What changed in this filing

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Item 1. Financial Statements

2023-11-09 compared with 2023-08-09 · 367 added, 560 removed, 1427 unchanged (39% of the section changed)

5 unchanged sentences

(in millions, except share and per share data) (Unaudited)

As of June 30,

As of September 30,

2023 As of December 31,

1 unchanged sentence

Cash and cash equivalents $ 643 $ 884

Accounts receivable, net of allowance for doubtful accounts of $ 5 as of both periods

Accounts receivable, net of allowance for doubtful accounts of $ 4 and $ 5 , respectively

Income taxes receivable 8 5

36 unchanged sentences

The accompanying notes are an integral part of these unaudited consolidated financial statements.

(a) Our consolidated total assets as of June 30, 2023 and December 31, 2022 include total assets of variable interest entities ("VIE") of $ 78 million and $ 115 million, respectively, which can only be used to settle the obligations of the VIEs.

Our consolidated total liabilities as of June 30, 2023 and December 31, 2022 include total liabilities of VIEs of $ 16 million and $ 18 million, respectively, for which the creditors of the VIEs have no recourse to us.

(a) Our consolidated total assets as of September 30, 2023 and December 31, 2022 include total assets of variable interest entities ("VIE") of $ 80 million and $ 115 million, respectively, which can only be used to settle the obligations of the VIEs.

Our consolidated total liabilities as of both September 30, 2023 and December 31, 2022 include total liabilities of VIEs of $ 18 million for which the creditors of the VIEs have no recourse to us.

Variable Interest Entities .

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

10 unchanged sentences

Amortization of definite-lived intangible assets 42 43 124 179

Gain on deconsolidation of subsidiary — — — ( 3,357 )

Loss (gain) on asset dispositions and other, net of impairment 5 ( 4 ) 11 ( 9 )

Loss (gain) on deconsolidation of subsidiary 10 — 10 ( 3,357 )

(Gain) loss on asset dispositions and other, net of impairment — ( 28 ) 11 ( 37 )

Total operating expenses (gains) 730 689 2,253 ( 759 )

Operating (loss) income ( 3 ) 107 18 3,573

Operating income 37 154 55 3,727

OTHER INCOME (EXPENSE):

1 unchanged sentence

Gain on extinguishment of debt 4 — 15 3

(Loss) income from equity method investments ( 1 ) 3 30 15

Other expense, net ( 38 ) ( 105 ) ( 27 ) ( 165 )

Income from equity method investments — 33 30 48

Other (expense) income, net ( 21 ) 10 ( 48 ) ( 155 )

Total other expense, net ( 94 ) ( 16 ) ( 230 ) ( 332 )

15 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

10 unchanged sentences

(in millions, except share and per share data) (Unaudited)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Sinclair Shareholders

7 unchanged sentences

Shares Values Shares Values

BALANCE, March 31, 2022 $ 184 47,934,815 $ 1 23,775,056 $ — $ 657 $ 109 $ ( 2 ) $ ( 62 ) $ 703

BALANCE, June 30, 2022 $ 187 46,470,546 $ 1 23,775,056 $ — $ 628 $ 79 $ ( 2 ) $ ( 64 ) $ 642

Dividends declared and paid on Class A and Class B Common Stock ($ 0.25 per share)

3 unchanged sentences

Distributions to noncontrolling interests ( 2 ) — — — — — — — ( 5 ) ( 5 )

Net income (loss) 5 — — — — — ( 11 ) — — ( 11 )

BALANCE, June 30, 2022 $ 187 46,470,546 $ 1 23,775,056 $ — $ 628 $ 79 $ ( 2 ) $ ( 64 ) $ 642

Six Months Ended June 30, 2022

Net income 5 — — — — — 21 — 3 24

BALANCE, September 30, 2022 $ 190 46,073,926 $ 1 23,775,056 $ — $ 623 $ 84 $ ( 2 ) $ ( 66 ) $ 640

Nine Months Ended September 30, 2022

Sinclair Shareholders

17 unchanged sentences

Net income 14 — — — — — 2,597 — 28 2,625

BALANCE, June 30, 2022 $ 187 46,470,546 $ 1 23,775,056 $ — $ 628 $ 79 $ ( 2 ) $ ( 64 ) $ 642

BALANCE, September 30, 2022 $ 190 46,073,926 $ 1 23,775,056 $ — $ 623 $ 84 $ ( 2 ) $ ( 66 ) $ 640

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

(in millions, except share and per share data) (Unaudited)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Sinclair Shareholders

Redeemable Noncontrolling Interests Class A

Common Stock Class B

2 unchanged sentences

Comprehensive

(Loss) Income Noncontrolling

Income Noncontrolling

Interests Total Equity

Shares Values Shares Values

BALANCE, March 31, 2023 $ — 44,360,502 $ 1 23,775,056 $ — $ 602 $ 289 $ ( 2 ) $ ( 59 ) $ 831

BALANCE, June 30, 2023 39,274,843 $ 1 23,775,056 $ — $ 510 $ 184 $ 7 $ ( 61 ) $ 641

Dividends declared and paid on Class A and Class B Common Stock ($ 0.25 per share)

— — — — — ( 16 ) — — ( 16 )

Repurchases of Class A Common Stock — ( 5,201,809 ) — — — ( 100 ) — — — ( 100 )

Class A Common Stock issued pursuant to employee benefit plans 374,416 — — — 4 — — — 4

Distributions to noncontrolling interests — — — — — — — ( 2 ) ( 2 )

Other comprehensive loss — — — — — — — 9 — 9

Other comprehensive income — — — — — — 2 — 2

Net (loss) income — — — — — ( 46 ) — 1 ( 45 )

BALANCE, June 30, 2023 $ — 39,274,843 $ 1 23,775,056 $ — $ 510 $ 184 $ 7 $ ( 61 ) $ 641

Six Months Ended June 30, 2023

BALANCE, September 30, 2023 39,649,259 $ 1 23,775,056 $ — $ 514 $ 122 $ 9 $ ( 62 ) $ 584

Nine Months Ended September 30, 2023

Sinclair Shareholders

16 unchanged sentences

Net (loss) income ( 4 ) — — — — — 50 — 15 65

BALANCE, June 30, 2023 $ — 39,274,843 $ 1 23,775,056 $ — $ 510 $ 184 $ 7 $ ( 61 ) $ 641

BALANCE, September 30, 2023 $ — 39,649,259 $ 1 23,775,056 $ — $ 514 $ 122 $ 9 $ ( 62 ) $ 584

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

(in millions) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

8 unchanged sentences

Loss (gain) on asset dispositions and other, net of impairment 11 ( 10 )

Gain on deconsolidation of subsidiary — ( 3,357 )

Loss (gain) on deconsolidation of subsidiary 10 ( 3,357 )

Income from equity method investments ( 30 ) ( 48 )

41 unchanged sentences

Additionally, we own digital media companies that are complementary to our extensive portfolio of television station related digital properties and we have interests in, own, manage, and/or operate technical and software services companies, research and development companies for the advancement of broadcast technology, and other media and non-media related businesses and assets, including real estate, venture capital, private equity, and direct investments.

For the quarter ended June 30, 2023, we had two reportable segments:

For the quarter ended September 30, 2023, we had two reportable segments:

local media and tennis.

1 unchanged sentence

The local media segment consists primarily of our 185 broadcast television stations in 86 markets, which we own, provide programming and operating services pursuant to agreements commonly referred to as local marketing agreements ("LMA"), or provide sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements ("JSA") and shared services agreements ("SSA")).

These stations broadcast 639 channels as of June 30, 2023.

These stations broadcast 639 channels as of September 30, 2023.

For the purpose of this report, these 185 stations and 639 channels are referred to as "our" stations and channels.

39 unchanged sentences

As a result, DSIH, whose operations represented the entirety of our local sports segment, was deconsolidated from our consolidated financial statements effective as of March 1, 2022 (the "Deconsolidation").

The consolidated statement of operations for the six months ended June 30, 2022 therefore includes two months of activity related to DSIH prior to the Deconsolidation.

The consolidated statement of operations for the nine months ended September 30, 2022 therefore includes two months of activity related to DSIH prior to the Deconsolidation.

Subsequent to February 28, 2022, the assets and liabilities of DSIH are no longer included within our consolidated balance sheets.

Any discussions related to results, operations, and accounting policies associated with DSIH are referring to the periods prior to the Deconsolidation.

Upon Deconsolidation, we recognized a gain before income taxes of approximately $ 3,357 million, which is recorded within gain on deconsolidation of subsidiary in our consolidated statements of operations for the six months ended June 30, 2022.

During the three and nine months ended September 30, 2023, we recorded an adjustment to the deconsolidation gain of $ 10 million.

Subsequent to the Deconsolidation, we accounted for our equity ownership interest in DSIH under the equity method of accounting.

3 unchanged sentences

Interim Financial Statements

The consolidated financial statements for the three and six months ended June 30, 2023 and 2022 are unaudited.

The consolidated financial statements for the three and nine months ended September 30, 2023 and 2022 are unaudited.

In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive (loss) income, consolidated statements of equity and redeemable noncontrolling interests, and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements.

10 unchanged sentences

The impact of the adoption did not have a material impact on our consolidated financial statements.

In September 2023, the FASB voted to finalize a proposed ASU "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures." The guidance is expected to be effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

The final ASU is expected during the fourth quarter of 2023.

We are currently evaluating the impact of this guidance.

Broadcast Television Programming

15 unchanged sentences

Amortization was accelerated in the event that the stated contractual rates over the term of the rights agreement resulted in an expense recognition pattern that was inconsistent with the projected growth of revenue over the contractual term.

The National Basketball Association ("NBA") and the National Hockey League ("NHL") postponed games in the fourth quarter of 2021 and rescheduled these games to be played in the first quarter of 2022.

The sports rights expense associated with these seasons was recognized over the modified term of these seasons.

Hedge Accounting

8 unchanged sentences

Non-cash Investing and Financing Activities

Leased assets obtained in exchange for new operating lease liabilities were $ 4 million and $ 7 million for the six months ended June 30, 2023 and 2022, respectively.

Leased assets obtained in exchange for new finance lease liabilities were $ 1 million for the six months ended June 30, 2022.

Non-cash investing activities included property and equipment purchases of $ 5 million for the six months ended June 30, 2023.

Leased assets obtained in exchange for new operating lease liabilities were $ 4 million and $ 9 million for the nine months ended September 30, 2023 and 2022, respectively.

Leased assets obtained in exchange for new finance lease liabilities were $ 1 million for the nine months ended September 30, 2022.

Non-cash investing activities included property and equipment purchases of $ 5 million for the nine months ended September 30, 2023.

SINCLAIR, INC.

2 unchanged sentences

The following table presents our revenue disaggregated by type and segment (in millions):

For the three months ended June 30, 2023 Local Media Tennis Other Eliminations Total

For the three months ended September 30, 2023 Local Media Tennis Other Eliminations Total

Distribution revenue $ 365 $ 49 $ — $ — $ 414

2 unchanged sentences

Total revenues $ 697 $ 59 $ 17 $ ( 6 ) $ 767

For the six months ended June 30, 2023 Local Media Tennis Other Eliminations Total

For the nine months ended September 30, 2023 Local Media Tennis Other Eliminations Total

Distribution revenue $ 1,118 $ 140 $ — $ — $ 1,258

2 unchanged sentences

Total revenues $ 2,101 $ 174 $ 48 $ ( 15 ) $ 2,308

For the three months ended June 30, 2022 Local Media Tennis Other Eliminations Total

For the three months ended September 30, 2022 Local Media Tennis Other Eliminations Total

Distribution revenue $ 381 $ 44 $ — $ — $ 425

2 unchanged sentences

Total revenues $ 781 $ 54 $ 17 $ ( 9 ) $ 843

For the six months ended June 30, 2022 Local Media Tennis Local Sports Other Eliminations Total

For the nine months ended September 30, 2022 Local Media Tennis Local Sports Other Eliminations Total

Distribution revenue $ 1,159 $ 136 $ 433 $ — $ — $ 1,728

19 unchanged sentences

We classify deferred revenue as either current in other current liabilities or long-term in other long-term liabilities in our consolidated balance sheets based on the timing of when we expect to satisfy our performance obligations.

Deferred revenue was $ 191 million and $ 200 million as of June 30, 2023 and December 31, 2022, respectively, of which $ 134 million and $ 144 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets.

Deferred revenue recognized during the six months ended June 30, 2023 and 2022, included in the deferred revenue balance as of December 31, 2022 and 2021, was $ 33 million and $ 42 million, respectively.

For the three months ended June 30, 2023, two customers accounted for 12 % and 10 %, respectively, of our total revenues.

For the six months ended June 30, 2023, two customers accounted for 11 % and 10 %, respectively, of our total revenues.

For the three months ended June 30, 2022, two customers accounted for 11 % and 10 %, respectively, of our total revenues.

For the six months ended June 30, 2022, three customers accounted for 15 %, 14 %, and 12 %, respectively, of our total revenues.

As of June 30, 2023, three customers accounted for 11 %, 10 %, and 10 %, respectively, of our accounts receivable, net.

Deferred revenue was $ 184 million and $ 200 million as of September 30, 2023 and December 31, 2022, respectively, of which $ 129 million and $ 144 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets.

Deferred revenue recognized during the nine months ended September 30, 2023 and 2022, included in the deferred revenue balance as of December 31, 2022 and 2021, was $ 44 million and $ 53 million, respectively.

For the three months ended September 30, 2023, two customers accounted for 11 % and 10 %, respectively, of our total revenues.

For the nine months ended September 30, 2023, two customers accounted for 11 % and 10 %, respectively, of our total revenues.

For the three months ended September 30, 2022, one customer accounted for 11 % of our total revenues.

For the nine months ended September 30, 2022, three customers accounted for 14 %, 12 %, and 11 %, respectively, of our total revenues.

As of September 30, 2023, three customers accounted for 11 %, 10 %, and 10 %, respectively, of our accounts receivable, net.

As of December 31, 2022, one customer accounted for 13 % of our accounts receivable, net.

1 unchanged sentence

Our income tax provision for all periods consists of federal and state income taxes.

The tax provision for the three and six months ended June 30, 2023 and 2022 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests.

The tax provision for the three and nine months ended September 30, 2023 and 2022 is based on the estimated effective tax rate applicable for the full year after taking into account discrete tax items and the effects of the noncontrolling interests.

We provide a valuation allowance for deferred tax assets if we determine that it is more likely than not that some or all of the deferred tax assets will not be realized.

