What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-10 compared with 2023-11-09 · 164 added, 291 removed, 185 unchanged (71% of the section changed)

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This discussion consists of the following sections:

Summary of Significant Events — financial events during the three months ended September 30, 2023 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of Sinclair's and SBG's revenues and expenses for the three and nine months ended September 30, 2023 and 2022.

Liquidity and Capital Resources — a discussion of Sinclair's and SBG's primary sources of liquidity and an analysis of Sinclair's and SBG's cash flows from or used in operating activities, investing activities, and financing activities during the three and nine months ended September 30, 2023.

Summary of Significant Events — financial events during the three months ended March 31, 2024 and through the date this Report on Form 10-Q is filed.

Results of Operations — an analysis of Sinclair's and SBG's revenues and expenses for the three months ended March 31, 2024 and 2023.

SUMMARY OF SIGNIFICANT EVENTS

Content and Distribution

• In July 2023, Sinclair announced a distribution agreement with Hulu to add carriage of Sinclair's Tennis Channel and T2 and SBG's Comet and CHARGE!

to Hulu's service offerings beginning in January 2024.

• In August 2023, SBG agreed to expand and extend its network affiliation agreement with The CW.

Under the terms of the comprehensive multiyear agreement, SBG will continue carrying The CW’s entertainment and sports programming in 35 of its owned and/or operated markets across the country.

The agreement also includes the right to negotiate carriage agreements directly with vMVPDs.

In addition, beginning September 1, SBG launched The CW on two new affiliate stations, KOMO-TV/KUNS-TV, in Seattle, Washington, and WPNT-TV in Pittsburgh, Pennsylvania.

• In September 2023, DIRECTV, LLC extended its distribution agreement with Sinclair.

• In September 2023, Tennis Channel and the Carvana Professional Pickleball Association (PPA Tour) announced a commercial joint venture to further grow pickleball in the US and worldwide.

The partnership will see the vast majority of PPA Tour matches appear live on Tennis Channel platforms, integrated advertising-sales efforts for media and tournaments, and the recent launch of a 24-hour pickleball channel.

Tennis Channel will produce all events for the PPA Tour.

• In October 2023, SBG launched The Nest, a new, free over-the-air national broadcast TV network with programming comprised of home-improvement, true-crime, factual reality series, and celebrity driven family shows.

The Nest joins SBG’s lineup of national broadcast networks, Comet, CHARGE!, and TBD.

It replaces Stadium network on broadcast stations across the country.

At launch, the network was available in more than 50% of all US television households including the major markets of New York, Los Angeles, Philadelphia, Dallas - Ft.

Worth, Boston, San Francisco - Oakland - San Jose and Seattle-Tacoma.

• In October 2023, SBG and Paramount reached comprehensive, multi-year distribution agreements across all 21 CBS network affiliations for SBG stations, including six top-50 market affiliates, KUTV in Salt Lake City, UT, KEYE in Austin, TX, WKRC in Cincinnati, OH, WPEC in West Palm Beach, FL, WWMT in Grand Rapids, MI and WHP in Harrisburg, PA.

Additionally, Paramount reached an agreement to renew the affiliations of WTVH in Syracuse, NY and WGFL in Gainesville, FL, stations to which SBG provides services.

Environmental, Social, and Governance

• To date in 2023, SBG's newsrooms have won a total of 260 journalism awards, including a RTDNA National Edward R.

Murrow award won by Sinclair's Seattle station, KOMO-TV, for Sports Reporting/Large Market Television category.

• In July 2023, Sinclair announced a partnership with the National Diaper Bank Network to launch Sinclair Cares:

Summer Diaper Drive, a nationwide campaign to create awareness, provide assistance, and build a community to reduce diaper need in the US.

• In July 2023, SBG announced that scholarships were awarded to 15 university students as a part of SBG's annual Diversity Scholarship program.

• In October 2023, Sinclair launched Sinclair Cares:

Humanitarian Relief in Israel, a fundraising partnership in conjunction with Magen David Adom (MDA), an affiliate of the International Federation of Red Cross and Red Crescent Societies, to help with their efforts providing humanitarian relief and emergency medical services for all people in Israel, regardless of religious creed or political belief.

• In October 2023, SBG announced the return of SBG's News Reporter and Producer Academies, a series of interactive, virtual workshops for college students interested in pursuing careers in journalism.

This year, SBG also added Weather Academy, a workshop for students interested in a career in weather.

The 90-minute sessions will run throughout November and assist students seeking to build a career in reporting, producing or weather.

• In January 2024, Sinclair announced a comprehensive multi-year distribution agreement with Verizon for carriage on FiOS TV, covering Tennis Channel and SBG's local television stations in 10 markets.

• In January 2024, Sinclair renewed its distribution agreement with the National Content & Technology Cooperative ("NCTC") that allows NCTC's member companies to opt into a multi-year retransmission consent agreement for SBG's owned and operated stations and includes an agreement for Tennis Channel.

• In January 2024, SBG and FOX Corporation reached an agreement for a multi-year renewal of all FOX affiliations in SBG markets, including where SBG provides sales and other services under JSAs or MSAs.

• In March 2024, Sinclair reached a comprehensive, multiyear distribution agreement with Charter Communications, Inc.

for continued carriage of Tennis Channel and SBG’s owned local broadcast stations.

• In May 2024, Sinclair reached a comprehensive, multiyear distribution agreement with Cox Communications, Inc.

for continued carriage of Tennis Channel and SBG’s owned local broadcast stations.

Corporate Social Responsibility

• To date in 2024, SBG's newsrooms have won a total of 47 journalism awards.

• In March 2024, Sinclair launched Sinclair Cares:

Supporting Children’s Literacy, a partnership with Reading Is Fundamental, the nation’s leading children’s literacy nonprofit, to create awareness around children’s literacy challenges and help get books into the hands of children across the U.S.

through a virtual book drive.

• In April 2024, WBFF FOX 45, Baltimore's #1 ranked news outlet and the David D.

Smith Family Foundation donated $50 thousand and $100 thousand, respectively, to the Maryland Tough Baltimore Strong Key Bridge Fund.

• In April 2024, Sinclair published its 2023 Corporate Social Responsibility report, detailing the Company's achievements and progress in its social responsibility journey.

• In April 2024, Sinclair held its second annual Sinclair Day of Service, whereby all employees were encouraged to volunteer that day for charitable causes.

Over 1,300 employees volunteered a total of more than 3,700 hours that day.

NextGen Broadcasting (ATSC 3.0)

• In October 2023, Sinclair announced an agreement to expand development of and promote NextGen services in South Korea with the Korea Radio Promotion Association.

• In 2023, Sinclair, in coordination with other broadcasters, and led by BitPath, its joint venture with another broadcaster, have deployed NextGen TV, powered by ATSC 3.0, in the 5 additional markets below.

• In April 2024, Sinclair announced the launch of its Broadspan datacasting platform to enable data distribution capability across all current Sinclair NextGen Broadcast (ATSC 3.0) markets where it serves as the host station.

Edgio, Inc., a leading content delivery network, will become the Company's first NextGen commercial partner.

• In 2024, Sinclair, in coordination with other broadcasters, and led by BitPath, its joint venture with another broadcaster, has deployed NextGen TV, powered by ATSC 3.0, in the market below.

This brings the total number of our markets in which NextGen TV has been deployed to 44:

Month Market Number of Stations Company Stations

March 2023 Rochester, NY 4 WHAM-TV (a) (ABC), WUHF (FOX)

March 2023 Des Moines, IA 4 KDSM-TV (FOX)

June 2023 South Bend, IN 5 WSBT-TV (CBS and FOX)

July 2023 Reno, NV 5 KRXI-TV (FOX), KRNV-DT (a) (NBC), and KNSN-TV (b) (MyNet)

August 2023 Minneapolis, MN 5 WUCW-TV (CW)

April 2024 Portland, ME 5 WGME (CBS), WPFO (a) (FOX)

(a) The license and programming assets for this station are currently owned by a third party.

SBG provides certain non-programming related sales, operational, and administrative services to this station pursuant to a service agreement, such as a JSA and SSA.

(b) The license assets for these stations are currently owned by a third party.

SBG provides programming, sales, operational, and administrative services to these stations pursuant to certain service agreements, such as LMAs.

Financing, Capital Allocation, and Shareholder Returns

• In August 2023, Sinclair declared a quarterly dividend of $0.25 per share and in November 2023, Sinclair declared a quarterly dividend of $0.25 per share.

• For the nine months ended September 30, 2023, Sinclair repurchased approximately 8.8 million shares of Class A Common Stock for $151 million, which all occurred through May 2023.

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

• Since the beginning of June 2023, STG purchased an aggregate $64 million of principal across multiple tranches of debt in the open market for $49 million.

• In January 2024, STG purchased $27 million aggregate principal amount of the Term Loan B-2 for consideration of $25 million and during the first quarter of 2024 we repaid $34 million across all tranches of the Term Loan B in scheduled principal payments.

• In February 2024, Sinclair declared a quarterly dividend of $0.25 per share and in May 2024, Sinclair declared a quarterly dividend of $0.25 per share.

• In January 2024, Sinclair announced that it has agreed, subject to Sinclair and DSG completing definitive documentation, to a global settlement and release of all claims associated with the litigation filed by DSG and DSG’s wholly-owned subsidiary, Diamond Sports Net, LLC, in July 2023 and on March 1, 2024, the court approved the settlement.

The settlement terms include Sinclair’s cash payment to DSG of $495 million.

Additionally, under the terms of the settlement, Sinclair will provide transition services to DSG to allow DSG to become a self-standing entity going forward.

An initial payment of $50 million was made in March 2024, which was funded by Ventures, and the remaining $445 million was paid in April 2024, of which $347 million was paid by STG and $98 million was paid by Ventures.

• In May 2024, Jason Smith was promoted to Executive Vice Chairman from his former position of Vice President, Chief of Staff.

SINCLAIR, INC.

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RESULTS OF OPERATIONS

Any references to the first, second, or fourth quarters are to the three months ended March 31, June 30, or December 31, respectively, for the year being discussed.

For the quarter ended September 30, 2023, we have two reportable segments, local media and tennis, that are disclosed separately from our other and corporate activities.

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

Any references to the second, third, or fourth quarters are to the three months ended June 30, September 30, or December 31, respectively, for the year being discussed.

As of March 31, 2024, we had two reportable segments for accounting purposes, local media and tennis.

Seasonality / Cyclicality

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The operating results of our tennis segment are usually subject to cyclical fluctuations due to the amount and significance of tournaments that take place in the respective quarters during the year.

The first and fourth quarter operating results are usually higher than the second and third quarters because of the amount and significance of tournaments that are played during the respective quarters.

The first and fourth quarter operating results are usually higher than the second and third quarters' because of the amount and significance of tournaments that are played during those periods.

Operating Data

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Media revenues $ 792 $ 766

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Corporate general and administrative expenses 58 58

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

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

Loss on asset dispositions and other, net of impairment — 6

Operating income $ 42 $ 21

Net (loss) income attributable to Sinclair

$ (46) $ 21 $ 50 $ 2,597

Net income attributable to Sinclair

SINCLAIR, INC.

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The following table sets forth our revenue and expenses for our local media segment for the periods presented (in millions):

Three Months Ended September 30, Percent Change Increase / (Decrease) Nine Months Ended September 30, Percent Change Increase / (Decrease)

2023 2022 2023 2022

Three Months Ended March 31, Percent Change Increase / (Decrease)

Distribution revenue $ 384 $ 381 1%

Advertising revenue 292 367 (20)% 881 1,023 (14)%

Other media revenues (a) 40 33 21% 102 113 (10)%

Media revenues (c) $ 697 $ 781 (11)% $ 2,101 $ 2,295 (8)%

Core advertising revenue 284 293 (3)%

Political advertising revenue 24 3 n/m

Other media revenues 35 28 25%

Media revenues (a) $ 727 $ 705 3%

Operating Expenses:

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Non-media expenses 2 6 (67)%

Gain on asset dispositions and other, net of impairment (2) (7) (71)% (5) (15) (67)%

Gain on asset dispositions and other, net of impairment — (1) n/m

Operating income $ 41 $ 41 —%

Interest expense including amortization of debt discount and deferred financing costs $ 76 $ 74 3%

Gain on extinguishment of debt $ 4 $ — n/m $ 15 $ 3 n/m

Other income, net $ 31 $ 12 n/m

n/m - not meaningful

(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 intercompany revenue related to certain services provided to other and local sports, prior to the Deconsolidation, under management services agreements, which is eliminated in consolidation, and $15 million and $39 million of revenue 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, for services provided by local media to local sports under management services agreements after the Deconsolidation, which is not eliminated in consolidation.

(b) Includes $2 million and $5 million for the three and nine months ended September 30, 2023, respectively, and $5 million and $8 million for the three and nine months ended September 30, 2022, respectively, of intercompany expense related to certain services provided to local media from other, which is eliminated in consolidation.

(c) Includes $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.

(a) Includes $2 million and $1 million for the three months ended March 31, 2024 and 2023, respectively, of intercompany revenue related to certain services provided to the tennis segment, which is eliminated in consolidation.

(b) Includes $2 million and $1 million for the three months ended March 31, 2024 and 2023, respectively, of intercompany expense related to certain services provided by other, which is eliminated in consolidation.

Distribution revenue.

Distribution revenue, which represents payments from Distributors for our broadcast signals, decreased $16 million and $41 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022, primarily due to a decrease in subscribers, partially offset by increases in contractual rates.

Advertising revenue.

Advertising revenue decreased $75 million and $142 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022, primarily due to a decrease in political advertising revenue of $77 million for the three-month period and $140 million for the nine-month period, as 2022 was a political year, compared to 2023 which is a non-political year.

Distribution revenue, which represents payments from Distributors for our broadcast signals, increased $3 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in contractual rates, partially offset by a decrease in subscribers.

Core advertising revenue.

Core advertising revenue decreased $9 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to decreases across certain advertising categories, most notably entertainment and medical, which decreased $5 million and $2 million, respectively.

Political advertising revenue.

Political advertising revenue increased $21 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to 2024 being a political year, compared to 2023 which was a non-political year.

Other media revenues.

Other media revenues increased $7 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase related to providing certain services under management services agreements.

SINCLAIR, INC.

RESULTS OF OPERATIONS

The following table sets forth our primary types of programming and their approximate percentages of advertising revenue, excluding digital revenue, for the periods presented:

Percent of Advertising Revenue (Excluding Digital) for the

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

2023 2022 2023 2022

Local news 37% 37% 35% 36%

The following table sets forth our primary types of programming and their approximate percentages of advertising revenue for the periods presented:

Percent of Advertising Revenue for the

Three Months Ended March 31,

Syndicated/Other programming 38% 37%

Local news 29% 28%

Network programming 16% 16%

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Percent of Advertising Revenue for the

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

# of Channels (a) 2023 2022 2023 2022

Three Months Ended March 31,

# of Channels 2024 2023

ABC 40 28% 27%

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NBC 25 12% 11%

CW 47 5% 5% 5% 5%

MNT 39 4% 4% 4% 4%

Other 403 6% 7%

(a) We broadcast other programming from the following providers on our channels including:

Antenna TV, Bounce, Catchy Comedy, CHARGE!, Comet, Dabl, Estrella TV, Get TV, Heroes & Icons, Me TV, The Nest, Quest, Rewind, Story Television, TBD, TCN, Telemundo, This TV, UniMas, Univision, and Weather.

Other Media Revenues.

Other media revenues increased $7 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase related to providing certain services under management services agreements.

Other media revenues decreased $11 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to a decrease in revenue from providing certain services under management services agreements.

Media programming and production expenses.

Media programming and production expenses increased $6 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase in fees pursuant to network affiliation agreements as a result of increased contractual rates.

Media programming and production expenses increased $25 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase in fees pursuant to network affiliation agreements as a result of increased contractual rates and an increase in employee compensation costs.

Media programming and production expenses increased $12 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in fees pursuant to network affiliation agreements as a result of increased contractual rates.

Media selling, general and administrative expenses.

Media selling, general and administrative expenses decreased $11 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to a $4 million decrease in both employee compensation and national sales commission, respectively, and a $2 million decrease in information technology costs.

Media selling, general and administrative expenses remained flat for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase in third-party fulfillment cost related to our digital business, partially offset by a decrease in national sales commissions.

Media selling, general and administrative expenses increased $8 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in trade related expenses.

Depreciation and amortization expenses.

Depreciation and amortization expenses decreased $1 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to assets retired during 2023.

Amortization of program contract costs.

The amortization of program contract costs decreased $4 million and $9 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022, primarily related to reduced programming renewal costs.

SINCLAIR, INC.

RESULTS OF OPERATIONS

The amortization of program contract costs decreased $3 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily related to reduced programming renewal costs.

Corporate general and administrative expenses.

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Non-media expenses.

Non-media expenses decreased $3 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily related to decreased expenses associated with our NextGen TV broadcast intiative.

Non-media expenses remained flat for the nine months ended September 30, 2023 when compared to the same period in 2022.

Gain on asset dispositions and other, net of impairments.

For the three and nine months ended September 30, 2023 we recorded gains of $2 million and $5 million, respectively, and for the three and nine months ended September 30, 2022 we recorded gains of $1 million and $3 million, respectively, related to reimbursements from the spectrum repack.

For the nine months ended September 30, 2022, we recorded a gain of $3 million related to the sale of assets of one of our stations.

Non-media expenses decreased $4 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily related to decreased expenses associated with our broadcast technology related initiatives.

Other income, net.

During the three months ended March 31, 2024, we recognized $26 million in proceeds related to the sale of certain broadcast related assets and $4 million in interest income.

Interest expense including amortization of debt discount and deferred financing costs.

Interest expense increased $18 million and $69 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022, primarily due to increased interest expense related to our variable rate debt resulting from higher interest rates.

Gain on extinguishment of debt.

During the nine months ended September 30, 2023 we purchased a total of $64 million in aggregate principal across multiple tranches of debt and recognized a gain on extinguishment of approximately $4 million and $15 million for the three and nine months ended September 30, 2023, respectively.

See Bank Credit Agreement and Notes under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair's Consolidated Financial Statements .

Interest expense increased $2 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to increased interest expense related to our variable rate debt resulting from higher interest rates.

SINCLAIR, INC.

RESULTS OF OPERATIONS

Tennis Segment

The following table sets forth our revenue and expenses for our tennis segment for the periods presented (in millions):

Three Months Ended September 30, Percent Change Increase / (Decrease) Nine Months Ended September 30, Percent Change Increase / (Decrease)

2023 2022 2023 2022

Three Months Ended March 31, Percent Change Increase / (Decrease)

Distribution revenue $ 52 $ 45 16%

Advertising revenue 9 9 —% 32 28 14%

Core advertising revenue 10 9 11%

Other media revenues 1 1 —%

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Depreciation and amortization expenses 5 5 —%

Corporate general and administrative expenses 1 — n/m 1 — n/m

Corporate general and administrative expenses 1 — n/m

Operating income $ 20 $ 18 11%

(a) Includes $ 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 expense related to certain services provided by the local media segment, which is eliminated in consolidation.

n/m - not meaningful

(a) Includes $2 million and $1 million for the three months ended March 31, 2024 and 2023, respectively, of intercompany expense related to certain services provided by the local media segment, which is eliminated in consolidation.

Distribution revenue.

Distribution revenue, which is generated through fees received from Distributors for the right to distribute Tennis Channel, increased $5 million and $4 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022, primarily due to an increase in subscribers as a result of increased carriage that occurred during the year.

Advertising revenue.

Advertising revenue is primarily generated from sales of commercial time within Tennis Channel programming.

Advertising revenue remained flat for the three months ended September 30, 2023 when compared to the same period in 2022 and increased $4 million for the nine months ended September 30, 2022 when compared to the same period in 2022, primarily due to an increase in the number of tournaments aired in the current period versus the prior period.

SINCLAIR, INC.

RESULTS OF OPERATIONS

Distribution revenue, which is generated through fees received from Distributors for the right to distribute Tennis Channel, increased $7 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in subscribers as a result of increased carriage that occurred during the second quarter of 2023 and the first quarter of 2024.

Core advertising revenue.

Core advertising revenue is primarily generated from sales of commercial time within Tennis Channel programming.

Core advertising revenue increased $1 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in the number of tournaments aired in the current period versus the prior period.

Media programming and production expenses.

Media programming and production expenses increased $3 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase in employee compensation costs.

Media programming and production expenses increased $10 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to increased programming, including rights fees, and live production expenses related to various tournaments during each period, which was a result of an increase in the number of tournaments aired in the current period versus the prior period.

Media programming and production expenses increased $3 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in production related employee compensation costs.

Media selling, general and administrative expenses.

Media selling, general and administrative expenses remained flat for the three months ended September 30, 2023 when compared to the same period in 2022.

Media selling, general and administrative expenses decreased $3 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to a decrease in expenses related to our online tennis platforms.

Media selling, general and administrative expenses increased $2 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in expenses related to certain services provided by the local media segment, which is eliminated in consolidation.

Corporate general and administrative expenses.

See explanation under Corporate and Unallocated Expenses.

Local Sports Segment

Our local sports segment reflected the results of our Bally RSNs, Marquee, and a minority interest in the YES Network prior to the Deconsolidation on March 1, 2022.

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

Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements.

The Bally RSNs, Marquee, and YES Network own the exclusive rights to air, among other sporting events, the games of professional sports teams in designated local viewing areas.

The following table sets forth our revenue and expenses for our local sports segment for the period presented (in millions):

Nine Months Ended September 30,

Distribution revenue $ 433

Advertising revenue 44

Other media revenue 5

Media revenue $ 482

Operating Expenses:

Media programming and production expenses $ 376

Media selling, general and administrative expenses (a) 55

Depreciation and amortization expenses 54

Corporate general and administrative 1

Operating loss (a) $ (4)

Income from equity method investments $ 10

(a) Includes $24 million for the nine months ended September 30, 2022 of intercompany expense related to certain services provided by the local media segment under a management services agreement, which is eliminated in consolidation.

(b) Represents the activity prior to the Deconsolidation on March 1, 2022.

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

Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements.

The revenue and expense items noted above for the nine months ended September 30, 2022 represent activity prior to the Deconsolidation which occurred on March 1, 2022, thus there is no activity presented for periods subsequent to the first quarter of 2022.

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

Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements for further discussion.

SINCLAIR, INC.

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The following table sets forth our revenues and expenses for our non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the periods presented (in millions):

Three Months Ended September 30, Percent Change Increase / (Decrease) Nine Months Ended September 30, Percent Change Increase/(Decrease)

2023 2022 2023 2022

Three Months Ended March 31, Percent Change Increase / (Decrease)

Media revenues (a) $ 6 $ 9 (33)%

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Non-media expenses (d) $ 12 $ 6 100%

Operating loss $ (7) $ 4 n/m $ (31) $ (4) n/m

Income from equity method investments $ — $ 33 n/m $ 30 $ 38 (21)%

Loss on asset dispositions and other, net of impairment $ — $ 7 n/m

Operating loss $ (3) $ (12) (75)%

Income from equity method investments $ 15 $ 31 (52)%

n/m - not meaningful

(a) Media revenues for the three and nine months ended September 30, 2023 include $2 million and $5 million, respectively, and for the three and nine months ended September 30, 2022 include $4 million and $14 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(b) Non-media revenues for the three and nine months ended September 30, 2023 include $2 million and $4 million, respectively, and for the three and nine months ended September 30, 2022 include $1 million and $8 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(c) Media expenses for the include $2 million for the nine months ended September 30, 2023, and $6 million for the nine months ended September 30, 2022 of intercompany expense primarily related to certain services provided by the local media segment, which is eliminated in consolidation.

(d) Non-media expenses for the three and nine months ended September 30, 2023 include $1 million and $2 million, respectively, and for the three and nine months ended September 30, 2022 include $2 million and $5 million, respectively, of intercompany expense related to certain services and sales provided by the local media segment, which is eliminated in consolidation.

Media revenues decreased $3 million and $19 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022, primarily due to the sale of one of our businesses.

Non-media revenues increased $3 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase in broadcast equipment sales.

Non-media revenues decreased $7 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to lower sales within our consolidated real estate investments.

Media expenses decreased $10 million and $27 million for the three and nine months ended September 30, 2023, respectively, when compared to the same periods in 2022, primarily due to the sale of one of our businesses.

Non-media expenses increased $5 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase in expenses related to our technical services business.

Non-media expenses decreased $2 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to lower sales within our consolidated real estate investments.

(a) Media revenues for the three months ended March 31, 2024 and 2023 include $2 million and $1 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(b) Non-media revenues for the three months ended March 31, 2024 and 2023 include $3 million and $1 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(c) Media expenses for the three months ended March 31, 2023 include $1 million of intercompany expense primarily related to certain services provided by the local media segment, which is eliminated in consolidation.

(d) Non-media expenses for the three months ended March 31, 2024 include $2 million of intercompany expense related to certain services and sales provided by the local media segment, which is eliminated in consolidation.

Media revenues decreased $3 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to the sale of our Stadium Network ("Stadium").

Non-media revenues increased $1 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in sales within our consolidated real estate investments.

Media expenses decreased $9 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to the sale of Stadium.

Non-media expenses increased $6 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in expenses related to our technical services business.

Income from equity method investments.

During the nine months ended September 30, 2023, we recognized a gain of $33 million on the sale of two of our real estate investments, which is included in income from equity method investments in our consolidated statements of operations.

During the three months ended March 31, 2024 and 2023, we recognized a gain of $17 million on the sale of two of our investments and a gain of $33 million on the sale of two of our real estate investments, respectively, which is included in income from equity method investments in our consolidated statements of operations.

SINCLAIR, INC.

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The following table presents our corporate and unallocated expenses for the periods presented (in millions):

Three Months Ended September 30, Percent Change

Increase/ (Decrease) Nine Months Ended September 30, Percent Change

Three Months Ended March 31, Percent Change

Increase/ (Decrease)

2023 2022 2023 2022

Corporate general and administrative expenses $ 58 $ 58 —%

Loss (gain) on deconsolidation of subsidiary $ 10 $ — n/m $ 10 $ (3,357) n/m

Other (expense) income, net $ (21) $ 10 n/m $ (48) $ (155) (69)%

Income tax benefit (provision) $ 12 $ (109) n/m $ 236 $ (756) n/m

Income tax benefit $ 4 $ 204 n/m

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The table above and the explanation that follows cover total consolidated corporate general and administrative expenses.

Corporate general and administrative expenses increased by $15 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to a $16 million increase in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 5.

Corporate general and administrative expenses remained flat for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to a $5 million increase in employee compensation costs, partially offset by a $3 million decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 5.

Commitments and Contingencies within Sinclair's Consolidated Financial Statements.

Corporate general and administrative expenses increased by $50 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to a $29 million increase in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 5.

Commitments and Contingencies within Sinclair's Consolidated Financial Statements a $17 million increase in employee compensation costs , and a $3 million increase in insurance expenses, primarily related to our cyber insurance policy.

Loss (gain) on deconsolidation of subsidiary.

For the nine months ended September 30, 2022, we recorded a gain of $3,357 million related to the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements .

Other (expense) income, net.

Other expense, net increased by $31 million for the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to changes in the fair value of certain investments recorded at fair value.

Other expense, net decreased by $107 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to changes in the fair value of certain investments recorded at fair value.

Other Assets within Sinclair's Consolidated Financial Statements for further information.

Income tax benefit (provision).

The effective tax rate for the three months ended September 30, 2023 was a benefit of 20.7% as compared to a provision of 78.3% during the same period in 2022.

The decrease in the effective tax rate for the three months ended September 30, 2023, as compared to the same period in 2022, is primarily due to a 2022 valuation allowance recorded on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

The effective tax rate for the nine months ended September 30, 2023 was a benefit of 134.3% compared to a provision of 22.3% during the same period in 2022.

The increase in the effective tax rate for the nine months ended September 30, 2023, as compared to the same period in 2022, is primarily due to a 2023 release of valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

Income tax benefit.

The effective tax rate for the three months ended March 31, 2024, was a benefit of 18.3% as compared to a benefit of 1870.7% during the same period in 2023.

The decrease in the effective tax rate for the three months ended March 31, 2024, when compared to the same period in 2023, is primarily due to a release of the 2023 valuation allowance on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j) as a result of the change in the tax classification of the legal entity owning the Diamond Sports business because of the exit of the sole minority investor.

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

Any references to the first, second, or fourth quarters are to the three months ended March 31, June 30, or December 31, respectively, for the year being discussed.

For the quarter ended September 30, 2023, SBG has one reportable segment, local media that is disclosed separately from SBG's other and corporate activities.

Prior to the Deconsolidation, SBG had one additional reportable segment, local sports, that was disclosed separately from SBG's other and corporate activities.

Any references to the second, third, or fourth quarters are to the three months ended June 30, September 30, or December 31, respectively, for the year being discussed.

As of March 31, 2024, SBG had one reportable segment for accounting purposes, local media.

Seasonality / Cyclicality

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Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Media revenues $ 727 $ 766

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Corporate general and administrative expenses 41 58

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

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

Loss on asset dispositions and other, net of impairment — 6

Operating income $ 41 $ 21

Net (loss) income attributable to SBG $ (22) $ 21 $ 62 $ 2,597

Net income attributable to SBG $ 5 $ 185

Local Media Segment

Refer to Local Media Segment above under Sinclair, Inc.'s Results of Operations for a discussion of SBG's local media segment, which is the same as Sinclair's local media segment for all of the three and nine months ended September 30, 2023 and 2022.

Local Sports Segment

Refer to Local Sports Segment above under Sinclair, Inc.'s Results of Operations for a discussion of SBG's local sports segment, which is the same as Sinclair's local sports segment for the nine months ended September 30, 2022, prior to the Deconsolidation.

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

The following table sets forth SBG's revenues and expenses for tennis, non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the periods presented, prior to the Reorganization (in millions):

Three Months Ended September 30, Percent Change Increase / (Decrease) Nine Months Ended September 30, Percent Change Increase/(Decrease)

2023 2022 2023 2022

Distribution revenue $ — $ 44 n/m $ 76 $ 136 (44)%

Advertising revenue — 15 n/m 29 61 (52)%

Other media revenues — 4 n/m 3 11 (73)%

Media revenues (a) $ — $ 63 n/m $ 108 $ 208 (48)%

Non-media revenues (b) $ — $ 8 n/m $ 11 $ 34 (68)%

The following table sets forth SBG's revenues and expenses for tennis, non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the period presented, prior to the Reorganization (in millions):

Three Months Ended March 31,

Distribution revenue $ 45

Core advertising revenue 15

Other media revenues 4

Media revenues (a) $ 64

Non-media revenues (b) $ 8

Operating Expenses:

Media expenses (c) $ — $ 52 n/m $ 86 $ 174 (51)%

Non-media expenses (d) $ — $ 8 n/m $ 10 $ 28 (64)%

(Gain) loss on asset dispositions and other, net of impairment $ — $ (11) n/m $ 13 $ (12) n/m

Operating income $ — $ 15 n/m $ — $ 31 n/m

Income from equity method investments $ — $ 33 n/m $ 31 $ 38 (18)%

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(a) Media revenues for the nine months ended September 30, 2023 include $3 million, and for the three and nine months ended September 30, 2022 include $ 4 million and $ 14 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(b) Non-media revenues for the nine months ended September 30, 2023 include $1 million, and for the three and nine months ended September 30, 2022 include $1 million and $8 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(c) Media expenses for the nine months ended September 30, 2023 and 2022 include $1 million and $9 million, respectively, of intercompany expense primarily related to certain services provided by the local media segment, which is eliminated in consolidation.

(d) Non-media expenses for both the three and nine months ended September 30, 2023 include $1 million, and for the three and nine months ended September 30, 2022 include $2 million and $5 million, respectively, of intercompany expense related to certain services and sales provided by the local media segment, which is eliminated in consolidation.

(e) Represents the activity prior to the Reorganization on June 1, 2023.

There was no reportable activity for the June through September period in the three and nine months ended September 30, 2023 following the Reorganization on June 1, 2023.

See Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolid ated Financial Statements.

The decrease in the revenue and expense items noted above for the three and nine months ended September 30, 2023, when compared to the same periods in the 2022, was primarily due to the Reorganization, as the three and nine months ended September 30, 2023 results include only five months of activity.

Due to the Reorganization, the Transferred Assets were moved to Ventures effective June 1, 2023, versus a full period of activity in the prior year periods, and therefore the periods are not comparable.

Media expenses (c) $ 46

Non-media expenses $ 6

Loss on asset dispositions and other, net of impairment $ 7

Operating income $ 6

Income from equity method investments $ 31

(a) Media revenues for the three months ended March 31, 2023 include $1 million of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

(b) Non-media revenues for the three months ended March 31, 2023 include $1 million of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.

The revenue and expense items noted above for the three months ended March 31, 2023 represent activity prior to the Reorganization which occurred June 1, 2023, thus there is no activity presented for periods subsequent to May 31, 2023.

See Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements.

SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS

Corporate and Unallocated Expenses

The following table presents SBG's corporate and unallocated expenses for the periods presented (in millions):

Three Months Ended September 30, Percent Change

Increase/ (Decrease) Nine Months Ended September 30, Percent Change

Three Months Ended March 31, Percent Change

Increase/ (Decrease)

2023 2022 2023 2022

Corporate general and administrative expenses $ 41 $ 58 (29)%

Loss (gain) on deconsolidation of subsidiary $ 10 $ — n/m $ 10 $ (3,357) n/m

Other income (expense), net $ 2 $ 10 (80)% $ (51) $ (155) (67)%

Income tax benefit (provision) $ 6 $ (109) n/m $ 236 $ (756) n/m

Income tax benefit $ 9 $ 204 n/m

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The table above and the explanation that follows cover total consolidated corporate general and administrative expenses.

Corporate general and administrative expenses increased by $1 million for the three months ended September 30, 2023, when compared to the same period in 2022, primarily due to an increase in legal, consulting, and regulatory costs.

Corporate general and administrative expenses increased by $32 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to a $29 million increase in legal, consulting, and regulatory costs and a $3 million increase in insurance expenses, primarily related to SBG's cyber insurance policy.

Loss (gain) on deconsolidation of subsidiary.

For the nine months ended September 30, 2022, SBG recorded a gain of $3,357 million related to the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements .

Other income (expense), net.

Other income, net decreased by $8 million for the three months ended September 30, 2023, when compared to the same period in 2022.

Other expense, net decreased by $104 million for the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to changes in the fair value of certain investments recorded at fair value prior to the Reorganization.

Income tax benefit (provision).

The effective tax rate for the three months ended September 30, 2023 was a benefit of 18.9% as compared to a provision of 78.3% during the same period in 2022.

The decrease in the effective tax rate for the three months ended September 30, 2023, as compared to the same period in 2022, is primarily due to 2022 valuation allowance recorded on deferred tax assets relating to deductibility of interest expense under the IRC Section 163(j).

The effective tax rate for the nine months ended September 30, 2023 was a benefit of 144.6% compared to a provision of 22.3% during the same period in 2022.

Corporate general and administrative expenses decreased by $17 million for the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to a decrease in legal, consulting, and regulatory costs.

Income tax benefit.

The effective tax rate for the three months ended March 31, 2024, was a benefit of 383.5% as compared to a benefit of 1870.7% during the same period in 2023.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Capital Resources

As of September 30, 2023, Sinclair had net working capital of approximately $830 million, including $643 million in cash and cash equivalent balances, and $650 million of available borrowing capacity.

As of March 31, 2024, Sinclair had net working capital of approximately $441 million, including $655 million in cash and cash equivalent balances, and $650 million of available borrowing capacity.

Cash on hand, cash generated by Sinclair's operations, and borrowing capacity under the Bank Credit Agreement are used as Sinclair's primary sources of liquidity.

As of September 30, 2023, SBG had net working capital of approximately $432 million, including $279 million in cash and cash equivalent balances, and $650 million of available borrowing capacity.

As of March 31, 2024, SBG had net working capital of approximately $51 million, including $337 million in cash and cash equivalent balances, and $650 million of available borrowing capacity.

Cash on hand, cash generated by SBG's operations, and borrowing capacity under the Bank Credit Agreement are used as SBG's primary sources of liquidity.

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 4.5x, measured as of the end of each fiscal quarter.

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

As of March 31, 2024, the STG first lien leverage ratio was below 4.5x.

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 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.

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, respectively, in open market transactions for consideration of $3 million, $8 million, and $8 million, respectively.

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.

During the nine months ended September 30, 2023, there were no material changes to Sinclair's or SBG's contractual cash obligations as of September 30, 2023.

Since there was no utilization under the revolving credit facility as of March 31, 2024, 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 March 31, 2024.

During the three months ended March 31, 2024, STG purchased $27 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $25 million.

During the three months ended March 31, 2024, Sinclair and SBG entered into agreements which increased estimated contractual amounts owed for network programming rights by $1,569 million which have terms that extend into 2027.

There were no other material changes to Sinclair's or SBG's contractual cash obligations as of March 31, 2024.

Sinclair and SBG anticipate that existing cash and cash equivalents, cash flow from the local media segment's operations, and borrowing capacity under the Bank Credit Agreement will be sufficient to satisfy the local media segment's debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months.

Sinclair anticipates that existing cash and cash equivalents and cash flow from the tennis segment and other's operations will be sufficient to satisfy the tennis segment and other's debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months.

However, certain factors, including but not limited to the war in Ukraine, conflict in the Middle East, and other geopolitical matters, natural disasters, and pandemics (such as the outbreak and worldwide spread of COVID-19), and their resulting effect on the economy, Sinclair's and SBG's advertisers, and Sinclair's and SBG's Distributors and their subscribers, could affect Sinclair's and SBG's liquidity and first lien leverage ratio which could affect Sinclair's and SBG's ability to access the full borrowing capacity under the Bank Credit Agreement.

Sinclair anticipates that existing cash and cash equivalents and cash flow from the tennis segment and other's operations will be sufficient to satisfy the tennis segment and other's debt service obligations, capital expenditure requirements, the DSG settlement, and working capital needs for the next twelve months.

However, certain factors, including but not limited to the war in Ukraine, conflict in the Middle East, and other geopolitical matters, natural disasters, and pandemics, and their resulting effect on the economy, Sinclair's and SBG's advertisers, and Sinclair's and SBG's Distributors and their subscribers, could affect Sinclair's and SBG's liquidity and first lien leverage ratio which could affect Sinclair's and SBG's ability to access the full borrowing capacity under the Bank Credit Agreement.

In addition to the sources described above, Sinclair and SBG may rely upon various sources for long-term liquidity needs, such as but not limited to, the issuance of long-term debt, the issuance of Sinclair equity, for Sinclair only, the issuance of Ventures equity or debt, or other instruments convertible into or exchangeable for Sinclair equity, or the sale of assets.

However, there can be no assurance that additional financing or capital or buyers of assets will be available, or that the terms of any transactions will be acceptable or advantageous to Sinclair or SBG.

In January 2024, Sinclair announced that it has agreed, subject to Sinclair and DSG completing definitive documentation, to a global settlement and release of all claims associated with the litigation filed by DSG and DSG’s wholly-owned subsidiary, Diamond Sports Net, LLC, in July 2023 and on March 1, 2024, the court approved the settlement.

The settlement terms include Sinclair’s cash payment to DSG of $495 million.

Additionally, under the terms of the settlement, Sinclair will provide transition services to DSG to allow DSG to become a self-standing entity going forward.

An initial payment of $50 million was made in March 2024 and the remaining $445 million was paid in April 2024.

Of the total $495 million settlement amount paid, $347 million was paid by STG and $148 million was paid by Ventures.

LIQUIDITY AND CAPITAL RESOURCES

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The following table sets forth Sinclair's cash flows for the periods presented (in millions):

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

2023 2022 2023 2022

Net cash flows from operating activities $ 1 $ 251 $ 143 $ 458

Cash flows (used in) from investing activities:

Three Months Ended March 31,

Net cash flows (used in) from operating activities $ (4) $ 62

Cash flows from (used in) investing activities:

Acquisition of property and equipment $ (21) $ (20)

Purchases of investments (3) (33)

Deconsolidation of subsidiary cash — — — (315)

Distributions from investments 1 9 205 90

Distributions and proceeds from investments 77 8

Other, net 1 1

Net cash flows (used in) from investing activities $ (32) $ (23) $ 97 $ (352)

Net cash flows from (used in) investing activities $ 54 $ (44)

Cash flows used in financing activities:

Proceeds from notes payable and commercial bank financing $ — $ — $ — $ 728

Repayments of notes payable, commercial bank financing, and finance leases $ (34) $ (9)

6 unchanged sentences

Operating Activities

Net cash flows from Sinclair's operating activities decreased during the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to a decrease in cash collections related to political revenue and a decrease in cash collections from Distributors.

Net cash flows from Sinclair's operating activities decreased during the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to a decrease in cash collections related to political revenue, a decrease in cash collections from Distributors, and an increase in production and overhead costs, as well as the partial period impact related to the Deconsolidation, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements.

Net cash flows used in Sinclair's operating activities increased during the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in production and overhead costs and a decrease in cash collections from Distributors, partially offset by an increase in cash collections related to political revenue.

Investing Activities

Net cash flows used in Sinclair's investing activities increased during the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to a decrease in distributions from investments.

Net cash flows from Sinclair's investing activities increased during the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to the removal of DSIH's cash balance as a result of the Deconsolidation in the first quarter of 2022, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements , as well as the $193 million A/R Facility principal payment received from DSPV and a decrease in the purchases of investments.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows from Sinclair's investing activities increased during the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in distributions and proceeds from investments and a decrease in purchases of investments.

Financing Activities

Net cash flows used in Sinclair's financing activities increased during the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase in the repayment of debt, partially offset by a decrease in the repurchase of outstanding Common Stock.

Net cash flows used in Sinclair's financing activities increased during the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to the repurchase of the Redeemable Subsidiary Preferred Equity and an increase in the repurchase of outstanding Common Stock, partially offset by a decrease in the net repayment of debt (repayments less proceeds).

Sinclair declared a quarterly dividend of $0.25 per share in August 2023 and $0.25 per share in November 2023.

Future dividends on Sinclair's shares of common stock, if any, will be at the discretion of Sinclair's Board of Directors and will depend on several factors including Sinclair's results of operations, cash requirements and surplus, financial condition, covenant restrictions, and other factors that the Board of Directors may deem relevant.

Net cash flows used in Sinclair's financing activities decreased during the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to the repurchase of outstanding Common Stock and the redeemable subsidiary preferred equity in the prior period, partially offset by an increase in the repayment of debt in the current period.

Sinclair declared a quarterly dividend of $0.25 per share in February 2024 and $0.25 per share in May 2024.

LIQUIDITY AND CAPITAL RESOURCES

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The following table sets forth SBG's cash flows for the periods presented (in millions):

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

2023 2022 2023 2022

Three Months Ended March 31,

Net cash flows from operating activities $ 17 $ 62

Cash flows (used in) from investing activities:

Cash flows from (used in) investing activities:

Acquisition of property and equipment $ (22) $ (20)

Purchases of investments — (33)

Deconsolidation of subsidiary cash — — — (315)

Distributions from investments — 9 204 90

Distributions and proceeds from investments 26 8

Other, net 1 1

Net cash flows (used in) from investing activities $ (28) $ (23) $ 102 $ (352)

Net cash flows from (used in) investing activities $ 5 $ (44)

Cash flows used in financing activities:

Proceeds from notes payable and commercial bank financing $ — $ — $ — $ 728

Repayments of notes payable, commercial bank financing, and finance leases $ (34) $ (9)

3 unchanged sentences

Distributions to noncontrolling interests, net (2) (4)

Distributions to member, net (69) — (429) —

Contributions from member, net 32 —

Other, net — (5)

1 unchanged sentence

Operating Activities

Net cash flows from SBG's operating activities decreased during the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to a decrease in cash collections related to political revenue and a decrease in cash collections from Distributors, as well as the impact related to the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements.

Net cash flows from SBG's operating activities decreased during the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to a decrease in cash collections related to political revenue, a decrease in cash collections from Distributors, and an increase in production and overhead costs, as well as the partial period impact related to the Deconsolidation and Reorganization, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC and Company Reorganization , respectively, under Note 1.

Net cash flows from SBG's operating activities decreased during the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in production and overhead costs and a decrease in cash collections from Distributors, partially offset by an increase in cash collections related to political revenue, as well as the impact of the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements.

Investing Activities

Net cash flows used in SBG's investing activities increased during the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to a decrease in distributions from investments, offset by a decrease in purchase of investments during the three months ended September 30, 2023, as a result of the Reorganization as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows from SBG's investing activities increased during the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to the removal of DSIH's cash balance as a result of the Deconsolidation in the first quarter of 2022, as discussed in Deconsolidation of Diamond Sports Intermediate Holdings LLC under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements;

the $193 million A/R Facility principal payment received from DSPV;

a decrease in the purchases of investments during the nine months ended September 30, 2023, as a result of the Reorganization;

and the partial period impact related to the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements .

The A/R Facility payment received from DSPV was transferred to Ventures as part of the Reorganization.

Net cash flows from SBG's investing activities increased during the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to a decrease in purchases of investments as a result of the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements , offset by an increase in distributions and proceeds from investments in the current period.

Financing Activities

Net cash flows used in SBG's financing activities increased during the three months ended September 30, 2023 when compared to the same period in 2022, primarily due to an increase in the repayment of debt during the three months ended September 30, 2023, partially offset by a decrease in the repurchase of outstanding Old Sinclair Common Stock and payments of dividends on Old Sinclair Common Stock as a result of the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements .

Net cash flows used in SBG's financing activities increased during the nine months ended September 30, 2023 when compared to the same period in 2022, primarily due to the repurchase of the Redeemable Subsidiary Preferred Equity;

an increase in the repurchase of outstanding Old Sinclair Common Stock, prior to the Reorganization;

the distribution to member as a result of the Reorganization;

and the partial period impact related to the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements , partially offset by a decrease in the net repayment of debt (repayments less proceeds).

Net cash flows used in SBG's financing activities decreased during the three months ended March 31, 2024, when compared to the same period in 2023, primarily due to an increase in net contributions from member as a result of the Reorganization, as discussed in Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies within SBG's Consolidated Financial Statements, in the current period and the repurchase of outstanding Old Sinclair Common Stock and the redeemable subsidiary preferred equity and payments of dividends on Old Sinclair Common Stock in the prior period, partially offset by an increase in the repayment of debt in the current period.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There were no changes to the critical accounting policies and estimates from those disclosed in Critical Accounting Policies and Estimates under Part II.

Management’s Discussion and Analysis of Financial Condition and Results of Operations within Old Sinclair's Annual Report on Form 10-K for the year ended December 31, 2022.

Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the year ended December 31, 2023.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes from the quantitative and qualitative discussion about market risk previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

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 2. Management’s Discussion and Analysis