. The more distributors there are, the better from our perspective. It creates more competition for our content.

And at the end of the day, if our content is to be on their platform, we have to read through it, we have to be compensated for it. Nothing really changes there from the way business is always operated. So, from our perspective, longer-term more distributors there are, the better..

Okay. Great. Thank you..

Our next question comes from the line of James Dix with Wedbush Securities. Please go ahead with your questions..

Good morning, guys.

Just wanted to – if you could refresh a recollection at kind of the upcoming case of any retransmission negotiations you have this year, and likewise, also on the affiliation side, what the cadence is of those maybe this year or next year? And then, secondly, on the advertising side, if you could just provide a little more color on where you stand with your local Programmatic ad selling? I think you've talked about ramping that up.

I just want to get a sense as to where that stands and how much of an impact we could see over the next year or so? Thanks..

Yeah. James, I'll take the first one on the retrans and the network affiliation agreement. So we've done a lot this year already on retrans. Really all we have left is Comcast. That comes up at the end of July. And then we are still in negotiation, which is ordinary course of business, with NBC and FOX on a handful of the FOX stations and about 12 NBCs.

Those came up at the end of 2015, again, still in negotiations with them but ordinary course of business. And then next, at the end of 2017, we have the rest of our FOX stations come up and a handful of ABCs and NBCs. So, on the network affiliation side, we're in very good shape as far as any kind of new agreements coming up here in the short-term.

And on the retrans side, most of the deals have already been done. Comcast is left for this year, and then really the next group starts up again in 2018. And just to reconfirm our guidance we gave you last quarter, we're reconfirming, so in 2016 we expect our net retrans to grow by high-teen percents.

In 2017, we expect net retrans to grow by low-teen percents, and in 2018 by single-digit percents. And again, that's really just a function of timing of the contracts..

So let me – I'll let Steve Marks speak to some of the interest we're getting around advertisers and partners for our Programmatic initiatives, but just to level-set what's going on there. We have, as of last year and continuing into this year, we do sell our stations on a network basis, just our stations alone. We don't do that programmatically.

But we've formed a group called the Audience Network which sells on a network basis our stations, which is a new pool of money for us, and that was why we started that. But the natural progression from there would start a Programmatic initiative, which was done in conjunction with Visible World, which is what we term Oxnix (21:18).

The technology for that is in beta; it's up and running on both of our traffic platforms and proving the concept that you can automate purchases. And ongoing discussions are being had with other partners, other broadcasters to join our footprint, so that we can address a larger national buy.

And we expect that launch in Q4 of 2016, as David said earlier in the call. And maybe Steve and sort of you too... (21:49).

Yeah. Thank you. I think you explained it terrific. I think the ultimate goal of all of this is to create demand on our inventory. As you know, throughout the last few years we've been following the dollars into technology and the digital space. Programmatic is technology, and as we go forward, it's important to have scale and leverage.

And when we marry up with other broadcasters, the viewership that we garner when we cover upwards of 70% of the country puts our comparisons in terms of viewers literally up against anything you want to compare it against.

When we cover over 70% of the country, we not only compare favorably with cable networks in every single time period, when we combine forces with other broadcasters, our viewership dwarfs not only cable networks but in a lot of instances the four traditional major networks.

So, going forward, this Oxnix (22:53) product not only has the ability to increase and leverage viewership. The future of Oxnix (23:01) is also overlaying data every time we sell a spot. So, in the future, there's going to be less waste for the advertiser. Sinclair and its partners are going to have a product that will be second to none.

And it will literally put us in the network business in terms of viewership. And what's unique about this -- it's a network of viewers, not necessarily a specific program or a specific network. It's a network of viewers..

And that's been – that theme has resonated well. The other piece of the puzzle than the automation is also, Marc (23:43), once you have the automation, once you have the Programmatic, then you can market to brands and create local activation opportunities.

So, just the baseline of Audience Net has been critical in moving us up the food chain to call on advertisers at a higher level..

I think the most important point to really bear this out -- we're playing in a pool of money that we presently have not played in before. Our Audience Network product is geared to go specifically after cable network dollars, and that's exactly what we're doing and we're doing it with a great deal of success.

Oxnix (24:22) is Audience Network on steroids. Same theory, but more leverage and more coverage..

Great. Just one follow-up. Is there any way of indicating how much of your inventory or advertising now is being sold through these types of methods? I know there's different technologies and approaches you're talking about here, but just any way of indicating kind of what traction you've already had.

Yeah. We specifically have carved out less than 5% of our inventory on the Audience Network side, and we will be testing what this threshold is on the Oxnix (25:04) side. But clearly when you take a look at what we're carving out, we don't sell every single spot. We wish we did, but we don't. So 3% of our inventory is absolutely minimal.

When you take a look at the success of what we're doing with Audience Network, another cheap point to point out is that it's our most profitable way of making a sale. So, when we make a sale with Audience Network, we bring more dollars to the bottom line..

