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Item 1. Financial Statements

2024-08-09 compared with 2024-05-10 · 444 added, 286 removed, 1093 unchanged (40% of the section changed)

5 unchanged sentences

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

As of March 31,

As of June 30,

2024 As of December 31,

39 unchanged sentences

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

(a) Our consolidated total assets as of March 31, 2024 and December 31, 2023 include total assets of variable interest entities ("VIE") of $ 78 million and $ 85 million, respectively, which can only be used to settle the obligations of the VIEs.

Our consolidated total liabilities as of March 31, 2024 and December 31, 2023 include total liabilities of VIEs of $ 16 million and $ 17 million, respectively, for which the creditors of the VIEs have no recourse to us.

(a) Our consolidated total assets as of June 30, 2024 and December 31, 2023 include total assets of variable interest entities ("VIE") of $ 72 million and $ 85 million, respectively, which can only be used to settle the obligations of the VIEs.

Our consolidated total liabilities as of June 30, 2024 and December 31, 2023 include total liabilities of VIEs of $ 14 million and $ 17 million, respectively, 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

2024 2023 2024 2023

Media revenues $ 819 $ 761 $ 1,611 $ 1,527

4 unchanged sentences

Media selling, general and administrative expenses 194 190 390 381

Amortization of program contract costs 19 22

Amortization of program costs 18 19 37 41

Non-media expenses 13 9 25 21

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Total operating expenses 765 771 1,521 1,523

Operating income 42 21

Operating income (loss) 64 ( 3 ) 106 18

OTHER INCOME (EXPENSE):

1 unchanged sentence

Gain on extinguishment of debt — 11 1 11

Income from equity method investments 14 31

Other income, net 40 11

Income (loss) from equity method investments 78 ( 1 ) 92 30

Other expense, net ( 42 ) ( 38 ) ( 2 ) ( 27 )

Total other expense, net ( 40 ) ( 104 ) ( 61 ) ( 136 )

Income (loss) before income taxes 24 ( 107 ) 45 ( 118 )

INCOME TAX BENEFIT 4 204

NET INCOME 25 193

INCOME TAX (PROVISION) BENEFIT ( 5 ) 20 ( 1 ) 224

NET INCOME (LOSS) 19 ( 87 ) 44 106

Net loss attributable to the redeemable noncontrolling interests — — — 4

Net income attributable to the noncontrolling interests ( 2 ) ( 2 ) ( 4 ) ( 14 )

NET INCOME ATTRIBUTABLE TO SINCLAIR $ 23 $ 185

NET INCOME (LOSS) ATTRIBUTABLE TO SINCLAIR $ 17 $ ( 89 ) $ 40 $ 96

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR:

8 unchanged sentences

Three Months Ended

Net income $ 25 $ 193

Unrealized gain (loss) on interest rate swap, net of tax 4 ( 3 )

Comprehensive income 29 190

June 30, Six Months Ended

2024 2023 2024 2023

Net income (loss) $ 19 $ ( 87 ) $ 44 $ 106

Unrealized gain on interest rate swap, net of tax 1 9 5 6

Comprehensive income (loss) 20 ( 78 ) 49 112

Comprehensive loss attributable to the redeemable noncontrolling interests — — — 4

Comprehensive income attributable to the noncontrolling interests ( 2 ) ( 2 ) ( 4 ) ( 14 )

Comprehensive income attributable to Sinclair $ 27 $ 182

Comprehensive income (loss) attributable to Sinclair $ 18 $ ( 80 ) $ 45 $ 102

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 March 31, 2023

Three Months Ended June 30, 2023

Sinclair Shareholders

Redeemable Noncontrolling Interests Class A

Common Stock Class B

2 unchanged sentences

Comprehensive

Income (Loss) Noncontrolling

(Loss) Income Noncontrolling

Interests Total

Shares Values Shares Values

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

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 116,150 — — — 8 — — — 8

Distributions to noncontrolling interests — — — — — — — ( 4 ) ( 4 )

Other comprehensive income — — — — — — 9 — 9

Net (loss) income — — — — — ( 89 ) — 2 ( 87 )

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

Six Months Ended June 30, 2023

Sinclair Shareholders

Redeemable Noncontrolling Interests Class A

Common Stock Class B

Common Stock Additional

Capital Retained Earnings Accumulated

Comprehensive

Income Noncontrolling

Interests Total Equity

Shares Values Shares Values

BALANCE, December 31, 2022 $ 194 45,847,879 $ 1 23,775,056 $ — $ 624 $ 122 $ 1 $ ( 67 ) $ 681

3 unchanged sentences

Class A Common Stock issued pursuant to employee benefit plans — 2,211,986 — — — 39 — — — 39

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

Distributions to noncontrolling interests — — — — — — — — ( 8 ) ( 8 )

Other comprehensive loss — — — — — — — ( 3 ) — ( 3 )

Other comprehensive income — — — — — — — 6 — 6

Redemption of redeemable subsidiary preferred equity, net of fees ( 190 ) — — — — — — — — —

Net (loss) income ( 4 ) — — — — — 96 — 14 110

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

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 March 31, 2024

Three Months Ended June 30, 2024

Sinclair Shareholders

6 unchanged sentences

Shares Values Shares Values

BALANCE, March 31, 2024 42,305,323 $ 1 23,775,056 $ — $ 554 $ ( 227 ) $ 5 $ ( 64 ) $ 269

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

— — — — — ( 17 ) — — ( 17 )

Class A Common Stock issued pursuant to employee benefit plans 200,448 — — — 6 — — — 6

Distributions to noncontrolling interests — — — — — — — ( 3 ) ( 3 )

Other comprehensive income — — — — — — 1 — 1

Net income — — — — — 17 — 2 19

BALANCE, June 30, 2024 42,505,771 $ 1 23,775,056 $ — $ 560 $ ( 227 ) $ 6 $ ( 65 ) $ 275

Six Months Ended June 30, 2024

Sinclair Shareholders

Common Stock Class B

Common Stock Additional

Capital Accumulated Deficit Accumulated

Comprehensive

Income Noncontrolling

Interests Total Equity

Shares Values Shares Values

BALANCE, December 31, 2023 39,737,682 $ 1 23,775,056 $ — $ 517 $ ( 234 ) $ 1 $ ( 64 ) $ 221

5 unchanged sentences

Net income — — — — — 40 — 4 44

BALANCE, March 31, 2024 42,305,323 $ 1 23,775,056 $ — $ 554 $ ( 227 ) $ 5 $ ( 64 ) $ 269

BALANCE, June 30, 2024 42,505,771 $ 1 23,775,056 $ — $ 560 $ ( 227 ) $ 6 $ ( 65 ) $ 275

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

2 unchanged sentences

(in millions) (Unaudited)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES:

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Depreciation of property and equipment 50 56

Amortization of program contract costs 19 22

Amortization of program costs 37 41

Stock-based compensation 37 36

2 unchanged sentences

Income from equity method investments ( 92 ) ( 30 )

(Income) loss from investments ( 27 ) 2

Loss from investments 20 53

Distributions from investments 2 29

8 unchanged sentences

Net cash flows (used in) from operating activities ( 310 ) 142

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of property and equipment ( 44 ) ( 40 )

2 unchanged sentences

Other, net 2 4

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

Net cash flows from investing activities 110 129

CASH FLOWS USED IN FINANCING ACTIVITIES:

18 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 March 31, 2024, we had two reportable segments:

For the quarter ended June 30, 2024, we had two reportable segments:

local media and tennis.

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 March 31, 2024.

These stations broadcast 638 channels as of June 30, 2024.

For the purpose of this report, these 185 stations and 638 channels are referred to as "our" stations and channels.

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Interim Financial Statements

The consolidated financial statements for the three months ended March 31, 2024 and 2023 are unaudited.

The consolidated financial statements for the three and six months ended June 30, 2024 and 2023 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 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.

29 unchanged sentences

The rights to this programming are reflected in the accompanying consolidated balance sheets at the lower of unamortized cost or fair value.

Program contract costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method.

Program contract costs estimated by management to be amortized in the succeeding year are classified as current assets.

Program costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method.

Program costs estimated by management to be amortized in the succeeding year are classified as current assets.

Payments of program contract liabilities are typically made on a scheduled basis and are not affected by amortization or fair value adjustments.

Fair value is determined utilizing a discounted cash flow model based on management's expectation of future advertising revenues, net of sales commissions, to be generated by the program material.

We assess our program contract costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

We assess our program costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

Hedge Accounting

8 unchanged sentences

Non-cash Investing and Financing Activities

Leased assets obtained in exchange for new operating lease liabilities were $ 2 million and $ 3 million for the three months ended March 31, 2024 and 2023, respectively.