2 unchanged sentences

A valuation allowance has been provided for deferred tax assets related to a substantial amount of our available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies and projected future taxable income.

Our effective income tax rate for the three months ended June 30, 2023 was less than the statutory rate primarily due to non-deductible expenses.

Our effective income tax rate for the six months ended June 30, 2023 was greater than the statutory rate primarily due to a release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

Our effective income tax rate for the three months ended June 30, 2022 was greater than the statutory rate primarily due to an increase in valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

Our effective income tax rate for the six months ended June 30, 2022 approximated our statutory rate.

Our effective income tax rate for the three months ended September 30, 2023 approximated the statutory rate.

Our effective income tax rate for the nine months ended September 30, 2023 was greater than the statutory rate primarily due to a release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

Our effective income tax rate for the three months ended September 30, 2022, was greater than the statutory rate primarily due to an increase in valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

Our effective income tax rate for the nine months ended September 30, 2022, approximated our statutory rate.

We believe that our liability for unrecognized tax benefits could be reduced by up to $ 1 million in the next twelve months, as a result of the expected statute of limitations expirations, and the resolution of examination issues and settlements with tax authorities.

2 unchanged sentences

There is no expiration date and currently, management has no plans to terminate this program.

For the six months ended June 30, 2023, we repurchased approximately 8.8 million shares of Class A Common Stock for $ 151 million.

As of June 30, 2023, the total remaining purchase authorization was $ 547 million.

For the nine months ended September 30, 2023, we repurchased approximately 8.8 million shares of Class A Common Stock for $ 151 million.

As of September 30, 2023, the total remaining purchase authorization was $ 547 million.

All shares were repurchased under an SEC Rule 10b5-1 plan.

2 unchanged sentences

Subsequent Events

In August 2023, our Board of Directors declared a quarterly dividend of $ 0.25 per share, payable on September 15, 2023 to holders of record at the close of business on September 1, 2023.

In November 2023, our Board of Directors declared a quarterly dividend of $ 0.25 per share, payable on December 15, 2023 to holders of record at the close of business on December 1, 2023.

SINCLAIR, INC.

1 unchanged sentence

OTHER ASSETS:

Other assets as of June 30, 2023 and December 31, 2022 consisted of the following (in millions):

As of June 30,

Other assets as of September 30, 2023 and December 31, 2022 consisted of the following (in millions):

As of September 30,

2023 As of December 31,

11 unchanged sentences

As of March 1, 2022, we reflected the investment in DSIH at fair value, which was determined to be nominal .

For the three and six months ended June 30, 2023 and 2022, we recorded no equity method loss related to the investment because the carrying value of the investment is zero and we are not obligated to fund losses incurred by DSIH.

For the three and nine months ended September 30, 2023 and 2022, we recorded no equity method loss related to the investment because the carrying value of the investment is zero and we are not obligated to fund losses incurred by DSIH.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

2 unchanged sentences

Prior to the Deconsolidation, we accounted for our investment in the YES Network as an equity method investment.

We recorded income of $ 10 million for the six months ended June 30, 2022 related to this investment, which is reflected in (loss) income from equity method investments in our consolidated statements of operations.

We recorded income of $ 10 million for the nine months ended September 30, 2022 related to this investment, which is reflected in income from equity method investments in our consolidated statements of operations.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

3 unchanged sentences

Additionally, certain investments are measured at net asset value ("NAV").

As of June 30, 2023 and December 31, 2022, we held $ 186 million and $ 234 million, respectively, in investments measured at fair value.

As of June 30, 2023 and December 31, 2022, we held $ 197 million and $ 190 million, respectively, in investments measured at NAV.

We recognized fair value adjustment losses of $ 47 million and $ 48 million for the three and six months ended June 30, 2023, respectively, and fair value adjustment losses of $ 105 million and $ 161 million for the three and six months ended June 30, 2022, respectively, associated with these investments, which are reflected in other expense, net in our consolidated statements of operations.

As of June 30, 2023 and December 31, 2022, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $ 80 million and $ 88 million, respectively.

Investments accounted for utilizing the measurement alternative were $ 14 million as of June 30, 2023 and $ 18 million, net of $ 7 million of cumulative impairments, as of December 31, 2022.

We recorded a $ 6 million impairment related to one investment for the three and six months ended June 30, 2023, which is reflected in other expense, net in our consolidated statements of operations.

There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for either of the three and six months ended June 30, 2022.

As of September 30, 2023 and December 31, 2022, we held $ 156 million and $ 234 million, respectively, in investments measured at fair value.

As of September 30, 2023 and December 31, 2022, we held $ 203 million and $ 190 million, respectively, in investments measured at NAV.

We recognized fair value adjustment losses of $ 26 million and $ 74 million for the three and nine months ended September 30, 2023, respectively, and a fair value adjustment gain of $ 4 million and loss of $ 157 million for the three and nine months ended September 30, 2022, respectively, associated with these investments, which are reflected in other (expense) income, net in our consolidated statements of operations.

As of September 30, 2023 and December 31, 2022, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $ 76 million and $ 88 million, respectively.

Investments accounted for utilizing the measurement alternative were $ 14 million as of September 30, 2023 and $ 18 million, net of $ 7 million of cumulative impairments, as of December 31, 2022.

We recorded a $ 6 million impairment related to one investment for the nine months ended September 30, 2023, which is reflected in other (expense) income, net in our consolidated statements of operations.

There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for any of the three months ended September 30, 2023 and the three and nine months ended September 30, 2022.

SINCLAIR, INC.

6 unchanged sentences

On May 10, 2023, DSPV paid the Company approximately $ 199 million, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses.

As of June 30, 2023, the note receivable due to the Company had no outstanding balance and, as of December 31, 2022, the note receivable due to the Company was $ 193 million, which is reflected in other assets in our consolidated balance sheets.

As of September 30, 2023, the note receivable due to the Company had no outstanding balance and, as of December 31, 2022, the note receivable due to the Company was $ 193 million, which is reflected in other assets in our consolidated balance sheets.

The maximum aggregate commitment under the A/R Facility is $ 50 million and the A/R Facility has a maturity date of September 23, 2024.

3 unchanged sentences

("STG"), a wholly-owned subsidiary of SBG (the "Bank Credit Agreement"), includes a financial maintenance covenant, the first lien leverage ratio (as defined in the Bank Credit Agreement), which requires such ratio not to exceed 4.5 x, measured as of the end of each fiscal quarter.

As of June 30, 2023, the STG first lien leverage ratio was below 4.5 x.

As of September 30, 2023, the STG first lien leverage ratio was below 4.5 x.

Under the Bank Credit Agreement, a financial maintenance covenant is only applicable if 35 % or more of the capacity (as a percentage of total commitments) under the revolving credit facility, measured as of the last day of each fiscal quarter, is utilized under the revolving credit facility as of such date.

Since there was no utilization under the revolving credit facility as of June 30, 2023, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement.

The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of June 30, 2023.

Since there was no utilization under the revolving credit facility as of September 30, 2023, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement.

The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of September 30, 2023.

During the three months ended September 30, 2023, we repurchased $ 30 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $ 26 million.

The portions of the Term Loan B-2 purchased were canceled immediately following their acquisition.

We recognized a gain on extinguishment of the Term Loan B-2 of $ 3 million for both the three and nine months ended September 30, 2023.

In June 2023, we purchased $ 3 million, $ 15 million, and $ 13 million aggregate principal amount of the 5.125 % Senior Notes due 2027, the 5.500 % Senior Notes due 2030, and the 4.125 % Senior Secured Notes due 2030 (collectively, the notes are referred to as the "STG Notes"), respectively, in open market transactions for consideration of $ 3 million, $ 8 million, and $ 8 million, respectively.

The STG Notes acquired in June 2023 were canceled immediately following their acquisition.

We recognized a gain on extinguishment of the STG Notes of $ 11 million for the three and six months ended June 30, 2023.

In July 2023, we purchased $ 0.5 million aggregate principal amount of the 5.125 % Senior Notes due 2027 in open market transactions for consideration of $ 0.4 million and repaid $ 1 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $ 0.8 million.

The STG Notes acquired in July 2023 were canceled immediately following their acquisition.

During the three months ended September 30, 2023 we purchased $ 4 million in aggregate principal amount of the 5.125 % Senior Notes due 2027 in open market transactions for consideration of $ 3 million.

The STG Notes acquired in June 2023 and during the three months ended September 30, 2023 were canceled immediately following their acquisition.

We recognized a gain on extinguishment of the STG Notes of $ 1 million and $ 12 million for the three and nine months ended September 30, 2023, respectively.

Finance Leases to Affiliates

The current portion of notes payable, finance leases, and commercial bank financing in our consolidated balance sheets includes finance leases to affiliates of $ 2 million and $ 3 million as of June 30, 2023 and December 31, 2022, respectively.

Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $ 6 million as of both June 30, 2023 and December 31, 2022.

Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $ 5 million and $ 6 million as of September 30, 2023 and December 31, 2022, respectively.

Related Person Transactions.

Debt of Variable Interest Entities and Guarantees of Third-Party Obligations

STG jointly, severally, unconditionally, and irrevocably guaranteed $ 2 million of debt of certain third parties as of both June 30, 2023 and December 31, 2022, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both June 30, 2023 and December 31, 2022.

STG jointly, severally, unconditionally, and irrevocably guaranteed $ 2 million of debt of certain third parties as of both September 30, 2023 and December 31, 2022, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both September 30, 2023 and December 31, 2022.

We provide a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $ 112 million with annual escalations of 4 % for the next six years .

We have determined that, as of June 30, 2023, it is not probable that we would have to perform under any of these guarantees.

We have determined that, as of September 30, 2023, it is not probable that we would have to perform under any of these guarantees.

SINCLAIR, INC.

1 unchanged sentence

Interest Rate Swap

We entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of our exposure to variable interest rates.

We entered into an interest rate swap effective February 7, 2023 and terminates on February 28, 2026 in order to manage a portion of our exposure to variable interest rates.

The swap agreement has a notional amount of $ 600 million, bears a fixed interest rate of 3.9 %, and we receive a floating rate of interest based on SOFR.

1 unchanged sentence

Nature of Operations and Summary of Significant Accounting Policies for further discussion.

As of June 30, 2023, the fair value of the interest rate swap was an asset o f $ 8 million, which is recorded in other assets in our consolidated balance sheets.

As of September 30, 2023, the fair value of the interest rate swap was an asset o f $ 11 million, which is recorded in other assets in our consolidated balance sheets.

REDEEMABLE NONCONTROLLING INTERESTS:

3 unchanged sentences

On August 23, 2019, Diamond Sports Holdings LLC ("DSH"), an indirect parent of Diamond Sports Group, LLC ("DSG") and indirect wholly-owned subsidiary of the Company, issued preferred equity (the "Redeemable Subsidiary Preferred Equity").

Dividends accrued during the six months ended June 30, 2023 were $ 3 million and during the three and six months ended June 30, 2022 were $ 3 million and $ 6 million, respectively, and are reflected in net income attributable to the redeemable noncontrolling interests in our consolidated statements of operations.

Dividends accrued during all of the six months ended June 30, 2023 and the three and six months ended June 30, 2022 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

Dividends accrued during the nine months ended September 30, 2023 were $ 3 million and during the three and nine months ended September 30, 2022 were $ 3 million and $ 9 million, respectively, and are reflected in net income attributable to the redeemable noncontrolling interests in our consolidated statements of operations.

Dividends accrued during all of the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

The balance, net of issuance costs, and the liquidation preference of the Redeemable Subsidiary Preferred Equity were $ 194 million and $ 198 million, respectively, as of December 31, 2022.

24 unchanged sentences

The NAL proposed a fine of $ 2.7 million against the Company, and fines ranging from $ 20,000 to $ 26,000 per station for the other licensees, including the LMA, JSA, and/or SSA stations, for a total of $ 3.4 million.

As of June 30, 2023, we have accrued $ 3.4 million.

As of September 30, 2023, we have accrued $ 3.4 million.

On October 21, 2022, the Company filed a written response seeking reduction of the proposed fine amount, and the matter remains pending.

14 unchanged sentences

The Court denied the defendants' motion to dismiss on November 6, 2020.

Since then, the Plaintiffs have served the Defendants with written discovery requests and have begun taking depositions of the employees of the defendants and certain third parties.

The Court has set a pretrial schedule which currently requires discovery to be completed by December 15, 2023, or 90 days after the Special Master certifies completion of the privilege review, whichever date is later, and requires briefing on class certification to be completed within 195 days after that date.

The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

Discovery commenced shortly after that and is continuing.

Under the current schedule set by the Court, fact discovery is scheduled to close 90 days after a special master completes his review of the plaintiffs' objections to the defendant's privilege claims.

That privilege review is ongoing.

On August 18, 2023, the defendants filed objections to the Special Master’s First Report and Recommendations with the Court, which has not yet ruled on those objections.

On May 26, 2023, the plaintiffs filed a motion with the Court seeking preliminary approval of settlements they have reached with four of the original defendants (CBS, Fox, Cox Media, and ShareBuilders), who agreed to pay a total of $ 48 million to settle the plaintiffs' claims against them.

The Court granted preliminary approval of these settlements on August 18, 2023, and set a deadline of October 26, 2023, for class members to file either objections or claims.

The plaintiffs filed a motion for final approval of the settlement on October 11, 2023.

A hearing on final approval is currently scheduled for December 7, 2023.

The Company and the other non-settling defendants continue to believe the lawsuits are without merit and intend to vigorously defend themselves against all such claims.

On July 19, 2023, as part of the ongoing bankruptcy proceedings of DSG, an independently managed and unconsolidated subsidiary of Sinclair, DSG and its wholly-owned subsidiary, Diamond Sports Net, LLC, filed a complaint, under seal, in the United States Bankruptcy Court for the Southern District of Texas naming certain subsidiaries of Sinclair, including SBG and STG, David D.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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Nature of Operations and Summary of Significant Accounting Policies.

The segment information within the comparative periods have been revised to reflect this new presentation.

During the period ended June 30, 2023, we measured segment performance based on operating income (loss).

For the quarter ended June 30, 2023, we had two reportable segments, local media and tennis.

The segment information within the comparative periods presented has been revised to reflect this new presentation.

Additionally, during the current period we reclassified certain assets previously reported in corporate to local media to better align with how each respective business is being managed as a result of the Reorganization.

During the period ended September 30, 2023, we measured segment performance based on operating income (loss).

For the quarter ended September 30, 2023, we had two reportable segments, local media and tennis.

Prior to the Deconsolidation , we had one additional reportable segment, local sports.

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Corporate costs primarily include our costs to operate as a public company and to operate our corporate `headquarters location.

All of our businesses are located within the United States.

All our businesses are located within the United States.

As a result of the Reorganization, the local media segment assets are owned and operated by SBG, the assets of the tennis segment are owned and operated by Ventures, and the other Transferred Assets, which are included in other and corporate, are owned and operated by Ventures.

Segment financial information is included in the following tables for the periods presented (in millions):

As of June 30, 2023 Local Media Tennis Other & Corporate Eliminations Consolidated

As of September 30, 2023 Local Media Tennis Other & Corporate Eliminations Consolidated

Assets $ 4,771 $ 274 $ 1,045 $ ( 7 ) $ 6,083

For the three months ended June 30, 2023 Local Media Tennis Other & Corporate Eliminations Consolidated

For the three months ended September 30, 2023 Local Media Tennis Other & Corporate Eliminations Consolidated

Revenue $ 697 (b) $ 59 $ 17 $ ( 6 ) (a) $ 767

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Corporate general and administrative expenses 31 1 13 — 45

Loss on deconsolidation of subsidiary — — 10 — 10

(Gain) loss on asset dispositions and other, net of impairment ( 2 ) — 2 — —

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Interest expense including amortization of debt discount and deferred financing costs 77 — — — 77

Loss from equity method investments — — ( 1 ) — ( 1 )

For the six months ended June 30, 2023 Local Media Tennis Other & Corporate Eliminations Consolidated

For the nine months ended September 30, 2023 Local Media Tennis Other & Corporate Eliminations Consolidated

Revenue $ 2,101 (b) $ 174 $ 48 $ ( 15 ) (a) $ 2,308

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Corporate general and administrative expenses 109 1 55 — 165

Loss on deconsolidation of subsidiary — — 10 — 10

(Gain) loss on asset dispositions and other, net of impairment ( 5 ) — 16 — 11

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended June 30, 2022 Local Media Tennis Other & Corporate Eliminations Consolidated

For the three months ended September 30, 2022 Local Media Tennis Other & Corporate Eliminations Consolidated

Revenue $ 781 (b) $ 54 $ 17 $ ( 9 ) (a) $ 843

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Gain on asset dispositions and other, net of impairment ( 7 ) — ( 21 ) — ( 28 )

Operating income (loss) 116 — ( 9 ) — 107

Operating income 143 11 — — 154

Interest expense including amortization of debt discount and deferred financing costs 59 — — — 59

Income from equity method investments — — 33 — 33

For the six months ended June 30, 2022 Local Media Tennis Local Sports (c) Other & Corporate Eliminations Consolidated

For the nine months ended September 30, 2022 Local Media Tennis Local Sports (c) Other & Corporate Eliminations Consolidated

Revenue $ 2,295 (b) $ 168 $ 482 $ 74 $ ( 51 ) (a) $ 2,968

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Income from equity method investments — — 10 38 — 48

(a) Includes $ 2 million and $ 3 million for the three and six months ended June 30, 2023, respectively, and $ 3 million and $ 10 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by other to local media, which is eliminated in consolidation;

$ 1 million for the six months ended June 30, 2023, and $ 1 million and $ 25 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by local media to other and local sports, which is eliminated in consolidation;

and $ 1 million and $ 2 million for the three and six months ended June 30, 2023, respectively, and $ 1 million and $ 2 million for the three and six months ended June 30, 2022, respectively, of intercompany revenue related to certain services provided to local media from tennis, which is eliminated in consolidation.

(b) Includes $ 14 million and $ 24 million for the three and six months ended June 30, 2023, respectively, and $ 10 million and $ 15 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by local media under management services agreements after the Deconsolidation, which is not eliminated in consolidation.

(a) Includes $ 2 million and $ 5 million for the three and nine months ended September 30, 2023, respectively, and $ 4 million and $ 14 million for the three and nine months ended September 30, 2022, respectively, of revenue for services provided by other to local media, which is eliminated in consolidation;

$ 1 million for the nine months ended September 30, 2023, and $ 1 million and $ 26 million for the three and nine months ended September 30, 2022, respectively, of revenue for services provided by local media to other and local sports, which is eliminated in consolidation;

and $ 2 million and $ 4 million for the three and nine months ended September 30, 2023, respectively, and $ 1 million and $ 3 million for the three and nine months ended September 30, 2022, respectively, of intercompany revenue related to certain services provided by local media to tennis, which is eliminated in consolidation.

(b) Includes $ 15 million and $ 39 million for the three and nine months ended September 30, 2023, respectively, and $ 12 million and $ 27 million for the three and nine months ended September 30, 2022, respectively, of revenue for services provided by local media to local sports under management services agreements after the Deconsolidation, which is not eliminated in consolidation.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

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The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in our consolidated balance sheets as of the dates presented, were as follows (in millions):

As of June 30,

As of September 30,

2023 As of December 31,

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The amounts above represent the combined assets and liabilities of the VIEs described above, for which we are the primary beneficiary.

Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from the above, were $ 130 million as of both June 30, 2023 and December 31, 2022, as these amounts are eliminated in consolidation.

Total liabilities associated with certain outsourcing agreements and purchase options with certain VIEs, which are excluded from the above, were $ 130 million as of both September 30, 2023 and December 31, 2022, as these amounts are eliminated in consolidation.

The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE.

As of June 30, 2023, all of the liabilities are non-recourse to us except for the debt of certain VIEs.

As of September 30, 2023, all of the liabilities are non-recourse to us except for the debt of certain VIEs.

See Debt of Variable Interest Entities and Guarantees of Third-Party Obligations under Note 3.

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However, we do not participate in the management of these entities, including the day-to-day operating decisions or other decisions which would allow us to control the entity, and therefore, we are not considered the primary beneficiary of these VIEs.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were $ 201 million and $ 187 million as of June 30, 2023 and December 31, 2022, respectively, and are included in other assets in our consolidated balance sheets.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were $ 206 million and $ 187 million as of September 30, 2023 and December 31, 2022, respectively, and are included in other assets in our consolidated balance sheets.

Other Assets for more information related to our equity investments.

Our maximum exposure is equal to the carrying value of our investments.

The income and loss related to equity method investments and other investments are recorded in (loss) income from equity method investments and other expense, net, respectively, in our consolidated statements of operations.

We recorded gains of $ 3 million and $ 38 million for the three and six months ended June 30, 2023, respectively, and gains of $ 5 million and $ 25 million for the three and six months ended June 30, 2022, respectively, related to these investments.

The income and loss related to equity method investments and other investments are recorded in income from equity method investments and other (expense) income, net, respectively, in our consolidated statements of operations.

We recorded gains of $ 5 million and $ 43 million for the three and nine months ended September 30, 2023, respectively, and gains of $ 33 million and $ 58 million for the three and nine months ended September 30, 2022, respectively, related to these investments.

In conjunction with the Transaction, the composition of the DSIH board of managers was modified resulting in our loss of voting control over DSIH.

We hold substantially all of the equity of DSIH and provide certain management and general and administrative services to DSIH.

We hold substantially all the equity of DSIH and provide certain management and general and administrative services to DSIH.

However, it was determined that we are not the primary beneficiary because we lack the ability to control the activities that most significantly drive the economics of the business.

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There was no outstanding balance as of June 30, 2023 and an outstanding balance of approximately $ 193 million as of December 31, 2022.

As of June 30, 2023, our aggregate commitment under the A/R Facility is $ 50 million.

There was no outstanding balance as of September 30, 2023 and an outstanding balance of approximately $ 193 million as of December 31, 2022.

As of September 30, 2023, our aggregate commitment under the A/R Facility is $ 50 million.

See Note Receivable within Note 2.

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Certain assets used by us and our operating subsidiaries are leased from entities owned by the controlling shareholders.

Lease payments made to these entities were $ 1 million and $ 3 million for the three and six months ended June 30, 2023, respectively, and $ 1 million and $ 3 million for the three and six months ended June 30, 2022, respectively.

Lease payments made to these entities were $ 2 million and $ 5 million for the three and nine months ended September 30, 2023, respectively, and $ 2 million and $ 5 million for the three and nine months ended September 30, 2022, respectively.

For further information, see Note 3.

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We lease aircraft owned by certain controlling shareholders.

For all leases, we incurred expenses of $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively.

We incurred expenses of less than $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2022, respectively.

For all leases, we incurred expenses of $ 0.2 million for the nine months ended September 30, 2023 and less than $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2022, respectively.

SINCLAIR, INC.

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Variable Interest Entities , for further discussion of the scope of services provided under these types of arrangements.

All of the non-voting stock of the Cunningham Stations is owned by trusts for the benefit of the children of our controlling shareholders.

All the non-voting stock of the Cunningham Stations is owned by trusts for the benefit of the children of our controlling shareholders.

We consolidate certain subsidiaries of Cunningham with which we have variable interests through various arrangements related to the Cunningham Stations.

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A portion of the fee is required to be applied to the purchase price to the extent of the 6 % increase.

The cumulative prepayments made under these purchase agreements were $ 63 million and $ 61 million as of June 30, 2023 and December 31, 2022, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both June 30, 2023 and December 31, 2022, was approximately $ 54 million.

The cumulative prepayments made under these purchase agreements were $ 64 million and $ 61 million as of September 30, 2023 and December 31, 2022, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both September 30, 2023 and December 31, 2022, was approximately $ 54 million.

Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and have a purchase option to acquire for $ 0.2 million.

We paid Cunningham, under these agreements, $ 3 million and $ 6 million for the three and six months ended June 30, 2023, respectively, and $ 1 million and $ 4 million for the three and six months ended June 30, 2022, respectively.

We paid Cunningham, under these agreements, $ 3 million and $ 9 million for the three and nine months ended September 30, 2023, respectively, and $ 3 million and $ 7 million for the three and nine months ended September 30, 2022, respectively.

The agreements with KBVU-TV/KCVU-TV, KRNV-DT/KENV-DT, WBSF-TV, WDBB-TV, WEMT-TV, WGTU-TV/WGTQ-TV, WPFO-TV, and WYDO-TV expire between April 2025 and November 2029 and certain stations have renewal provisions for successive eight-year periods.

As we consolidate the licensees as VIEs, the amounts we earn or pay under the arrangements are eliminated in consolidation and the gross revenues of the stations are reported in our consolidated statements of operations.

Our consolidated revenues include $ 33 million and $ 69 million for the three and six months ended June 30, 2023, respectively, and $ 37 million and $ 71 million for the three and six months ended June 30, 2022, respectively, related to the Cunningham Stations.

Our consolidated revenues include $ 33 million and $ 102 million for the three and nine months ended September 30, 2023, respectively, and $ 40 million and $ 111 million for the three and nine months ended September 30, 2022, respectively, related to the Cunningham Stations.

We have an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which Cunningham has an LMA that expires in June 2025.

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and Greenville, North Carolina markets.

In exchange for carriage of these networks in their markets, we paid $ 0.5 million and $ 1 million for the three and six months ended June 30, 2023, respectively, and $ 1 million for both the three and six months ended June 30, 2022 under these agreements.

In exchange for carriage of these networks in their markets, we paid $ 0.5 million and $ 1.5 million for the three and nine months ended September 30, 2023, respectively, and $ 0.5 million and $ 1.5 million for the three and nine months ended September 30, 2022, respectively, under these agreements.

MileOne Autogroup Inc.

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("MileOne"), including automobile dealerships, body shops, and an automobile leasing company.

Smith, our Executive Chairman, has a controlling interest in, and is a member of the Board of Directors of, MileOne.

We received payments for advertising totaling less than $ 0.1 million for each of the three and six months ended June 30, 2023 and 2022.

David Smith, our Executive Chairman, has a controlling interest in, and is a member of the Board of Directors of, MileOne.

We received payments for advertising totaling less than $ 0.1 million for each of the three and nine months ended September 30, 2023 and 2022.

SINCLAIR, INC.

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Certain of our real estate ventures have entered into leases with entities owned by members of the Smith Family.

Total rent payments received under these leases were $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2023, respectively, and $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2022, respectively.

Total rent payments received under these leases were $ 0.3 million and $ 1 million for the three and nine months ended September 30, 2023, respectively, and $ 0.3 million and $ 0.8 million for the three and nine months ended September 30, 2022, respectively.

Diamond Sports Intermediate Holdings LLC

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As a condition to the Transaction, DSG will defer the cash payment of a portion of its management fee payable to the Company over the next four years .

Pursuant to this agreement, the local media segment recorded $ 13 million and $ 22 million of revenue for the three and six months ended June 30, 2023, respectively, and $ 10 million and $ 38 million of revenue for the three and six months ended June 30, 2022, respectively, of which $ 24 million for the six months ended June 30, 2022 was eliminated in consolidation prior to the Deconsolidation.

Pursuant to this agreement, the local media segment recorded $ 14 million and $ 36 million of revenue for the three and nine months ended September 30, 2023, respectively, and $ 11 million and $ 49 million of revenue for the three and nine months ended September 30, 2022, respectively, of which $ 24 million for the nine months ended September 30, 2022 was eliminated in consolidation prior to the Deconsolidation.

We will not recognize the portion of deferred management fees as revenue until such fees are determined to be collectible.

Distributions .

DSIH made distributions to DSH for tax payments on the dividends of the Redeemable Subsidiary Preferred Equity of $ 2 million and $ 3 million during the three and six months ended June 30, 2022, respectively.

DSIH made distributions to DSH for tax payments on the dividends of the Redeemable Subsidiary Preferred Equity of $ 2 million and $ 5 million during the three and nine months ended September 30, 2022, respectively.

Note receivable .

We received payments totaling $ 206 million and $ 209 million during the three and six months ended June 30, 2023, respectively, and $ 10 million and $ 60 million during the three and six months ended June 30, 2022, respectively, from DSPV related to the note receivable associated with the A/R Facility, including $ 199 million from DSPV on May 10, 2023, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses.

We recorded revenue of $ 6 million and $ 11 million during the three and six months ended June 30, 2023, respectively, and $ 4 million and $ 5 million during the three and six months ended June 30, 2022, respectively, related to certain other transactions between DSIH and the Company.

We received payments totaling $ 203 million from DSPV during the nine months ended September 30, 2023 and received payments totaling $ 60 million from DSPV and funded an additional $ 40 million during the nine months ended September 30, 2022 related to the note receivable associated with the A/R Facility, including $ 199 million from DSPV on May 10, 2023, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses.

We recorded revenue of $ 4 million and $ 15 million during the three and nine months ended September 30, 2023, respectively, and $ 5 million and $ 10 million during the three and nine months ended September 30, 2022, respectively, related to certain other transactions between DSIH and the Company.

Other Equity Method Investees

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The agreement will automatically renew for two 2 -year renewal terms, with a final expiration on August 29, 2029.

Pursuant to the terms of the agreement, the YES Network paid us a management services fee of $ 1 million for the six months ended June 30, 2022.

Pursuant to the terms of the agreement, the YES Network paid us a management services fee of $ 1 million for the nine months ended September 30, 2022.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

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Prior to the Deconsolidation, we accounted for these as equity method investments.

DSIH made payments to these businesses for production services totaling $ 5 million for the six months ended June 30, 2022.

DSIH made payments to these businesses for production services totaling $ 5 million for the nine months ended September 30, 2022.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

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We have a minority interest in a sports marketing company, which we account for as an equity method investment.

We made payments to this business for marketing services totaling $ 2 million for the six months ended June 30, 2022.

We made payments to this business for marketing services totaling $ 2 million for the nine months ended September 30, 2022.

SINCLAIR, INC.

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Affiliates of six professional teams had non-controlling equity interests in certain of DSIH's RSNs.

DSIH paid $ 61 million for the six months ended June 30, 2022 under sports programming rights agreements covering the broadcast of regular season games associated with these professional teams.

DSIH paid $ 61 million for the nine months ended September 30, 2022 under sports programming rights agreements covering the broadcast of regular season games associated with these professional teams.

Prior to the Deconsolidation, these payments were recorded in our consolidated statements of operations and cash flows.

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Jason Smith, an employee of the Company, is the son of Frederick Smith, who is a Vice President of the Company and a member of the Company's Board of Directors.

Jason Smith received total compensation of $ 0.2 million and $ 0.1 million for the three months ended June 30, 2023 and 2022, respectively, and $ 0.4 million and $ 0.2 million for the six months ended June 30, 2023 and 2022, respectively, consisting of salary and bonus.

Jason Smith received total compensation of $ 0.2 million for both the three months ended September 30, 2023 and 2022 and $ 0.6 million and $ 0.4 million for the nine months ended September 30, 2023 and 2022, respectively, consisting of salary and bonus.

Ethan White, an employee of the Company, is the son-in-law of J.

Duncan Smith, who is a Vice President of the Company and Secretary of the Company's Board of Directors.

Ethan White received total compensation of less than $ 0.1 million for both the three months ended June 30, 2023 and 2022 and $ 0.1 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus, and was granted 1,252 shares of restricted stock, vesting over two years , during the six months ended June 30, 2023.

Ethan White received total compensation of $ 0.1 million and less than $ 0.1 million for the three months ended September 30, 2023 and 2022, respectively, and $ 0.2 million and $ 0.1 million for the nine months ended September 30, 2023 and 2022, respectively, consisting of salary and bonus, and was granted 1,252 shares of restricted stock, vesting over two years , during the nine months ended September 30, 2023.

Amberly Thompson, an employee of the Company, is the daughter of Donald Thompson, who is an Executive Vice President and Chief Human Resources Officer of the Company.

Amberly Thompson received total compensation of less than $ 0.1 million for both the three months ended June 30, 2023 and 2022 and $ 0.1 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus.

Amberly Thompson received total compensation of less than $ 0.1 million for both the three months ended September 30, 2023 and 2022 and $ 0.1 million for both the nine months ended September 30, 2023 and 2022, consisting of salary and bonus.

Edward Kim, an employee of the company, is the brother-in-law of Christopher Ripley, who is the President and Chief Executive Officer of the Company.

Edward Kim received total compensation of less than $ 0.1 million for both the three months ended June 30, 2023 and 2022 and $ 0.1 million for both the six months ended June 30, 2023 and 2022, consisting of salary, and was granted 516 and 302 shares of restricted stock during the six months ended June 30, 2023 and 2022, respectively, vesting over two years .

Edward Kim received total compensation of less than $ 0.1 million for both the three months ended September 30, 2023 and 2022 and $ 0.1 million for both the nine months ended September 30, 2023 and 2022, consisting of salary, and was granted 516 and 302 shares of restricted stock during the nine months ended September 30, 2023 and 2022, respectively, vesting over two years .

Frederick Smith is the brother of David Smith, Executive Chairman of the Company and Chairman of the Company's Board of Directors;

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Duncan Smith.

Frederick Smith received total compensation of $ 0.2 million for both the three months ended June 30, 2023 and 2022 and $ 0.4 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus.

Frederick Smith received total compensation of $ 0.2 million for both the three months ended September 30, 2023 and 2022 and $ 0.6 million for both the nine months ended September 30, 2023 and 2022, consisting of salary and bonus.

Duncan Smith is the brother of David Smith, Frederick Smith, and Robert Smith.

Duncan Smith received total compensation of $ 0.2 million for both the three months ended June 30, 2023 and 2022 and $ 0.4 million for both the six months ended June 30, 2023 and 2022, consisting of salary and bonus.

Duncan Smith received total compensation of $ 0.2 million for both the three months ended September 30, 2023 and 2022 and $ 0.6 million for both the nine months ended September 30, 2023 and 2022, consisting of salary and bonus.

FAIR VALUE MEASUREMENTS:

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The following table sets forth the face value and fair value of our financial assets and liabilities for the periods presented (in millions):

As of June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

Face Value Fair Value Face Value Fair Value

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Money market funds N/A 571 N/A 741

Deferred compensation assets $ 43 43 $ 41 41

Deferred compensation liabilities 40 40 35 35

Deferred compensation assets N/A 42 N/A 41

Deferred compensation liabilities N/A 39 N/A 35

Investments in equity securities (a) N/A 103 N/A 153

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The swap agreement has a notional amount of $ 600 million, bears a fixed interest rate of 3.9 %, and we receive a floating rate of interest based on SOFR.

T he fair value of the interest rate swap was an asset as of June 30, 2023.

T he fair value of the interest rate swap was an asset as of September 30, 2023.

See Hedge Accounting within Note 1.

1 unchanged sentence

Notes Payable, Finance Leases, and Commercial Bank Financing.

(c) Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $ 51 million and $ 56 million as of June 30, 2023 and December 31, 2022, respectively.

(c) Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $ 48 million and $ 56 million as of September 30, 2023 and December 31, 2022, respectively.

(d) On November 18, 2020, we entered into a commercial agreement with Bally's and received warrants and options to acquire common equity in the business.

During both the three and six months ended June 30, 2023 we recorded a fair value adjustment loss of $ 17 million and during the three and six months ended June 30, 2022 we recorded fair value adjustment losses of $ 74 million and $ 130 million, respectively, related to these interests.

During the three and nine months ended September 30, 2023 we recorded fair value adjustment losses of $ 10 million and $ 27 million and during the three and nine months ended September 30, 2022 we recorded fair value adjustment losses of $ 0.2 million and $ 130 million, respectively, related to these interests.

The fair value of the warrants is primarily derived from the quoted trading prices of the underlying common equity.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three and six months ended June 30, 2023 and 2022 (in millions):

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three and nine months ended September 30, 2023 and 2022 (in millions):

Options and Warrants

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Fair value at March 31, 2023 $ 75 Fair value at December 31, 2022 $ 75

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Fair value at June 30, 2023 $ 58 Fair value at December 31, 2022 $ 75

Measurement adjustments ( 10 ) Measurement adjustments ( 27 )

Fair value at June 30, 2023 $ 58 Fair value at June 30, 2023 $ 58

Fair value at September 30, 2023 $ 48 Fair value at September 30, 2023 $ 48

Options and Warrants

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Fair value at March 31, 2022 $ 226 Fair value at December 31, 2021 $ 282

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Fair value at June 30, 2022 $ 152 Fair value at December 31, 2021 $ 282

Measurement adjustments — Measurement adjustments ( 130 )

Fair value at June 30, 2022 $ 152 Fair value at June 30, 2022 $ 152

Fair value at September 30, 2022 $ 152 Fair value at September 30, 2022 $ 152

FINANCIAL STATEMENTS OF SINCLAIR BROADCAST GROUP, LLC

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(in millions, except share and per share data) (Unaudited)

As of June 30,

As of September 30,

2023 As of December 31,

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Redeemable noncontrolling interests — 194

SBG member's equity:

SBG member's equity (deficit):

Accumulated deficit ( 512 ) —

Accumulated other comprehensive income 9 —

Total SBG member's equity ( 411 ) —

Total SBG member's deficit ( 503 ) —

Old Sinclair shareholders' equity:

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Noncontrolling interests ( 63 ) ( 67 )

Total equity ( 472 ) 681

Total (deficit) equity ( 566 ) 681

Total liabilities, redeemable noncontrolling interests, and equity $ 4,885 $ 6,704

The accompanying notes are an integral part of these unaudited consolidated financial statements.

(a) SBG's consolidated total assets as of June 30, 2023 and December 31, 2022 include total assets of variable interest entities ("VIE") of $ 78 million and $ 115 million, respectively, which can only be used to settle the obligations of the VIEs.

SBG's consolidated total liabilities as of June 30, 2023 and December 31, 2022 include total liabilities of VIEs of $ 16 million and $ 18 million, respectively, for which the creditors of the VIEs have no recourse to SBG.

(a) SBG's consolidated total assets as of September 30, 2023 and December 31, 2022 include total assets of variable interest entities ("VIE") of $ 80 million and $ 115 million, respectively, which can only be used to settle the obligations of the VIEs.

SBG's consolidated total liabilities as of both September 30, 2023 and December 31, 2022 include total liabilities of VIEs of $ 18 million for which the creditors of the VIEs have no recourse to SBG.

Variable Interest Entities .

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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Amortization of definite-lived intangible assets 34 43 114 179

Gain on deconsolidation of subsidiary — — — ( 3,357 )

Loss (gain) on asset dispositions and other, net of impairment 4 ( 4 ) 10 ( 9 )

Loss (gain) on deconsolidation of subsidiary 10 — 10 ( 3,357 )

(Gain) loss on asset dispositions and other, net of impairment ( 3 ) ( 28 ) 7 ( 37 )

Total operating expenses (gains) 653 689 2,144 ( 759 )

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Income from equity method investments — 33 31 48

Other expense, net ( 64 ) ( 105 ) ( 53 ) ( 165 )

Other income (expense), net 2 10 ( 51 ) ( 155 )

Total other expense, net ( 71 ) ( 16 ) ( 232 ) ( 332 )

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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(in millions, except share and per share data) (Unaudited)

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Old Sinclair Shareholders

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Shares Values Shares Values

BALANCE, March 31, 2022 $ 184 47,934,815 $ 1 23,775,056 $ — $ 657 $ 109 $ ( 2 ) $ ( 62 ) $ 703

BALANCE, June 30, 2022 $ 187 46,470,546 $ 1 23,775,056 $ — $ 628 $ 79 $ ( 2 ) $ ( 64 ) $ 642

Dividends declared and paid on Old Sinclair Class A and Class B Common Stock ($ 0.25 per share)

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Distributions to noncontrolling interests ( 2 ) — — — — — — — ( 5 ) ( 5 )

Net income (loss) 5 — — — — — ( 11 ) — — ( 11 )

BALANCE, June 30, 2022 $ 187 46,470,546 $ 1 23,775,056 $ — $ 628 $ 79 $ ( 2 ) $ ( 64 ) $ 642

Six Months Ended June 30, 2022

Net income 5 — — — — — 21 — 3 24

BALANCE, September 30, 2022 $ 190 46,073,926 $ 1 23,775,056 $ — $ 623 $ 84 $ ( 2 ) $ ( 66 ) $ 640

Nine Months Ended September 30, 2022

Old Sinclair Shareholders

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Net income 14 — — — — — 2,597 — 28 2,625

BALANCE, June 30, 2022 $ 187 46,470,546 $ 1 23,775,056 $ — $ 628 $ 79 $ ( 2 ) $ ( 64 ) $ 642

BALANCE, September 30, 2022 $ 190 46,073,926 $ 1 23,775,056 $ — $ 623 $ 84 $ ( 2 ) $ ( 66 ) $ 640

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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(in millions, except share and per share data) (Unaudited)

Three Months Ended June 30, 2023

Redeemable Noncontrolling Interests Class A

Common Stock Class B

Common Stock Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated

Three Months Ended September 30, 2023

Accumulated Deficit Accumulated

Comprehensive

(Loss) Income Noncontrolling

Interests Total Member's Equity (Deficit)

Shares Values Shares Values

BALANCE, March 31, 2023 $ — 44,360,502 $ 1 23,775,056 $ — $ 602 $ 289 $ ( 2 ) $ ( 59 ) $ 831

Repurchases of Old Sinclair Class A Common Stock — ( 5,201,809 ) — — — ( 100 ) — — — ( 100 )

Old Sinclair Class A Common Stock issued pursuant to employee benefit plans — 178,722 — — — 9 — — — 9

Old Sinclair Class A and Class B Common Stock converted to SBG member's equity — ( 39,337,415 ) ( 1 ) ( 23,775,056 ) — — — — — ( 1 )

Income Noncontrolling

Interests Total Deficit

BALANCE, June 30, 2023 $ ( 418 ) $ 7 $ ( 61 ) $ ( 472 )

Deemed dividend to parent ( 20 ) — — ( 20 )

Distribution to parent ( 52 ) — — ( 52 )

Distributions to noncontrolling interests — ( 3 ) ( 3 )

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Net (loss) income ( 22 ) — 1 ( 21 )

BALANCE, June 30, 2023 $ — — $ — — $ — $ — $ ( 418 ) $ 7 $ ( 61 ) $ ( 472 )

Six Months Ended June 30, 2023

Redeemable Noncontrolling Interests Class A

Common Stock Class B

Common Stock Additional

BALANCE, September 30, 2023 $ ( 512 ) $ 9 $ ( 63 ) $ ( 566 )

Nine Months Ended September 30, 2023

Redeemable Noncontrolling Interests Old Class A

Common Stock Old Class B

Common Stock Old Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated

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Income Noncontrolling

Interests Total Member's Equity (Deficit)

Interests Total Equity (Deficit)

Shares Values Shares Values

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Deemed dividend to parent — — — — — ( 511 ) ( 626 ) — ( 1 ) ( 1,138 )

Distribution to parent — — — — — — ( 52 ) — — ( 52 )

Repurchase of redeemable subsidiary preferred equity ( 190 ) — — — — — — — — —

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Net (loss) income ( 4 ) — — — — — 62 — 15 77

BALANCE, June 30, 2023 $ — — $ — — $ — $ — $ ( 418 ) $ 7 $ ( 61 ) $ ( 472 )

BALANCE, September 30, 2023 $ — — $ — — $ — $ — $ ( 512 ) $ 9 $ ( 63 ) $ ( 566 )

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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(in millions) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Loss (gain) on asset dispositions and other, net of impairment 7 ( 10 )

Gain on deconsolidation of subsidiary — ( 3,357 )

Loss (gain) on deconsolidation of subsidiary 10 ( 3,357 )

Income from equity method investments ( 31 ) ( 48 )

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Increase in prepaid expenses and other current assets ( 10 ) ( 95 )

Increase in due from member ( 12 ) —

Increase in accounts payable and accrued and other current liabilities 27 49

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Repurchase of redeemable subsidiary preferred equity ( 190 ) —

Distributions to member ( 360 ) —

Distributions to member, net ( 429 ) —

Distributions to noncontrolling interests, net ( 10 ) ( 10 )

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Additionally, prior to the Reorganization (as defined below in Company Reorganization ) , SBG had interests in, owned, managed, and/or operated Tennis Channel, digital media companies, technical and software services companies, research and development companies for the advancement of broadcast technology, and other media and non-media related businesses and assets, including real estate, venture capital, private equity, and direct investments.

For the quarter ended June 30, 2023, SBG had one reportable segment:

For the quarter ended September 30, 2023, SBG had one reportable segment:

Prior to the Deconsolidation (as defined below in Deconsolidation of Diamond Sports Intermediate Holdings LLC), SBG had one additional reportable segment:

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The local media segment consists primarily of SBG's 185 broadcast television stations in 86 markets, which SBG owns, provides programming and operating services pursuant to agreements commonly referred to as local marketing agreements ("LMA"), or provides sales services and other non-programming operating services pursuant to other outsourcing agreements (such as joint sales agreements ("JSA") and shared services agreements ("SSA")).

These stations broadcast 639 channels as of June 30, 2023.

These stations broadcast 639 channels as of September 30, 2023.

For the purpose of this report, these 185 stations and 639 channels are referred to as "SBG" stations and channels.

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On the day following the Share Exchange Effective Time, Sinclair Holdings became the intermediate holding company between Sinclair and SBG, and SBG transferred certain of its assets (the "Transferred Assets") to Sinclair Ventures, LLC, a new indirect wholly-owned subsidiary of Sinclair ("Ventures").

We refer to the Share Exchange and the related steps described above collectively as the "Reorganization." The Transferred Assets included technical and software services companies, intellectual property for the advancement of broadcast technology, and other media and non-media related businesses and assets including real estate, venture capital, private equity, and direct investments, as well as Compulse, a marketing technology and managed services company, and Tennis Channel and related assets.

As a result of the Reorganization, SBG's consolidated statement of operations for the three months ended June 30, 2023 includes two months of activity related to the Transferred Assets and for the six months ended June 30, 2023 includes five months of activity related to the Transferred Assets prior to the Reorganization.

The Share Exchange and the related steps described above collectively are referred to as the "Reorganization." The Transferred Assets included technical and software services companies, intellectual property for the advancement of broadcast technology, and other media and non-media related businesses and assets including real estate, venture capital, private equity, and direct investments, as well as Compulse, a marketing technology and managed services company, and Tennis Channel and related assets.

As a result of the Reorganization, SBG's consolidated statement of operations for the nine months ended September 30, 2023 includes five months of activity related to the Transferred Assets prior to the Reorganization.

Subsequent to June 1, 2023, the assets and liabilities of the Transferred Assets are no longer included within SBG's consolidated balance sheets.

Any discussions related to results, operations, and accounting policies associated with the Transferred Assets are referring to the periods prior to the Reorganization.

The Reorganization is considered transactions between entities under common control and therefore the Transferred Assets were transferred from SBG to Ventures at a net book value of $ 1,118 million, which is recognized in SBG's consolidated statements of equity and redeemable noncontrolling interests as a dividend to SBG's parent.

Any discussions related to results, operations, and accounting policies associated with the Transferred Assets refer to the periods prior to the Reorganization.

The Reorganization is considered transactions between entities under common control and therefore the Transferred Assets were transferred from SBG to Ventures at a net book value of $ 1,138 million during the nine months ended September 30, 2023, which is recognized in SBG's consolidated statements of equity and redeemable noncontrolling interests as a dividend to SBG's parent.

Deconsolidation of Diamond Sports Intermediate Holdings LLC

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As a result, DSIH, whose operations represented the entirety of SBG's local sports segment, was deconsolidated from SBG's consolidated financial statements effective as of March 1, 2022 (the "Deconsolidation").

SBG's consolidated statement of operations for the six months ended June 30, 2022 therefore includes two months of activity related to DSIH prior to the Deconsolidation.

SBG's consolidated statement of operations for the nine months ended September 30, 2022 therefore includes two months of activity related to DSIH prior to the Deconsolidation.

Subsequent to February 28, 2022, the assets and liabilities of DSIH are no longer included within SBG's consolidated balance sheets.

Any discussions related to results, operations, and accounting policies associated with DSIH are referring to the periods prior to the Deconsolidation.

Upon Deconsolidation, SBG recognized a gain before income taxes of approximately $ 3,357 million, which is recorded within gain on deconsolidation of subsidiary in SBG's consolidated statements of operations for the six months ended June 30, 2022.

During the three and nine months ended September 30, 2023, we recorded an adjustment to the deconsolidation gain of $ 10 million.

Subsequent to the Deconsolidation, SBG's equity ownership interest in DSIH is accounted for under the equity method of accounting.

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Interim Financial Statements

SBG's consolidated financial statements for the three and six months ended June 30, 2023 and 2022 are unaudited.

SBG's consolidated financial statements for the three and nine months ended September 30, 2023 and 2022 are unaudited.

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The impact of the adoption did not have a material impact on SBG's consolidated financial statements.

In September 2023, the FASB voted to finalize a proposed ASU "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures." The guidance is expected to be effective for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years.

The final ASU is expected during the fourth quarter of 2023.

SBG is currently evaluating the impact of this guidance.

Broadcast Television Programming

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The National Basketball Association ("NBA") and the National Hockey League ("NHL") postponed games in the fourth quarter of 2021 and rescheduled these games to be played in the first quarter of 2022.

The sports rights expense associated with these seasons was recognized over the modified term of these seasons.

Hedge Accounting

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Non-cash Investing and Financing Activities

Leased assets obtained in exchange for new operating lease liabilities were $ 3 million and $ 7 million for the six months ended June 30, 2023 and 2022, respectively.

Leased assets obtained in exchange for new finance lease liabilities were $ 1 million for the six months ended June 30, 2022.

Non-cash investing activities included property and equipment purchases of $ 5 million for the six months ended June 30, 2023.

As part of the Reorganization, SBG made a noncash distribution of $ 758 million to Ventures for the six months ended June 30, 2023, which represents the book value of the net assets distributed.

Leased assets obtained in exchange for new operating lease liabilities were $ 4 million and $ 9 million for the nine months ended September 30, 2023 and 2022, respectively.

Leased assets obtained in exchange for new finance lease liabilities were $ 1 million for the nine months ended September 30, 2022.

Non-cash investing activities included property and equipment purchases of $ 5 million for the nine months ended September 30, 2023.

SBG made noncash distributions of $ 778 million to Sinclair, and certain of its direct and indirect subsidiaries, for the nine months ended September 30, 2023, which represents the book value of the net assets distributed.

See Company Reorganization above.

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The following table presents SBG's revenue disaggregated by type and segment (in millions):

For the three months ended June 30, 2023 Local Media Other Eliminations Total

For the three months ended September 30, 2023 Local Media Total

Distribution revenue $ 365 $ 365

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Total revenues $ 697 $ 697

For the six months ended June 30, 2023 Local Media Other Eliminations Total

For the nine months ended September 30, 2023 Local Media Other Eliminations Total

Distribution revenue $ 1,118 $ 76 $ — $ 1,194

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Total revenues $ 2,101 $ 119 $ ( 7 ) $ 2,213

For the three months ended June 30, 2022 Local Media Other Eliminations Total

For the three months ended September 30, 2022 Local Media Other Eliminations Total

Distribution revenue $ 381 $ 44 $ — $ 425

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Total revenues $ 781 $ 71 $ ( 9 ) $ 843

For the six months ended June 30, 2022 Local Media Local Sports Other Eliminations Total

For the nine months ended September 30, 2022 Local Media Local Sports Other Eliminations Total

Distribution revenue $ 1,159 $ 433 $ 136 $ — $ 1,728

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SBG classifies deferred revenue as either current in other current liabilities or long-term in other long-term liabilities in SBG's consolidated balance sheets based on the timing of when SBG expects to satisfy performance obligations.

Deferred revenue was $ 181 million and $ 200 million as of June 30, 2023 and December 31, 2022, respectively, of which $ 134 million and $ 144 million, respectively, was reflected in other long-term liabilities in SBG's consolidated balance sheets.

Deferred revenue recognized during the six months ended June 30, 2023 and 2022, included in the deferred revenue balance as of December 31, 2022 and 2021, was $ 32 million and $ 42 million, respectively.

For the three months ended June 30, 2023, two customers accounted for 12 % and 10 %, respectively, of SBG's total revenues.

For the six months ended June 30, 2023, two customers accounted for 11 % and 10 %, respectively, of SBG's total revenues.

For the three months ended June 30, 2022, two customers accounted for 11 % and 10 %, respectively, of SBG's total revenues.

For the six months ended June 30, 2022, three customers accounted for 15 %, 14 %, and 12 %, respectively, of SBG's total revenues.

As of June 30, 2023, three customers accounted for 11 %, 11 %, and 10 %, respectively, of SBG's accounts receivable, net.

Deferred revenue was $ 176 million and $ 200 million as of September 30, 2023 and December 31, 2022, respectively, of which $ 129 million and $ 144 million, respectively, was reflected in other long-term liabilities in SBG's consolidated balance sheets.

Deferred revenue recognized during the nine months ended September 30, 2023 and 2022, included in the deferred revenue balance as of December 31, 2022 and 2021, was $ 39 million and $ 53 million, respectively.

For the three months ended September 30, 2023, one customer accounted for 11 % of SBG's total revenues.

For the nine months ended September 30, 2023, two customers accounted for 11 % and 10 %, respectively, of SBG's total revenues.

For the three months ended September 30, 2022, one customer accounted for 11 % of SBG's total revenues.

For the nine months ended September 30, 2022, three customers accounted for 14 %, 12 %, and 11 %, respectively, of SBG's total revenues.

As of September 30, 2023, three customers accounted for 11 %, 11 %, and 10 %, respectively, of SBG's accounts receivable, net.

As of December 31, 2022, one customer accounted for 13 % of SBG's accounts receivable, net.

For purposes of this disclosure, a single customer may include multiple entities under common control.

SBG's (provision) benefit for taxes and deferred tax balances have been calculated on a separate return basis as if SBG filed its own tax returns, although its operations are included in the Sinclair consolidated tax returns.

The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if SBG were a separate taxpayer and a standalone enterprise.

SBG’s income tax provision for all periods consists of federal and state income taxes.

SBG provides a valuation allowance for deferred tax assets if it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized.

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A valuation allowance has been provided for deferred tax assets related to a substantial amount of SBG’s available state net operating loss carryforwards based on past operating results, expected timing of the reversals of existing temporary basis differences, alternative tax strategies and projected future taxable income.

SBG's effective income tax rate for the three months ended June 30, 2023 was less than the statutory rate primarily due to non-deductible expenses.

SBG's effective income tax rate for the six months ended June 30, 2023 was greater than the statutory rate primarily due to a release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

SBG's effective income tax rate for the three months ended June 30, 2022 was greater than the statutory rate primarily due to an increase in valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

SBG's effective income tax rate for the six months ended June 30, 2022 approximated SBG's statutory rate.

SBG’s effective income tax rate for the three months ended September 30, 2023 approximated the statutory rate.

SBG’s effective income tax rate for the nine months ended September 30, 2023 was greater than the statutory rate primarily due to a release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

SBG’s effective income tax rate for the three months ended September 30, 2022, was greater than the statutory rate primarily due to an increase in valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

SBG’s effective income tax rate for the nine months ended September 30, 2022, approximated SBG’s statutory rate.

SBG believes that its liability for unrecognized tax benefits could be reduced by up to $ 1 million, in the next twelve months, as a result of the expected statute of limitations expirations, and the resolution of examination issues and settlements with tax authorities.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Share Repurchase Program

For the six months ended June 30, 2023, SBG repurchased approximately 8.8 million shares of Old Sinclair Class A Common Stock for $ 151 million.

For the nine months ended September 30, 2023, SBG repurchased approximately 8.8 million shares of Old Sinclair Class A Common Stock for $ 151 million.

All shares were repurchased under an SEC Rule 10b5-1 plan, which is no longer applicable subsequent to the Reorganization.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications

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OTHER ASSETS:

Other assets as of June 30, 2023 and December 31, 2022 consisted of the following (in millions):

As of June 30,

Other assets as of September 30, 2023 and December 31, 2022 consisted of the following (in millions):

As of September 30,

2023 As of December 31,

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Total other assets $ 233 $ 964

(a) The note receivable and certain of the equity method and other investments were transferred to Ventures as part of the Reorganization.

(a) The note receivable, other investments, and certain of the equity method investments were transferred to Ventures as part of the Reorganization.

Equity Method Investments

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As of March 1, 2022, SBG reflected the investment in DSIH at fair value, which was determined to be nominal .

For the three and six months ended June 30, 2023 and 2022, SBG recorded no equity method loss related to the investment because the carrying value of the investment is zero and SBG is not obligated to fund losses incurred by DSIH.

For the three and nine months ended September 30, 2023 and 2022, SBG recorded no equity method loss related to the investment because the carrying value of the investment is zero and SBG is not obligated to fund losses incurred by DSIH.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

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Prior to the Deconsolidation, SBG's investment in the YES Network was accounted for as an equity method investment.

SBG recorded income of $ 10 million for the six months ended June 30, 2022 related to this investment, which is reflected in (loss) income from equity method investments in SBG's consolidated statements of operations.

SBG recorded income of $ 10 million for the nine months ended September 30, 2022 related to this investment, which is reflected in income from equity method investments in SBG's consolidated statements of operations.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

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Additionally, certain investments are measured at net asset value ("NAV").

All of the investments measured at fair value and certain of the investments measured at NAV were transferred to Ventures as part of the Reorganization.

As of December 31, 2022, SBG held $ 234 million in investments measured at fair value.

As of June 30, 2023 and December 31, 2022, SBG held $ 25 million and $ 190 million, respectively, in investments measured at NAV.

SBG recognized fair value adjustment losses of $ 72 million and $ 73 million for the three and six months ended June 30, 2023,

All of the investments measured at fair value and NAV were transferred to Ventures as part of the Reorganization.

As of December 31, 2022, SBG held $ 234 million in investments measured at fair value and $ 190 million in investments measured at NAV.

SBG recognized a fair value adjustment loss of $ 73 million for the nine months ended September 30, 2023 and a fair value adjustment gain of $ 4 million and loss of $ 157 million for the three and nine months ended September 30, 2022, respectively, associated with these investments, which are reflected in other (expense) income, net in SBG's consolidated statements of operations.

As of December 31, 2022, SBG's unfunded commitments related to the investments valued using the NAV practical expedient totaled $ 88 million.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

respectively, and fair value adjustment losses of $ 105 million and $ 161 million for the three and six months ended June 30, 2022, respectively, associated with these investments, which are reflected in other expense, net in SBG's consolidated statements of operations.

As of June 30, 2023 and December 31, 2022, SBG's unfunded commitments related to the investments valued using the NAV practical expedient totaled $ 40 million and $ 88 million, respectively.

The investments remaining at SBG will be transferred to Ventures upon receipt of third party consents.

Certain of the investments accounted for utilizing the measurement alternative were transferred to Ventures as part of the Reorganization.

Investments accounted for utilizing the measurement alternative were $ 1 million as of June 30, 2023 and $ 18 million, net of $ 7 million of cumulative impairments, as of December 31, 2022.

SBG recorded a $ 6 million impairment related to one investment for the three and six months ended June 30, 2023, which is reflected in other expense, net in SBG's consolidated statements of operations.

There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for either of the three and six months ended June 30, 2022.

The investments remaining at SBG will be transferred to Ventures upon receipt of third party consents.

All of the investments accounted for utilizing the measurement alternative were transferred to Ventures as part of the Reorganization.

Investments accounted for utilizing the measurement alternative were $ 18 million, net of $ 7 million of cumulative impairments, as of December 31, 2022.

SBG recorded a $ 6 million impairment related to one investment for the nine months ended September 30, 2023, which is reflected in other (expense) income, net in SBG's consolidated statements of operations.

There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for either of the three and nine months ended September 30, 2022.

Note Receivable

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The loans under the A/R Facility and cash received were transferred to Ventures as part of the Reorganization.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

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As of June 30, 2023, the STG first lien leverage ratio was below 4.5 x.

As of September 30, 2023, the STG first lien leverage ratio was below 4.5 x.

Since there was no utilization under the revolving credit facility as of June 30, 2023, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement.

The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of June 30, 2023.

Since there was no utilization under the revolving credit facility as of September 30, 2023, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement.

The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of September 30, 2023.

During the three months ended September 30, 2023, STG purchased $ 30 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $ 26 million.

The portions of the Term Loan B-2 purchased were canceled immediately following their acquisition.

STG recognized a gain on extinguishment of the Term Loan B-2 of $ 3 million for both the three and nine months ended September 30, 2023.

In June 2023, STG purchased $ 3 million, $ 15 million, and $ 13 million aggregate principal amount of the 5.125 % Senior Notes due 2027, the 5.500 % Senior Notes due 2030, and the 4.125 % Senior Secured Notes due 2030 (collectively, the notes are referred to as the "STG Notes"), respectively, in open market transactions for consideration of $ 3 million, $ 8 million, and $ 8 million, respectively.

The STG Notes acquired in June 2023 were canceled immediately following their acquisition.

SBG recognized a gain on extinguishment of the STG Notes of $ 11 million for the three and six months ended June 30, 2023.

In July 2023, STG purchased $ 0.5 million aggregate principal amount of the 5.125 % Senior Notes due 2027 in open market transactions for consideration of $ 0.4 million and repaid $ 1 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $ 0.8 million.

The STG Notes acquired in July 2023 were canceled immediately following their acquisition.

During the three months ended September 30, 2023, STG purchased $ 4 million in aggregate principal amount of the 5.125 % Senior Notes due 2027 in open market transactions for consideration of $ 3 million.

The STG Notes acquired in June 2023 and during the three months ended September 30, 2023 were canceled immediately following their acquisition.

SBG recognized a gain on extinguishment of the STG Notes of $ 1 million and $ 12 million for the three and nine months ended September 30, 2023, respectively.

Finance Leases to Affiliates

The current portion of notes payable, finance leases, and commercial bank financing in SBG's consolidated balance sheets includes finance leases to affiliates of $ 2 million and $ 3 million as of June 30, 2023 and December 31, 2022, respectively.

Notes payable, finance leases, and commercial bank financing, less current portion, in SBG's consolidated balance sheets includes finances leases to affiliates of $ 6 million as of both June 30, 2023 and December 31, 2022.

Notes payable, finance leases, and commercial bank financing, less current portion, in SBG's consolidated balance sheets includes finances leases to affiliates of $ 5 million and $ 6 million as of September 30, 2023 and December 31, 2022, respectively.

Related Person Transactions.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Debt of Variable Interest Entities and Guarantees of Third-Party Obligations

STG jointly, severally, unconditionally, and irrevocably guaranteed $ 2 million of debt of certain third parties as of both June 30, 2023 and December 31, 2022, all of which relate to consolidated VIEs and is included in SBG's consolidated balance sheets as of both June 30, 2023 and December 31, 2022.

SBG provides a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $ 112 million with annual escalations of 4 % for the next seven years .

SBG has determined that, as of June 30, 2023, it is not probable that SBG would have to perform under any of these guarantees.

STG jointly, severally, unconditionally, and irrevocably guaranteed $ 2 million of debt of certain third parties as of both September 30, 2023 and December 31, 2022, all of which relate to consolidated VIEs and is included in SBG's consolidated balance sheets as of both September 30, 2023 and December 31, 2022.

SBG provides a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $ 112 million with annual escalations of 4 % for the next six years .

SBG has determined that, as of September 30, 2023, it is not probable that SBG would have to perform under any of these guarantees.

Interest Rate Swap

SBG entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of SBG's exposure to variable interest rates.

SBG entered into an interest rate swap effective February 7, 2023 and terminates on February 28, 2026 in order to manage a portion of SBG's exposure to variable interest rates.

The swap agreement has a notional amount of $ 600 million , bears a fixed interest rate of 3.9 %, and SBG receives a floating rate of interest based on SOFR.

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Nature of Operations and Summary of Significant Accounting Policies for further discussion.

As of June 30, 2023, the fair value of the interest rate swap was an asset o f $ 8 million , which is recorded in other assets in SBG's consolidated balance sheets.

As of September 30, 2023, the fair value of the interest rate swap was an asset o f $ 11 million , which is recorded in other assets in SBG's consolidated balance sheets.

REDEEMABLE NONCONTROLLING INTERESTS:

3 unchanged sentences

On August 23, 2019, Diamond Sports Holdings LLC ("DSH"), an indirect parent of Diamond Sports Group, LLC ("DSG") and indirect wholly-owned subsidiary of SBG, issued preferred equity (the "Redeemable Subsidiary Preferred Equity").

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Distributions accrued during the six months ended June 30, 2023 were $ 3 million and during the three and six months ended June 30, 2022 were $ 3 million and $ 6 million, respectively, and are reflected in net income attributable to the redeemable noncontrolling interests in SBG's consolidated statements of operations.

Distributions accrued during all of the six months ended June 30, 2023 and the three and six months ended June 30, 2022 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

Distributions accrued during the nine months ended September 30, 2023 were $ 3 million and during the three and nine months ended September 30, 2022 were $ 3 million and $ 9 million, respectively, and are reflected in net income attributable to the redeemable noncontrolling interests in SBG's consolidated statements of operations.

Distributions accrued during all of the nine months ended September 30, 2023 and the three and nine months ended September 30, 2022 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

The balance, net of issuance costs, and the liquidation preference of the Redeemable Subsidiary Preferred Equity were $ 194 million and $ 198 million, respectively, as of December 31, 2022.

10 unchanged sentences

The Company filed an opposition to the petitions on June 18, 2020, and the petitions remain pending.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On September 1, 2020, one of the individuals who filed a petition for reconsideration of the Order and Consent Decree filed a petition to deny the license renewal application of WBFF(TV), Baltimore, MD, and the license renewal applications of two other Baltimore, MD stations with which the Company has a JSA or LMA, Deerfield Media station WUTB(TV) and Cunningham Broadcasting Corporation ("Cunningham") station WNUV(TV).

10 unchanged sentences

As of June 30, 2023, SBG has accrued $ 3.4 million.

As of September 30, 2023, SBG has accrued $ 3.4 million.

On October 21, 2022, the Company filed a written response seeking reduction of the proposed fine amount, and the matter remains pending.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Other Litigation Matters

13 unchanged sentences

The Court denied the defendants' motion to dismiss on November 6, 2020.

Since then, the Plaintiffs have served the Defendants with written discovery requests and have begun taking depositions of the employees of the defendants and certain third parties.

The Company believes the lawsuits are without merit and intends to vigorously defend itself against all such claims.

Discovery commenced shortly after that and is continuing.

That privilege review is ongoing.

On August 18, 2023, the defendants filed objections to the Special Master’s First Report and Recommendations with the Court, which has not yet ruled on those objections.

The Court granted preliminary approval of these settlements on August 18, 2023, and set a deadline of October 26, 2023, for class members to file either objections or claims.

The plaintiffs filed a motion for final approval of the settlement on October 11, 2023.

A hearing on final approval is currently scheduled for December 7, 2023.

The Company and the other non-settling defendants continue to believe the lawsuits are without merit and intend to vigorously defend themselves against all such claims.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

7 unchanged sentences

The complaint alleges that SBG and its subsidiaries (other than DSG and its subsidiaries) received payments or indirect benefits of approximately $ 1.5 billion as a result of the alleged misconduct.

The complaint asserts a variety of claims, including certain fraudulent transfers of assets, unlawful distributions and payments, breaches of contracts, unjust enrichment and breaches of fiduciary duties.

The complaint asserts a variety of claims, including certain fraudulent transfers of assets, unlawful distributions and payments, breaches of contract, unjust enrichment and breaches of fiduciary duties.

The plaintiffs are seeking, among other relief, avoidance of fraudulent transfers and unlawful distributions, and unspecified monetary damages to be determined.

1 unchanged sentence

While at this early stage of the proceedings it is not possible to determine the probability of any outcome or probability or amount of any loss, in the event of an unfavorable outcome, SBG's subsidiaries may be required to pay monetary damages, which could materially and adversely affect SBG's financial and results of operations.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT DATA:

1 unchanged sentence

Nature of Operations and Summary of Significant Accounting Policies.

The segment information within the comparative periods have been revised to reflect this new presentation.

During the period ended June 30, 2023, SBG measured segment performance based on operating income (loss).

For the quarter ended June 30, 2023, SBG had one reportable segment:

The segment information within the comparative periods has been revised to reflect this new presentation.

During the period ended September 30, 2023, SBG measured segment performance based on operating income (loss).

For the quarter ended September 30, 2023, SBG had one reportable segment:

Prior to the Deconsolidation , SBG had one additional reportable segment:

10 unchanged sentences

All of SBG's businesses are located within the United States.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Segment financial information is included in the following tables for the periods presented (in millions):

As of June 30, 2023 Local Media Other & Corporate Eliminations Consolidated

As of September 30, 2023 Local Media Corporate Eliminations Consolidated

Assets $ 4,771 $ 114 $ — $ 4,885

For the three months ended June 30, 2023 Local Media Other & Corporate (c) Eliminations Consolidated

For the three months ended September 30, 2023 Local Media Corporate Eliminations Consolidated

Revenue $ 697 (b) $ — $ — $ 697

2 unchanged sentences

Corporate general and administrative expenses 31 — — 31

(Gain) loss on asset dispositions and other, net of impairment ( 2 ) 6 — 4

Loss on deconsolidation of subsidiary — 10 — 10

Gain on asset dispositions and other, net of impairment ( 2 ) ( 1 ) — ( 3 )

Operating income (loss) 53 ( 9 ) — 44

Interest expense including amortization of debt discount and deferred financing costs 77 — — 77

For the six months ended June 30, 2023 Local Media Other & Corporate (c) Eliminations Consolidated

For the nine months ended September 30, 2023 Local Media Other & Corporate (c) Eliminations Consolidated

Revenue $ 2,101 (b) $ 119 $ ( 7 ) (a) $ 2,213

2 unchanged sentences

Corporate general and administrative expenses 109 38 — 147

Loss on deconsolidation of subsidiary — 10 — 10

(Gain) loss on asset dispositions and other, net of impairment ( 5 ) 12 — 7

2 unchanged sentences

Income from equity method investments — 31 — 31

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended June 30, 2022 Local Media Other & Corporate Eliminations Consolidated

For the three months ended September 30, 2022 Local Media Other & Corporate Eliminations Consolidated

Revenue $ 781 (b) $ 71 $ ( 9 ) (a) $ 843

3 unchanged sentences

Gain on asset dispositions and other, net of impairment ( 7 ) ( 21 ) — ( 28 )

Operating income (loss) 116 ( 9 ) — 107

Operating income 143 11 — 154

Interest expense including amortization of debt discount and deferred financing costs 59 — — 59

Income from equity method investments — 33 — 33

For the six months ended June 30, 2022 Local Media Local Sports (d) Other & Corporate Eliminations Consolidated

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2022 Local Media Local Sports (d) Other & Corporate Eliminations Consolidated

Revenue $ 2,295 (b) $ 482 $ 242 $ ( 51 ) (a) $ 2,968

8 unchanged sentences

Income from equity method investments — 10 38 — 48

(a) Includes $ 1 million for the six months ended June 30, 2023, and $ 1 million and $ 25 million for the three and six months ended June 30, 2022, respectively, of revenue for services provided by local media to other and local sports, which is eliminated in consolidation.

(a) Includes $ 1 million for the nine months ended September 30, 2023, and $ 1 million and $ 26 million for the three and nine months ended September 30, 2022, respectively, of revenue for services provided by local media to other and local sports, which is eliminated in consolidation.