Great. Thanks very much..

Thank you..

Our next question comes from the line of Marci Ryvicker with Wells Fargo. Please go ahead with your questions..

Thanks. I have a couple.

The first, when you gave the Q1 core ex-political plus 2% and the Q2 pace of low-single digits, is that just station advertising or do you have Tennis in there, COMET, digital, et cetera?.

Yeah. So, that is our advertising, so whether the advertising is coming on the TV side or on the digital side..

Okay.

And Tennis Channel – but the Tennis Channel affiliate piece are not in there, correct?.

Not affiliates, no..

Okay..

Correct..

Can you give the Tennis Channel contribution in the first quarter?.

It was pretty small, Marci, because we only had it for one month..

Okay..

And I think the important thing here really to focus on, as Chris mentioned, that if you look at the midpoint of our revenue guidance that we gave for Q1, we ended up beating that midpoint, even excluding any of the transactions, Tennis, Lincoln, the South Bend (26:55).

Taking those all out, we beat the midpoint by about $8 million, which is pretty much the political bid number..

Okay. And then, the last question, the full-year expense guide went up relative to what was put in the Q4 front.

Can you talk about the drivers of the increase since last quarter?.

Yeah. So, and I think a lot of people that are flashing out this morning hit this right, got this story correct. So, last quarter, our full-year media expenses were $1.434 billion. We're now guiding to on an as-reported basis to $1.438 billion.

That $4 million increase is really reflective of $5 million of incremental transactions, the timing of the transactions, and a $1 million bid in Q1. So the takeaway here is that our full-year expense guidance has not changed except for the $1 million bid in Q1 and then timing of the transactions versus how we had guided before..

Okay. Thank you..

Our next question comes from the line of Dan Kurnos with Benchmark. Please proceed with your questions..

Great. Thanks. Good morning. Just a few for me here on – let's splitting out non-political and political here for a second, there was some additional upside in Q1 even taking out the political bid here. And obviously I think, well, some of that came from digital and maybe a little bit from retrans versus expectations.

Just curious if you could talk about some of the puts and takes in digital that's driving the strength there? And I think you alluded to some of that before.

And then, secondarily, on the 2Q guide, if you assume – if you take out the fact that political is flat essentially quarter-over-quarter, which – it was in line with what everybody else has been saying, just getting to the full-year numbers and giving people confidence, especially now that Cruz has dropped out of the race, so you possibly lose some anti-Trump dollars.

Just how you're thinking about a full-year political number? Thanks..

Look, after the first quarter, we blew it out politically, which is great. When you take a look at where we're going to be for the first six months, first six months of 2012 represented roughly about 15% to 16% of our total political spend.

When you take that math into account, we're very comfortable with how we're pacing on, where we'd see the final numbers for 2016. I think we're in the $270 million to $280 million range, somewhere in that neighborhood, which will be a healthy increase of where we hold out that with 2012.

As far as Trump is concerned, he represented about 8% of our presidential spending so far. And when you take into account all the candidates that we're running in first quarter, I don't think that's really a bad number.

And what's interesting as well, the swing states that we enjoyed being in are obviously still there, but now we've entered into the New York equation where New York was never really up for grants as a state and always goes democratic. It will be interesting to see how that state goes now.

And the reason why I bring it up is because Sinclair has a big footprint in New York City. We're in Syracuse, Rochester, Buffalo, Albany. And that state, previously as I mentioned, has always been democratic. That could bode well for us in the upcoming election, specifically with Trump.

So, that's a market to take a look at and maybe beneficial for Sinclair in particular..

On the digital, there's a lot of things that's coming together for our digital group. The full implementation of our new CMS had created some more efficient model and actually created more sellable inventory. We're maturing as digital sellers. We're improving our training in digital selling.

Also, we have developed competitive digital marketing programs for SMBs that allow us to compete on a slightly different space than display. So there's just a continuous improvement of our digital group and a lot of that is due to the investment in Seattle and the leadership in that group..

Great. Thanks. And then just one more if I could.

Just kind of as we think about balancing investment in content with future revenue streams here, if we could just get sort of an update if there is one on progress of ASN towards profitability? And certainly how you're thinking about in this landscape right now, given some of the upside you recorded of putting it back in near term? Obviously, we have your expense guidance, but just how you think about that balance of reinvesting in content over the next year or two years? Thanks..

Sure. So ASN is progressing. It just went 24/7 back in January and it's having a number of distributor conversations as we speak, not only on the MVPD side, but also with other broadcasters for multi-channel or multi-cast distribution. It is a lengthy process to ramp up a new channel like that. So we need to give enough time to mature.

And you know what, as we've stated before, for us it was a three-year process to get to path of profitability on ASN. So we're about a-year-and-a-half in and we'll keep our eye on it and manage it closely. And so far so good, I guess, on ASN..