Leased assets obtained in exchange for new finance lease liabilities were $ 7 million for the three months ended March 31, 2024.

Non-cash investing activities included property and equipment purchases of $ 5 million and $ 6 million for the three months ended March 31, 2024 and 2023, respectively.

Leased assets obtained in exchange for new operating lease liabilities were $ 3 million and $ 4 million for the six months ended June 30, 2024 and 2023, respectively.

Leased assets obtained in exchange for new finance lease liabilities were $ 7 million for the six months ended June 30, 2024.

Non-cash investing activities included property and equipment purchases of $ 5 million for both the six months ended June 30, 2024 and 2023 .

SINCLAIR, INC.

2 unchanged sentences

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

For the three months ended March 31, 2024 Local Media Tennis Other Eliminations Total

For the three months ended June 30, 2024 Local Media Tennis Other Eliminations Total

Distribution revenue $ 384 $ 51 $ — $ — $ 435

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Total revenues $ 750 $ 67 $ 20 $ ( 8 ) $ 829

For the three months ended March 31, 2023 Local Media Tennis Other Eliminations Total

For the six months ended June 30, 2024 Local Media Tennis Other Eliminations Total

Distribution revenue $ 768 $ 103 $ — $ — $ 871

3 unchanged sentences

Total revenues $ 1,477 $ 130 $ 35 $ ( 15 ) $ 1,627

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

Distribution revenue $ 372 $ 46 $ — $ — $ 418

Core advertising revenue 287 14 6 ( 4 ) 303

Political advertising revenue 6 — — — 6

Other media, non-media, and intercompany revenues 34 — 8 ( 1 ) 41

Total revenues $ 699 $ 60 $ 14 $ ( 5 ) $ 768

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

Distribution revenue $ 753 $ 91 $ — $ — $ 844

Core advertising revenue 580 23 12 ( 6 ) 609

Political advertising revenue 9 — — — 9

Other media, non-media, and intercompany revenues 62 1 19 ( 3 ) 79

Total revenues $ 1,404 $ 115 $ 31 $ ( 9 ) $ 1,541

Distribution Revenue.

We have agreements with multi-channel video programming distributors ("MVPD") and virtual MVPDs ("vMVPD," and together with MVPDs, "Distributors").

7 unchanged sentences

Core Advertising Revenue.

We generate advertising revenue primarily from the sale of advertising spots/impressions within our broadcast television and digital platforms.

We generate core advertising revenue primarily from the sale of non-political advertising spots/impressions within our broadcast television and digital platforms.

Political Advertising Revenue.

1 unchanged sentence

In accordance with ASC 606, we do not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) distribution arrangements which are accounted for as a sales/usage based royalty.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Deferred Revenue.

1 unchanged sentence

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 $ 187 million and $ 178 million as of March 31, 2024 and December 31, 2023, respectively, of which $ 119 million and $ 124 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets.

Deferred revenue recognized during the three months ended March 31, 2024 and 2023, included in the deferred revenue balance as of December 31, 2023 and 2022, was $ 18 million and $ 19 million, respectively.

For the three months ended March 31, 2024, two customers accounted for 11 % and 11 %, respectively, of our total revenues.

For the three months ended March 31, 2023, two customers accounted for 11 % and 10 %, respectively, of our total revenues.

As of March 31, 2024, four customers accounted for 12 %, 11 %, 10 %, and 10 %, respectively, of our accounts receivable, net.

Deferred revenue was $ 189 million and $ 178 million as of June 30, 2024 and December 31, 2023, respectively, of which $ 114 million and $ 124 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets.

Deferred revenue recognized during the six months ended June 30, 2024 and 2023, included in the deferred revenue balance as of December 31, 2023 and 2022, was $ 30 million and $ 33 million, respectively.

For the three months ended June 30, 2024, two customers accounted for 11 % and 10 %, respectively, of our total revenues.

For the six months ended June 30, 2024, two customers accounted for 11 % and 11 %, respectively, of our total revenues.

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.

As of June 30, 2024, three customers accounted for 14 %, 10 %, and 10 %, respectively, of our accounts receivable, net.

As of December 31, 2023, two customers accounted for 10 % and 10 %, respectively, of our accounts receivable, net.

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

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

The tax provision for the three months ended March 31, 2024 and 2023 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 six months ended June 30, 2024 and 2023 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 March 31, 2024 was greater than the statutory rate primarily due to an immaterial $ 7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims.

Our effective income tax rate for the three months ended March 31, 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) 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.

Our effective income tax rate for the three months ended June 30, 2024 was less than the statutory rate primarily due to accrual of interest income attributable to prior years’ pending income tax refund claims offset by non-deductible expenses.

Our effective income tax rate for the six months ended June 30, 2024 was less than the statutory rate primarily due to an immaterial $ 7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims.

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 the 2023 valuation allowance on deferred tax assets relating to deductibility of interest expense under the Internal Revenue Code Section 163(j) ("IRC Section 163(j)") as a result of the change in the tax classification of the legal entity owning the DSG business from a partnership to a disregarded entity because of the exit of the sole minority investor.

We do not believe that our liability for unrecognized tax benefits would be materially impacted, in the next twelve months, as a result of the expected statute of limitations expirations, the application of limits under available state administrative practice exceptions, and the resolution of examination issues and settlements with federal and certain state tax authorities.

2 unchanged sentences

Subsequent Events

In May 2024, our Board of Directors declared a quarterly dividend of $ 0.25 per share, payable on June 17, 2024 to holders of record at the close of business on June 3, 2024.

In August 2024, our Board of Directors declared a quarterly dividend of $ 0.25 per share, payable on September 13, 2024 to holders of record at the close of business on August 30, 2024.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

OTHER ASSETS:

Other assets as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

As of March 31,

Other assets as of June 30, 2024 and December 31, 2023 consisted of the following (in millions):

As of June 30,

2024 As of December 31,

4 unchanged sentences

Total other assets $ 680 $ 742

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Equity Method Investments

We have a portfolio of investments, including our investment in Diamond Sports Intermediate Holdings LLC ("DSIH"), and also a number of entities that are primarily focused on the development of real estate and other media and non-media businesses.

During the six months ended June 30, 2024, we sold one of our other media investments which had a book value of $ 37 million as of December 31, 2023 for proceeds of $ 130 million and recognized a gain of $ 93 million.

No investments were individually significant for the periods presented.

1 unchanged sentence

We account for our equity interest in DSIH under the equity method of accounting.

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

For the three months ended March 31, 2024 and 2023, 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 six months ended June 30, 2024 and 2023, 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.

Other Investments

1 unchanged sentence

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

As of March 31, 2024 and December 31, 2023, we held $ 155 million and $ 162 million, respectively, in investments measured at fair value.

As of March 31, 2024 and December 31, 2023, we held $ 174 million and $ 189 million, respectively, in investments measured at NAV.

We recognized a fair value adjustment gain of $ 2 million for the three months ended March 31, 2024 and a fair value adjustment loss of $ 1 million for the three months ended March 31, 2023 associated with these investments, which are reflected in other income, net in our consolidated statements of operations.

As of March 31, 2024 and December 31, 2023, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $ 73 million and $ 74 million, respectively.

Investments accounted for utilizing the measurement alternative were $ 39 million and $ 36 million as of March 31, 2024 and December 31, 2023, respectively.

There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for either of the three months ended March 31, 2024 and the three months ended March 31, 2023.

As of June 30, 2024 and December 31, 2023, we held $ 136 million and $ 162 million, respectively, in investments measured at fair value.

As of June 30, 2024 and December 31, 2023, we held $ 154 million and $ 189 million, respectively, in investments measured at NAV.

We recognized fair value adjustment losses of $ 45 million and $ 43 million for the three and six months ended June 30, 2024, respectively, and fair value adjustment losses of $ 47 million and $ 48 million for the three and six months ended June 30, 2023, respectively, associated with these investments, which are reflected in other expense, net in our consolidated statements of operations.

As of June 30, 2024 and December 31, 2023, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $ 66 million and $ 74 million, respectively.

Investments accounted for utilizing the measurement alternative were $ 38 million and $ 36 million as of June 30, 2024 and December 31, 2023, respectively.

We recorded a $ 2 million impairment related to one investment for the three and six months ended June 30, 2024 and a $ 6 million impairment related to one investment for the three and six months ended June 30, 2023, which are reflected in other expense, net in our consolidated statements of operations.

Note Receivable

2 unchanged sentences

The A/R Facility was terminated on March 14, 2024.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

1 unchanged sentence

The bank credit agreement of Sinclair Television Group, Inc.

As of March 31, 2024, 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 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, we repurchased $ 27 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $ 25 million.

("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, which 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, 2024, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement.

As of June 30, 2024, the STG first lien leverage ratio was above 4.5 x, which effectively reduces STG's borrowing capacity under the revolving credit facility from $ 650 million to $ 228 million.

The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of June 30, 2024.

During the six months ended June 30, 2024, we repurchased $ 27 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $ 25 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 $ 1 million for the three months ended March 31, 2024.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

We recognized a gain on extinguishment of the Term Loan B-2 of $ 1 million for the six months ended June 30, 2024.

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 as of both March 31, 2024 and December 31, 2023.

Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $ 11 million and $ 5 million as of March 31, 2024 and December 31, 2023, 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 March 31, 2024 and December 31, 2023, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both March 31, 2024 and December 31, 2023.

We provide a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $ 117 million with annual escalations of 4 % for the next five years .

We have determined that, as of March 31, 2024, it is not probable that we 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 June 30, 2024 and December 31, 2023, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both June 30, 2024 and December 31, 2023.

We have also provided a guarantee that requires us to provide funding to Marquee regional sports network ("Marquee") if Marquee's free cash flow generated in the applicable year and its existing cash balance are insufficient to allow Marquee to make certain payments under certain of Marquee's agreements with affiliates of the Chicago Cubs, an affiliate of which is also a co-owner of Marquee.

The funding obligation under the guarantee is subject to a maximum annual amount of $ 117 million with annual escalations of 4 % for the next five years .

We have determined that, as of June 30, 2024, it is not probable that we would have to perform under any of these guarantees.

Commitments and Contingencies for additional information.

Interest Rate Swap

3 unchanged sentences

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

As of March 31, 2024 and December 31, 2023, the fair value of the interest rate swap was an asset o f $ 7 million and $ 1 million, respectively, which are recorded in other assets in our consolidated balance sheets.

As of June 30, 2024 and December 31, 2023, the fair value of the interest rate swap was an asset o f $ 7 million and $ 1 million, respectively, which are recorded in other assets in our consolidated balance sheets.

REDEEMABLE NONCONTROLLING INTERESTS:

We account for redeemable noncontrolling interests in accordance with ASC 480, Distinguishing Liabilities from Equity , and classify them as mezzanine equity in our consolidated balance sheets because their possible redemption is outside of the control of the Company.

Our redeemable non-controlling interests consist of the following:

Our redeemable non-controlling interests previously consisted of the following:

Redeemable Subsidiary Preferred Equity .

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").

On February 10, 2023, we purchased the remaining 175,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate purchase price of $ 190 million, representing 95 % of the sum of the remaining unreturned capital contribution of $ 175 million, and accrued and unpaid dividends up to, but not including, the date of purchase.

Dividends accrued during the three months ended March 31, 2023 were $ 3 million and are reflected in net loss attributable to the redeemable noncontrolling interests in our consolidated statements of operations.

Dividends accrued during the three months ended March 31, 2023 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

COMMITMENTS AND CONTINGENCIES:

Litigation, Claims, and Regulatory Matters

We are a party to lawsuits, claims, and regulatory matters from time to time in the ordinary course of business.

1 unchanged sentence

Except as noted below, we do not believe the outcome of these matters, individually or in the aggregate, will have a material effect on our financial statements.

FCC Litigation Matters

On May 22, 2020, the Federal Communications Commission ("FCC") released an Order and Consent Decree pursuant to which the Company agreed to pay $ 48 million to resolve the matters covered by a Notice of Apparent Liability for Forfeiture ("NAL") issued in December 2017 proposing a $ 13 million fine for alleged violations of the FCC's sponsorship identification rules by the Company and certain of its subsidiaries, the FCC's investigation of the allegations raised in the Hearing Designation Order issued in connection with the Company's proposed acquisition of Tribune, and a retransmission related matter.

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

The consent decree expired on May 29, 2024.

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).

8 unchanged sentences

A Petition for Reconsideration of the forfeiture order was filed on August 7, 2021.

On March 14, 2022, the FCC released a Memorandum Opinion and Order and Order on Reconsideration, reaffirming the forfeiture order and dismissing (and in the alternative, denying) the Petition for Reconsideration.

On March 14, 2022, the FCC released a Memorandum Opinion and Order and Order on Reconsideration, which reaffirmed the forfeiture order, and dismissed (and in the alternative, denied) the Petition for Reconsideration, and stated that because the fines were not paid within the period stated in the July 2021 forfeiture order the FCC may refer the case to the U.S.

Department of Justice for enforcement of the forfeiture pursuant to Section 504 of the Communications Act.

Our understanding is that enforcement remains pending.

The Company is not a party to this forfeiture order;

however, our consolidated financial statements include an accrual of additional expenses of $ 8 million for the above legal matters during the year ended December 31, 2021, as we consolidate these stations as VIEs.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On September 21, 2022, the FCC released an NAL against the licensees of a number of stations, including 83 Company stations and several stations with whom the Company has LMAs, JSAs, and/or SSAs, for violation of the FCC's limitations on commercial matter in children's television programming related to KidsClick network programming distributed by the Company in 2018.

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 March 31, 2024, we have accrued $ 3.4 million.

As of June 30, 2024, 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.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Other Litigation Matters

Other Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the Department of Justice ("DOJ").

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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 (the "Diamond Litigation"), 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.

Smith, Sinclair's Executive Chairman, Christopher S.

Ripley, Sinclair's President and Chief Executive Officer, Lucy A.

Rutishauser, Sinclair's Executive Vice President & Chief Financial Officer, and Scott Shapiro, Sinclair's Executive Vice President, Corporate Development and Strategy, as defendants.

In the complaint, plaintiffs challenge a series of transactions involving SBG and certain of its subsidiaries, on the one hand, and DSG and its subsidiaries, on the other hand, since SBG acquired the former Fox Sports regional sports networks from The Walt Disney Company in August 2019.

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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.

During the first quarter of 2024, we paid $ 50 million related to the settlement and as of March 31, 2024, we have accrued $ 445 million, exclusive of any potential offsetting benefits to be received, related to the above matter, which is recorded within accounts payable and accrued liabilities in our consolidated balance sheets.

The final settlement payment was made on April 30, 2024 and of the total $ 495 million settlement amount paid, $ 347 million was paid by STG and $ 148 million was paid by Ventures.

During the first quarter of 2024, we paid $ 50 million related to the settlement.

The final settlement payment was made during the second quarter of 2024 and of the total $ 495 million settlement amount paid, $ 347 million was paid by STG and $ 148 million was paid by Ventures.

As described under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing we have provided a guarantee that requires us to provide funding to Marquee under certain circumstances.

On July 19, 2024, Marquee sent us a funding notice seeking $ 29 million under the Marquee guarantee by August 1, 2024 purportedly to make payments under certain agreements to affiliates of the Chicago Cubs, an affiliate of which is also a co-owner of Marquee.

Based on the information provided to us by Marquee, Marquee has sufficient cash to make such payments without funding under the Marquee guarantee.

For this and other reasons, we do not believe we are contractually required to provide funding under the Marquee guarantee at this time and have so informed Marquee.

On August 2, 2024, Marquee sent us another letter claiming that our failure to timely pay the amounts subject to Marquee’s funding notice constitutes a breach of the Marquee guarantee and requesting payment of such amounts no later than August 17, 2024 at which time Marquee has stated it will pursue any and all available remedies pursuant to the Marquee guarantee.

This dispute may result in litigation, and based on our expectation of Marquee’s claims, we believe we have meritorious defenses and intend to vigorously defend against such claims.

EARNINGS PER SHARE:

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Income (Numerator)

Net income $ 25 $ 193

Net income (loss) $ 19 $ ( 87 ) $ 44 $ 106

Net loss attributable to the redeemable noncontrolling interests — — — 4

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Weighted-average stock-settled appreciation rights and outstanding stock options excluded 8,745 3,693 6,932 3,645

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

During the period ended March 31, 2024, we measured segment performance based on operating income (loss).

For the quarter ended March 31, 2024, we had two reportable segments, local media and tennis.

We measure segment performance based on operating income (loss).

For the quarter ended June 30, 2024, we had two reportable segments, local media and tennis.

Our local media segment includes our television stations, original networks and content and provides these through free over-the-air programming to television viewing audiences for stations in markets located throughout the continental United States, as well as distributes the content of these stations to MVPDs for distribution to their customers in exchange for contractual fees.

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

As of March 31, 2024 Local Media Tennis Other & Corporate Eliminations Consolidated

As of June 30, 2024 Local Media Tennis Other & Corporate Eliminations Consolidated

Assets $ 4,418 $ 307 $ 964 $ ( 3 ) $ 5,686

For the three months ended March 31, 2024 Local Media Tennis Other & Corporate Eliminations Consolidated

For the three months ended June 30, 2024 Local Media Tennis Other & Corporate Eliminations Consolidated

Revenue $ 750 $ 67 $ 20 $ ( 8 ) (a) $ 829

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 58 6 — ( 1 ) 63

Amortization of program contract costs 19 — — — 19

Amortization of program costs 18 — — — 18

Corporate general and administrative expenses 29 — 21 — 50

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Income from equity method investments — — 78 — 78

For the three months ended March 31, 2023 Local Media Tennis Other & Corporate Eliminations Consolidated

For the six months ended June 30, 2024 Local Media Tennis Other & Corporate Eliminations Consolidated

Revenue $ 1,477 $ 130 $ 35 $ ( 15 ) (a) $ 1,627

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 116 11 1 ( 2 ) 126

Amortization of program contract costs 22 — — — 22

Amortization of program costs 37 — — — 37

Corporate general and administrative expenses 70 1 37 — 108

(Gain) loss on asset dispositions and other, net of impairment ( 1 ) — 7 — 6

Loss on asset dispositions and other, net of impairment — — 2 — 2

Operating income (loss) 124 21 ( 39 ) — 106

Interest expense including amortization of debt discount and deferred financing costs 152 — — — 152

Income from equity method investments — — 31 — 31

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

(Loss) income from equity method investments — ( 1 ) 93 — 92

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

Revenue $ 699 $ 60 $ 14 $ ( 5 ) (a) $ 768

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 67 5 1 — 73

Amortization of program costs 19 — — — 19

Corporate general and administrative expenses 46 — 16 — 62

(Gain) loss on asset dispositions and other, net of impairment ( 2 ) — 7 — 5

Operating income (loss) 22 3 ( 28 ) — ( 3 )

Interest expense including amortization of debt discount and deferred financing costs 76 — — — 76

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

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

Revenue $ 1,404 115 31 ( 9 ) (a) $ 1,541

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 126 10 3 ( 1 ) 138

Amortization of program costs 41 — — — 41

Corporate general and administrative expenses 78 — 42 — 120

(Gain) loss on asset dispositions and other, net of impairment ( 3 ) — 14 — 11

Operating income (loss) 63 21 ( 66 ) — 18

Interest expense including amortization of debt discount and deferred financing costs 150 — — — 150

Income from equity method investments — — 30 — 30

(a) Includes $ 3 million and $ 5 million for the three and six months ended June 30, 2024, respectively, and $ 2 million and $ 3 million for the three and six months ended June 30, 2023, respectively, of revenue for services provided by other to local media, which is eliminated in consolidation.

VARIABLE INTEREST ENTITIES:

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The fees paid between us and the licensees pursuant to these arrangements are eliminated in consolidation.

SINCLAIR, INC.

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 our consolidated balance sheets as of the dates presented, were as follows (in millions):

As of March 31,

As of June 30,

2024 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 March 31, 2024 and December 31, 2023, 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 $ 129 million as of June 30, 2024 and $ 130 million as of December 31, 2023, 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 March 31, 2024, all of the liabilities are non-recourse to us except for the debt of certain VIEs.

As of June 30, 2024, 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.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were $ 171 million and $ 192 million as of March 31, 2024 and December 31, 2023, 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 $ 154 million and $ 192 million as of June 30, 2024 and December 31, 2023, 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 income from equity method investments and other income, net, respectively, in our consolidated statements of operations.

We recorded a loss of $ 1 million for the three months ended March 31, 2024 and a gain of $ 35 million for the three months ended March 31, 2023 related to these investments.

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

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

We recorded losses of $ 22 million and $ 23 million for the three and six months ended June 30, 2024, respectively, and gains of $ 3 million and $ 38 million for the three and six months ended June 30, 2023, respectively, related to these investments.

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

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

RELATED PERSON TRANSACTIONS:

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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 $ 2 million for both the three months ended March 31, 2024 and 2023.

Lease payments made to these entities were $ 1 million and $ 3 million for the three and six months ended June 30, 2024, respectively, and $ 1 million and $ 3 million for the three and six months ended June 30, 2023, 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 less than $ 0.1 million for the three months ended March 31, 2023.

For all leases, we incurred expenses of less than $ 0.1 million for both the three and six months ended June 30, 2024 and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively.

Cunningham Broadcasting Corporation

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

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The services provided to WNUV-TV, WMYA-TV, WTTE-TV, WRGT-TV and WVAH-TV are governed by a master agreement which has a current term that expires on July 1, 2028 and there is one additional five-year renewal term remaining with final expiration on July 1, 2033.

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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 $ 66 million and $ 65 million as of March 31, 2024 and December 31, 2023, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both March 31, 2024 and December 31, 2023, was approximately $ 54 million.

The cumulative prepayments made under these purchase agreements were $ 67 million and $ 65 million as of June 30, 2024 and December 31, 2023, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both June 30, 2024 and December 31, 2023, 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 for both the three months ended March 31, 2024 and 2023.

We paid Cunningham, under these agreements, $ 3 million and $ 6 million for the three and six months ended June 30, 2024, respectively, and $ 3 million and $ 6 million for the three and six months ended June 30, 2023, 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 $ 34 million for the three months ended March 31, 2024 and $ 36 million for the three months ended March 31, 2023 related to the Cunningham Stations.

Our consolidated revenues include $ 34 million and $ 68 million for the three and six months ended June 30, 2024, respectively, and $ 33 million and $ 69 million for the three and six months ended June 30, 2023, respectively, related to the Cunningham Stations.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 for both the three months ended March 31, 2024 and 2023, under these agreements.

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, 2024, respectively, and $ 0.5 million and $ 1 million for the three and six months ended June 30, 2023, respectively, under these agreements.

Leased Property by Real Estate Ventures

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 $ 0.4 million for both the three months ended March 31, 2024 and 2023.

Total rent payments received under these leases were $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2024, respectively, and $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2023, respectively.

Diamond Sports Intermediate Holdings LLC

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We have a management services agreement with DSG, a wholly-owned subsidiary of DSIH, in which we provide DSG with affiliate sales and marketing services and general and administrative services.

Pursuant to this agreement, the local media segment recorded $ 13 million and $ 9 million of revenue for the three months ended March 31, 2024 and 2023, respectively.

Pursuant to this agreement, the local media segment recorded $ 17 million and $ 30 million of revenue for the three and six months ended June 30, 2024, respectively, and $ 13 million and $ 22 million of revenue for the three and six months ended June 30, 2023, respectively.

Note receivable .

We received payments totaling $ 3 million from DSPV during the three months ended March 31, 2023 related to the note receivable associated with the A/R Facility.

We received payments totaling $ 206 million and $ 209 million from DSPV during three and six months ended June 30, 2023, respectively, related to the note receivable associated with the A/R Facility.

The A/R Facility was terminated on March 14, 2024.

We recorded revenue of $ 4 million and $ 5 million during the three months ended March 31, 2024 and 2023, respectively, related to certain other transactions between DSIH and the Company.

We recorded revenue of $ 4 million and $ 8 million during the three and six months ended June 30, 2024, respectively, and $ 6 million and $ 11 million for the three and six months ended June 30, 2023, respectively, related to certain other transactions between DSIH and the Company.

SINCLAIR, INC.

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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 for both the three months ended March 31, 2024 and 2023, consisting of salary and bonus, and was granted 37,566 shares of restricted stock, vesting over two years , and 500,000 stock appreciation rights, vesting over two years , during the three months ended March 31, 2024.

Jason Smith received total compensation of $ 0.3 million and $ 0.2 million for the three months ended June 30, 2024 and 2023, respectively, and $ 0.5 million and $ 0.4 million for the six months ended June 30, 2024 and 2023, respectively, consisting of salary and bonus, and was granted 37,566 shares of restricted stock, vesting over two years , and 500,000 stock appreciation rights, vesting over two years , during the six months ended June 30, 2024.

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 $ 0.1 million, consisting of salary, and less than $ 0.1 million, consisting of salary and bonus, for the three months ended March 31, 2024 and 2023, respectively, and was granted 1,503 and 1,252 shares of restricted stock, vesting over two years , during the three months ended March 31, 2024 and 2023, respectively.

Ethan White received total compensation of $ 0.1 million and less than $ 0.1 million for the three months ended June 30, 2024 and 2023, respectively, and $ 0.1 million for both the six months ended June 30, 2024 and 2023, consisting of salary and bonus, and was granted 1,503 and 1,252 shares of restricted stock, vesting over two years , during the six months ended June 30, 2024 and 2023, respectively.

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, consisting of salary, and $ 0.1 million, consisting of salary and bonus, for the three months ended March 31, 2024 and 2023, respectively.

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 March 31, 2024 and 2023, consisting of salary, and was granted 656 and 516 shares of restricted stock, vesting over two years , during the three months ended March 31, 2024 and 2023, respectively.

Amberly Thompson received total compensation of less than $ 0.1 million for both the three months ended June 30, 2024 and 2023 and $ 0.1 million for both the six months ended June 30, 2024 and 2023, consisting of salary and bonus.

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 March 31, 2024 and 2023, consisting of salary and bonus.

Frederick Smith received total compensation of $ 0.2 million for both the three months ended June 30, 2024 and 2023 and $ 0.4 million for both the six months ended June 30, 2024 and 2023, 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 March 31, 2024 and 2023, consisting of salary and bonus.

Duncan Smith received total compensation of $ 0.2 million for both the three months ended June 30, 2024 and 2023 and $ 0.4 million for both the six months ended June 30, 2024 and 2023, 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 March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023

Face Value Fair Value Face Value Fair Value

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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 March 31, 2024.

T he fair value of the interest rate swap was an asset as of June 30, 2024 and December 31, 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 $ 43 million and $ 46 million as of March 31, 2024 and December 31, 2023, 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 the three months ended March 31, 2024 we recorded a fair value adjustment loss of $ 1 million.

(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 $ 41 million and $ 46 million as of June 30, 2024 and December 31, 2023, respectively.

(d) Amounts primarily relate to warrants and options to acquire common equity in Bally's.

We recorded fair value adjustment losses of $ 7 million and $ 8 million during the three and six months ended June 30, 2024 and a loss of $ 17 million during both the three and six months ended June 30, 2023.

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 months ended March 31, 2024 and 2023 (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 six months ended June 30, 2024 and 2023 (in millions):

Options and Warrants

Three Months Ended March 31, 2024

Fair value at December 31, 2023 $ 46

Measurement adjustments ( 1 )

Fair value at March 31, 2024 $ 45

Three Months Ended June 30, 2024 Six Months Ended June 30, 2024

Fair value at March 31, 2024 $ 45 Fair value at December 31, 2023 $ 46

Measurement adjustments ( 3 ) Measurement adjustments ( 4 )

Fair value at June 30, 2024 $ 42 Fair value at June 30, 2024 $ 42

Options and Warrants

Three Months Ended March 31, 2023

Fair value at December 31, 2022 $ 75

Measurement adjustments —

Fair value at March 31, 2023 $ 75

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 ( 17 ) Measurement adjustments ( 17 )

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

FINANCIAL STATEMENTS OF SINCLAIR BROADCAST GROUP, LLC

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(in millions) (Unaudited)

As of March 31,

As of June 30,

2024 As of December 31,

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

(a) SBG's consolidated total assets as of March 31, 2024 and December 31, 2023 include total assets of variable interest entities ("VIE") of $ 78 million and $ 85 million, respectively, which can only be used to settle the obligations of the VIEs.

SBG's consolidated total liabilities as of March 31, 2024 and December 31, 2023 include total liabilities of VIEs of $ 16 million and $ 17 million , respectively, for which the creditors of the VIEs have no recourse to SBG.

(a) SBG's consolidated total assets as of June 30, 2024 and December 31, 2023 include total assets of variable interest entities ("VIE") of $ 72 million and $ 85 million, respectively, which can only be used to settle the obligations of the VIEs.

SBG's consolidated total liabilities as of June 30, 2024 and December 31, 2023 include total liabilities of VIEs of $ 14 million and $ 17 million , respectively, 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

2024 2023 2024 2023

Media revenues $ 750 $ 740 $ 1,477 $ 1,506

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Media selling, general and administrative expenses 178 184 361 375

Amortization of program contract costs 19 22

Amortization of program costs 18 19 37 41

Non-media expenses 2 7 4 19

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Income from equity method investments — — — 31

Other income, net 31 11

Other income (expense), net 2 ( 64 ) 33 ( 53 )

Total other expense, net ( 74 ) ( 129 ) ( 118 ) ( 161 )

Loss before income taxes ( 3 ) ( 11 )

Income (loss) before income taxes 3 ( 125 ) — ( 136 )

INCOME TAX BENEFIT 1 26 10 230

NET INCOME 6 193

NET INCOME (LOSS) 4 ( 99 ) 10 94

Net loss attributable to the redeemable noncontrolling interests — — — 4

Net income attributable to the noncontrolling interests ( 2 ) ( 2 ) ( 3 ) ( 14 )

NET INCOME ATTRIBUTABLE TO SBG $ 5 $ 185

NET INCOME (LOSS) ATTRIBUTABLE TO SBG $ 2 $ ( 101 ) $ 7 $ 84

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

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Three Months Ended

Net income $ 6 $ 193

Unrealized gain (loss) on interest rate swap, net of tax 4 ( 3 )

Comprehensive income 10 190

June 30, Six Months Ended

2024 2023 2024 2023

Net income (loss) $ 4 $ ( 99 ) $ 10 $ 94

Unrealized gain on interest rate swap, net of tax 1 9 5 6

Comprehensive income (loss) 5 ( 90 ) 15 100

Comprehensive loss attributable to the redeemable noncontrolling interests — — — 4

Comprehensive income attributable to the noncontrolling interests ( 2 ) ( 2 ) ( 3 ) ( 14 )

Comprehensive income attributable to SBG $ 9 $ 182

Comprehensive income (loss) attributable to SBG $ 3 $ ( 92 ) $ 12 $ 90

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

SINCLAIR BROADCAST GROUP, LLC

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

CONSOLIDATED STATEMENTS OF MEMBER'S EQUITY (DEFICIT) AND REDEEMABLE NONCONTROLLING INTERESTS

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

Three Months Ended March 31, 2023

Old Sinclair Shareholders

Three Months Ended June 30, 2023

Common Stock Class B

Common Stock Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive

(Loss) Income Noncontrolling

Interests Total

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 Common Stock converted to SBG member's equity ( 39,337,415 ) ( 1 ) ( 23,775,056 ) — — — — — ( 1 )

Deemed dividend to parent — — — — ( 511 ) ( 606 ) — ( 1 ) ( 1,118 )

Distributions to noncontrolling interests — — — — — — — ( 3 ) ( 3 )

Other comprehensive income — — — — — — 9 — 9

Net (loss) income — — — — — ( 101 ) — 2 ( 99 )

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

Six Months Ended June 30, 2023

Redeemable Noncontrolling Interests Class A

1 unchanged sentence

Common Stock Additional

Capital Retained Earnings Accumulated

Capital Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive

Income (Loss) Noncontrolling

Income Noncontrolling

Interests Total

Equity (Deficit)

Shares Values Shares Values

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Old Sinclair Class A Common Stock issued pursuant to employee benefit plans — 2,274,558 — — — 40 — — — 40

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

Deemed dividend to parent — — — — — ( 511 ) ( 606 ) — ( 1 ) ( 1,118 )

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

Distributions to noncontrolling interests — — — — — — — — ( 7 ) ( 7 )

Other comprehensive loss — — — — — — — ( 3 ) — ( 3 )

Other comprehensive income — — — — — — — 6 — 6

Net (loss) income ( 4 ) — — — — — 84 — 14 98

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

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

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

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(in millions) (Unaudited)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Accumulated Deficit Accumulated

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Interests Total Deficit

BALANCE, March 31, 2024 $ ( 795 ) $ 5 $ ( 65 ) $ ( 855 )

Contributions from member, net 79 — — 79

Distributions to noncontrolling interests — — ( 3 ) ( 3 )

Other comprehensive income — 1 — 1

Net income 2 — 2 4

BALANCE, June 30, 2024 $ ( 714 ) $ 6 $ ( 66 ) $ ( 774 )

Six Months Ended June 30, 2024

Accumulated Deficit Accumulated

Comprehensive

Income Noncontrolling

Interests Total Deficit

BALANCE, December 31, 2023 $ ( 865 ) $ 1 $ ( 64 ) $ ( 928 )

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Net income 7 — 3 10

BALANCE, March 31, 2024 $ ( 795 ) $ 5 $ ( 65 ) $ ( 855 )

BALANCE, June 30, 2024 $ ( 714 ) $ 6 $ ( 66 ) $ ( 774 )

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

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(in millions) (Unaudited)

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Six Months Ended June 30,

CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES:

Net income $ 10 $ 94

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Depreciation of property and equipment 51 55

Amortization of program contract costs 19 22

Amortization of program costs 37 41

Equity-based compensation 34 34

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Gain on extinguishment of debt ( 1 ) ( 11 )

Change in assets and liabilities, net of acquisitions:

Change in assets and liabilities, net of acquisitions and asset transfer to Ventures:

(Increase) decrease in accounts receivable ( 37 ) 33

Increase in prepaid expenses and other current assets ( 2 ) ( 42 )

Decrease (increase) in prepaid expenses and other current assets 14 ( 34 )

Net change in due to/from member 39 —

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Other, net ( 43 ) 3

Net cash flows from operating activities 17 62

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:

Net cash flows (used in) from operating activities ( 312 ) 122

CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:

Acquisition of property and equipment ( 44 ) ( 41 )

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Other, net 2 4

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

CASH FLOWS USED IN FINANCING ACTIVITIES:

Net cash flows (used in) from investing activities ( 18 ) 130

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:

Repayments of notes payable, commercial bank financing, and finance leases ( 43 ) ( 37 )

2 unchanged sentences

Repurchase of redeemable subsidiary preferred equity — ( 190 )

Contributions from member, net 32 —

Contributions from (distributions to) member, net 111 ( 360 )

Distributions to noncontrolling interests, net ( 5 ) ( 7 )

Other, net — ( 3 )

Net cash flows used in financing activities ( 4 ) ( 279 )

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 18 ( 261 )

Net cash flows from (used in) financing activities 63 ( 768 )

NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 267 ) ( 516 )

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 319 884

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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 March 31, 2024, SBG had one reportable segment:

For the quarter ended June 30, 2024, SBG had one reportable segment:

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 March 31, 2024.

These stations broadcast 638 channels as of June 30, 2024.

For the purpose of this report, these 185 stations and 638 channels are referred to as "SBG" stations and channels.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As a result of the Reorganization, SBG's consolidated statement of operations for the three months ended March 31, 2023 includes three months of activity related to the Transferred Assets prior to the Reorganization.

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.

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

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Interim Financial Statements

SBG's consolidated financial statements for the three months ended March 31, 2024 and 2023 are unaudited.

SBG's consolidated financial statements for the three and six months ended June 30, 2024 and 2023 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 income, consolidated statements of equity and redeemable noncontrolling interests, consolidated statements of member's deficit and consolidated statements of cash flows for these periods as adjusted for the adoption of recent accounting pronouncements.

As permitted under the applicable rules and regulations of the SEC, SBG's consolidated financial statements do not include all disclosures normally included with audited consolidated financial statements and, accordingly, should be read together with the audited consolidated financial statements and notes thereto in Sinclair's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.

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The rights to this programming are reflected in the accompanying consolidated balance sheets at the lower of unamortized cost or fair value.

Program contract costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method.

Program contract costs estimated by management to be amortized in the succeeding year are classified as current assets.

Program costs are amortized on a straight-line basis except for contracts greater than three years which are amortized utilizing an accelerated method.

Program costs estimated by management to be amortized in the succeeding year are classified as current assets.

Payments of program contract liabilities are typically made on a scheduled basis and are not affected by amortization or fair value adjustments.

Fair value is determined utilizing a discounted cash flow model based on management's expectation of future advertising revenues, net of sales commissions, to be generated by the program material.

SBG assesses the program contract costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

SBG assesses the program costs on a quarterly basis to ensure the costs are recorded at the lower of unamortized cost or fair value.

Hedge Accounting

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Non-cash Investing and Financing Activities

Leased assets obtained in exchange for new operating lease liabilities were $ 2 million and $ 3 million for the three months ended March 31, 2024 and 2023, respectively.

Leased assets obtained in exchange for new finance lease liabilities were $ 7 million for the three months ended March 31, 2024.

Non-cash investing activities included property and equipment purchases of $ 5 million and $ 6 million for the three months ended March 31, 2024 and 2023, respectively.

Leased assets obtained in exchange for new operating lease liabilities were $ 3 million for both the six months ended June 30, 2024 and 2023.

Leased assets obtained in exchange for new finance lease liabilities were $ 7 million for the six months ended June 30, 2024.

Non-cash investing activities included property and equipment purchases of $ 5 million for both the six months ended June 30, 2024 and 2023.

SINCLAIR BROADCAST GROUP, LLC

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

For the three months ended March 31, 2024 Local Media

For the three months ended June 30, 2024 Local Media

Distribution revenue $ 384

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Total revenues $ 750

For the three months ended March 31, 2023 Local Media Other Eliminations Total

For the six months ended June 30, 2024 Local Media

Distribution revenue $ 768

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Political advertising revenue 64

Other media and intercompany revenues 76

Total revenues $ 1,477

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

Distribution revenue $ 372 $ 31 $ — $ 403

Core advertising revenue 287 13 ( 3 ) 297

Political advertising revenue 6 — — 6

Other media, non-media, and intercompany revenues 34 3 — 37

Total revenues $ 699 $ 47 $ ( 3 ) $ 743

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

Distribution revenue $ 753 $ 76 $ — $ 829

Core advertising revenue 580 29 ( 5 ) 604

Political advertising revenue 9 — — 9

Other media, non-media, and intercompany revenues 62 14 ( 2 ) 74

Total revenues $ 1,404 $ 119 $ ( 7 ) $ 1,516

Distribution Revenue.

SBG has agreements with multi-channel video programming distributors ("MVPD") and virtual MVPDs ("vMVPD," and together with MVPDs, "Distributors").

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Core Advertising Revenue.

SBG generates advertising revenue primarily from the sale of advertising spots/impressions within broadcast television and digital platforms.

SBG generates core advertising revenue primarily from the sale of non-political advertising spots/impressions within broadcast television and digital platforms.

Political Advertising Revenue.

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In accordance with ASC 606, SBG does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) distribution arrangements which are accounted for as a sales/usage based royalty.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Deferred Revenue.

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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 $ 180 million and $ 171 million as of March 31, 2024 and December 31, 2023, respectively, of which $ 119 million and $ 124 million, respectively, was reflected in other long-term liabilities in SBG's consolidated balance sheets.

Deferred revenue recognized during the three months ended March 31, 2024 and 2023, included in the deferred revenue balance as of December 31, 2023 and 2022, was $ 15 million and $ 19 million, respectively.

For the three months ended March 31, 2024, two customers accounted for 11 % and 11 %, respectively, of SBG's total revenues.

For the three months ended March 31, 2023, two customers accounted for 11 % and 10 %, respectively, of SBG's total revenues.

As of March 31, 2024, four customers accounted for 12 %, 11 %, 10 %, and 10 %, respectively, of SBG's accounts receivable, net.

Deferred revenue was $ 179 million and $ 171 million as of June 30, 2024 and December 31, 2023, respectively, of which $ 114 million and $ 124 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, 2024 and 2023, included in the deferred revenue balance as of December 31, 2023 and 2022, was $ 26 million and $ 32 million, respectively.

For the three months ended June 30, 2024, two customers accounted for 12 % and 10 %, respectively, of SBG's total revenues.

For the six months ended June 30, 2024, two customers accounted for 11 % and 10 %, respectively, of SBG's total revenues.

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.

As of June 30, 2024, three customers accounted for 14 %, 11 %, and 10 %, respectively, of SBG's accounts receivable, net.

As of December 31, 2023, two customers accounted for 10 % and 10 %, respectively, of SBG's accounts receivable, net.

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

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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.

2 unchanged sentences

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 March 31, 2024 was greater than the statutory rate primarily due to an immaterial $ 7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims.

SBG’s effective income tax rate for the three months ended March 31, 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) 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.

SBG’s effective income tax rate for the three months ended June 30, 2024 was greater than the statutory rate primarily due to accrual of interest income attributable to prior years’ pending income tax refund claims.

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

SBG’s effective income tax rate for the six months ended June 30, 2024 was greater than the statutory rate primarily due to an immaterial $ 7.5 million correcting adjustment related to the accrual of interest income attributable to prior years’ pending income tax refund claims.

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 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 DSG business because of the exit of the sole minority investor.

SBG does not believe that our liability for unrecognized tax benefits would be materially impacted, in the next twelve months, as a result of the expected statute of limitations expirations, the application of limits under available state administrative practice exceptions, and the resolution of examination issues and settlements with federal and certain state tax authorities.

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OTHER ASSETS:

Other assets as of March 31, 2024 and December 31, 2023 consisted of the following (in millions):

As of March 31,

Other assets as of June 30, 2024 and December 31, 2023 consisted of the following (in millions):

As of June 30,

2024 As of December 31,

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SBG has an investment in Diamond Sports Intermediate Holdings LLC ("DSIH").

No investments were individually significant for the periods presented.

Diamond Sports Intermediate Holdings LLC.

SBG's equity interest in DSIH is accounted for under the equity method of accounting.

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

For the three months ended March 31, 2024 and 2023, 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 six months ended June 30, 2024 and 2023, 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.

Other Investments

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

SBG recognized a fair value adjustment loss of $ 1 million for the three months ended March 31, 2023 associated with these investments, which is reflected in other income, net in SBG's consolidated statements of operations.

Investments accounted for utilizing the measurement alternative were $ 3 million as of March 31, 2024.

SBG recognized fair value adjustment losses of $ 72 million and $ 73 million for the three and six months ended June 30, 2023, respectively, associated with these investments, which is reflected in other expense, net in SBG's consolidated statements of operations.

Investments accounted for utilizing the measurement alternative were $ 4 million as of June 30, 2024.

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, 2024.

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.

SINCLAIR BROADCAST GROUP, LLC

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The bank credit agreement of Sinclair Television Group, Inc.

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

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.

Since there was no utilization under the revolving credit facility as of June 30, 2024, STG was not subject to the financial maintenance covenant under the Bank Credit Agreement.

As of June 30, 2024, the STG first lien leverage ratio was above 4.5 x, which effectively reduces STG's borrowing capacity under the revolving credit facility from $ 650 million to $ 228 million.

The Bank Credit Agreement contains other restrictions and covenants with which STG was in compliance as of June 30, 2024.

During the six months ended June 30, 2024, STG purchased $ 27 million aggregate principal amount of the Term Loan B-2, due September 30, 2026, for consideration of $ 25 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 $ 1 million for the three months ended March 31, 2024.

STG recognized a gain on extinguishment of the Term Loan B-2 of $ 1 million for the six months ended June 30, 2024.

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 as of both March 31, 2024 and December 31, 2023.

Notes payable, finance leases, and commercial bank financing, less current portion, in SBG's consolidated balance sheets includes finances leases to affiliates of $ 11 million and $ 5 million as of March 31, 2024 and December 31, 2023, respectively.

8 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 March 31, 2024 and December 31, 2023, all of which relate to consolidated VIEs and is included in SBG's consolidated balance sheets as of both March 31, 2024 and December 31, 2023.

SBG provides a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $ 117 million with annual escalations of 4 % for the next five years .

SBG has determined that, as of March 31, 2024, it is not probable that SBG would have to perform under any of these guarantees.

SBG has also provided a guarantee that requires SBG to provide funding to Marquee regional sports network ("Marquee") if Marquee's free cash flow generated in the applicable year and its existing cash balance are insufficient to allow Marquee to make certain payments under certain of Marquee's agreements with affiliates of the Chicago Cubs, an affiliate of which is also a co-owner of Marquee.

The funding obligation under the guarantee is subject to a maximum annual amount of $ 117 million with annual escalations of 4 % for the next five years .

SBG has determined that, as of June 30, 2024, it is not probable that SBG would have to perform under any of these guarantees.

Commitments and Contingencies for additional information.

Interest Rate Swap

3 unchanged sentences

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

As of March 31, 2024 and December 31, 2023, the fair value of the interest rate swap was an asset o f $ 7 million and $ 1 million , respectively, which are recorded in other assets in SBG's consolidated balance sheets.

As of June 30, 2024 and December 31, 2023, the fair value of the interest rate swap was an asset o f $ 7 million and $ 1 million , respectively, which are recorded in other assets in SBG's consolidated balance sheets.

REDEEMABLE NONCONTROLLING INTERESTS:

SBG accounts for redeemable noncontrolling interests in accordance with ASC 480, Distinguishing Liabilities from Equity , and classifies them as mezzanine equity in SBG's consolidated balance sheets because their possible redemption is outside of the control of SBG.

SBG's redeemable non-controlling interests consist of the following:

SBG's redeemable non-controlling interests previously consisted of the following:

Redeemable Subsidiary Preferred Equity .

3 unchanged sentences

On February 10, 2023, SBG purchased the remaining 175,000 units of the Redeemable Subsidiary Preferred Equity for an aggregate purchase price of $ 190 million, representing 95 % of the sum of the remaining unreturned capital contribution of $ 175 million, and accrued and unpaid distributions up to, but not including, the date of purchase.

Distributions accrued during the three months ended March 31, 2023 were $ 3 million and are reflected in net loss attributable to the redeemable noncontrolling interests in SBG's consolidated statements of operations.

Distributions accrued during the three months ended March 31, 2023 were paid-in-kind and added to the liquidation preference, which was partially offset by certain required cash tax distributions.

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

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

COMMITMENTS AND CONTINGENCIES:

Litigation, Claims, and Regulatory Matters

SBG is a party to lawsuits, claims, and regulatory matters from time to time in the ordinary course of business.

1 unchanged sentence

Except as noted below, SBG does not believe the outcome of these matters, individually or in the aggregate, will have a material effect on SBG's financial statements.

FCC Litigation Matters

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

The consent decree expired on May 29, 2024.

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A Petition for Reconsideration of the forfeiture order was filed on August 7, 2021.

On March 14, 2022, the FCC released a Memorandum Opinion and Order and Order on Reconsideration, which reaffirmed the forfeiture order, dismissed (and in the alternative, denied) the Petition for Reconsideration, and stated that because the fines were not paid within the period stated in the July 2021 forfeiture order the FCC may refer the case to the U.S.

Department of Justice for enforcement of the forfeiture pursuant to Section 504 of the Communications Act.

Our understanding is that enforcement remains pending.

The Company is not a party to this forfeiture order;

however, SBG's consolidated financial statements include an accrual of additional expenses of $ 8 million for the above legal matters during the year ended December 31, 2021, as SBG consolidates these stations as VIEs.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On September 21, 2022, the FCC released an NAL against the licensees of a number of stations, including 83 SBG stations and several stations with whom SBG has LMAs, JSAs, and/or SSAs, for violation of the FCC's limitations on commercial matter in children’s television programming related to KidsClick network programming distributed by the Company in 2018.

The NAL proposed a fine of $ 2.7 million against SBG, 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 March 31, 2024, SBG has accrued $ 3.4 million.

As of June 30, 2024, 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

Other Matters

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the Department of Justice ("DOJ").

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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 (the "DSG Litigation"), 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.

Smith, Sinclair's Executive Chairman, Christopher S.

Ripley, Sinclair's President and Chief Executive Officer, Lucy A.

Rutishauser, Sinclair's Executive Vice President & Chief Financial Officer, and Scott Shapiro, Sinclair's Executive Vice President, Corporate Development and Strategy, as defendants.

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 (the "DSG Litigation"), under seal, in the United States Bankruptcy Court for the Southern District of Texas naming certain subsidiaries of Sinclair, including SBG and STG and certain officers of SBG and STG, as defendants.

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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.

During the first quarter of 2024, SBG paid $ 50 million of the total settlement, which was funded by Ventures, and as of March 31, 2024, SBG has accrued $ 445 million, exclusive of any potential offsetting benefits to be received, related to the above matter, which is recorded within accounts payable and accrued liabilities in SBG's consolidated balance sheets.

The final settlement payment was made on April 30, 2024 and of the total $ 495 million settlement amount paid, $ 347 million was paid by STG and $ 148 million was paid by Ventures.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

During the first quarter of 2024, SBG paid $ 50 million of the total settlement, which was funded by Ventures.

The final settlement payment was made during the second quarter of 2024 and of the total $ 495 million settlement amount paid, $ 347 million was paid by STG and $ 148 million was paid by Ventures.

As described under Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing , SBG has provided a guarantee that requires SBG to provide funding to Marquee under certain circumstances.

On July 19, 2024, Marquee sent SBG a funding notice seeking $ 29 million under the Marquee guarantee by August 1, 2024 purportedly to make payments under certain agreements to affiliates of the Chicago Cubs, an affiliate of which is also a co-owner of Marquee.

Based on the information provided to SBG by Marquee, Marquee has sufficient cash to make such payments without funding under the Marquee guarantee.

For this and other reasons, SBG does not believe it is contractually required to provide funding under the Marquee guarantee at this time and have so informed Marquee.

On August 2, 2024, Marquee sent SBG another letter claiming that SBG's failure to timely pay the amounts subject to Marquee’s funding notice constitutes a breach of the Marquee guarantee and requesting payment of such amounts no later than August 17, 2024 at which time Marquee has stated it will pursue any and all available remedies pursuant to the Marquee guarantee.

This dispute may result in litigation, and based on SBG's expectation of Marquee’s claims, SBG believes that it has meritorious defenses and intends to vigorously defend against such claims.

SEGMENT DATA:

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

During the period ended March 31, 2024, SBG measured segment performance based on operating income (loss).

For the quarter ended March 31, 2024, SBG had one reportable segment:

SBG measures segment performance based on operating income (loss).

For the quarter ended June 30, 2024, SBG had one reportable segment:

The local media segment includes SBG's television stations, original networks, and content and provides these through free over-the-air programming to television viewing audiences for stations in markets located throughout the continental United States, as well as distributes the content of these stations to MVPDs for distribution to their customers in exchange for contractual fees.

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

As of March 31, 2024 Local Media Corporate Consolidated

As of June 30, 2024 Local Media Corporate Consolidated

Assets $ 4,439 $ 85 $ 4,524

For the three months ended March 31, 2024 Local Media

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended June 30, 2024 Local Media Corporate Consolidated

Revenue $ 750 $ — $ 750

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 58 — 58

Amortization of program contract costs 19

Amortization of program costs 18 — 18

Corporate general and administrative expenses 29 6 35

Operating income 41

Operating income (loss) 83 ( 6 ) 77

Interest expense including amortization of debt discount and deferred financing costs 76 — 76

For the three months ended March 31, 2023 Local Media Other & Corporate (a) Eliminations Consolidated

For the six months ended June 30, 2024 Local Media Corporate Consolidated

Revenue $ 1,477 — 1,477

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 116 — 116

Amortization of program contract costs 22 — — 22

Amortization of program costs 37 — 37

Corporate general and administrative expenses 70 6 76

Operating income (loss) 124 ( 6 ) 118

Interest expense including amortization of debt discount and deferred financing costs 152 — 152

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

Revenue $ 699 $ 47 $ ( 3 ) $ 743

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 67 3 — 70

Amortization of program costs 19 — — 19

Corporate general and administrative expenses 46 12 — 58

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

1 unchanged sentence

Interest expense including amortization of debt discount and deferred financing costs 76 — — 76

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

Revenue $ 1,404 119 ( 7 ) (b) $ 1,516

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 126 10 ( 1 ) 135

Amortization of program costs 41 — — 41

Corporate general and administrative expenses 78 38 — 116

(Gain) loss on asset dispositions and other, net of impairment ( 3 ) 13 — 10

Operating income (loss) 63 ( 38 ) — 25

Interest expense including amortization of debt discount and deferred financing costs 150 — — 150

Income from equity method investments — 31 — 31

2 unchanged sentences

Nature of Operations and Summary of Significant Accounting Policies .

(b) Includes $ 1 million for the six months ended June 30, 2023 of revenue for services provided by local media to other, which is eliminated in consolidation.

SINCLAIR BROADCAST GROUP, LLC

8 unchanged sentences

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 March 31,

As of June 30,

2024 As of December 31,

13 unchanged sentences

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 March 31, 2024, all of the liabilities are non-recourse to SBG except for the debt of certain VIEs.

As of June 30, 2024, 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

SBG's investments in these VIEs for which SBG was not the primary beneficiary were transferred to Ventures as part of the Reorganization.

The income and loss related to equity method investments and other investments are recorded in income from equity method investments and other income, net, respectively, in SBG's consolidated statements of operations.

SBG recorded a gain of $ 35 million for the three months ended March 31, 2023, related to these investments.

SBG holds substantially all of the equity of DSIH and provides certain management and general and administrative services to DSIH.

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

SBG holds substantially all of the equity of DSIH and provides certain management and general and administrative services to subsidiaries of DSIH.

However, it was determined that SBG is not the primary beneficiary because SBG lacks the ability to control the activities that most significantly drive the economics of the business.

6 unchanged sentences

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

Lease payments made to these entities were $ 2 million for both the three months ended March 31, 2024 and 2023.

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 less than $ 0.1 million for the three months ended March 31, 2023.

For all leases, SBG incurred expenses of less than $ 0.1 million for both the three and six months ended June 30, 2024 and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively.

Cunningham Broadcasting Corporation

25 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 $ 66 million and $ 65 million as of March 31, 2024 and December 31, 2023, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both March 31, 2024 and December 31, 2023, was approximately $ 54 million.

The cumulative prepayments made under these purchase agreements were $ 67 million and $ 65 million as of June 30, 2024 and December 31, 2023, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both June 30, 2024 and December 31, 2023, 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 for both the three months ended March 31, 2024 and 2023.

SBG paid Cunningham, under these agreements, $ 3 million and $ 6 million for the three and six months ended June 30, 2024, respectively, and $ 3 million and $ 6 million for the three and six months ended June 30, 2023, respectively.

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 $ 34 million for the three months ended March 31, 2024 and $ 36 million for the three months ended March 31, 2023, related to the Cunningham Stations.

SBG's consolidated revenues include $ 34 million and $ 68 million for the three and six months ended June 30, 2024, respectively, and $ 33 million and $ 69 million for the three and six months ended June 30, 2023, 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 for both the three months ended March 31, 2024 and 2023, under these agreements.

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, 2024, respectively, and $ 0.5 million and $ 1 million for the three and six months ended June 30, 2023, respectively, under these agreements.

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 $ 0.4 million for the three months ended March 31, 2023.

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.

Sinclair, Inc.

2 unchanged sentences

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

SBG recorded revenue of $ 2 million during the three months ended March 31, 2024, 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 the three months ended March 31, 2024, within the local media segment related to digital advertising services provided by Sinclair, and certain of its direct and indirect subsidiaries, to SBG.

SBG received net cash payments of $ 15 million from Sinclair, and certain of its direct and indirect subsidiaries, during the three months ended March 31, 2024.

SBG recorded revenue of $ 3 million and $ 5 million during the three and six months ended June 30, 2024, respectively, and $ 1 million for 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 $ 3 million and $ 5 million during the three and six months ended June 30, 2024, respectively, and $ 2 million for 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 received net cash payments of $ 57 million and $ 72 million from Sinclair, and certain of its direct and indirect subsidiaries, during the three and six months ended June 30, 2024, respectively.

During both the three and six months ended June 30, 2023, SBG made a cash distribution of $ 360 million to Sinclair.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2024, SBG had a payable to Sinclair, and certain of its direct and indirect subsidiaries, of $ 6 million, included within other current liabilities in SBG's consolidated balance sheets, and as of December 31, 2023, SBG had a receivable from Sinclair, and certain of its direct and indirect subsidiaries, of $ 3 million, included within prepaid expenses and other current assets in SBG's consolidated balance sheets.

As of June 30, 2024, SBG had a payable to Sinclair, and certain of its direct and indirect subsidiaries, of $ 15 million, included within other current liabilities in SBG's consolidated balance sheets, and as of December 31, 2023, SBG had a receivable from Sinclair, and certain of its direct and indirect subsidiaries, of $ 3 million, included within prepaid expenses and other current assets in SBG's consolidated balance sheets.

Diamond Sports Intermediate Holdings LLC

2 unchanged sentences

SBG has a management services agreement with DSG, a wholly-owned subsidiary of DSIH, in which SBG provides DSG with affiliate sales and marketing services and general and administrative services.

Pursuant to this agreement, SBG recorded $ 13 million of revenue for the three months ended March 31, 2024 and $ 9 million of revenue for the three months ended March 31, 2023.

Pursuant to this agreement, SBG recorded $ 17 million and $ 30 million of revenue for the three and six months ended June 30, 2024, respectively, and $ 13 million and $ 22 million of revenue for the three and six months ended June 30, 2023, respectively.

Note receivable .

SBG received payments of $ 3 million from DSPV during the three months ended March 31, 2023 related to the note receivable associated with the A/R Facility.

SBG received payments of $ 206 million and $ 209 million from DSPV during three and six months ended June 30, 2023, respectively, related to the note receivable associated with the A/R Facility.

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

The A/R Facility was terminated on March 14, 2024.

SBG recorded revenue of $ 1 million during the three months ended March 31, 2024 and $ 5 million during the three months ended March 31, 2023 within the local media segment and other related to certain other transactions between DSIH and SBG.

SBG recorded revenue of $ 1 million and $ 2 million during the three and six months ended June 30, 2024, respectively, and $ 4 million and $ 9 million during the three and six months ended June 30, 2023, respectively, within the local media segment and other related to certain other transactions between DSIH and SBG.

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.

Duncan Smith, who is a Vice President of SBG and a 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;

Robert Smith, a member of the SBG's Board of Managers;

Robert Smith, a member of SBG's Board of Managers;

Duncan Smith.

Frederick Smith received total compensation of $ 0.2 million for both the three months ended March 31, 2024 and 2023, consisting of salary and bonus.

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

Duncan Smith received total compensation of $ 0.2 million for both the three months ended March 31, 2024 and 2023, consisting of salary and bonus.

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

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

FAIR VALUE MEASUREMENTS:

6 unchanged sentences

Unobservable inputs that reflect the reporting entity's own assumptions.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 March 31, 2024 As of December 31, 2023

As of June 30, 2024 As of December 31, 2023

Face Value Fair Value Face Value Fair Value

14 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 March 31, 2024.

T he fair value of the interest rate swap was an asset as of June 30, 2024 and December 31, 2023.

See Hedge Accounting within Note 1.

1 unchanged sentence

Notes Payable, Finance Leases, and Commercial Bank Financing.

(b) 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 $ 43 million and $ 46 million as of March 31, 2024 and December 31, 2023, respectively.

(b) 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 $ 41 million and $ 46 million as of June 30, 2024 and December 31, 2023, respectively.

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