(b) Includes $ 15 million and $ 39 million for the three and nine months ended September 30, 2023, respectively, and $ 12 million and $ 27 million for the three and nine months ended September 30, 2022, respectively, of revenue for services provided by local media under management services agreements after the Deconsolidation, which is not eliminated in consolidation.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

6 unchanged sentences

Nature of Operations and Summary of Significant Accounting Policies.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

VARIABLE INTEREST ENTITIES:

12 unchanged sentences

Nature of Operations and Summary of Significant Accounting Policies.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in SBG's consolidated balance sheets as of the dates presented, were as follows (in millions):

As of June 30,

As of September 30,

2023 As of December 31,

14 unchanged sentences

Total liabilities $ 24 $ 26

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The amounts above represent the combined assets and liabilities of the VIEs described above, for which SBG is the primary beneficiary.

The assets of each of these consolidated VIEs can only be used to settle the obligations of the VIE.

As of June 30, 2023, all of the liabilities are non-recourse to SBG except for the debt of certain VIEs.

As of September 30, 2023, all of the liabilities are non-recourse to SBG except for the debt of certain VIEs.

See Debt of variable interest entities and guarantees of third-party obligations under Note 3.

6 unchanged sentences

Other Assets for more information related to SBG's equity investments.

SBG recorded gains of $ 2 million and $ 37 million for the three and six months ended June 30, 2023, respectively, and gains of $ 5 million and $ 25 million for the three and six months ended June 30, 2022, respectively, related to these investments.

SBG recorded gains of $ 37 million for the nine months ended September 30, 2023 and gains of $ 33 million and $ 58 million for the three and nine months ended September 30, 2022, respectively, related to these investments.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In conjunction with the Transaction, the composition of the DSIH board of managers was modified resulting in SBG's loss of voting control over DSIH.

13 unchanged sentences

Certain assets used by SBG and SBG's operating subsidiaries are leased from entities owned by the Sinclair controlling shareholders.

For further information, see Note 3.

2 unchanged sentences

SBG leases aircraft owned by certain Sinclair controlling shareholders.

For all leases, SBG incurred expenses of $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively, and less than $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2022, respectively.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For all leases, SBG incurred expenses of $ 0.2 million for the nine months ended September 30, 2023 and less than $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2022, respectively.

Cunningham Broadcasting Corporation

23 unchanged sentences

A portion of the fee is required to be applied to the purchase price to the extent of the 6 % increase.

The cumulative prepayments made under these purchase agreements were $ 63 million and $ 61 million as of June 30, 2023 and December 31, 2022, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both June 30, 2023 and December 31, 2022, was approximately $ 54 million.

The cumulative prepayments made under these purchase agreements were $ 64 million and $ 61 million as of September 30, 2023 and December 31, 2022, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both September 30, 2023 and December 31, 2022, was approximately $ 54 million.

Additionally, SBG provides services to WDBB-TV pursuant to an LMA, which expires April 22, 2025, and has a purchase option to acquire for $ 0.2 million.

SBG paid Cunningham, under these agreements, $ 3 million and $ 6 million for the three and six months ended June 30, 2023, respectively, and $ 1 million and $ 4 million for the three and six months ended June 30, 2022, respectively.

SBG paid Cunningham, under these agreements, $ 3 million and $ 9 million for the three and nine months ended September 30, 2023, respectively, and $ 3 million and $ 7 million for the three and nine months ended September 30, 2022, respectively.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As SBG consolidates the licensees as VIEs, the amounts SBG earns or pays under the arrangements are eliminated in consolidation and the gross revenues of the stations are reported in SBG's consolidated statements of operations.

SBG's consolidated revenues include $ 33 million and $ 69 million for the three and six months ended June 30, 2023, respectively, and $ 37 million and $ 71 million for the three and six months ended June 30, 2022, respectively, related to the Cunningham Stations.

SBG's consolidated revenues include $ 33 million and $ 102 million for the three and nine months ended September 30, 2023, respectively, and $ 40 million and $ 111 million for the three and nine months ended September 30, 2022, respectively, related to the Cunningham Stations.

SBG has an agreement with Cunningham to provide master control equipment and provide master control services to a station in Johnstown, PA with which Cunningham has an LMA that expires in June 2025.

9 unchanged sentences

and Greenville, North Carolina markets.

In exchange for carriage of these networks in their markets, SBG paid $ 0.5 million and $ 1 million for the three and six months ended June 30, 2023, respectively, and $ 1 million for both the three and six months ended June 30, 2022 under these agreements.

In exchange for carriage of these networks in their markets, SBG paid $ 0.5 million and $ 1.5 million for the three and nine months ended September 30, 2023, respectively, and $ 0.5 million and $ 1.5 million for the three and nine months ended September 30, 2022, respectively, under these agreements.

MileOne Autogroup Inc.

1 unchanged sentence

("MileOne"), including automobile dealerships, body shops, and an automobile leasing company.

Smith, has a controlling interest in, and is a member of the Board of Directors of, MileOne.

SBG received payments for advertising totaling less than $ 0.1 million for each of the three and six months ended June 30, 2023 and 2022.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

David Smith has a controlling interest in, and is a member of the Board of Directors of, MileOne.

SBG received payments for advertising totaling less than $ 0.1 million for each of the three and nine months ended September 30, 2023 and 2022.

Leased Property by Real Estate Ventures

Certain of SBG's real estate ventures have entered into leases with entities owned by members of the Smith Family.

Total rent payments received under these leases were $ 0.7 million for the nine months ended September 30, 2023 and $ 0.3 million and $ 0.8 million for the three and nine months ended September 30, 2022, respectively.

Sinclair, Inc.

2 unchanged sentences

Nature of Operations and Summary of Significant Accounting Policies for further discussion.

SBG recorded revenue of $ 1 million during both the three and six months ended June 30, 2023 within the local media segment related to sales services provided by SBG to Sinclair, and certain of its direct and indirect subsidiaries.

SBG recorded expenses of $ 2 million during both the three and six months ended June 30, 2023 within the local media segment related to digital advertising services provided by Sinclair, and certain of its direct and indirect subsidiaries, to SBG.

SBG made a cash distribution of $ 360 million to Sinclair, and certain of its direct and indirect subsidiaries, during both the three and six months ended June 30, 2023, as part of the Reorganization.

As of June 30, 2023, SBG had a receivable from Sinclair, and certain of its direct and indirect subsidiaries, of $ 16 million, included within prepaid expenses and other current assets in SBG's consolidated balance sheets.

SBG recorded revenue of $ 2 million and $ 3 million during the three and nine months ended September 30, 2023, respectively, within the local media segment related to sales services provided by SBG to Sinclair, and certain of its direct and indirect subsidiaries.

SBG recorded expenses of $ 2 million and $ 4 million during the three and nine months ended September 30, 2023, respectively, within the local media segment related to digital advertising services provided by Sinclair, and certain of its direct and indirect subsidiaries, to SBG.

SBG made cash distributions of $ 83 million and $ 443 million to Sinclair, and certain of its direct and indirect subsidiaries, during the three and nine months ended September 30, 2023, respectively.

SBG received cash payments of $ 16 million from Sinclair, and certain of its direct and indirect subsidiaries, during both the three and nine months ended September 30, 2023.

As of September 30, 2023, SBG had a receivable from Sinclair, and certain of its direct and indirect subsidiaries, of $ 27 million, included within prepaid expenses and other current assets in SBG's consolidated balance sheets.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Diamond Sports Intermediate Holdings LLC

7 unchanged sentences

As a condition to the Transaction, DSG will defer the cash payment of a portion of its management fee payable to SBG over the next four years .

SBG will not recognize the portion of deferred management fees as revenue until such fees are determined to be collectible.

Distributions .

Note receivable .

SBG received payments totaling $ 206 million and $ 209 million during the three and six months ended June 30, 2023, respectively, and $ 10 million and $ 60 million during the three and six months ended June 30, 2022, respectively, from DSPV related to the note receivable associated with the A/R Facility, including $ 199 million from DSPV on May 10, 2023, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses.

SBG received payments of $ 203 million from DSPV during the nine months ended September 30, 2023 and received payments of $ 60 million from DSPV and funded an additional $ 40 million during the nine months ended September 30, 2022 related to the note receivable associated with the A/R Facility, including $ 199 million from DSPV on May 10, 2023, representing the aggregate outstanding principal amount of the loans under the A/R Facility, accrued interest, and outstanding fees and expenses.

The loans under the A/R Facility and cash received on May 10, 2023 were transferred to Ventures as part of the Reorganization.

SBG recorded revenue of $ 4 million and $ 9 million during the three and six months ended June 30, 2023, respectively, and $ 4 million and $ 5 million during the three and six months ended June 30, 2022, respectively, within the local media segment and other related to certain other transactions between DSIH and SBG.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SBG recorded revenue of $ 1 million and $ 10 million during the three and nine months ended September 30, 2023, respectively, and $ 5 million and $ 10 million during the three and nine months ended September 30, 2022, respectively, within the local media segment and other related to certain other transactions between DSIH and SBG.

Other Equity Method Investees

1 unchanged sentence

The agreement will automatically renew for two 2 -year renewal terms, with a final expiration on August 29, 2029.

Pursuant to the terms of the agreement, the YES Network paid SBG a management services fee of $ 1 million for the six months ended June 30, 2022.

Pursuant to the terms of the agreement, the YES Network paid SBG a management services fee of $ 1 million for the nine months ended September 30, 2022.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

2 unchanged sentences

Prior to the Deconsolidation, SBG accounted for these as equity method investments.

DSIH made payments to these businesses for production services totaling $ 5 million for the six months ended June 30, 2022.

DSIH made payments to these businesses for production services totaling $ 5 million for the nine months ended September 30, 2022.

See Deconsolidation of Diamond Sports Intermediate Holdings LLC within Note 1.

1 unchanged sentence

SBG has a minority interest in a sports marketing company, which is accounted for as an equity method investment.

Payments to this business for marketing services totaled $ 2 million for the six months ended June 30, 2022.

Payments to this business for marketing services totaled $ 2 million for the nine months ended September 30, 2022.

Sports Programming Rights

Affiliates of six professional teams had non-controlling equity interests in certain of DSIH's RSNs.

DSIH paid $ 61 million for the six months ended June 30, 2022 under sports programming rights agreements covering the broadcast of regular season games associated with these professional teams.

DSIH paid $ 61 million for the nine months ended September 30, 2022 under sports programming rights agreements covering the broadcast of regular season games associated with these professional teams.

Prior to the Deconsolidation, these payments were recorded in SBG's consolidated statements of operations and cash flows.

1 unchanged sentence

Nature of Operations and Summary of Significant Accounting Policies.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Jason Smith, an employee of SBG, is the son of Frederick Smith, who is a Vice President of SBG and a member of SBG's Board of Managers.

Ethan White, an employee of SBG, is the son-in-law of J.

Duncan Smith, who is a Vice President of SBG and member of SBG's Board of Managers.

Amberly Thompson, an employee of SBG, is the daughter of Donald Thompson, who is an Executive Vice President and Chief Human Resources Officer of SBG.

Edward Kim, an employee of SBG, is the brother-in-law of Christopher Ripley, who is the President and Chief Executive Officer of SBG.

Frederick Smith is the brother of David Smith, Executive Chairman of SBG and a member of SBG's Board of Managers, and J.

Duncan Smith.

Duncan Smith is the brother of David Smith and Frederick Smith.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FAIR VALUE MEASUREMENTS:

9 unchanged sentences

The following table sets forth the face value and fair value of SBG's financial assets and liabilities for the periods presented (in millions):

As of June 30, 2023 As of December 31, 2022

As of September 30, 2023 As of December 31, 2022

Face Value Fair Value Face Value Fair Value

1 unchanged sentence

Money market funds N/A 264 N/A 741

Deferred compensation assets $ 43 43 $ 41 41

Deferred compensation liabilities 40 40 35 35

Deferred compensation assets N/A 42 N/A 41

Deferred compensation liabilities N/A 39 N/A 35

Investments in equity securities (a) (b) N/A — N/A 153

18 unchanged sentences

The swap agreement has a notional amount of $ 600 million , bears a fixed interest rate of 3.9 %, and SBG receives a floating rate of interest based on SOFR.

T he fair value of the interest rate swap was an asset as of June 30, 2023.

T he fair value of the interest rate swap was an asset as of September 30, 2023.

See Hedge Accounting within Note 1.

1 unchanged sentence

Notes Payable, Finance Leases, and Commercial Bank Financing.

(d) Amounts are carried in SBG's consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $ 51 million and $ 56 million as of June 30, 2023 and December 31, 2022, respectively.

(d) Amounts are carried in SBG's consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $ 48 million and $ 56 million as of September 30, 2023 and December 31, 2022, respectively.

(e) On November 18, 2020, SBG entered into a commercial agreement with Bally's and received warrants and options to acquire common equity in the business.

During both the three and six months ended June 30, 2023 SBG recorded a fair value adjustment loss of $ 25 million and during the three and six months ended June 30, 2022 SBG recorded fair value adjustment losses of $ 74 million and $ 130 million, respectively, related to these interests.

During the nine months ended September 30, 2023 SBG recorded a fair value adjustment loss of $ 25 million and during the three and nine months ended September 30, 2022 SBG recorded fair value adjustment losses of $ 0.2 million and $ 130 million, respectively, related to these interests.

The fair value of the warrants is primarily derived from the quoted trading prices of the underlying common equity.

4 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three and nine months ended September 30, 2023 and 2022 (in millions):

Options and Warrants

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Fair value at March 31, 2023 $ 75 Fair value at December 31, 2022 $ 75

Measurement adjustments ( 25 ) Measurement adjustments ( 25 )

Transfer to Ventures ( 50 ) Transfer to Ventures ( 50 )

Fair value at June 30, 2023 $ — Fair value at June 30, 2023 $ —

Nine Months Ended September 30, 2023

Fair value at December 31, 2022 $ 75

Measurement adjustments ( 25 )

Transfer to Ventures ( 50 )

Fair value at September 30, 2023 $ —

Options and Warrants

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

Fair value at March 31, 2022 $ 226 Fair value at December 31, 2021 $ 282

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Fair value at June 30, 2022 $ 152 Fair value at December 31, 2021 $ 282

Measurement adjustments — Measurement adjustments ( 130 )

Fair value at June 30, 2022 $ 152 Fair value at June 30, 2022 $ 152

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

STG is the primary obligor under the Bank Credit Agreement, the 5.125 % Senior Notes due 2027, the 5.500 % Senior Notes due 2030, and the 4.125 % Senior Secured Notes due 2030 (collectively, the notes are referred to as the "STG Notes").

Sinclair's Class A Common Stock and Class B Common Stock as of June 30, 2023, were obligations or securities of Sinclair and not obligations or securities of STG.

SBG is a guarantor under the STG Notes.