Okay. Great. Thanks..

Thank you..

Our next questions come from the line of Kyle Evans with Stephens. Please go ahead with your questions..

Hi. Thanks. I've got three. What does the plus 2% in core look like, excluding digital? I know you guys have re-described core, but if you have that, that'd be great..

Actually in first quarter, I was just looking at this, interestingly enough out of our top 10 categories, seven of them are plus, which is really strong for first quarter. So there's no doubt that our first quarter was extremely strong on core, much more so than we've seen recently. So, off to a good start, as I mentioned earlier.

I guess, 7 of the top 10 categories up, that's a good thing..

Okay.

I know you're not going to dive down into retrans revenue or sub-pricing, but could you provide any high level commentary on the unit volume side of that equation, where I think sub-count has been historically flat to up for you and all your peers?.

On unit volumes, I assume you're talking about subs..

Yes, I am..

So, our subs remain stable. And so, from that perspective, units are essentially static, and then rate keeps going up..

And you mentioned that 7 of the 10 categories are up. Last quarter, Steve, you commented that 13 categories of 15 categories were pacing up in 1Q 2016.

How did that hold over the full quarter? And how is that 13 categories out of 15 categories comp to 2Q pacing?.

Yeah. We didn't have as many up in first quarter, but we ramped up better on the core than we did on the quarter that you're referring to in terms of the (35:04). So, top 10 drove us. Second quarter is pretty similar. As I mentioned, automotive in particular is stronger in second quarter than first quarter.

Some of the other top 10 categories not pacing quite as good as first quarter, but awfully close..

Thank you..

Thank you..

Thank you Our next question comes from the line of Leo Kulp with RBC. Please go ahead with your questions..

Good morning. Thanks for taking the questions. I just had two.

First, given the strong growth in digital over the past several years, can you provide some color around what percentage of your total revenue is now coming from digital? And then second, on the pro forma 2012 political, can you provide some color around what percentage of that came from presidential spending?.

Yeah. So, on the second one, I believe on a pro forma basis that we did about 50% to 60% from presidential spending in 2012. And right now, presidential money through our current pace for the first part of this year is running more about 80%..

And on digital, it's still a relatively small part of our business. We don't disclose specific percentage. And the reason we don't do that is it really – the business is driven on a same base of assets and sold to similar customers.

And so, from our perspective, parsing it between the two divisions is artificial and would just lead to concludings which we don't think are productive..

Got it. Thank you. And just one more if I could.

Could you provide any updates on key upcoming ATSC 3 milestones?.

Yeah. I think probably the biggest milestone is that the National Association of Broadcasters filed a petition along with the industry in general that was supported by the consumer electronics manufacturers and essentially everybody on a global basis. The FCC at the (37:27) of the NAB said they were going to put this on a short leash.

They've asked for public comments by the end of this month. Once they have those comments, then NPRM will likely go out. That's kind of the normal protocol here. And we think it's reasonable that sometime early first quarter or possibly next year that the FCC will grant the authority for the industry to move in its discretion.

So we view this just incredibly positive sign that the industry is ready to go, and people should start thinking about this as opportunities that are going to roll off the back of ATSC 3.0 over the next 5 years to 10 years, just enormous it'll be a life altering event for this industry..

Got it. Thank you very much..

Our next question is coming from the line of Tracy Young with Evercore ISI. Please go ahead with your questions..

Yeah. Thanks, David. I did have a question also on the ATSC. Is there any timing that they have regarding that NPRM? And then also in terms of the spectrum auction, obviously you can't talk about your efforts on that front, but could you talk about the possibilities for proceeds and what you might do with those following the auction? Thanks..

Sure. So, on timing for the NPRM, we expect that to conclude in the first part of next year, and allow broadcasters to move forward with the voluntary deployment. And on the standard itself, we expect that to be done by the end of the year.

We did it fully as of right now and Bootstrap has been finalized, but the rest of it should be maybe by the end of the year and the FCC part beginning of next year..

So, Tracy, I think the NPRM should be out for at least – I mean I think, remember, this is just a procedural kind of process they go through where they ask for comments and then they issue an NPRM, and everybody files their views of the world and then they consider it and they make a decision. So we view this kind of fairly routine..

Okay. Thanks..

And on the auction, we are in the quiet period, so it's really hard for us to talk about the auction.

But in terms of proceeds that we may receive or the auction, we will analyze them as we do our free cash flow in terms of our uses and they'll be balanced between what our acquisition and investment opportunities are from a return perspective at that time and balance that with repurchasing our stock..

Okay. Thank you..

Thank you. This concludes today's question-and-answer session. I'd like to turn the floor back over to management for closing remarks..

Well, thank you, everyone, and thank you, operator. And as usual, if you have any questions or further questions, please feel free to give us a call. Thank you..

This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation..