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Item 1. Financial Statements

2024-11-08 compared with 2024-08-09 · 336 added, 318 removed, 1219 unchanged (35% of the section changed)

5 unchanged sentences

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

As of June 30,

As of September 30,

2024 As of December 31,

1 unchanged sentence

Cash and cash equivalents $ 536 $ 662

Accounts receivable, net of allowance for doubtful accounts of $ 4 as of both periods

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

Income taxes receivable 7 8

9 unchanged sentences

Total assets (a) $ 5,785 $ 6,085

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS, AND EQUITY

LIABILITIES AND EQUITY

Current liabilities:

17 unchanged sentences

Accumulated deficit ( 149 ) ( 234 )

Accumulated other comprehensive income 6 1

Accumulated other comprehensive (loss) income ( 2 ) 1

Total Sinclair shareholders' equity

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

(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.

(a) Our consolidated total assets as of September 30, 2024 and December 31, 2023 include total assets of variable interest entities ("VIE") of $ 76 million and $ 85 million, respectively, which can only be used to settle the obligations of the VIEs.

Our consolidated total liabilities as of both September 30, 2024 and December 31, 2023 include total liabilities of VIEs of $ 17 million for which the creditors of the VIEs have no recourse to us.

Variable Interest Entities .

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

10 unchanged sentences

Amortization of definite-lived intangible assets 37 42 113 124

Loss on asset dispositions and other, net of impairment 2 5 2 11

Loss on deconsolidation of subsidiary — 10 — 10

(Gain) loss on asset dispositions and other, net of impairment ( 13 ) — ( 11 ) 11

Total operating expenses 738 730 2,259 2,253

Operating income (loss) 64 ( 3 ) 106 18

Operating income 179 37 285 55

OTHER INCOME (EXPENSE):

1 unchanged sentence

Gain on extinguishment of debt — 4 1 15

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

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

Income from equity method investments — — 92 30

Other income (expense), net 24 ( 21 ) 22 ( 48 )

Total other expense, net ( 54 ) ( 94 ) ( 115 ) ( 230 )

12 unchanged sentences

SINCLAIR, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions) (Unaudited)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net income (loss) $ 96 $ ( 45 ) $ 140 $ 61

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

Unrealized (loss) gain on interest rate swap, net of tax ( 8 ) 2 ( 3 ) 8

Comprehensive income (loss) 88 ( 43 ) 137 69

6 unchanged sentences

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

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Sinclair Shareholders

2 unchanged sentences

Capital Retained Earnings Accumulated

Comprehensive

(Loss) Income Noncontrolling

Comprehensive Income Noncontrolling

Interests Total

Shares Values Shares Values

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

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

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

— — — — — ( 16 ) — — ( 16 )

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

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

2 unchanged sentences

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

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

Six Months Ended June 30, 2023

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

Nine Months Ended September 30, 2023

Sinclair Shareholders

14 unchanged sentences

Other comprehensive income — — — — — — — 8 — 8

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

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

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

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

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

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

SINCLAIR, INC.

CONSOLIDATED STATEMENTS OF EQUITY

CONSOLIDATED STATEMENTS OF EQUITY AND NONCONTROLLING INTERESTS

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

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Sinclair Shareholders

3 unchanged sentences

Comprehensive

Income Noncontrolling

Income (Loss) Noncontrolling

Interests Total Equity

Shares Values Shares Values

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

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

2 unchanged sentences

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

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

Other comprehensive loss — — — — — — ( 8 ) — ( 8 )

Net income — — — — — 94 — 2 96

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

Six Months Ended June 30, 2024

BALANCE, September 30, 2024 42,584,090 $ 1 23,775,056 $ — $ 565 $ ( 149 ) $ ( 2 ) $ ( 66 ) $ 349

Nine Months Ended September 30, 2024

Sinclair Shareholders

3 unchanged sentences

Comprehensive

Income Noncontrolling

Income (Loss) Noncontrolling

Interests Total Equity

5 unchanged sentences

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

Other comprehensive income — — — — — — 5 — 5

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

Net income — — — — — 134 — 6 140

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

BALANCE, September 30, 2024 42,584,090 $ 1 23,775,056 $ — $ 565 $ ( 149 ) $ ( 2 ) $ ( 66 ) $ 349

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

2 unchanged sentences

(in millions) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES:

6 unchanged sentences

Deferred tax provision (benefit) 36 ( 237 )

Loss on asset dispositions and other, net of impairment 2 11

(Gain) loss on asset dispositions and other, net of impairment ( 7 ) 11

Loss on deconsolidation of subsidiary — 10

Income from equity method investments ( 92 ) ( 30 )

4 unchanged sentences

(Increase) decrease in accounts receivable ( 5 ) 11

Increase in prepaid expenses and other current assets ( 8 ) ( 47 )

Decrease (increase) in prepaid expenses and other current assets 10 ( 39 )

(Decrease) increase in accounts payable and accrued and other current liabilities ( 408 ) 22

29 unchanged sentences

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

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

For the quarter ended September 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 638 channels as of June 30, 2024.