As of June 30, 2023, SBG's consolidated total debt, net of deferred financing costs and debt discounts, of $ 4,206 million included $ 4,206 million related to STG and its subsidiaries of which SBG guaranteed $ 4,176 million.

SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG's wholly-owned subsidiaries ("guarantor subsidiaries") have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG's obligations.

Those guarantees are joint and several.

There are certain contractual restrictions on the ability of SBG, STG, or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.

The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and comprehensive income, and consolidated statements of cash flows of SBG (subsequent to the Reorganization), Old Sinclair (prior to the Reorganization), STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG, and the eliminations necessary to arrive at SBG's information on a consolidated basis.

The condensed consolidating financial statements are provided pursuant to the terms of certain of SBG's debt agreements.

Investments in the subsidiaries of SBG (subsequent to the Reorganization), Old Sinclair (prior to the Reorganization), STG, KDSM, LLC and the guarantor subsidiaries, and the direct and indirect non-guarantor subsidiaries of SBG are presented in each column under the equity method of accounting.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

As such, these condensed consolidating financial statements should be read in conjunction with the accompanying notes to consolidated financial statements.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JUNE 30, 2023

(in millions) (unaudited)

Group, LLC Sinclair

Subsidiaries Eliminations SBG Consolidated

Cash and cash equivalents $ — $ 368 $ — $ — $ — $ 368

Accounts receivable, net — 1 526 17 — 544

Other current assets 18 55 94 2 ( 17 ) 152

Total current assets 18 424 620 19 ( 17 ) 1,064

Property and equipment, net 16 14 644 17 ( 2 ) 689

Investment in equity of consolidated subsidiaries 274 3,144 — — ( 3,418 ) —

Goodwill — — 2,015 1 — 2,016

Indefinite-lived intangible assets — — 109 14 — 123

Definite-lived intangible assets, net — — 707 36 ( 28 ) 715

Other long-term assets 92 987 638 119 ( 1,449 ) 387

Total assets $ 400 $ 4,569 $ 4,733 $ 206 $ ( 4,914 ) $ 4,994

Accounts payable and accrued liabilities $ 5 $ 101 $ 266 $ 8 $ ( 2 ) $ 378

Current portion of long-term debt — 27 6 4 ( 1 ) 36

Other current liabilities 4 2 114 21 ( 17 ) 124

Total current liabilities 9 130 386 33 ( 20 ) 538

Long-term debt — 4,142 22 10 ( 4 ) 4,170

Other long-term liabilities 802 56 1,183 166 ( 1,449 ) 758

Total liabilities 811 4,328 1,591 209 ( 1,473 ) 5,466

Total SBG (deficit) equity ( 411 ) 241 3,142 62 ( 3,445 ) ( 411 )

Noncontrolling interests in consolidated subsidiaries — — — ( 65 ) 4 ( 61 )

Total liabilities and equity $ 400 $ 4,569 $ 4,733 $ 206 $ ( 4,914 ) $ 4,994

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2022

(in millions)

Subsidiaries Eliminations Old Sinclair Consolidated

Cash and cash equivalents $ 47 $ 750 $ 1 $ 86 $ — $ 884

Accounts receivable, net — — 555 57 — 612

Other current assets 32 42 159 19 ( 65 ) 187

Total current assets 79 792 715 162 ( 65 ) 1,683

Property and equipment, net — 31 668 51 ( 22 ) 728

Investment in equity of consolidated subsidiaries 1,093 3,463 — — ( 4,556 ) —

Goodwill — — 2,081 7 — 2,088

Indefinite-lived intangible assets — — 136 14 — 150

Definite-lived intangible assets, net — — 935 42 ( 31 ) 946

Other long-term assets 411 938 512 573 ( 1,325 ) 1,109

Total assets $ 1,583 $ 5,224 $ 5,047 $ 849 $ ( 5,999 ) $ 6,704

Accounts payable and accrued liabilities $ — $ 80 $ 300 $ 18 $ ( 1 ) $ 397

Current portion of long-term debt — 28 6 5 ( 1 ) 38

Other current liabilities 4 8 139 87 ( 65 ) 173

Total current liabilities 4 116 445 110 ( 67 ) 608

Long-term debt — 4,181 24 26 ( 4 ) 4,227

Other long-term liabilities 831 52 1,120 314 ( 1,323 ) 994

Total liabilities 835 4,349 1,589 450 ( 1,394 ) 5,829

Redeemable noncontrolling interests — — — 194 — 194

Total Old Sinclair equity 748 875 3,458 275 ( 4,608 ) 748

Noncontrolling interests in consolidated subsidiaries — — — ( 70 ) 3 ( 67 )

Total liabilities, redeemable noncontrolling interests, and equity $ 1,583 $ 5,224 $ 5,047 $ 849 $ ( 5,999 ) $ 6,704

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2023

(in millions) (unaudited)

Group, LLC Sinclair

Subsidiaries Eliminations SBG Consolidated

Net revenue $ — $ 15 $ 713 $ 33 $ ( 18 ) $ 743

Media programming and production expenses — 4 377 27 ( 11 ) 397

Selling, general and administrative expenses 13 49 181 4 ( 5 ) 242

Depreciation, amortization and other operating expenses 1 1 85 15 ( 2 ) 100

Total operating expenses 14 54 643 46 ( 18 ) 739

Operating (loss) income ( 14 ) ( 39 ) 70 ( 13 ) — 4

Equity in (loss) earnings of consolidated subsidiaries ( 88 ) 54 — — 34 —

Interest expense — ( 75 ) — 2 ( 3 ) ( 76 )

Other (expense) income ( 1 ) 17 — ( 69 ) — ( 53 )

Total other (expense) income ( 89 ) ( 4 ) — ( 67 ) 31 ( 129 )

Income tax benefit (provision) 2 19 ( 15 ) 20 — 26

Net (loss) income ( 101 ) ( 24 ) 55 ( 60 ) 31 ( 99 )

Net income attributable to the noncontrolling interests — — — ( 2 ) — ( 2 )

Net (loss) income attributable to SBG $ ( 101 ) $ ( 24 ) $ 55 $ ( 62 ) $ 31 $ ( 101 )

Comprehensive (loss) income $ ( 101 ) $ ( 15 ) $ 55 $ ( 60 ) $ 31 $ ( 90 )

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2022

(in millions) (unaudited)

Subsidiaries Eliminations Old Sinclair Consolidated

Net revenue $ — $ 11 $ 820 $ 46 $ ( 40 ) $ 837

Media programming and production expenses — 2 383 36 ( 18 ) 403

Selling, general and administrative expenses 3 38 206 6 ( 20 ) 233

Depreciation, amortization and other operating expenses 1 1 84 12 ( 4 ) 94

Total operating expenses 4 41 673 54 ( 42 ) 730

Operating (loss) income ( 4 ) ( 30 ) 147 ( 8 ) 2 107

Equity in (loss) earnings of consolidated subsidiaries ( 12 ) 119 — — ( 107 ) —

Interest expense — ( 53 ) — ( 4 ) 3 ( 54 )

Other income (expense) 6 ( 2 ) — ( 103 ) — ( 99 )

Total other (expense) income ( 6 ) 64 — ( 107 ) ( 104 ) ( 153 )

Income tax (provision) benefit ( 1 ) 10 ( 27 ) 58 — 40

Net (loss) income ( 11 ) 44 120 ( 57 ) ( 102 ) ( 6 )

Net income attributable to the redeemable noncontrolling interests — — — ( 5 ) — ( 5 )

Net (loss) income attributable to Old Sinclair $ ( 11 ) $ 44 $ 120 $ ( 62 ) $ ( 102 ) $ ( 11 )

Comprehensive (loss) income $ ( 11 ) $ 44 $ 120 $ ( 57 ) $ ( 102 ) $ ( 6 )

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2023

(in millions) (unaudited)

Group, LLC Sinclair

Subsidiaries Eliminations SBG Consolidated

Net revenue $ — $ 25 $ 1,452 $ 76 $ ( 37 ) $ 1,516

Media programming and production expenses — 7 753 61 ( 26 ) 795

Selling, general and administrative expenses 38 84 368 9 ( 8 ) 491

Depreciation, amortization and other operating expenses 2 2 167 37 ( 3 ) 205

Total operating expenses 40 93 1,288 107 ( 37 ) 1,491

Operating (loss) income ( 40 ) ( 68 ) 164 ( 31 ) — 25

Equity in earnings of consolidated subsidiaries 119 123 — — ( 242 ) —

Interest expense — ( 148 ) ( 1 ) ( 1 ) — ( 150 )

Other (expense) income ( 4 ) 25 — ( 32 ) — ( 11 )

Total other income (expense) 115 — ( 1 ) ( 33 ) ( 242 ) ( 161 )

Income tax benefit (provision) 9 38 ( 38 ) 221 — 230

Net income (loss) 84 ( 30 ) 125 157 ( 242 ) 94

Net loss attributable to the redeemable noncontrolling interests — — — 4 — 4

Net income attributable to the noncontrolling interests — — — ( 14 ) — ( 14 )

Net income (loss) attributable to SBG $ 84 $ ( 30 ) $ 125 $ 147 $ ( 242 ) $ 84

Comprehensive income (loss) $ 84 $ ( 24 ) $ 125 $ 157 $ ( 242 ) $ 100

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(in millions) (unaudited)

Subsidiaries Eliminations Old Sinclair Consolidated

Net revenue $ — $ 40 $ 1,611 $ 577 $ ( 103 ) $ 2,125

Media programming and production expenses — 2 745 448 ( 34 ) 1,161

Selling, general and administrative expenses 6 86 405 69 ( 66 ) 500

Gain on deconsolidation of subsidiary ( 3,357 ) — — — — ( 3,357 )

Depreciation, amortization and other operating expenses 1 3 168 82 ( 6 ) 248

Total operating (gains) expenses ( 3,350 ) 91 1,318 599 ( 106 ) ( 1,448 )

Operating income (loss) 3,350 ( 51 ) 293 ( 22 ) 3 3,573

Equity in (loss) earnings of consolidated subsidiaries ( 50 ) 219 — — ( 169 ) —

Interest expense ( 4 ) ( 97 ) ( 1 ) ( 79 ) 12 ( 169 )

Other income (expense) 10 ( 1 ) 3 ( 153 ) ( 6 ) ( 147 )

Total other (expense) income ( 44 ) 121 2 ( 232 ) ( 163 ) ( 316 )

Income tax (provision) benefit ( 730 ) 30 ( 74 ) 127 — ( 647 )

Net income (loss) 2,576 100 221 ( 127 ) ( 160 ) 2,610

Net income attributable to the redeemable noncontrolling interests — — — ( 9 ) — ( 9 )

Net income attributable to the noncontrolling interests — — — ( 25 ) — ( 25 )

Net income (loss) attributable to Old Sinclair $ 2,576 $ 100 $ 221 $ ( 161 ) $ ( 160 ) $ 2,576

Comprehensive income (loss) $ 2,576 $ 100 $ 221 $ ( 124 ) $ ( 160 ) $ 2,613

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2023

(in millions) (unaudited)

Group, LLC Sinclair

Subsidiaries Eliminations SBG Consolidated

NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES $ ( 74 ) $ ( 115 ) $ 91 $ 221 $ ( 1 ) $ 122

NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES

Acquisition of property and equipment — ( 2 ) ( 38 ) ( 2 ) 1 ( 41 )

Purchases of investments ( 4 ) — ( 21 ) ( 12 ) — ( 37 )

Distributions from investments 196 — — 8 — 204

Other, net — — 3 1 — 4

Net cash flows from (used in) investing activities 192 ( 2 ) ( 56 ) ( 5 ) 1 130

NET CASH FLOWS USED IN FINANCING ACTIVITIES

Repayments of notes payable, commercial bank financing and finance leases — ( 33 ) ( 3 ) ( 1 ) — ( 37 )

Repurchase of outstanding Old Sinclair Class A Common Stock ( 153 ) — — — — ( 153 )

Dividends paid on Old Sinclair Class A and Class B Common Stock ( 18 ) — — — — ( 18 )

Redemption of redeemable subsidiary preferred equity — — — ( 190 ) — ( 190 )

Distributions to member ( 250 ) — — ( 110 ) — ( 360 )

Distributions to noncontrolling interests — — — ( 7 ) — ( 7 )

Increase (decrease) in intercompany payables 259 ( 232 ) ( 33 ) 6 — —

Other, net ( 3 ) — — — — ( 3 )

Net cash flows used in financing activities ( 165 ) ( 265 ) ( 36 ) ( 302 ) — ( 768 )

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 47 ) ( 382 ) ( 1 ) ( 86 ) — ( 516 )

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 47 750 1 86 — 884

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period $ — $ 368 $ — $ — $ — $ 368

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2022

(in millions) (unaudited)

Subsidiaries Eliminations Old Sinclair Consolidated

NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES $ ( 111 ) $ ( 96 ) $ 616 $ ( 206 ) $ 4 $ 207

NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES

Acquisition of property and equipment — ( 2 ) ( 43 ) ( 2 ) 2 ( 45 )

Deconsolidation of subsidiary cash — — — ( 315 ) — ( 315 )

Purchases of investments ( 44 ) ( 1 ) ( 3 ) ( 13 ) — ( 61 )

Distributions from investments 60 — 10 11 — 81

Other, net — — 7 4 — 11

Net cash flows from (used in) investing activities 16 ( 3 ) ( 29 ) ( 315 ) 2 ( 329 )

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES

Proceeds from notes payable and commercial bank financing — 728 — — — 728

Repayments of notes payable, commercial bank financing and finance leases — ( 841 ) ( 3 ) ( 1 ) — ( 845 )

Repurchase of outstanding Old Sinclair Class A Common Stock ( 104 ) — — — — ( 104 )

Dividends paid on Old Sinclair Class A and Class B Common Stock ( 36 ) — — — — ( 36 )

Dividends paid on redeemable subsidiary preferred equity — — — ( 3 ) — ( 3 )

Distributions to noncontrolling interests — — — ( 5 ) — ( 5 )

Increase (decrease) in intercompany payables 269 248 ( 585 ) 74 ( 6 ) —

Other, net ( 4 ) ( 8 ) — — — ( 12 )

Net cash flows from (used in) financing activities 125 127 ( 588 ) 65 ( 6 ) ( 277 )

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 30 28 ( 1 ) ( 456 ) — ( 399 )

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 2 316 2 499 — 819

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period $ 32 $ 344 $ 1 $ 43 $ — $ 420

Fair value at September 30, 2022 $ 152 Fair value at September 30, 2022 $ 152

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements