Greetings and welcome to the Sinclair Broadcast Group Fourth Quarter 2014 Earnings Conference. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Amy, Executive Vice President and Chief Operating Officer. Thank you. Please go ahead.

Thank you, operator, and good morning everyone. Participating on the call with me today are David Smith, President and CEO; Steve Marks and Steve Pruett, 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.

Thanks, Dave, and 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 fourth 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. Redistribution of this call is prohibited without the express written consent of the company. 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 Investor Information, Reports & Filings.

Thank you, Lucy. Before we go through the results let me review some of the activities that have taken place since our last earnings call. On November 1st we close on the previously announced purchase of the non-licensed assets of KSNV, the NBC affiliate in Las Vegas as well as the purchase of a non-licensed assets of eight stations and trade market of new age media. On December 19 we closed previously announced acquisition of four stations and three markets and a divesture of three stations in two markets of media general. We recently successfully complete a negotiations for Nutri transmission consent agreement with over 490 multi-channel video programming distributor including U-verse, FiOS, Armstrong Utilities, Atlantic broadband. cable one, century link wave broadband and wide open web. The re-transmission consent agreement provided uninterrupted carriage of our stations to over 6.3 million unit subscribers representing over 99.9% of subscribers covered by the expired agreements. With regards to our content initiative American sports network added the Atlantic 10 conference and now produces games for 11 NCAA division one conferences and reaches 93 million homes included syndicated households. Development of the next generation of broadcast technology recently reached a milestone with one Media announcing outstanding results in the first system test of its next generation broadcast platform in transmitting six noble and data service about a set top and tablet devices. Over the year testing of the one media system commenced that’s an early commission Austin, Texas transmission facility at the end of '14. In conjunction with this and last facilities one mediate is working with industry recognized vendors and service providers since to develop a diversity of products and services for our robust support echo-system. Our pro-forma net broadcast revenues for 2014 were almost $2 billion pro-forma EBITA was $805 million and pro-forma free cash flow was $440 million. For 2015 and 2016 we're expecting total free cash flow of $805 million to $885 million or $8.45 to $9.25 per share which equates to a current free cash flow yield of 38% for the two year period. Now Chris will take you through the fourth quarter results.

Thank you David. Net broadcast revenues for the fourth quarter were $557 million, an increase of 46% or $174 million higher than fourth quarter 2013 and higher than our guidance excluding the fourth quarter transaction. For the full year net broadcast revenues were 1.783 billion, an increase of 46% or 565 million higher than full year 2013. As Dave mentioned on a pro forma basis net broadcast revenues for 2014 were 1.998 billion, up 10% from 2013, pro forma net broadcast revenue of 1.222 billion. Television operating expenses for the fourth quarter to find station, production and station SG&A expenses before barter, were 274 million, up 38% or 76 million from fourth quarter last year. On a full year basis, TV operating expenses were 948 million, up 49% or 313 million from 2013. Corporate overhead in the quarter was 19 million, up 5 million versus the same period last year and primarily the acquisition cost and ONE Media development cost. For the year corporate overhead was 69 million. Television broadcast cash flow for the quarter was 264 million, up 98 million or 59% higher than last year’s fourth quarter BCF. The broadcast cash flow margin on net broadcast revenues for the quarter was 48%. For the year broadcast cash flow was 762 million, an increase of 50% or 254 million. EBITDA was 250 million in the quarter, up 95 million or 61% higher than the same period last year and higher than our guidance including the fourth quarter transaction. For the year EBITDA was 715 million, on a pro forma basis EBITDA for the year was 805 million, an 14% increase over 2013 accounting with of 705 million. The EBITDA margin on total revenues was 41% for the quarter. Net interest expense for the quarter was 47 million; up 7…

Thank you, Chris. At December 31, total debt was 3.929 billion. Included in that amount was $121 million of non-guaranteed and VIE debt that we are required to consolidate on our books. We ended the quarter with $18 million of cash on hand and a 144 million available and our revolver for total liquidity of 162 million. Capital expenditures in the fourth quarter were 23 million, totaling 81 million for the year. For 2015, we are estimating CapEx of 89 million, which includes operates and fixed assets for the acquire stations, filming and studio projects, American Sports Network live trucks and build out its network operating center and high definition new upgrades. Cash program in payments from the fourth quarter was 24 million and a full year programing payments in terms of 94. For 2015, we are estimating film payments of a 108 million, cash tax state in the fourth quarter roughly 4 million and for the year were 100 million. Total net leverage through the holding company at quarter end was 4.7 times and this excludes the VIE and non-guaranteed debt and is net of cash. The first lien indebtedness ratio was 2.25 times on a covenant of 4 times. Our 2013-2014 two year average net leverage is 4.99 times and our 2014-2015 two year average net leverage is expected to be approximately 4.6 times assuming our current portfolio. In the fourth quarter, we repurchased $25 million or 1 million shares of our equity at an average price of $25.58. For 2014, we repurchased a total of $133 million or 4.9 million shares at an average price of 27.32. When combined with the 61 million in dividends paid, we returned almost $200 million to our shareholders, representing over 50% payout of our as reported free cash flow. In the first quarter of 2015 we repurchased another 300,000 shares for $18 million worth at an average price 25.60. Our remaining buyback authorization is $127 million. Now David Amy will take you through our operating performance.

Thanks Lucy. Fourth quarter net broadcast revenues were up 46% versus the fourth quarter of '13, political revenues were 80 million as compared to 7 million in the fourth quarter of '13. Pro forma core advertising was up slightly including digital revenues and adjusting for despite political revenues. We believe that about 75% to 80% of our political revenue was incremental in the fourth quarter and about 60% for the year. I'll return to our outlook for 2015. For the first quarter of '15 we're expecting net broadcast revenues to be approximately 457 million to 461 million up 22% to 23% as compared to first quarter of '14. This assumes $2 million of political revenue versus 6 million in same period last year, the absence of $3.7 million in Olympic revenues and an incremental shift of $5.3 million and less Super Bowl revenues as a result of it being aired on NBC this year versus FOX last year. First quarter net broadcast revenues on a pro forma basis are expected to be up about 3% versus 446 million in '14, while adjusting pro forma core advertising revenues are estimated to be up slightly in the quarter from the same period last year. Categories did well in the first quarter are auto, furniture, media and broadcast. Services goals entertainment and telecommunications are soft, on expense side we're forecasting TV production and SG&A expenses in the first quarter to be approximately $284 million versus 209 million of as reported expenses in the first quarter of '14 and for the year. 2015 TV expenses are forecasted at 1.158 billion versus 14 pro forma TV expenses of 1.59 billion. The increase is primarily due to news expansions in seven markets, the launch of our digital content management system. Full year American sports network production…

Two things. First in terms of the advertising business. It sounds like auto is doing okay. Do you have a read as to how it might be looking for the year just based on model leases and any other color you have gotten on the sales side? And then just also what ad category has really contributed in 2014 the greatest volume of ad growth and do you see any changes in those trends for 2015? And then my second one is on the next generation broadcast platform. How you see that fitting specifically into a world of increasing on demand video delivery if at all?

I think on the automotive question we're off to a good start on first quarter 2014 was a good year for automotive as well there was a crowding out factor in fourth quarter because of the heavy demand for political. Once we got out of the political season the automotive category saw to show growth again and here we all back in first quarter and once again that category is showing growth again. And every single report that you read on the category is extremely positive for 2015 and going forward. So really good news because obviously it is our biggest category and it continues to do very well, so when you address while we're successful for us in 2014 and while we look forward in 2015 first and foremost as I just mentioned you have to have the automotive category on the plus side and we're already off to a good start on that. And we enjoyed the plus side of that in 2014. One of our other biggest categories telecommunications that tends to get hot and cold some quarters it's very robust and then some quarters it retreats and it really depends on what they're offering at any given time. So those quite frankly are two biggest categories as we look forward to some change in the economy - one thing that we notice in first quarter earnings is that the furniture category is out. I typically believe that’s an indication and the economy is moving in the right direction and people are investing in their own homes. I think it bows well for us going into 2015 there are lot of positive signs going forward.

I think you will also see more stimuli in auto from bigger vehicles as the gas prices have gone down and there are some new vehicles that were designed actually for lighter weight aluminum body pickup and so on but that just going to be a double bonus to people with low gas prices.

As you think about the next generation broad gas platform is a really multifaceted kind of future business platform. I think as minimum where you have to give thoughts today is to recognized that the broadcast industry is at this point in time moving in the right direction to be able established itself as the pre-imminent deliver of content not just to the device in the home but to every mobile device every portable device automobiles things of that nature in the future. And as technology evolves one of the things that will become available to the consumer everywhere literally is essentially infinite storage capacity. So much in the same way when you think about the evolution of VCR in the home and how that kind of become kind of has evolved into the notion that you can record something that playback it will easy your investing concept exist today expect to ton on storage devices outside the home. And the way we think about that in the future will always simply suggest that device is as I said we'll have infinite storage capacity people will store wherever they want and take that content with them wherever they go. The capabilities to do that is essentially here it just about what generation of equipment is does that technology get put into and we think it's during the year. So we see nothing by technical upside and an effective leveling of the plain field from the competitive perspective from the standpoint of selling spots and delivering information. So all the other technologies that are out there, so we're very high with the long term opportunity is for the broadcast industry as it relates to the platform that’s coming.

Our next question comes from the line of Alexia Quadrani with JPMorgan. Please go ahead with your question.

Just first of a bit of a follow up on that last question but maybe more on the financial side. I guess long term I guess what are opportunities for Sinclair in terms of recapturing some of the advertising dollar go into cities newer sort of diesel tack or even some new application something CBS of access type of partnership. I guess how sort of maybe this into a bigger picture can view that opportunity for you guys.

Well I think there is any number of ways to deal with that you can deal within two ways of the context of traditionally the way it's been done now and our whole digital platform capabilities been build out is going to kind of put it in that business. But to me the larger more interesting opportunity is the ability struck to deliver content and commercials to portable devices. You have kind of get over the notion that we're kind of in house delivery platform and notion is going to end and we're going to be essentially the same as everybody else. And I think when that happens and I think it is going to happen. When that happens the plain filed in terms of advertising selling becomes level. So we go to New York and sit down with an advertiser and say well I can now do everything everybody else does. The reality of my product is just dramatically better than everybody else is. And if you doubt that just look at what the average audience delivery is of a local television station against any competitor in the marketplace absent and other television station. Look at t against any internet platform, any cable platform, any satellite platform any media in whatsoever in terms of audience gathering and beat them all badly. So, we think we become the go to place to go, if you want reach, if you want to buy 3%, you want to buy 10 million spots on the Internet, why but you’ll be able to be very efficient bias as a delivery platform.

And as far as the over the top type of question that you're asking with I think you’ll see a lot of PLL between re-trends and over the top in regards to our ability provide authentication in regards to our content that’s being delivered to the consumer the amount of money that they will pay for the over the top service legal fee plus capturing a portion of that very similar to a re-trans type of in it.

So it sounds like they are interested and having those conversations when the [opposite demand] if it make sense financially for you guys?

Well absolutely, you look at any kind of means of distribution of our property of our signals and our content and how to monetize that we’re always interested in this conversation.

And then just last question on the re-trans you guys are continue to have those in terms of the distribution discussions, I mean discussions with distributors and I believe with your affiliates, network affiliates, do you still think sort of at the end of the day a 50-50 [spud] is probably where you guys with industry going down?

I think our general view is 50-50 is kind of is a fair number, we are -- I think if we get there I think it takes time to get there, but matter of fact is we’re okay with that score profitably.

The next question comes from the line of Aaron Watts with Deutsche Bank. Please go ahead with your question.

No questions for me, I guess one follow on the core ad environment, we had a good jobs report, oil prices are down, sounds like you're seeing some good traction in key categories, why do you think or what are you hearing in the market on why core ad trans aren’t a bit more robust now and I guess that your expectation that a lot of these indicators can translate to better growth as the year unfolds?

Well, I think there is obviously more competition and one thing that nobody should do side of is that we’re following with a dollars are going, people keep on talking on non-linear advertising and it is taking away dollars, we’re following those dollars. Our bid is growth now within the digital lens and that’s only going to continue. So our business is changing and we’re following where those changes are occurring, so you got to follow where the money is going and we have the capability to do that and we are doing that.

I think you just to expect is the broadcast industry in general believe to that show, that’s all. Online advertisers been going on for a long time and as industry we’ve just kind of started into that space. So, you have to look at as kind of link to the party, but in the end we’re really what the ultimate delivery meaning is in terms of eyeballs. So on the Internet and on local television, so I think you just have to give us time to catch-up if you will and start to learn how to do this businesses, because this is a new business for us. As Steve said and that probably I’ll tell you it's a huge growing business for us.

Yes, we mentioned you should be very excited about what we are doing and what direction are going and as you hear about the investments that we’re making in our content management system and we ensuing upside benefits that what we seeing that with -- we produce now however and somewhere close to 2,200 hours per week across our platform of local news content and when you take that into consideration, how that can fit into all the social media that’s out there whether Instagram or Facebook or Twitter or what have you and how we can reach our viewer in the social media through with investments that we’re making you're going to see we believe a significant growth in our digital line.

So, I think one of the ways it's also and hard to kind of bifurcated out the things we do insight of business sight, but if we were just to take out our web business, just the websites that we have in all the cities where we have television businesses and compare to those to websites that have valuations of anywhere from $0.5 billion to $2 billion per day. You’ve look at that and say well these are risks, there are little local broadcast business once to aggregated all up and you look at what this has in contrast to those businesses, you’d say well, how many billions is our little platform was, we’re not getting that evaluation because we’re not looking in reality, we’re not looking that way in. But the fact of matter is as we are fundamentally no different than what a buzz feed is or a gawker or a wiser anything else. The difference is we produced the news everyday live real time and on the Internet and we’re not recognized for being in that business, but I think you have to give us some credit for doing what we do now, which is we’re the largest news producers in the country and you should assume at some point in time that we will kind of enter that space possibly as a separate discrete stand-alone enterprise. Just to get the proper valuation on it. Again if you look at a company like vice, I am not here to tell you if they are or aren’t they have a private evaluation of excess of $2 billion, and they [won't] do anything, all they do is put stories up on the Internet, we do that every day and people actually pay attention to them. So I think there is a disconnect when it comes to valuating local television stations like ours and everybody else's relevant to what the rest of the Internet does in terms of serving the public interest. And it is our job to make sure that gets known and understood, and as I say we just kind of started down that path. So you're going to hearing more about that era, that industry.

One another question from me, just curious you talked about the free cash generation of the business. And as you kind of move through 2015 can you just talk about how you're thinking about acquisition opportunities both here on a digital side and on the station side and as well as original pro-ramming possibly, the use of that cash. And I guess in light of the station how you sit versus the [SET] cap and think about that?

Our policy on free cash flow uses really hasn’t changed going into this year, we still think about is in four broad buckets. One being dividend, second being share repurchases and then station acquisition and acquisitions or investments in adjacencies which include content and cable and digital. So those are the four buckets that we're focused on and we allocate between those buckets as opportunities arise. In terms of acquisitions specifically station acquisition my expectations for this year is that those will be at a much slower pace than what you last year. And some of that is obviously driven by what we mentioned before in terms of where we're relative to the FCC cap. So that's what I expect for this year, but I would expect some activity there and it will be significant relative to our free cash flow but not nearly as it was in years past.

I think the other thing you need to just understand is you may not be aware that the congress is currently undertaking kind of initial round of a complete re-write of the communications act, and it's an important event because and it's an important opportunity because frankly most of them would remember congress and help them understand the imbalance in the marketplace. Just one little fact is that say you have an appreciation for how imbalance it is. When you look to where we compete in today as a broadcaster and recognizing that companies are essentially going into the broadcast business with spectrum space that used to be used for broadcasting they're going to be a direct long-term one-to-one competitor because of their technology capability. The interesting thing is that they have the right to reach 100% of the country, they have the right to use their platform and any technology that serves their interest without regard to the consumer, and they have the right to use the exact same spectrum space that we use except they have no restrains whatsoever in terms of the content they CapEx push through. So when you sit down with the member of congress and you say please can you help me understand why we're so regulated and they are not? The answer is we didn't know. Hence the communications act rewrite will raise the obvious issues of the marketplaces constraint against us as an industry. And that's just a legacy issue of regulations that are 60 years old. So I think there everybody kind of has an open mind to the notion that the broadcast industry in general should be deregulated in order to compete on a level Plainfield and we don't think that's a big ask and I think we're fairly optimistic about the notion that the government is likely to say why do you have any constraints at all? We grew with that notion, we just want to Plainfield, that's all we're asking for. That's all the broadcast industry is asking for. Let us do what everybody else does and we'll be fine.

And to jump in the finish here, answering your specific question around original programming. I wouldn’t expect that to be a significant use of free cash flow this year.

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

I just want to walk through the expense guidance for '15 and '16. It sounds like from your comments the call you have 40 million of incremental expense for '15 and '16. I looked at the press release there is another 18 million of one-time for next generation. So in total it sounds like there is $58 million of incremental expense in '15 that we didn’t have in our numbers. Is there anything of on top of that?

Marci the way to look at this is there is about 40 million of incremental expense in '15, another 40 million of incremental expense in '16. And what that covers is talking about 80 million over the two year period. So what's in there is the FCC requirement on the closed captioning in both of those years, that's something would not have had in your model. The investments in One media is included already in that 80 million the incremental cost for ASN on the full year versus part year as well as our bill about of the content management system on digital side. So really when you think about there is expenses ASN and content management system and one media there is all investment are going generate returns for us in the future it's really just the FCC close captioning requirement it is just a pure out of pocket cost.

Are any those initiatives recognizing revenue now I guess ASN specifically?

No to other than ASN, ASN is on a year on a number of our markets. So after that is to the degree we are beginning to pick some revenues in for ASN. But from a standpoint the projections that we're providing and the expectations that you're looking at they are really not included the major returns that we would be expecting to see over the next couple of years are not included in our projections.

And David you talked about all the retrain contracts that you've done were those at year end or those throughout '14.

Well they were throughout '14. But primarily coming it at the end of the year.

Can you give us kind of what you're looking at for '15?

We still have on this $0.84 of our retrains contracts coming from renewal between now and the middle of 2016. So if you recall on November earnings call we talk about that we really have just 100% to be done we've done roughly 20% of them here at year end and we still have almost another 80% to do over the next 15 months.

And then my last question. Did you see a divergent are you seeing a divergent in performance with regards to your FOX stations versus the rest of your portfolio.

I think we obviously had trouble with FOX in 2014 we talked about that consistently in first quarter as we mentioned we're going up against the Super Bowl. So the FOX affiliates are negative in the first quarter but we obviously expected that I think the great thing about FOX right now and we're very, very encouraged about this because it has been a drag for us. Is that they legitimately got a hit show in Empire, that show is only been on a year for less than two months and it's a legitimate and estimate marketplaces you should appreciate that it actually beats America Idol by upwards of 30% to 40%. To go on a those type of ratings and in a two month period is something that I'm not sure we've seen and quite some time. So that single entity as both the buzz back to that network and what could have been a treacherous cycle now looks like the network is turning itself around. You coupled out with Gotham and Sleepy Hallow and they actually have a line out now that is far more competitive then literally two months ago. We have now four or five shows in the top 25 if you take our Super Bowl and we did not have that most of last show.

I think the other now I would add on its topic that into appreciate their position revolving which was all ABC affiliate ABC is now our largest affiliate group in terms of contribution throughout revenue DTS was it uses to be FOX. But now FOX is still very large but EC is now the biggest driver.

And then just to put a point on Empire if you take out the Super Bowl related programming Empire was the number two show at the end of January.

And our next question comes from the line of Tracy Young with Evercore. Please go ahead with your question.

Yes thank you just as few follow up can you say how many markets ASN is on now. And then in terms of that 40 million of incremental expense as we go through our quarterly model should we be thinking about as flowing through on an even basis or is it more current in the beginning of the year. And then related to the spectrums are there any other groups that are involve with this one media and can you also just give us an update on your losses against the SEC regarding the spectrum. Thank you.

I'll do the expense timing first. So it will be a little bit more heavily weighted in the front end of the year only because we only launched ASN in the third quarter of last year.

I think as it relates to the spectrum issue I think the thing we'll appreciate is that broadcast industry is essentially our math's and what I mean by that is for leaders in the industry have cloisters around very simple notion which is the ATSC standards committee which will ultimately determine the shape and color and size of the mix broadcast platform. That organization was historically run by the consumer electronics about from a global basis and the broadcast industry was kind of if you will around and that discussion with tactical discussion and I think now for first time in my memory the broadcast industry is now sensibly telling the consumer electronics folks and the ATSC standards committee, this is what we want period, end of discussion. We will no longer be a potential victim of your technology that doesn’t serve our interest and so in another words when you think of that the technologies that we have today that we use up in the air which is essentially totally ineffective in terms of reaching portable devices, multiple devices in most cases and house reception was a product largely for manufacturers and I take as I think I am encourage now because I am in the broadcast industry is finally recognized that it has the ability to get together and essentially demand what’s in the best interest of our industry period, end of discussion.

Same question there we now have 11 NCAA division one signed up and we’re reaching 93 million home, which we believe puts us in third behind ESPN and Start Sports in terms of the size and reach that we have and we have indicated households as well as we have partners that we’re including in our ASN initiative. So, we think that’s a pretty impressive given that we just started to broadcast thing live sports, these live sporting events and look forward and underneath all of American Sports Network we also include our high school football line up which is very local and as we mentioned in the past that has been very successful in terms of reaching our local audiences. So that is actually I think the best way for you to think about it.

And our next question comes from the line Lance Vitanza with CRT Capital. Please go ahead with your question.

Hi, guys couple of follow-ups on spectrum and the communication act rewrite. The first I guess on the spectrum, what’s your reaction of the FCCs recent upward revision to if you estimate of what your spectrum might bring at auction, I mean from my perspective it's a -- you guys are sitting on spectrum that’s where the multiple of your equity market cap and while I appreciate the work that you're doing to unlock that value, wouldn’t the simpler path just be to play in the auction and get a big check?

Yes, so I think there maybe a little bit of confusion as to what the numbers that we just put out from Greenhill. The recent numbers were opening bid numbers that were put out by the FCC and they did the descending clock double sided auction to the opening bids were designed to be high because they will tick down as broadcasters drop out, but they did not represent an estimate of what the FCC thinks your station worth. The estimates what the FCC thinks your stations are worth were released earlier last year and they haven’t changed -- I think the opening bids are just a representation of where they want to start the options. When you do the math on the media and prices for what the FCC thinks are your stations are worse, you come to a pre-tax valuation of 4.4 billion which is significantly less than our total enterprise value to today. So that doesn’t mean that we aren’t open to the auction and maximizing our shareholder value by participating or make sense, but I think it just kind of give you a big picture view on where the opportunities may lie, so we’re keeping an eye on it and we’re evaluating all of our opportunities as it relates the option and what we can do at the spectrum on our own with our new broadcast standard.

Well just clear, so 4.4 billion again that’s a multiple of your market cap and if you can retain your ability to broadcast on different frequencies that the FCC will put you in and retain all of your NVPD contracts, I mean I guess I am just struggling with why that’s not into arena?

Well, that you 4.4 billion will be going off the air, so you wouldn’t be able to retain anything. So [Indiscernible] in your business and our total enterprise value is over 6 billion today, so 6 billion versus 4.4 pre-tax.

So, you don’t believe when the FCC says that you are under a different band and you can continue operating why does that not work?

We have to accept to lasting money, if you wanted to go down to a High V or Low V, there are estimate right now and going from U to High V would be a 32% discount and going from a U to a low view would at 66% discount, again that’s only an estimate it will be market determined at the time of the auctions, so there is really no way to go until the auction happens and what the ultimate prices, but all these numbers are just estimate and that is the reason we don’t take them seriously, we take them very seriously and we’re analyzing every possible situation scenario and what we would like to do is where it make sense to monetize our spectrum where we don’t believe we can do better within our own then we'll do that, and we'll also retain our affiliate business and grow that as well. And it's a multi-variable equation that we're solving here and something we're working very hard on internally to make sure that we maximize shareholder value at the end of the day through this auction and through what we can do with the spectrum, with our new standards.

And then just on the communications act, what's the timing there? Do you have any sense of how likely this is to come together by the end of this congress?

Well I think there has been some discussion where the house is already in a re-write currently and is asking for a comments and things of that nature from broadcasters like ourselves. So I think it's possible to see something this year certainly the form of a draft. I know the Senate is countering kind of the same thing right now in terms of what these look like in all the various constituencies and explain that. So my sense it's underway, nobody really knows you can’t predict what Congress likely to do in the world we live in. But my sense is its off the table and it's taking shape and we’re doing everything we can as well as all the broadcasters to go in there and simply tell very simple story about the imbalance in the marketplace created by old legislation and old rules that need to be corrected. And frankly there isn't any push back on. because actually it's completely right. The broadcast position is completely absolutely correct.

Thank you. And our next question comes from the line of Davis Hebert with Wells Fargo. Please go ahead with your question.

On the re-trans negotiations, Lucy you said 80% between now and the middle of 2016. I am just curious is there a plan to go to market with other channels maybe News Channel 8 or some of first other content you're rolling out as part of that re-trans negotiation?

I am going to let Chris answer that one.

Our contents our cable network strategy over the last 1.5 years has gotten fairly broad ambition and that does include, that has already been worked into our discussions with distributers and we'll be working, have future discussions that will happen over the next 12 months. And so when you think about what Sinclair is doing on cable, we've already done a significant amount of work, we'll continue to do significant amount of work on the distribution side. And we have several kernels for the content side of the equation which includes NewsChannel 8, ASN and several others that we haven't been probably talking about which include organic initiatives, inorganic initiatives and partnerships. And so we’re working and the content side here including cable network opportunities but also other screens that both content kernels could live on through digital strategies. And so it's too early to say which are those strategies that are going to be the most profitable combination. But I think it's fair to say that Sinclair within not too distant future will have at least one cable network with a significant U.S. footprint.

And then as you're negotiating these re-trans deals, they had to be in accordance with the FCC rules around joint re-trans negotiations. Just curious how I guess technically you are handling that?

So in terms of the joint probation you are referring to?

That's correct.

It doesn't go into effect until the stay order is finalized to the end of 2016. So that hasn't really impacted our ability to jointly negotiate as of today.

And then last one on CapEx, I saw your guidance for 89 million. I just wonder if you could kind of break that out, what's your normalized kind of meet at the CapEx level versus some I guess investments front end loaded stuff you're doing this year.

So really with all the acquisitions now that we have, you're probably looking at maintenance CapEx really about $40 million $50 million a year. So really the difference between that and our guidance is all the investments that I talked about ASN and some of the new acquisitions which we didn’t have last year, we're investing in some there, they're offering some HD news cast, some building consolidation project and studio project. For modeling purposes, we will never adjust the maintenance CapEx numbers. So we did want to pump here that 40 million to 50 million by [summer] now. But I don't think when we get into 2016, I don’t think you're going to be looking at 90 million type level based on our current portfolio.

Our next question comes from the line of Edward Atorino with Benchmark. Please proceed with your question.

On your sort of game plan of us getting into programming, is it build or buy or one of the other preferable way to go. And would you really become a production company as well as a TV company in the long term basis.

So we are evaluating all alternatives and when you take a look at what we've been doing as it relates to some of our content initiative around ASN and Sinclair original programming those are build strategies. But we're also evaluating certain buy strategies as well. So I don’t think it's right sitting whole less than one strategy or the other well I think at the end of the want to pursuing both to some extent and but we're going to do it in a very jurisdiction cost efficient manner. So we're not typical Hollywood players who do high cost budget content.

That sort of aiming to ask. What's on the air now what kind numbers are you selling in terms of minutes and what kind of pricing are you getting?

Nowhere to ASN specifically is just evolving we launched it in September. It's more of a local product right now and interestingly enough when we have regional gains of interest like for argument sake we're in conference where Marshall University we've been airing both Football and Basketball games. Our stations in Charleston, West Virginia just to a bang of number and we have pockets like that throughout the country. So as we evolve with this it's very interesting concept because although we're aiming for a network goal at the end of this that will have localism to it and it's terrific to promote and the games are of local interest in our marketplaces.

Lots of positive countries high school sports, college sports is really a big business.

It is, we're also seeing more major advertisers in our high school sport this year we had [Indiscernible] in a lot of markets subway and many other larger century 21 sponsor high school football and it's becoming more and more and more popular. So in the past we didn’t see as many large national brand in high school football but we're seeing that to be actually requested now requested type of -

Not to believe with this but in terms of your programming appetite this will be sort of [Indiscernible] stuff movies big budget programs. Just wanted to see what's on your mind.

We're focused on is actually I would care guiding more is a reality was and you see sports is form of reality and our original programming focus as significant area focus within reality and mainly that is driven my cost effectiveness.

We did announce our show TV want to talk about the show we announce would go on.

Well it's a reality base show that we're doing and we leverage distribution for partners of them it’s basically a crime reality show.

Our next question comes from the line of David Bank with RBC. Please go ahead with your question.

This is [Indiscernible] for David Bank just a two quick question one is I know it's early but looking out to 2016. How should we think about net trends group kind of given the affiliate renewals you're going be going through that. Is it possible that you're still being able to grow that re-trends in 2016 again?

We sincerely consist in [Indiscernible] industry did. We expect our net re-trends to grow for the foreseeable future and actually as we look for the next several years out we expect net re-trends to grow in the [Indiscernible] percentages.

And your expense guidance is well higher than we anticipated but the free cash guidance is pretty strong. Are you having any thoughts on how you think about how you're able to access strong through cash growth given the higher expense growth.

Well basically tend to conservative type of numbers that we're looking at actually. So we're looking at from a standpoint for the basic business and where we are harvesting some of the low hang crew that we talked about during the call here today. Whether it's the news operations over it DC where we seeing some great opportunity there to and to our bottom line or there see expansion and addition of seven new additional new properties across our platform or just a fundamentals of what we see in terms of digital growth. But what we are including our lot of returns that we expect to see with those investment sort of those expense that we were talking about that the content management system the development about a separate cable net and the impact that the sports network will have going forward in terms of our top line. So those were holding back on at the moment. So, we think we’re providing that pretty conservative view in terms of that projection of free cash flow.

Our next question comes from the line of Barry Lucas with Gabelli & Co. Please go ahead with your questions.

David you going to take cutting edge of the spectrum issue for some time and just hoping to provide a little bit of color on kind of the milestones to get from where we are today to this next generation platform being in operation. So, how long does it take to get to the [standards] change to what are the regulatory hurdles need to be overcome if any what does it cost and a while ago you commissioned a white paper talking about the opportunity in data distribution, what is that opportunity well quite now so further update you can provide there?

Yes, so let me just kind of walk you through the time little bit Barry, I think there is an evolving believe that the ATSC process that’s currently underway and has been underway for some time could and at the end of this year was been [Indiscernible] standard, which effectively means the broadcast industry will have what it wants and we’re done. The political process in Washington DC will start well before that process after the process ends. And frankly I don’t see the political process is any great obstacle frankly the from my sense of the government is that they don’t really care what standard we use, any more than they care what standard the phone company use or sort of satellite guys use or anybody else uses, just as in front when they give a lot of thought. Having said that, historically with broadcast industry has been regulated I think we’ll have to sit down with them and say, this is what we like to do, we’ll go through a process, and become an orderly process. But my sense is that kind of the noise that we’ve heard and we actually seen in recent past that have suggested that they don’t have any particular issue with a change in standard it's just that we have to go through the process and we’re happy to go do that. Our view is we like to get it done tomorrow because as fast we get, so fast we can start getting the technology and devices and we can just start building our business. So I don’t know if there is any gigantic obstacle in the way, we’re just over coming our own inertia of let’s just go get it done and I think we’re getting very close to that. In terms of the longer-term business opportunity, we’ve been kind of very in front of that over the years and have our view that the business models that we can roll off the back of the platform are very material and I would tell you just can’t believe if there were material -- why would you think the phone company would want our spectrum inspection. It shouldn’t be any more complicated than that to the layperson that the phone company wants our real estate so they can go to [Indiscernible] and make money with it and our view is why we can’t just do that because there is not lot of money out there that we made. So it's certainly being more complicated than or thought of in any different terms than that.

If you had, how sort of guesses to one you could be up and running with beyond a trail or a test but more of a broad-based business are we talking about 2017, ’18?

I think it could be inside three years.

Thank you. And our next question comes from the line of Howard Rosencrans with Societe Advisory. Please go ahead with your questions.

Along the lines of what, you said previously David or you finalized it's your money and it's your wish and hats off for you to being so committed to the investment, certainly much more substantial as you highlight off on vis-à-vis the other management of company. You slow down -- just a few points that you slowed down your buybacks, you certainly you return 50-ish some odd percentage you highlight in terms of the EBITDA conversion that’s the free cash flow generation and return to shareholders, but wouldn’t it be prudent at this time possibly to start the level up and to be more aggressive, I mean I assume you are frustrated as all of us that the value as you perceive are not being reflected and in the same lines I would think along the lines that lands and [Indiscernible] highlighted that you would want to do something in terms of the option to try to highlight some of the values and last along the same highlight and get some of the value here as the non-linear that you’ve highlighted value of your local stations et cetera talking about $500 million to $2 billion being describe to some of the non-linear players, what are we going to do start moving the needle on getting the value to be reflected in the stock even with David Amy highlighting the 40% that I think it's a great data point [to your] free cash flow -- stock is still down, I am not looking at day to day basis, I am just saying we're not moving the needle and I know it's foremost it's really important.

I think I would start by saying that we bought back more shares this past year than think we've ever bought back, so I think it's not really fair to close anything down from a share repurchase.

You did in the fourth quarter.

Yes, we don't think about it that granular of a sense and the other thing I think you need to appreciate too that we are approaching or add here five times leverage overall. So when you see down in terms of share repurchases is an overall difficult part for the company and staying within a certain rating band for the rating agencies is another consideration. So in your comments would it make sense to lever up and take advantage of certainly something we think about a lot and I think what you've see despite all the acquisition activity that we had last year we did buyback amount of stock, and a lot of companies would have not done that and just said we're taking a lot of debt in acquisitions -- buyback stock but yes we still did. And I think that speaks to our view as to the value of the company that isn't being recognized. And we share your frustration in terms of stock market view of our value and why it isn't higher and certainly that's something that we're working on every day and we highlighted some of those things on the call in terms of what we're doing on the digital front as Dave mentioned earlier we may have to create a separate entity for those activities. Because I am just not sure that how within Sinclair that a digital strategy will ever get the type of credit that you see in other entities that are standalone and have investments in rates that are much, much higher value then we could ever achieve on [Indiscernible]. So that's something that is on the drawing board and can be a way for us to realize more value in terms of more activities.

David Smith do you any specific thoughts in that regard, highlighting the values?

I think our interest are lined here as Chris said we're as frustrating as everybody else on it, I look at the Internet companies that are bleeding money all more than we're, originally [Indiscernible], but relates how much we can do about that. It's really up to the industry in general that continue just to educate as to what our real value proposition is to the consumer and the shareholder and hope that translates. As I said I am as frustrated as you are, it take the hell out of me when I see these things going in the marketplace, we see and say how can that be?

Yes if you take a look at the private value of our business versus the public value or the disparity the ratio is just extreme, it had to just scratch your head. How does that work in terms of the sentiment that felt there on Wall Street, and it not being considered with the overall enterprise is really worth versus what the public market is trading in, it's apparently not.

I look forward to seeing what you do in '15 and '16 to better highlight the values.

Thank you. This concludes today's question-and-answer session. I would like to turn the floor back to David Amy for closing remarks.