These stations broadcast 638 channels as of September 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 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.

The consolidated financial statements for the three and nine months ended September 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 (loss), 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.

As permitted under the applicable rules and regulations of the Securities and Exchange Commission (the "SEC"), the 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 our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC.

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We are currently evaluating the impact of this guidance.

In November 2024, the FASB issued guidance requiring disclosure of disaggregated information about certain income statement expense line items.

The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

We are currently evaluating the impact of this guidance.

Broadcast Television Programming

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We have determined that the interest rate swap meets the criteria for hedge accounting.

The initial value of the interest rate swap and any changes in value in subsequent periods is included in accumulated other comprehensive income, with a corresponding change recorded in assets or liabilities depending on the position of the swap.

The initial value of the interest rate swap and any changes in value in subsequent periods is included in accumulated other comprehensive (loss) income, with a corresponding change recorded in assets or liabilities depending on the position of the swap.

Gains or losses on the monthly settlement of the interest rate swap are reflected in i nterest expense in our consolidated statements of operations.

3 unchanged sentences

Non-cash Investing and Financing Activities

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 .

Leased assets obtained in exchange for new operating lease liabilities were $ 4 million for both the nine months ended September 30, 2024 and 2023.

Leased assets obtained in exchange for new finance lease liabilities were $ 17 million for the nine months ended September 30, 2024.

Non-cash investing activities included property and equipment purchases of $ 5 million for both the nine months ended September 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 June 30, 2024 Local Media Tennis Other Eliminations Total

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

Distribution revenue $ 383 $ 51 $ — $ — $ 434

3 unchanged sentences

Total revenues $ 845 $ 60 $ 19 $ ( 7 ) $ 917

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

For the nine months ended September 30, 2024 Local Media Tennis Other Eliminations Total

Distribution revenue $ 1,151 $ 154 $ — $ — $ 1,305

3 unchanged sentences

Total revenues $ 2,322 $ 190 $ 54 $ ( 22 ) $ 2,544

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

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

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

3 unchanged sentences

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

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

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

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

4 unchanged sentences

Distribution Revenue.

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

We have agreements with Distributors.

We generate distribution revenue through fees received from these Distributors for the right to distribute our stations and other properties.

9 unchanged sentences

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

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 $ 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.

Deferred revenue was $ 189 million and $ 178 million as of September 30, 2024 and December 31, 2023, respectively, of which $ 109 million and $ 124 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets.

Deferred revenue recognized for the nine months ended September 30, 2024 and 2023, included in the deferred revenue balance as of December 31, 2023 and 2022, was $ 40 million and $ 44 million, respectively.

For the three months ended September 30, 2024, one customer accounted for 10 % of our total revenues.

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

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

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

As of September 30, 2024, three customers accounted for 11 %, 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.

1 unchanged sentence

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

The tax provision for the three and six months ended June 30, 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 nine months ended September 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 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.

Our effective income tax rate for the three months ended September 30, 2024 was greater than the statutory rate primarily due to non-deductible expenses.

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

Our effective income tax rate for the nine months ended September 30, 2023 was greater than the statutory rate primarily due to a release of 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 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 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.

In November 2024, our Board of Directors declared a quarterly dividend of $ 0.25 per share, payable on December 16, 2024 to holders of record at the close of business on December 2, 2024.

SINCLAIR, INC.

1 unchanged sentence

OTHER ASSETS:

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

As of June 30,

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

As of September 30,

2024 As of December 31,

6 unchanged sentences

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.

During the nine months ended September 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.

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.

For the three and nine months ended September 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 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.

As of September 30, 2024 and December 31, 2023, we held $ 214 million and $ 162 million, respectively, in investments measured at fair value.

As of September 30, 2024 and December 31, 2023, we held $ 104 million and $ 189 million, respectively, in investments measured at NAV.

We recognized a fair value adjustment gain of $ 15 million and a loss of $ 28 million for the three and nine months ended September 30, 2024, respectively, and fair value adjustment losses of $ 26 million and $ 74 million for the three and nine months ended September 30, 2023, respectively, associated with these investments, which are reflected in other income (expense), net in our consolidated statements of operations.

As of September 30, 2024 and December 31, 2023, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $ 61 million and $ 74 million, respectively.

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

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

Note Receivable

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("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.

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

As of September 30, 2024, the STG first lien leverage ratio was below 4.5 x.

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

During the nine months ended September 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 six months ended June 30, 2024.

We recognized a gain on extinguishment of the Term Loan B-2 of $ 1 million for the nine months ended September 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 June 30, 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 June 30, 2024 and December 31, 2023, respectively.

