Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Sinclair and SBG are exposed to market risk from changes in interest rates and consider entering into derivative instruments primarily for the purpose of reducing the impact of changing interest rates on our floating rate debt and to reduce the impact of changing fair market values on Sinclair’s and SBG’s fixed rate debt. See Note 6. Notes Payable and Commercial Bank Financing within each of Sinclair’s Consolidated Financial Statements and SBG’s Consolidated Financial Statements for further discussion. During the year ended December 31, 2023, STG entered into an interest rate swap effective February 7, 2023 and terminating on February 28, 2026 in order to manage a portion of STG’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 STG receives a floating rate of interest based on SOFR. See Hedge Accounting in Note 1. Nature of Operations and Summary of Significant Accounting Policies and Interest Rate Swap in Note 6. Notes Payable and Commercial Bank Financing within Sinclair’s Consolidated Financial Statements . See Hedge Accounting in Note 1. Nature of Operations and Summary of Significant Accounting Policies and Interest Rate Swap in Note 6. Notes Payable and Commercial Bank Financing within SBG’s Consolidated Financial Statements . Sinclair and SBG did not have any outstanding derivative instruments during the year ended December 31, 2022.
Sinclair and SBG are exposed to risk from the changing interest rates of their variable rate debt issued under the Bank Credit Agreement. Based on Sinclair and SBG’s total variable rate debt under the Bank Credit Agreement as of December 31, 2024 of $2,620 million Sinclair and SBG estimate that adding 1% to respective interest rates would result in an increase in each of Sinclair and SBG’s interest expense of $26 million, exclusive of any impact of our interest rate swap and prior to the impact of the refinancing activities discussed within Note 18. Subsequent Events within Sinclair’s Consolidated Financial Statements and Note 16. Subsequent Events within SBG’s Consolidated Financial Statements.
ITEM 8A. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA OF SINCLAIR, INC.
The financial statements and supplementary data of Sinclair, Inc. required by this item are filed as exhibits to this report, are listed under Item 15(a)(1) and (2), and are incorporated by reference in this report.
ITEM 8B. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA OF SINCLAIR BROADCAST GROUP, LLC
The financial statements and supplementary data of Sinclair Broadcast Group, LLC required by this item are filed as exhibits to this report, are listed under Item 15(a)(1) and (2), and are incorporated by reference in this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no changes in and/or disagreements with accountants on accounting and financial disclosure during the year ended December 31, 2024.