The current portion of notes payable, finance leases, and commercial bank financing in our consolidated balance sheets includes finance leases to affiliates of $ 3 million and $ 2 million as of September 30, 2024 and December 31, 2023, respectively.

Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $ 9 million and $ 5 million as of September 30, 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 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.

STG jointly, severally, unconditionally, and irrevocably guaranteed $ 2 million of debt of certain third parties as of both September 30, 2024 and December 31, 2023, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both September 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.

We have determined that, as of September 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

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

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

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

1 unchanged sentence

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

As of June 30, 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 September 30, 2024 and December 31, 2023, the fair value of the interest rate swap was a liability o f $ 3 million and an asset of $ 1 million, respectively, which are recorded in other current liabilities and other assets, respectively, in our consolidated balance sheets.

REDEEMABLE NONCONTROLLING INTERESTS:

6 unchanged sentences

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 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.

Dividends accrued for the nine months ended September 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 for the nine months ended September 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:

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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.

Department of Justice ("DOJ") for enforcement of the forfeiture pursuant to Section 504 of the Communications Act.

Our understanding is that enforcement remains pending.

5 unchanged sentences

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

As of June 30, 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.

As of September 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.

On September 6, 2024, the FCC denied the Company's request for reduction of the fine (and similar requests filed by certain other licensees) and issued a forfeiture order imposing the fine as proposed in the NAL.

The Company and all other affected licensees filed a joint petition for reconsideration of the forfeiture order on October 7, 2024 and the matter remains pending.

Other Matters

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

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the DOJ.

This consent decree resolves the DOJ's investigation into the sharing of pacing information among certain stations in some local markets.

19 unchanged sentences

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 and certain officers of SBG and STG, 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.

The complaint alleges, among other things, that the management services agreement (the "MSA") entered into by STG and DSG was not fair to DSG and was designed to benefit STG and SBG;

that the Bally's Corporation ("Bally's") transaction in November 2020 through which Bally's acquired naming rights to certain regional sports networks was not fair to DSG and was designed to benefit STG and SBG;

and that certain distributions made by DSG that were used to pay down preferred equity of DSH, were inappropriate and were conducted at a time when DSG was insolvent.

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

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

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

On July 19, 2023, as part of 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 and certain officers of SBG and STG, as defendants.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On January 17, 2024, Sinclair announced that it had agreed, subject to definitive documentation and final court approval, to a global settlement and release of all claims associated with the Diamond Litigation, which settlement includes an amendment to the MSA.

On March 1, 2024, the court approved the settlement.

Sinclair has entered into the settlement, without admitting any fault or wrongdoing.

The settlement terms include, among other things, DSG’s dismissal with prejudice of its $ 1.5 billion litigation against Sinclair and all other defendants, along with the full and final satisfaction and release of all claims in that litigation against all defendants, including Sinclair and its subsidiaries, in exchange for Sinclair’s cash payment to DSG of $ 495 million.

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

In the complaint, plaintiffs challenged 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.

The complaint alleged, among other things, that the management services agreement (the "MSA") entered into by STG and DSG was not fair to DSG and was designed to benefit STG and SBG;

and that certain distributions made by DSG that were used to pay down preferred equity of DSH, were inappropriate and were conducted at a time when DSG was insolvent.

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

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

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

On March 1, 2024, the court approved a global settlement and release of all claims associated with the Diamond Litigation, which settlement included an amendment to the MSA.

Sinclair entered into the settlement, without admitting any fault or wrongdoing.

The settlement terms included, among other things, DSG's dismissal with prejudice of its $ 1.5 billion litigation against Sinclair and all other defendants, along with the full and final satisfaction and release of all claims in that litigation against all defendants, including Sinclair and its subsidiaries, in exchange for Sinclair's cash payment to DSG of $ 495 million.

Additionally, under the terms of the settlement, Sinclair would 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.

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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.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

EARNINGS PER SHARE:

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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SEGMENT DATA:

During the period ended June 30, 2023 we modified our segment reporting to align with the new organizational structure of the Company discussed within Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies.

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

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.

For the quarter ended September 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 June 30, 2024 Local Media Tennis Other & Corporate Eliminations Consolidated

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

Assets $ 4,546 $ 271 $ 971 $ ( 3 ) $ 5,785

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

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

Revenue $ 845 $ 60 $ 19 $ ( 7 ) (a) $ 917

2 unchanged sentences

Corporate general and administrative expenses 24 1 16 — 41

Gain on asset dispositions and other, net of impairment ( 11 ) — ( 2 ) — ( 13 )

Operating income (loss) 182 11 ( 14 ) — 179

Interest expense including amortization of debt discount and deferred financing costs 78 — — — 78

Income from equity method investments — — 78 — 78

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

Income (loss) from equity method investments 1 ( 1 ) — — —

For the nine months ended September 30, 2024 Local Media Tennis Other & Corporate Eliminations Consolidated

Revenue $ 2,322 $ 190 $ 54 $ ( 22 ) (a) $ 2,544

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Corporate general and administrative expenses 94 2 53 — 149

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

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

Operating income (loss) 306 32 ( 53 ) — 285

Interest expense including amortization of debt discount and deferred financing costs 230 — — — 230

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

Income (loss) from equity method investments 1 ( 2 ) 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

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

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

2 unchanged sentences

Corporate general and administrative expenses 31 1 13 — 45

Loss on deconsolidation of subsidiary — — 10 — 10

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

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

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

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

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

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

2 unchanged sentences

Corporate general and administrative expenses 109 1 55 — 165

Loss on deconsolidation of subsidiary — — 10 — 10

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

2 unchanged sentences

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.

(a) Includes $ 4 million and $ 9 million for the three and nine months ended September 30, 2024, respectively, and $ 2 million and $ 5 million for the three and nine months ended September 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 carrying amounts and classification of the assets and liabilities of the VIEs mentioned above, which have been included in our consolidated balance sheets as of the dates presented, were as follows (in millions):

As of June 30,

As of September 30,

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

As of September 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.

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.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were $ 102 million and $ 192 million as of September 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 (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.

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

We recorded losses of $ 55 million and $ 77 million for the three and nine months ended September 30, 2024, respectively, and gains of $ 5 million and $ 43 million for the three and nine months ended September 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.

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

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

Lease payments made to these entities were $ 2 million and $ 5 million for the three and nine months ended September 30, 2024, respectively, and $ 2 million and $ 5 million for the three and nine months ended September 30, 2023, respectively.

For further information, see Note 3.

2 unchanged sentences

We lease aircraft owned by certain controlling shareholders.

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.

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

Real Estate Sales.

A real estate project we had an investment in was purchased by a controlling shareholder during the three months ended September 30, 2024.

We recognized a gain of $ 4 million for both the three and nine months ended September 30, 2024 as a result of this transaction.

Cunningham Broadcasting Corporation

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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 $ 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.

The cumulative prepayments made under these purchase agreements were $ 68 million and $ 65 million as of September 30, 2024 and December 31, 2023, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both September 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 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.

We paid Cunningham, under these agreements, $ 3 million and $ 9 million for the three and nine months ended September 30, 2024, respectively, and $ 3 million and $ 9 million for the three and nine months ended September 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 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

Our consolidated revenues include $ 41 million and $ 109 million for the three and nine months ended September 30, 2024, respectively, and $ 33 million and $ 102 million for the three and nine months ended September 30, 2023, respectively, related to the Cunningham Stations.

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

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and Greenville, North Carolina markets.

In exchange for carriage of these networks in their markets, we paid $ 0.5 million and $ 1 million for the three and six months ended June 30, 2024, respectively, and $ 0.5 million and $ 1 million for the three and six months ended June 30, 2023, respectively, under these agreements.

In exchange for carriage of these networks in their markets, we paid $ 0.2 million and $ 1.2 million for the three and nine months ended September 30, 2024, respectively, and $ 0.5 million and $ 1.5 million for the three and nine months ended September 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 $ 0.3 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.

Prior to September 2024, certain of our real estate ventures entered into leases with entities owned by members of the Smith Family.

Total rent payments received under these leases were $ 0.3 million and $ 1 million for three and nine months ended September 30, 2024, respectively, and $ 0.3 million and $ 1 million for the three and nine months ended September 30, 2023, respectively.

Diamond Sports Intermediate Holdings LLC

2 unchanged sentences

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 $ 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.

Pursuant to this agreement, the local media segment recorded $ 18 million and $ 48 million of revenue for the three and nine months ended September 30, 2024, respectively, and $ 14 million and $ 36 million of revenue for the three and nine months ended September 30, 2023, respectively.

Note receivable .

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.

We received payments totaling $ 203 million from DSPV for the nine months ended September 30, 2023, 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 $ 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.

We recorded revenue of $ 3 million and $ 11 million for the three and nine months ended September 30, 2024, respectively, and $ 4 million and $ 15 million for the three and nine months ended September 30, 2023, respectively, related to certain other transactions between DSIH and the Company.

SINCLAIR, INC.

1 unchanged sentence

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 $ 0.3 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.

Jason Smith received total compensation of $ 0.3 million and $ 0.2 million for the three months ended September 30, 2024 and 2023, respectively, and $ 0.8 million and $ 0.6 million for the nine months ended September 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 , for the nine months ended September 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 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.

Ethan White received total compensation of $ 0.1 million for both the three months ended September 30, 2024 and 2023 and $ 0.2 million for both the nine months ended September 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 , for the nine months ended September 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 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.

Amberly Thompson received total compensation of less than $ 0.1 million for both the three months ended September 30, 2024 and 2023 and $ 0.1 million for both the nine months ended September 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;

1 unchanged sentence

Duncan Smith.

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.

Frederick Smith received total compensation of $ 0.2 million for both the three months ended September 30, 2024 and 2023 and $ 0.6 million for both the nine months ended September 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 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 received total compensation of $ 0.2 million for both the three months ended September 30, 2024 and 2023 and $ 0.6 million for both the nine months ended September 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 June 30, 2024 As of December 31, 2023

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

Face Value Fair Value Face Value Fair Value

22 unchanged sentences

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

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

T he fair value of the interest rate swap was a liability as of September 30, 2024 and an asset as of 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 $ 41 million and $ 46 million as of June 30, 2024 and December 31, 2023, respectively.

(c) Amounts are carried in our consolidated balance sheets net of debt discount, premium, and deferred financing cost, which are excluded in the above table, of $ 38 million and $ 46 million as of September 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.

We recorded fair value adjustment gains of $ 18 million and $ 10 million for the three and nine months ended September 30, 2024, respectively, and losses of $ 10 million and $ 27 million for the three and nine months ended September 30, 2023, respectively.

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

3 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three and six months ended June 30, 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 nine months ended September 30, 2024 and 2023 (in millions):

Options and Warrants

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

Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024

Fair value at June 30, 2024 $ 42 Fair value at December 31, 2023 $ 46

Measurement adjustments 16 Measurement adjustments 12

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

Fair value at September 30, 2024 $ 58 Fair value at September 30, 2024 $ 58

Options and Warrants

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

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

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

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

Measurement adjustments ( 10 ) Measurement adjustments ( 27 )

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

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

FINANCIAL STATEMENTS OF SINCLAIR BROADCAST GROUP, LLC

2 unchanged sentences

(in millions) (Unaudited)

As of June 30,

As of September 30,

2024 As of December 31,

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Accumulated deficit ( 674 ) ( 865 )

Accumulated other comprehensive income 6 1

Accumulated other comprehensive (loss) income ( 2 ) 1

Total SBG member's deficit ( 676 ) ( 864 )

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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 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.

(a) SBG's consolidated total assets as of September 30, 2024 and December 31, 2023 include total assets of variable interest entities ("VIE") of $ 76 million and $ 85 million, respectively, which can only be used to settle the obligations of the VIEs.

SBG's consolidated total liabilities as of both September 30, 2024 and December 31, 2023 include total liabilities of VIEs of $ 17 million for which the creditors of the VIEs have no recourse to SBG.

Variable Interest Entities .

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Amortization of definite-lived intangible assets 33 34 98 114

Loss on asset dispositions and other, net of impairment — 4 — 10

Loss on deconsolidation of subsidiary — 10 — 10

(Gain) loss on asset dispositions and other, net of impairment ( 11 ) ( 3 ) ( 11 ) 7

Total operating expenses 663 653 2,022 2,144

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Income (loss) before income taxes 107 ( 27 ) 107 ( 163 )

INCOME TAX BENEFIT 1 26 10 230

INCOME TAX (PROVISION) BENEFIT ( 25 ) 6 ( 15 ) 236

NET INCOME (LOSS) 82 ( 21 ) 92 73

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SINCLAIR BROADCAST GROUP, LLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions) (Unaudited)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net income (loss) $ 82 $ ( 21 ) $ 92 $ 73

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

Unrealized (loss) gain on interest rate swap, net of tax ( 8 ) 2 ( 3 ) 8

Comprehensive income (loss) 74 ( 19 ) 89 81

6 unchanged sentences

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

Three Months Ended June 30, 2023

Common Stock Class B

Common Stock Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated

Three Months Ended September 30, 2023

Accumulated Deficit Accumulated

Comprehensive

(Loss) Income Noncontrolling

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 )

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

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

Distribution to parent ( 52 ) — — ( 52 )

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

1 unchanged sentence

Net (loss) income ( 22 ) — 1 ( 21 )

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

Six Months Ended June 30, 2023

Redeemable Noncontrolling Interests Class A

Common Stock Class B

Common Stock Additional

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

Nine Months Ended September 30, 2023

Redeemable Noncontrolling Interests Old Class A

Common Stock Old Class B

Common Stock Old Additional

Capital Retained Earnings (Accumulated Deficit) Accumulated

11 unchanged sentences

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

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

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

2 unchanged sentences

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

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

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

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

SINCLAIR BROADCAST GROUP, LLC

CONSOLIDATED STATEMENTS OF MEMBER'S DEFICIT

CONSOLIDATED STATEMENTS OF MEMBER'S DEFICIT AND NONCONTROLLING INTERESTS

(in millions) (Unaudited)

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Accumulated Deficit Accumulated

Comprehensive

Income Noncontrolling

Income (Loss) Noncontrolling

Interests Total Deficit

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

Contributions from member, net 79 — — 79

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

Distributions to member, net ( 40 ) — — ( 40 )

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

Other comprehensive income — 1 — 1

Other comprehensive loss — ( 8 ) — ( 8 )

Net income 80 — 2 82

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

Six Months Ended June 30, 2024

BALANCE, September 30, 2024 $ ( 674 ) $ ( 2 ) $ ( 67 ) $ ( 743 )

Nine Months Ended September 30, 2024

Accumulated Deficit Accumulated

Comprehensive

Income Noncontrolling

Income (Loss) Noncontrolling

Interests Total Deficit

2 unchanged sentences

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

Other comprehensive income — 5 — 5

Other comprehensive loss — ( 3 ) — ( 3 )

Net income 87 — 5 92

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

BALANCE, September 30, 2024 $ ( 674 ) $ ( 2 ) $ ( 67 ) $ ( 743 )

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

2 unchanged sentences

(in millions) (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES:

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Deferred tax benefit 24 ( 237 )

Loss on asset dispositions and other, net of impairment — 10

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

Loss on deconsolidation of subsidiary — 10

Income from equity method investments — ( 31 )

3 unchanged sentences

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

(Increase) decrease in accounts receivable ( 37 ) 33

Decrease in accounts receivable 2 30

Decrease (increase) in prepaid expenses and other current assets 27 ( 10 )

11 unchanged sentences

Net cash flows (used in) from investing activities ( 20 ) 102

CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:

CASH FLOWS USED IN FINANCING ACTIVITIES:

Repayments of notes payable, commercial bank financing, and finance leases ( 51 ) ( 76 )

5 unchanged sentences

Other, net — ( 3 )

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

Net cash flows used in financing activities ( 11 ) ( 879 )

NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 117 ) ( 605 )

8 unchanged sentences

("Sinclair"), is a diversified media company with national reach and a strong focus on providing high-quality content on SBG's local television stations and digital properties.

The content, distributed through SBG's broadcast platform and third-party platforms, consists of programming provided by third-party networks and syndicators, local news, other original programming produced by SBG and SBG owned networks.

The content, distributed through SBG's broadcast platform and third-party platforms, consists of programming provided by third-party networks and syndicators, local news and other original programming produced by SBG and SBG owned networks.

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

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

For the quarter ended September 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 638 channels as of June 30, 2024.

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

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

19 unchanged sentences

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

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

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Interim Financial Statements

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.

SBG's consolidated financial statements for the three and nine months ended September 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 (loss), 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 Securities and Exchange Commission (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.

SBG's consolidated statements of operations presented in the accompanying consolidated financial statements are not necessarily representative of operations for an entire year.

19 unchanged sentences

SBG is currently evaluating the impact of this guidance.

In November 2024, the FASB issued guidance requiring disclosure of disaggregated information about certain income statement expense line items.

The guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

SBG is currently evaluating the impact of this guidance.

SINCLAIR BROADCAST GROUP, LLC

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SBG has determined that the interest rate swap meets the criteria for hedge accounting.

Gains or losses on the monthly settlement of the interest rate swap are reflected in i nterest expense in SBG's consolidated statements of operations.

3 unchanged sentences

Non-cash Investing and Financing Activities

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.

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

Leased assets obtained in exchange for new finance lease liabilities were $ 17 million for the nine months ended September 30, 2024.

Non-cash investing activities included property and equipment purchases of $ 5 million for both the nine months ended September 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 June 30, 2024 Local Media

For the three months ended September 30, 2024 Local Media

Distribution revenue $ 383

3 unchanged sentences

Total revenues $ 845

For the six months ended June 30, 2024 Local Media

For the nine months ended September 30, 2024 Local Media

Distribution revenue $ 1,151

3 unchanged sentences

Total revenues $ 2,322

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

For the three months ended September 30, 2023 Local Media

Distribution revenue $ 365

3 unchanged sentences

Total revenues $ 697

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

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

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

22 unchanged sentences

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 $ 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.

Deferred revenue was $ 179 million and $ 171 million as of September 30, 2024 and December 31, 2023, respectively, of which $ 109 million and $ 124 million, respectively, was reflected in other long-term liabilities in SBG's consolidated balance sheets.

Deferred revenue recognized for the nine months ended September 30, 2024 and 2023, included in the deferred revenue balance as of December 31, 2023 and 2022, was $ 35 million and $ 39 million, respectively.

For the three months ended September 30, 2024, one customer accounted for 10 % of SBG's total revenues.

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

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

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

As of September 30, 2024, three customers accounted for 11 %, 10 %, 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.

1 unchanged sentence

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 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's effective income tax rate for the three months ended September 30, 2024 was greater than the statutory rate primarily due to non-deductible expenses.

SBG's effective income tax rate for the nine months ended September 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.

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

SBG's effective income tax rate for the nine months ended September 30, 2023 was greater than the statutory rate primarily due to a release of 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.

4 unchanged sentences

OTHER ASSETS:

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

As of June 30,

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

As of September 30,

2024 As of December 31,

8 unchanged sentences

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

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.

For the three and nine months ended September 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

2 unchanged sentences

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

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.

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

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

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

SINCLAIR BROADCAST GROUP, LLC

4 unchanged sentences

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.

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

As of September 30, 2024, the STG first lien leverage ratio was below 4.5 x.

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

During the nine months ended September 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 six months ended June 30, 2024.

STG recognized a gain on extinguishment of the Term Loan B-2 of $ 1 million for the nine months ended September 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 June 30, 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 June 30, 2024 and December 31, 2023, respectively.

The current portion of notes payable, finance leases, and commercial bank financing in SBG's consolidated balance sheets includes finance leases to affiliates of $ 3 million and $ 2 million as of September 30, 2024 and December 31, 2023, respectively.

Notes payable, finance leases, and commercial bank financing, less current portion, in SBG's consolidated balance sheets includes finances leases to affiliates of $ 9 million and $ 5 million as of September 30, 2024 and December 31, 2023, respectively.

8 Related Person Transactions .

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

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.

SBG has determined that, as of September 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

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

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

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.

1 unchanged sentence

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

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.

As of September 30, 2024 and December 31, 2023, the fair value of the interest rate swap was a liability o f $ 3 million and an asset of $ 1 million , respectively, which are recorded in other current liabilities and other assets, respectively, in SBG's consolidated balance sheets.

REDEEMABLE NONCONTROLLING INTERESTS:

6 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 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.

Distributions accrued for the nine months ended September 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 for the nine months ended September 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:

16 unchanged sentences

The NAL proposed a $ 0.5 million penalty for each station, totaling $ 9 million.

The licensees filed a response to the NAL on October 15, 2020, asking the Commission to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $ 25,000 per station.

The licensees filed a response to the NAL on October 15, 2020, asking the FCC to dismiss the proceeding or, alternatively, to reduce the proposed forfeiture to $ 25,000 per station.

On July 28, 2021, the FCC issued a forfeiture order in which the $ 0.5 million penalty was upheld for all but one station.

1 unchanged sentence

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.

Department of Justice ("DOJ") for enforcement of the forfeiture pursuant to Section 504 of the Communications Act.

Our understanding is that enforcement remains pending.

5 unchanged sentences

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 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.

As of September 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.

The Company and all other affected licensees filed a joint petition for reconsideration of the forfeiture order on October 7, 2024 and the matter remains pending.

Other Matters

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

On November 6, 2018, the Company agreed to enter into a proposed consent decree with the DOJ.

This consent decree resolves the DOJ's investigation into the sharing of pacing information among certain stations in some local markets.

19 unchanged sentences

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 and certain officers of SBG and STG, as defendants.

The complaint alleges, among other things, that the management services agreement (the "MSA") entered into by STG and DSG was not fair to DSG and was designed to benefit STG and SBG;

and that certain distributions made by DSG that were used to pay down preferred equity of DSH, were inappropriate and were conducted at a time when DSG was insolvent.

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

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

The defendants believe the allegations in this lawsuit are without merit and intend to vigorously defend against plaintiffs' claims.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

On March 1, 2024, the court approved the settlement.

Sinclair has entered into the settlement, without admitting any fault or wrongdoing.

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.

The complaint alleged, among other things, that the management services agreement (the "MSA") entered into by STG and DSG was not fair to DSG and was designed to benefit STG and SBG;

and that certain distributions made by DSG that were used to pay down preferred equity of DSH, were inappropriate and were conducted at a time when DSG was insolvent.

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

On March 1, 2024, the court approved a global settlement and release of all claims associated with the Diamond Litigation, which settlement included an amendment to the MSA.

Sinclair entered into the settlement, without admitting any fault or wrongdoing.

Additionally, under the terms of the settlement, Sinclair would 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 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.

6 unchanged sentences

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.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEGMENT DATA:

During the period ended June 30, 2023, SBG modified its segment reporting to align with the new organizational structure of SBG discussed within Company Reorganization under Note 1.

Nature of Operations and Summary of Significant Accounting Policies.

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

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

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

For the quarter ended September 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.

8 unchanged sentences

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

As of June 30, 2024 Local Media Corporate Consolidated

As of September 30, 2024 Local Media Corporate Consolidated

Assets $ 4,547 $ 66 $ 4,613

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

Revenue $ 845 $ — $ 845

2 unchanged sentences

Corporate general and administrative expenses 24 — 24

Operating income (loss) 83 ( 6 ) 77

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

Operating income 182 — 182

Interest expense including amortization of debt discount and deferred financing costs 78 — 78

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

For the nine months ended September 30, 2024 Local Media Corporate Consolidated

Revenue $ 2,322 $ — 2,322

2 unchanged sentences

Corporate general and administrative expenses 94 6 100

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

Operating income (loss) 306 ( 6 ) 300

Interest expense including amortization of debt discount and deferred financing costs 230 — 230

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

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

Revenue $ 697 $ — $ 697

2 unchanged sentences

Corporate general and administrative expenses 31 — 31

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

Loss on deconsolidation of subsidiary — 10 10

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

Operating income (loss) 53 ( 9 ) 44

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

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

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

2 unchanged sentences

Corporate general and administrative expenses 109 38 — 147

Loss on deconsolidation of subsidiary — 10 — 10

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

5 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

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

VARIABLE INTEREST ENTITIES:

5 unchanged sentences

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

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

As of June 30,

As of September 30,

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 June 30, 2024, all of the liabilities are non-recourse to SBG except for the debt of certain VIEs.

As of September 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.

1 unchanged sentence

The risk and reward characteristics of the VIEs are similar.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Prior to the Reorganization, SBG had several investments in entities which are considered VIEs.

1 unchanged sentence

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

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 recorded a gain of $ 37 million for the nine months ended September 30, 2023 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.

1 unchanged sentence

The carrying amount of SBG's investment in DSIH is zero and there is no obligation for SBG to provide additional financial support.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

RELATED PERSON TRANSACTIONS:

4 unchanged sentences

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

For further information, see Note 3.

2 unchanged sentences

SBG leases aircraft owned by certain Sinclair controlling shareholders.

For all leases, SBG incurred expenses of 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.

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

Cunningham Broadcasting Corporation

18 unchanged sentences

SBG consolidates certain subsidiaries of Cunningham with which SBG has variable interests through various arrangements related to the Cunningham Stations.

SINCLAIR BROADCAST GROUP, LLC

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.

3 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 $ 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.

The cumulative prepayments made under these purchase agreements were $ 68 million and $ 65 million as of September 30, 2024 and December 31, 2023, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both September 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 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.

SBG paid Cunningham, under these agreements, $ 3 million and $ 9 million for the three and nine months ended September 30, 2024, respectively, and $ 3 million and $ 9 million for the three and nine months ended September 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 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's consolidated revenues include $ 41 million and $ 109 million for the three and nine months ended September 30, 2024, respectively, and $ 33 million and $ 102 million for the three and nine months ended September 30, 2023, respectively, related to the Cunningham Stations.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

9 unchanged sentences

and Greenville, North Carolina markets.

In exchange for carriage of these networks in their markets, SBG paid $ 0.5 million and $ 1 million for the three and six months ended June 30, 2024, respectively, and $ 0.5 million and $ 1 million for the three and six months ended June 30, 2023, respectively, under these agreements.

In exchange for carriage of these networks in their markets, SBG paid $ 0.2 million and $ 1.2 million for the three and nine months ended September 30, 2024, respectively, and $ 0.5 million and $ 1.5 million for the three and nine months ended September 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 $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2023, respectively.

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

Total rent payments received under these leases were $ 0.7 million for the nine months ended September 30, 2023.

Sinclair, Inc.

2 unchanged sentences

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

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 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.

SBG recorded revenue of $ 3 million and $ 8 million for the three and nine months ended September 30, 2024, respectively, and $ 2 million and $ 3 million for the three and nine months ended September 30, 2023, respectively, within the local media segment related to sales services provided by SBG to Sinclair, and certain of its direct and indirect subsidiaries.

SBG recorded expenses of $ 4 million and $ 9 million for the three and nine months ended September 30, 2024, respectively, and $ 2 million and $ 4 million for the three and nine months ended September 30, 2023, respectively, within the local media segment related to digital advertising services provided by Sinclair, and certain of its direct and indirect subsidiaries, to SBG.

SBG made net cash distributions of $ 85 million and $ 13 million to Sinclair, and certain of its direct and indirect subsidiaries, for the three and nine months ended September 30, 2024, respectively.

SBG made net cash distributions of $ 67 million and $ 427 million to Sinclair, and certain of its direct and indirect subsidiaries, for the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024, SBG had a receivable from Sinclair, and certain of its direct and indirect subsidiaries, of $ 1 million, included within prepaid expenses and other current assets 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 $ 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.

Pursuant to this agreement, SBG recorded $ 18 million and $ 48 million of revenue for the three and nine months ended September 30, 2024, respectively, and $ 14 million and $ 36 million of revenue for the three and nine months ended September 30, 2023, respectively.

Note receivable .

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.

SBG received payments of $ 203 million from DSPV for the nine months ended September 30, 2023 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 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.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

SBG recorded revenue of $ 1 million and $ 3 million for the three and nine months ended September 30, 2024, respectively, and $ 1 million and $ 10 million for the three and nine months ended September 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 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.

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

1 unchanged sentence

Duncan Smith.

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 June 30, 2024 As of December 31, 2023

As of September 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 June 30, 2024 and December 31, 2023.

T he fair value of the interest rate swap was a liability as of September 30, 2024 and an asset as of 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 $ 41 million and $ 46 million as of June 30, 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 $ 38 million and $ 46 million as of September 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