What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-11-08 · 489 added, 653 removed, 902 unchanged (56% of the section changed)

5 unchanged sentences

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

As of September 30,

As of March 31,

2025 As of December 31,

4 unchanged sentences

Prepaid expenses and other current assets 161 146

Assets held-for-sale 36 —

Total current assets 1,504 1,485

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Accounts payable and accrued liabilities $ 439 $ 416

Income taxes payable 88 —

Current portion of notes payable, finance leases, and commercial bank financing 25 38

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Other current liabilities 93 60

Liabilities held-for-sale 5 —

Total current liabilities 724 605

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Additional paid-in capital 597 570

Accumulated deficit ( 149 ) ( 234 )

Accumulated other comprehensive (loss) income ( 2 ) 1

(Accumulated deficit) retained earnings ( 163 ) 10

Accumulated other comprehensive income 1 2

Total Sinclair shareholders’ equity

3 unchanged sentences

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

(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.

(a) Our consolidated total assets as of March 31, 2025 and December 31, 2024 include total assets of variable interest entities (“VIE”) of $ 66 million and $ 70 million, respectively, which can only be used to settle the obligations of the VIEs.

Our consolidated total liabilities as of March 31, 2025 and December 31, 2024 include total liabilities of VIEs of $ 15 million and $ 16 million, respectively, for which the creditors of the VIEs have no recourse to us.

Variable Interest Entities .

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Media revenues $ 770 $ 792

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Amortization of definite-lived intangible assets 36 38

Loss on deconsolidation of subsidiary — 10 — 10

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

Loss on asset dispositions and other, net 8 —

Total operating expenses 762 756

3 unchanged sentences

Gain on extinguishment of debt 2 1

Income from equity method investments — — 92 30

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

(Loss) income from equity method investments ( 6 ) 14

Other (expense) income, net ( 66 ) 40

Total other expense, net ( 214 ) ( 21 )

Income (loss) before income taxes 125 ( 57 ) 170 ( 175 )

INCOME TAX (PROVISION) BENEFIT ( 29 ) 12 ( 30 ) 236

NET INCOME (LOSS) 96 ( 45 ) 140 61

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

(Loss) income before income taxes ( 200 ) 21

INCOME TAX BENEFIT 46 4

NET (LOSS) INCOME ( 154 ) 25

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

NET INCOME (LOSS) ATTRIBUTABLE TO SINCLAIR $ 94 $ ( 46 ) $ 134 $ 50

NET (LOSS) INCOME ATTRIBUTABLE TO SINCLAIR $ ( 156 ) $ 23

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO SINCLAIR:

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SINCLAIR, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in millions) (Unaudited)

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

Net (loss) income $ ( 154 ) $ 25

Unrealized (loss) gain on interest rate swap, net of tax ( 1 ) 4

Comprehensive income (loss) 88 ( 43 ) 137 69

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

Comprehensive (loss) income ( 155 ) 29

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

Comprehensive income (loss) attributable to Sinclair $ 86 $ ( 44 ) $ 131 $ 58

Comprehensive (loss) income attributable to Sinclair $ ( 157 ) $ 27

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

SINCLAIR, INC.

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS

CONSOLIDATED STATEMENTS OF EQUITY AND NONCONTROLLING INTERESTS

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

Three Months Ended September 30, 2023

Three Months Ended March 31, 2024

Sinclair Shareholders

1 unchanged sentence

Common Stock Additional

Capital Retained Earnings Accumulated

Capital Accumulated Deficit Accumulated

Comprehensive Income Noncontrolling

1 unchanged sentence

Shares Values Shares Values

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 )

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

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

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

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

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

Nine Months Ended September 30, 2023

Sinclair Shareholders

Redeemable Noncontrolling Interests Class A

Common Stock Class B

Common Stock Additional

Capital Retained Earnings Accumulated

Comprehensive

Income Noncontrolling

Interests Total Equity

Shares Values Shares Values

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

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— — — — — ( 16 ) — — ( 16 )

Repurchases of Class A Common Stock — ( 8,785,022 ) — — — ( 153 ) — — — ( 153 )

Class A Common Stock issued pursuant to employee benefit plans 2,567,641 — — — 37 — — — 37

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Other comprehensive income — — — — — — 4 — 4

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

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

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

Net income — — — — — 23 — 2 25

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

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

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

Three Months Ended September 30, 2024

Sinclair Shareholders

Common Stock Class B

Common Stock Additional

Capital Accumulated Deficit Accumulated

Comprehensive

Income (Loss) Noncontrolling

Interests Total Equity

Shares Values Shares Values

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)

— — — — — ( 16 ) — — ( 16 )

Class A Common Stock issued pursuant to employee benefit plans 78,319 — — — 5 — — — 5

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

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

Net income — — — — — 94 — 2 96

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

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Sinclair Shareholders

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Common Stock Additional

Capital Accumulated Deficit Accumulated

Capital Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive

Income (Loss) Noncontrolling

Income Noncontrolling

Interests Total Equity

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Other comprehensive loss — — — — — — ( 1 ) — ( 1 )

Net income — — — — — 134 — 6 140

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

Net (loss) income — — — — — ( 156 ) — 2 ( 154 )

BALANCE, March 31, 2025 45,756,209 $ 1 23,775,056 $ — $ 597 $ ( 163 ) $ 1 $ ( 68 ) $ 368

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

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(in millions) (Unaudited)

Nine Months Ended September 30,

CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES:

Net income $ 140 $ 61

Adjustments to reconcile net income to net cash flows (used in) from operating activities:

Three Months Ended March 31,

CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES:

Net (loss) income $ ( 154 ) $ 25

Adjustments to reconcile net (loss) income to net cash flows from (used in) operating activities:

Amortization of definite-lived intangible and other assets 36 38

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Stock-based compensation 22 27

Deferred tax provision (benefit) 36 ( 237 )

(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 )

Loss from investments 5 78

Deferred tax (benefit) provision ( 138 ) 4

Loss on asset dispositions and other, net 8 —

Loss (income) from equity method investments 6 ( 14 )

Loss (income) from investments 73 ( 27 )

Distributions from investments 2 1

Gain on extinguishment of debt ( 2 ) ( 1 )

Debt issuance costs 68 —

Change in assets and liabilities, net of acquisitions:

(Increase) decrease in accounts receivable ( 5 ) 11

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

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

Increase in accounts receivable ( 33 ) ( 27 )

Increase in prepaid expenses and other current assets ( 29 ) ( 3 )

Increase (decrease) in accounts payable and accrued and other current liabilities 24 ( 35 )

Net change in net income taxes payable/receivable 92 ( 8 )

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Other, net 4 ( 6 )

Net cash flows (used in) from operating activities ( 100 ) 143

CASH FLOWS FROM INVESTING ACTIVITIES:

Net cash flows from (used in) operating activities 5 ( 4 )

CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:

Acquisition of property and equipment ( 16 ) ( 21 )

Acquisition of businesses, net of cash acquired ( 25 ) —

Purchases of investments ( 8 ) ( 3 )

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Other, net — 1

Net cash flows from investing activities 86 97

Net cash flows (used in) from investing activities ( 42 ) 54

CASH FLOWS USED IN FINANCING ACTIVITIES:

Proceeds from notes payable and commercial bank financing 1,430 —

Repayments of notes payable, commercial bank financing, and finance leases ( 1,331 ) ( 34 )

Repurchase of outstanding Class A Common Stock — ( 153 )

Dividends paid on Class A and Class B Common Stock ( 17 ) ( 16 )

Repurchase of redeemable subsidiary preferred equity — ( 190 )

Debt issuance costs ( 99 ) —

Distributions to noncontrolling interests, net ( 3 ) ( 2 )

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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 September 30, 2024, we had two reportable segments:

For the quarter ended March 31, 2025, 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 September 30, 2024.

These stations broadcast 640 channels as of March 31, 2025.

For the purpose of this report, these 185 stations and 640 channels are referred to as “our” stations and channels.

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Tennis Channel International streaming service;

Tennis Channel Plus streaming service;

T2 FAST, a 24-hours a day free ad-supported streaming television channel;

Tennis Channel streaming service;

TennisChannel 2, a 24-hour a day free ad-supported streaming television channel;

and Tennis.com.

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Noncontrolling interests represent a minority owner’s proportionate share of the equity in certain of our consolidated entities.

Noncontrolling interests which may be redeemed by the holder, and the redemption is outside of our control, are presented as redeemable noncontrolling interests.

All intercompany transactions and account balances have been eliminated in consolidation.

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Income from equity method investments represents our proportionate share of net income generated by equity method investees.

Company Reorganization

On April 3, 2023, the company formerly known as Sinclair Broadcast Group, Inc., a Maryland corporation ("Old Sinclair"), entered into an Agreement of Share Exchange and Plan of Reorganization (the "Share Exchange Agreement") with Sinclair, and Sinclair Holdings, LLC, a Maryland limited liability company ("Sinclair Holdings").

The purpose of the transactions contemplated by the Share Exchange Agreement was to effect a holding company reorganization in which Sinclair would become the publicly-traded parent company of Old Sinclair.

Effective at 12:00 am Eastern U.S.

time on June 1, 2023 (the "Share Exchange Effective Time"), pursuant to the Share Exchange Agreement and Articles of Share Exchange filed with the Maryland State Department of Assessments and Taxation, the share exchange between Sinclair and Old Sinclair was completed (the "Share Exchange").

In the Share Exchange, (i) each share or fraction of a share of Old Sinclair's Class A common stock, par value $ 0.01 per share ("Old Sinclair Class A Common Shares"), outstanding immediately prior to the Share Exchange Effective Time was exchanged on a one -for-one basis for an equivalent share of Sinclair's Class A common stock, par value $ 0.01 per share ("Sinclair Class A Common Shares"), and (ii) each share or fraction of a share of Old Sinclair's Class B common stock, par value $ 0.01 per share ("Old Sinclair Class B Common Shares"), outstanding immediately prior to the Share Exchange Effective Time was exchanged on a one -for-one basis for an equivalent share of Sinclair's Class B common stock, par value $ 0.01 per share ("Sinclair Class B Common Shares").

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Immediately following the Share Exchange Effective Time, Old Sinclair converted from a Maryland corporation to a Maryland limited liability company named Sinclair Broadcast Group, LLC ("SBG").

On the day following the Share Exchange Effective Time (June 2, 2023), Sinclair Holdings became the intermediate holding company between Sinclair and SBG, and SBG transferred certain of its assets (the "Transferred Assets") to Ventures, a new indirect wholly-owned subsidiary of Sinclair.

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

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

At the Share Exchange Effective Time, Sinclair's articles of incorporation and bylaws were amended and restated to be the same in all material respects as the existing articles of incorporation and bylaws of Old Sinclair immediately prior to the Share Exchange.

As a result, the Sinclair Class A Common Shares confer upon the holders thereof the same rights with respect to Sinclair that the holders of the Old Sinclair Class A Common Shares had with respect to Old Sinclair, and the Sinclair Class B Common Shares confer upon the holders thereof the same rights with respect to Sinclair that the holders of the Old Sinclair Class B Common Shares had with respect to Old Sinclair.

Sinclair's Board of Directors, including its committees, and senior management team immediately after the Share Exchange were the same as Old Sinclair's immediately before the Share Exchange.

The Reorganization is considered transactions between entities under common control and as SBG and Ventures are both subsidiaries of Sinclair, there was no impact on the consolidated financial statements of Sinclair.

Interim Financial Statements

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.

The consolidated financial statements for the three months ended March 31, 2025 and 2024 are unaudited.

In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive (loss) income, consolidated statements of equity and 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, 2024 filed with the SEC.

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

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

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Recent Accounting Pronouncements

In October 2021, the FASB issued guidance to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice.

ASU 2021-08 requires that an acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, as if it had originated the contracts.

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

We adopted this guidance during the first quarter of 2023.

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

In November 2023, the FASB issued guidance to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, applied retrospectively.

Early adoption is permitted.

We are currently evaluating the impact of this guidance.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In December 2023, the FASB issued guidance to enhance the transparency and decision usefulness of income tax disclosures, requiring annual disclosure of consistent categories and greater disaggregation of information in the rate reconciliation table;

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Early adoption is permitted.

We are currently evaluating the impact of this guidance.

We are currently evaluating the impact of this guidance but do not expect it to have a material impact on our consolidated financial statements.

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

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

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

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

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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 (loss) 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 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.

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Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion.

Non-cash Investing and Financing Activities

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.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Non-cash Investing and Financing Activities

Leased assets obtained in exchange for new operating lease liabilities were $ 3 million and $ 2 million for the three months ended March 31, 2025 and 2024, respectively.

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

Non-cash investing activities included property and equipment purchases of $ 5 million for both the three months ended March 31, 2025 and 2024.

We received equity shares in investments valued at $ 8 million and $ 3 million for the three months ended March 31, 2025 and 2024, respectively, in exchange for an obligation to deliver an equivalent value of advertising spots.

Revenue Recognition

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

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

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

Core advertising revenue 283 8 9 ( 5 ) 295

Political advertising revenue 138 — — — 138

Other media, non-media, and intercompany revenues 41 1 10 ( 2 ) 50

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

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

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

Core advertising revenue 852 32 24 ( 13 ) 895

Political advertising revenue 202 — — — 202

Other media, non-media, and intercompany revenues 117 4 30 ( 9 ) 142

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

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

For the three months ended March 31, 2025 Local Media Tennis Other Eliminations Total

Distribution revenue $ 395 $ 56 $ — $ — $ 451

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Total revenues $ 694 $ 68 $ 21 $ ( 7 ) $ 776

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

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

Distribution revenue $ 384 $ 52 $ — $ — $ 436

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Distribution Revenue.

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.

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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.

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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 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.

Deferred revenue was $ 186 million and $ 170 million as of March 31, 2025 and December 31, 2024, respectively, of which $ 107 million and $ 112 million, respectively, was reflected in other long-term liabilities in our consolidated balance sheets.

Deferred revenue recognized for the three months ended March 31, 2025 and 2024, included in the deferred revenue balance as of December 31, 2024 and 2023, was $ 21 million and $ 18 million, respectively.

For the three months ended March 31, 2025, two customers accounted for 11 % and 11 %, respectively, of our total revenues.

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

As of March 31, 2025, three customers accounted for 12 %, 11 %, and 11 %, respectively, of our accounts receivable, net.

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

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

Business Combinations and Station Disposals

During the three months ended March 31, 2025, Sinclair Ventures, LLC (“Ventures”) completed the acquisition of CPX Interactive LLC (“CPX Interactive”) for approximately $ 30 million in cash, net of cash acquired of $ 5 million, in which Ventures acquired the remaining 75 % of the business they did not already own.

The acquired assets and liabilities were recorded at fair value as of the closing date of the transactions, which included $ 22 million of definite-lived intangible assets and $ 24 million of goodwill.

During the three months ended March 31, 2025, we entered into an asset purchase agreement with a counterparty to sell our owned stations within Milwaukee, WI (WVTV), Springfield, IL (WICS/WICD), Ottumwa, IA (KTVO), and Quincy, IL (KHQA) for approximately $ 30 million.

As of March 31, 2025, we classified the related assets and liabilities as held-for-sale in our consolidated balance sheets.

As of March 31, 2025, amounts classified as assets held-for-sale in our consolidated balance sheets primarily consist of accounts receivable of $ 10 million, property and equipment of $ 23 million, and other assets of $ 3 million and amounts classified as liabilities held-for-sale in our consolidated balance sheets primarily consists of accounts payable and accrued liabilities of $ 3 million and current portion of program contracts payable of $ 1 million.

Additionally, during the three months ended March 31, 2025, we accrued the estimated loss we expect to recognize upon closing of the sale of approximately $ 17 million, which is included within loss on asset dispositions and other, net within our consolidated statements of operations and our local media segment within Note 6.

Segment Data and was recorded to reflect the underlying assets at the lower of carrying value and fair value.

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

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.

The tax provision for the three months ended March 31, 2025 and 2024 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.

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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 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.

Our effective income tax rate for the three months ended March 31, 2025 approximated the statutory rate.

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

We believe that our liability for unrecognized tax benefits could be reduced by up to $ 3 million, 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.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications

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Subsequent Events

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.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In May 2025, our Board of Directors declared a quarterly dividend of $ 0.25 per share, payable on June 13, 2025 to holders of record at the close of business on May 30, 2025.

OTHER ASSETS:

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

As of September 30,

Other assets as of March 31, 2025 and December 31, 2024 consisted of the following (in millions):

As of March 31,

2025 As of December 31,

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Equity Method Investments

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

During the 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.

We have a portfolio of investments in a number of entities that are primarily focused on the development of real estate and other media and non-media businesses.

No investments were individually significant for the periods presented.

Diamond Sports Intermediate Holdings LLC.

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

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

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

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

We were party to an Accounts Receivable Securitization Facility ("A/R Facility"), held by Diamond Sports Finance SPV, LLC ("DSPV"), an indirect wholly-owned subsidiary of DSIH.

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

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

As of March 31, 2025 and December 31, 2024, we held $ 149 million and $ 228 million, respectively, in investments measured at fair value.

As of March 31, 2025 and December 31, 2024, we held $ 123 million and $ 116 million, respectively, in investments measured at NAV.

We recognized a fair value adjustment loss of $ 73 million for the three months ended March 31, 2025 and a fair value adjustment gain of $ 2 million for the three months ended March 31, 2024, associated with these investments, which are reflected in other (expense) income, net in our consolidated statements of operations.

As of March 31, 2025 and December 31, 2024, our unfunded commitments related to our investments valued using the NAV practical expedient totaled $ 57 million and $ 60 million, respectively.

Investments accounted for utilizing the measurement alternative were $ 42 million and $ 38 million as of March 31, 2025 and December 31, 2024, respectively.

There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for the three months ended March 31, 2025 and 2024.

NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Credit Agreement and Notes

During the first quarter of 2025, Sinclair Television Group, Inc.

(“STG”), a wholly-owned subsidiary of Sinclair Broadcast Group, LLC (“SBG”), completed a series of financing transactions (the “Transactions”) as follows:

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Bank Credit Agreement and Notes

The bank credit agreement of Sinclair Television Group, Inc.

("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 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 nine months ended September 30, 2024.

Exchanged $ 711.4 million aggregate principal amount outstanding of the $ 714 million Term Loan B-3, which mature April 1, 2028 and bear interest at SOFR plus 3.00 % , into second-out first lien Term Loan B-6 issued under a new credit agreement dated February 12, 2025 (the “New Credit Agreement”), which mature December 31, 2029 and bear interest at SOFR plus 3.30 % .

Exchanged all of the $ 731.3 million aggregate principal amount outstanding of Term Loan B-4, which matured on April 21, 2029 and bore interest at SOFR plus 3.75 %, into second-out first lien Term Loan B-7 issued under the New Credit Agreement, which mature December 31, 2030 and bear interest at SOFR plus 4.10 % .

Exchanged $ 575 million of commitments under the existing revolving credit facility into $ 575 million first-out first lien revolving commitments (the “First-Out Revolving Credit Facility”) under the New Credit Agreement, which mature February 12, 2030 and borrowings thereunder will bear interest at SOFR plus 2.00 % .

The existing bank credit agreement was amended as of February 12, 2025 (the “Amended Credit Agreement”) concurrent with the Transactions and entering into the New Credit Agreement, subordinating the secured obligations thereunder and eliminating substantially all covenants and certain events of default.

As a result, the remaining $ 3 million of Term Loan B-3 and the remaining $ 75 million of commitments under the existing revolving credit facility are ranked as third lien obligations.

STG issued $ 1,430 million aggregate principal amount of 8.125 % first-out first lien secured notes due 2033 (the “ 8.125 % First-Out Notes”), which mature on February 15, 2033.

The proceeds from the 8.125 % First-Out Notes were used to repay in full the $ 1,175 million aggregate principal amounts outstanding of Term Loan B-2 due 2026, a pproximately $ 63.6 million aggregate principal amount of 4.125 % Senior Secured Notes due 2030 at 84 % of the principal amount, and a pproximately $ 104 million aggregate principal amount of 5.125 % Senior Notes due 2027 at 97 % of the principal amount and to pay fees and expenses related to the Transactions.

Exchanged $ 431 million aggregate principal amount of the existing 4.125 % Senior Secured Notes due 2030 into 9.750 % senior secured second lien notes due 2033 (the “ 9.750 % Second Lien Notes”), which mature on February 15, 2033.

Exchanged $ 239 million aggregate principal amount of the existing 4.125 % Senior Secured Notes due 2030 into 4.375 % second-out first lien secured notes due 2032 (the “ 4.375 % Second-Out Notes”), which mature on December 31, 2032.

The remaining 4.125 % Senior Secured Notes due 2030 of $ 5 million became unsecured obligations as the related indenture was amended to release all liens on the collateral and eliminate substantially all covenants and certain events of default.

For the three months ended March 31, 2025 , we recognized a gain on extinguishment of the 4.125 % Senior Secured Notes due 2030 and 5.125 % Senior Notes due 2027 of $ 5 million and $ 3 million , respectively, and a loss on extinguishment of the Term Loan B-2 of $ 6 million.

The New Credit Agreement and the indentures for the 8.125 % First-Out Notes, 4.375 % Second-Out Notes, and 9.750 % Second Lien Notes (collectively, the “New Indentures”) contain certain restrictive covenants including, but not limited to, restrictions on indebtedness, liens, restricted payments (including repayment of certain subordinated debt), investments, mergers, consolidations, sales and other dispositions of assets and affiliate transactions.

These covenants are subject to a number of exceptions and limitations as described in the New Credit Agreement and New Indentures.

The New Credit Agreement and New Indentures also include events of default, including certain cross-default and cross-acceleration provisions with other debt of STG, customary for agreements of its type.

Prior to February 15, 2028, December 1, 2025, and February 15, 2027, we may redeem the 8.125 % First-Out Notes, 4.375 % Second-Out Notes, and 9.750 % Second Lien Notes, respectively, in whole or in part, at any time or from time to time at a price equal to 100 % of the principal amount of the respective notes, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium as set forth in the New Indentures.

On or prior to February 15, 2028 and February 15, 2027, we may redeem up to 40 % of the aggregate principal amount of the 8.125 % First-Out Notes and 9.750 % Second Lien Notes, respectively, at a price equal to 108.125 % and 109.750 % of the principal amount of the 8.125 % First-Out Notes and 9.750 % Second Lien Notes, respectively, plus accrued and unpaid interest, if any, to, but not including, the date of redemption using the proceeds of certain equity offerings.

Prior to February 15, 2028 and February 15, 2027, we may redeem the 8.125 % First-Out Notes and 9.750 % Second Lien Notes, respectively, in whole but not in part, at a redemption price equal to 108.125 % and 109.750 % of the principal amount of the 8.125 % First-Out Notes and 9.750 % Second Lien Notes, respectively, plus accrued and unpaid interest, if any, to, but not including, the redemption date upon certain change of control transactions or certain significant acquisitions.

Beginning on December 1, 2025, we may redeem some or all of the 4.375 % Second-Out Notes at any time or from time to time at the redemption prices set forth in the New Indentures, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

In addition, upon the sale of certain of STG’s assets or certain changes of control, we may be required to offer to repurchase some or all of the 8.125 % First-Out Notes, 4.375 % Second-Out Notes, and 9.750 % Second Lien Notes.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The First-Out Revolving Credit Facility includes a financial maintenance covenant, the first-out first lien leverage ratio (as defined in the New Credit Agreement), which requires such ratio not to exceed 3.5 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 First-Out Revolving Credit Facility, measured as of the last day of each fiscal quarter, is utilized as of such date.

Since there was no utilization under the First-Out Revolving Credit Facility as of March 31, 2025, STG was not subject to the financial maintenance covenant under the New Credit Agreement.

As of March 31, 2025, the STG first-out first lien leverage ratio was below 3.5 x.

The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of March 31, 2025.

During the three months ended March 31, 2024, we repurchased $ 27 million aggregate principal amount of Term Loan B-2 for consideration of $ 25 million.

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

We recognized a gain on extinguishment of the Term Loan B-2 of $ 1 million for the three months ended March 31, 2024.

In April 2025, we repurchased $ 66 million aggregate principal amount of the 5.125 % Senior Notes due 2027 for consideration of $ 62 million.

The 5.125 % Senior Notes due 2027 acquired in April 2025 were canceled immediately following their acquisition.

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 $ 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.

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 as of both March 31, 2025 and December 31, 2024.

Notes payable, finance leases, and commercial bank financing, less current portion, in our consolidated balance sheets includes finances leases to affiliates of $ 8 million and $ 9 million as of March 31, 2025 and December 31, 2024, 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 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 September 30, 2024, it is not probable that we would have to perform under any of these guarantees.

Commitments and Contingencies for additional information.

STG jointly, severally, unconditionally, and irrevocably guaranteed $ 2 million of debt of certain third parties as of both March 31, 2025 and December 31, 2024, all of which related to consolidated VIEs and is included in our consolidated balance sheets as of both March 31, 2025 and December 31, 2024.

We provide a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $ 122 million with annual escalations of 4 % for the next four years .

As described under Note 4.

Commitments and Contingencies , we believe that as of January 1, 2025, we have no further obligations related to this guarantee, however the counterparty associated with the related agreement may not agree with our conclusion.

Interest Rate Swap

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

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:

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

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

Redeemable Subsidiary Preferred Equity .

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

As of both March 31, 2025 and December 31, 2024, the fair value of the interest rate swap was an asset o f $ 1 million, which is recorded in other assets in our consolidated balance sheets.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 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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The Company submitted the $ 48 million payment on August 19, 2020.

As part of the consent decree, the Company also agreed to implement a 4 -year compliance plan.

As part of the consent decree, the Company also agreed to implement a four-year compliance plan (which terminated on May 29, 2024).

Two petitions were filed on June 8, 2020 seeking reconsideration of the Order and Consent Decree.

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

The consent decree expired on May 29, 2024.

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

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An opposition was filed to the motion to dismiss on February 5, 2024, and the Company timely filed its reply on February 13, 2024, and the matter remains pending.

Licensees are authorized to continue operating stations in accordance with their existing licenses while their renewal applications are pending before the FCC.

On April 14, 2025, the same attorney who filed the earlier petition against WBFF(TV), on behalf of a different client, filed a similar petition to deny against applications by the Company seeking FCC consent to sell certain stations to a third party.

The Company timely opposed the petition on April 24, 2025, the petitioner filed a reply on May 1, 2025, and the matter remains pending.

On September 2, 2020, the FCC adopted a Memorandum Opinion and Order and NAL against the licensees of several stations with whom the Company has LMAs, JSAs, and/or SSAs in response to a complaint regarding those stations’ retransmission consent negotiations.

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

On March 14, 2022, the FCC released a Memorandum Opinion and Order and Order on Reconsideration, which reaffirmed the forfeiture order, 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.

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 (“DOJ”) for enforcement of the forfeiture pursuant to Section 504 of the Communications Act.

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

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

As of September 30, 2024, we have accrued $ 3.4 million.

As of March 31, 2025, we have accrued $ 3.4 million.

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

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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.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Other Matters

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Discovery commenced shortly after that and is continuing.

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

That privilege review is ongoing.

On August 18, 2023, the defendants filed objections to the Special Master's First Report and Recommendations with the Court.

The Court overruled the defendants' objections on January 31, 2024.

The Special Master has not indicated when he expects to complete his privilege review.

On December 8, 2023, the Court granted final approval of the settlements the plaintiffs had reached with four of the original defendants (CBS, Fox, Cox Media, and ShareBuilders), who agreed to pay a total of $ 48 million to settle the plaintiffs’ claims against them.

The 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 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

The plaintiffs are continuing to pursue their claims against the Company and the other non-settling defendants.

Under the current schedule set by the Court, fact discovery is scheduled to close 90 days after a Special Master completes his review of the plaintiffs’ objections to the defendants’ privilege claims.

On December 6, 2024, the plaintiffs filed a motion seeking sanctions against the Company in connection with the loss of certain cell phone data.

On February 4, 2025, following briefing on that motion, the Court heard arguments and took the motion under advisement.

On February 20, 2025, the Special Master issued Report and Recommendation No.

3 addressing plaintiffs’ challenges to certain of defendants’ privilege log entries (“R&R No.

3”), which compelled disclosure of certain documents Sinclair and the other non-settling defendants withheld from discovery based on assertions of privilege.

Sinclair and the other co-defendants filed objections to R&R No.

3 and appeared at a status conference on March 18, 2025 during which they argued in favor of their objections to R&R No.

The Court took the objections under advisement.

At the March 18, 2025 status conference, the Court also set a tentative trial date of April 1, 2026 and stated its expectations that depositions will resume.

Although a trial date has been tentatively set, the Court has not set a schedule for dispositive motions and other deadlines prior to trial, and the Special Master’s review of plaintiffs’ challenges to the defendants’ privilege claims remains ongoing.

The Company continues 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 bankruptcy proceedings of Diamond Sports Group, LLC (“DSG”), at such time, 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 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.

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

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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.

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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.

On January 2, 2025, DSG announced that it had emerged from bankruptcy, at which time, Sinclair’s equity interest in DSG was terminated.

As described under Note 3.

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

Notes Payable, Finance Leases, and Commercial Bank Financing we have provided a guarantee that requires us to provide funding to the Marquee Sports Network (“Marquee”) under certain circumstances.

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

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

As of January 1, 2025, we believe we have no further obligations related to the guarantee, however, Marquee may not agree with our conclusion.

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:

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Income (Numerator)

Net income (loss) $ ( 154 ) $ 25

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

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

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Weighted-average stock-settled appreciation rights and outstanding stock options excluded 5,434 5,120

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

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

For the quarter ended March 31, 2025, 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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All our businesses are located within the United States.

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

The local media segment assets are owned and operated by SBG, the assets of the tennis segment are owned and operated by Ventures, and the assets in other and corporate are owned and operated by Ventures.

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

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

As of March 31, 2025 Local Media Tennis Other & Corporate Eliminations Consolidated

Assets $ 4,541 $ 276 $ 963 $ ( 1 ) $ 5,779

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

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

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 58 5 1 ( 1 ) 63

Amortization of program costs 18 — — — 18

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 (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

For the three months ended March 31, 2025 Local Media Tennis Other & Corporate Eliminations Consolidated

Revenue $ 694 $ 68 $ 21 $ ( 7 ) (b) $ 776

Media programming and production expenses 390 27 1 — 418

Media selling, general and administrative expenses 170 18 11 ( 7 ) 192

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 56 5 1 — 62

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Corporate general and administrative expenses 37 — 15 — 52

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

Loss on asset dispositions and other, net 8 — — — 8

Other segment items (a) 2 — 9 — 11

Operating income (loss) $ 12 $ 18 $ ( 16 ) $ — $ 14

Interest expense including amortization of debt discount and deferred financing costs $ 144 $ — $ — $ — $ 144

Income (loss) from equity method investments 1 ( 2 ) 93 — 92

Loss from equity method investments — ( 1 ) ( 5 ) — ( 6 )

Gain on extinguishment of debt 2 — — — 2

Other income (expense), net 3 — ( 69 ) — ( 66 )

Loss before income taxes $ ( 200 )

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 59 5 3 ( 1 ) 66

Amortization of program costs 18 — — — 18

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 — —

Operating income (loss) 53 13 ( 29 ) — 37

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

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

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

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

Revenue $ 727 $ 63 $ 15 $ ( 7 ) (b) $ 798

Media programming and production expenses 383 25 — — 408

Media selling, general and administrative expenses 183 12 5 ( 4 ) 196

Depreciation of property and equipment and amortization of definite-lived intangibles and other assets 58 5 1 ( 1 ) 63

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Corporate general and administrative expenses 41 1 16 — 58

Loss on deconsolidation of subsidiary — — 10 — 10

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

Other segment items (a) 2 — 12 ( 2 ) 12

Operating income (loss) $ 41 $ 20 $ ( 19 ) $ — $ 42

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

Income from equity method investments — — 30 — 30

(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.

(Loss) income from equity method investments — ( 1 ) 15 — 14

Gain on extinguishment of debt 1 — — — 1

Other income, net 31 — 9 — 40

Income before income taxes $ 21

(a) Other segment items relate primarily to non-media expenses.

(b) Includes $ 4 million and $ 2 million for the three months ended March 31, 2025 and 2024 , 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 September 30,

As of March 31,

2025 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 September 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 $ 113 million as of March 31, 2025 and $ 128 million as of December 31, 2024, 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 September 30, 2024, all of the liabilities are non-recourse to us except for the debt of certain VIEs.

As of March 31, 2025, 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 $ 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.

The carrying amounts of our investments in these VIEs for which we are not the primary beneficiary were $ 75 million and $ 79 million as of March 31, 2025 and December 31, 2024, respectively, and are included in other assets in our consolidated balance sheets.

Other Assets for more information related to our equity investments.

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

The income and loss related to equity method investments and other investments are recorded in income from equity method investments and other income (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.

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

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

We were also party to the A/R Facility held by an indirect wholly-owned subsidiary of DSIH which had a maturity date of September 23, 2024.

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

See Note Receivable within Note 2.

Other Assets .

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

We recorded a loss of $ 1 million for both the three months ended March 31, 2025 and 2024 related to these investments.

SINCLAIR, INC.

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

Lease payments made to these entities were $ 2 million 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.

Lease payments made to these entities were $ 2 million for both the three months ended March 31, 2025 and 2024.

For further information, see Note 3.

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We lease aircraft owned by certain controlling shareholders.

For all leases, we incurred expenses of less than $ 0.1 million 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.

For all leases, we incurred expenses of $ 0.2 million for the three months ended March 31, 2025.

The Baltimore Sun .

David Smith is the majority shareholder of The Baltimore Sun.

We have entered into agreements with The Baltimore Sun to provide independent contractor services, sales representation, news resource sharing, and content sharing.

In relation to these agreements, we recorded revenue of $ 0.1 million for the three months ended March 31, 2025.

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 $ 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.

The cumulative prepayments made under these purchase agreements were $ 70 million and $ 69 million as of March 31, 2025 and December 31, 2024, respectively.

The remaining aggregate purchase price of these stations, net of prepayments, as of both March 31, 2025 and December 31, 2024, was approximately $ 54 million.

Additionally, we provide services to WDBB-TV pursuant to an LMA, which expires April 22, 2030, and have a purchase option to acquire for $ 0.2 million.

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.

We paid Cunningham, under these agreements, $ 3 million for both the three months ended March 31, 2025 and 2024.

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 August 2025 and April 2030 and certain stations have renewal provisions for successive eight-year periods.

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

Our consolidated revenues include $ 34 million for both the three months ended March 31, 2025 and 2024 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 $ 0.2 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.

In exchange for carriage of these networks in their markets, we paid $ 0.3 million for the three months ended March 31, 2025 and $ 0.5 million for the three months ended March 31, 2024 under these agreements.

Leased Property by Real Estate Ventures

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

We account for our equity interest in DSIH as an equity method investment.

Management Services Agreement.

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 $ 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 $ 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 $ 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.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 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.

Total rent payments received under these leases were $ 0.4 million for the three months ended March 31, 2024.

WG Communications Group

The wife of Robert Weisbord, our Chief Operating Officer and President of Local Media, has an ownership interest in WG Communications Group (“WGC”).

We received revenue from advertisers represented by WGC of $ 0.1 million for both the three months ended March 31, 2025 and 2024 and made payments to WGC of less than $ 0.1 million for both the three months ended March 31, 2025 and 2024.

Jason Smith, Executive Vice Chairman 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 March 31, 2025 and 2024, respectively, consisting of salary and bonus, and was granted 159,607 and 37,566 shares of restricted stock, vesting over two years , for the three months ended March 31, 2025 and 2024, respectively, and 500,000 stock appreciation rights, vesting over two years , for the three months ended March 31, 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 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.

Ethan White received total compensation of $ 0.1 million for both the three months ended March 31, 2025 and 2024, consisting of salary, and was granted 3,244 and 1,503 shares of restricted stock, vesting over two years , for the three months ended March 31, 2025 and 2024, respectively.

Ryan McCoy, an employee of the Company, is the son-in-law of J.

Duncan Smith.

Ryan McCoy received total compensation of less than $ 0.1 million for both the three months ended March 31, 2025 and 2024, consisting of salary.

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 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.

Amberly Thompson received total compensation of less than $ 0.1 million for both the three months ended March 31, 2025 and 2024, consisting of salary, and was granted 285 shares of restricted stock, vesting over two years , for the three months ended March 31, 2025.

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

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Duncan Smith.

Frederick Smith received total compensation of $ 0.2 million for both the three months ended 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.

Frederick Smith received total compensation of $ 0.2 million for both the three months ended March 31, 2025 and 2024, 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 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 received total compensation of $ 0.2 million for both the three months ended March 31, 2025 and 2024, consisting of salary and bonus.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Face Value Fair Value Face Value Fair Value

5 unchanged sentences

Interest rate swap (b) N/A 1 N/A 1

5.500 % Senior Notes due 2030

9.750 % Second Lien Senior Secured Notes due 2033 (d)

$ 431 445 $ — —

8.125 % First-Out First Lien Secured Notes due 2033 (d)

1,430 1,411 — —

5.500 % Senior Notes due 2030

485 361 485 328

4.125 % Senior Secured Notes due 2030

5.125 % Senior Notes due 2027 (d)

170 161 274 249

Term Loan B-2, due September 30, 2026 $ 1,178 $ 1,116 $ 1,215 $ 1,124

Term Loan B-3, due April 1, 2028 $ 716 $ 530 $ 722 $ 595

Term Loan B-4, due April 21, 2029 $ 733 $ 543 $ 739 $ 602

4.375 % Second-Out First Lien Secured Notes due 2032 (d)

4.125 % Senior Secured Notes due 2030 (d)

4.125 % Unsecured Notes due 2030 (d)

Term Loan B-2, due September 30, 2026 (d) — — 1,175 1,160

Term Loan B-3, due April 1, 2028 (d) 3 2 714 575

Term Loan B-4, due April 21, 2029 (d) — — 731 589

Term Loan B-6, due December 31, 2029 (d) 711 592 — —

Term Loan B-7, due December 31, 2030 (d) 731 609 — —

Debt of variable interest entities (c) 6 6 7 7

Debt of non-media subsidiaries (c) $ — $ — $ 15 $ 15

Investments in equity securities (d) N/A $ 58 N/A $ 46

Investments in equity securities (e) N/A 2 N/A 68

N/A - Not applicable

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The fair value of the warrants are derived from the quoted trading prices of the underlying common equity securities less the exercise price.

(b) 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.

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.

(b) T he fair value of the interest rate swap was an asset as of both March 31, 2025 and December 31, 2024.

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 $ 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 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.

The fair value of the options is derived utilizing the Black Scholes valuation model.

The most significant inputs include the trading price of the underlying common stock and the exercise price of the options, which range from $ 30 to $ 45 per share.

(c) Amounts are carried in our consolidated balance sheets net of debt discount and deferred financing cost, which are excluded in the above table, of $ 59 million and $ 36 million as of March 31, 2025 and December 31, 2024, respectively.

(d) STG completed a series of financing transactions, including a new money financing and debt recapitalization, during the three months ended March 31, 2025.

For further information, see Note 3.

Notes Payable, Finance Leases, and Commercial Bank Financing .

(e) Amounts as of December 31, 2024 primarily related to warrants and options to acquire common equity in Bally’s.

We recorded fair value adjustment losses of $ 8 million and $ 1 million for the three months ended March 31, 2025 and 2024, respectively.

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

The fair value of the options was derived utilizing the Black Scholes valuation model.

The most significant inputs included the trading price of the underlying common stock and the exercise price of the options, which range from $ 30 to $ 45 per share.

During the three months ended March 31, 2025, all outstanding awards to acquire common equity in Bally’s were converted to warrants and transferred to Level 2.

SINCLAIR, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the changes in financial assets measured at fair value on a recurring basis and categorized as Level 3 under the fair value hierarchy for the three and nine months ended September 30, 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 months ended March 31, 2025 and 2024 (in millions):

Options and Warrants

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

Three Months Ended March 31, 2025

Fair value at December 31, 2024 $ 68

Transfer to Level 2 ( 58 )

Measurement adjustments ( 8 )

Fair value at March 31, 2025 $ 2

Options and Warrants

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

Three Months Ended March 31, 2024

Fair value at December 31, 2023 $ 46

Measurement adjustments ( 1 )

Fair value at March 31, 2024 $ 45

FINANCIAL STATEMENTS OF SINCLAIR BROADCAST GROUP, LLC

2 unchanged sentences

(in millions) (Unaudited)

As of September 30,

As of March 31,

2025 As of December 31,

1 unchanged sentence

Cash and cash equivalents $ 277 $ 291

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

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

Income taxes receivable — 29

Prepaid expenses and other current assets 102 104

Assets held-for-sale 36 —

Total current assets 1,009 1,006

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Accounts payable and accrued liabilities $ 389 $ 374

Income taxes payable 45 —

Current portion of notes payable, finance leases, and commercial bank financing 25 38

2 unchanged sentences

Other current liabilities 84 56

Liabilities held-for-sale 5 —

Total current liabilities 622 559

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Accumulated deficit ( 661 ) ( 560 )

Accumulated other comprehensive (loss) income ( 2 ) 1

Accumulated other comprehensive income 1 2

Total SBG member’s deficit ( 660 ) ( 558 )

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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 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.

(a) Sinclair Broadcast Group, LLC’s (“SBG”) consolidated total assets as of March 31, 2025 and December 31, 2024 include total assets of variable interest entities (“VIE”) of $ 66 million and $ 70 million, respectively, which can only be used to settle the obligations of the VIEs.

SBG’s consolidated total liabilities as of March 31, 2025 and December 31, 2024 include total liabilities of VIEs of $ 15 million and $ 16 million, respectively, for which the creditors of the VIEs have no recourse to SBG.

Variable Interest Entities .

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Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Media revenues $ 845 $ 697 $ 2,322 $ 2,203

Non-media revenues — — — 10

Total revenues 845 697 2,322 2,213

Total media revenues $ 694 $ 727

OPERATING EXPENSES:

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Amortization of definite-lived intangible assets 31 33

Loss on deconsolidation of subsidiary — 10 — 10

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

Loss on asset dispositions and other, net 8 —

Total operating expenses 682 686

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Gain on extinguishment of debt 2 1

Income from equity method investments — — — 31

Other income (expense), net 3 2 36 ( 51 )

Other income, net 3 31

Total other expense, net ( 139 ) ( 44 )

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

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

NET INCOME (LOSS) 82 ( 21 ) 92 73

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

Loss before income taxes ( 127 ) ( 3 )

INCOME TAX BENEFIT 26 9

NET (LOSS) INCOME ( 101 ) 6

Net income attributable to the noncontrolling interests ( 1 ) ( 1 )

NET INCOME (LOSS) ATTRIBUTABLE TO SBG $ 80 $ ( 22 ) $ 87 $ 62

NET (LOSS) INCOME ATTRIBUTABLE TO SBG $ ( 102 ) $ 5

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

SINCLAIR BROADCAST GROUP, LLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in millions) (Unaudited)

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

Net (loss) income $ ( 101 ) $ 6

Unrealized (loss) gain on interest rate swap, net of tax ( 1 ) 4

Comprehensive income (loss) 74 ( 19 ) 89 81

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

Comprehensive (loss) income ( 102 ) 10

Comprehensive income attributable to the noncontrolling interests ( 1 ) ( 1 )

Comprehensive income (loss) attributable to SBG $ 72 $ ( 20 ) $ 84 $ 70

Comprehensive (loss) income attributable to SBG $ ( 103 ) $ 9

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

SINCLAIR BROADCAST GROUP, LLC

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

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

Three Months Ended September 30, 2023

CONSOLIDATED STATEMENTS OF MEMBER’S DEFICIT AND NONCONTROLLING INTERESTS

(in millions) (Unaudited)

Three Months Ended March 31, 2024

Accumulated Deficit Accumulated

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Income Noncontrolling

Interests Total

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 )

Other comprehensive income — 2 — 2

Net (loss) income ( 22 ) — 1 ( 21 )

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

Comprehensive

Income Noncontrolling

Interests Total

Equity (Deficit)

Shares Values Shares Values

Interests Total Deficit

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

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

— — — — — — ( 18 ) — — ( 18 )

Repurchases of Old Sinclair Class A Common Stock — ( 8,785,022 ) — — — ( 153 ) — — — ( 153 )

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

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

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

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

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

Contributions from member, net 65 — — 65

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

Other comprehensive income — 4 — 4

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

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

Net income 5 — 1 6

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

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

2 unchanged sentences

(in millions) (Unaudited)

Three Months Ended September 30, 2024

Accumulated Deficit Accumulated

Comprehensive

Income (Loss) Noncontrolling

Interests Total Deficit

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

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

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

Other comprehensive loss — ( 8 ) — ( 8 )

Net income 80 — 2 82

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

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Accumulated Deficit Accumulated

Comprehensive

Income (Loss) Noncontrolling

Income Noncontrolling

Interests Total Deficit

BALANCE, December 31, 2024 $ ( 560 ) $ 2 $ ( 68 ) $ ( 626 )

Contributions from member, net 104 — — 104

Distributions to member, net 1 — — 1

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

Other comprehensive loss — ( 1 ) — ( 1 )

Net income 87 — 5 92

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

Net (loss) income ( 102 ) — 1 ( 101 )

BALANCE, March 31, 2025 $ ( 661 ) $ 1 $ ( 69 ) $ ( 729 )

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

2 unchanged sentences

(in millions) (Unaudited)

Nine Months Ended September 30,

CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES:

Net income $ 92 $ 73

Adjustments to reconcile net income to net cash flows from operating activities:

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income $ ( 101 ) $ 6

Adjustments to reconcile net (loss) income to net cash flows from operating activities:

Amortization of definite-lived intangible and other assets 31 33

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Deferred tax benefit ( 99 ) —

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

Loss on deconsolidation of subsidiary — 10

Income from equity method investments — ( 31 )

(Income) loss from investments ( 25 ) 77

Distributions from investments — 29

Loss on asset dispositions and other, net 8 —

Income from investments — ( 25 )

Gain on extinguishment of debt ( 2 ) ( 1 )

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

Decrease in accounts receivable 2 30

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

Debt issuance costs 68 —

Change in assets and liabilities, net of acquisitions:

Increase in accounts receivable ( 20 ) ( 10 )

Increase in prepaid expenses and other current assets ( 8 ) ( 2 )

Net change in due to/from member 1 17

(Decrease) increase in accounts payable and accrued and other current liabilities ( 394 ) 27

Increase (decrease) in accounts payable and accrued and other current liabilities 30 ( 16 )

Net change in net income taxes payable/receivable 73 ( 9 )

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Other, net 6 ( 23 )

Net cash flows (used in) from operating activities ( 86 ) 172

Net cash flows from operating activities 34 17

CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:

Acquisition of property and equipment ( 15 ) ( 22 )

Purchases of investments ( 4 ) ( 37 )

Distributions and proceeds from investments — 26

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CASH FLOWS USED IN FINANCING ACTIVITIES:

Proceeds from notes payable and commercial bank financing 1,430 —

Repayments of notes payable, commercial bank financing, and finance leases ( 1,331 ) ( 34 )

Repurchase of outstanding Old Sinclair Class A Common Stock — ( 153 )

Dividends paid on Old Sinclair Class A and Class B Common Stock — ( 18 )

Repurchase of redeemable subsidiary preferred equity — ( 190 )

Contributions from (distributions to) member, net 48 ( 429 )

Debt issuance costs ( 99 ) —

(Distributions to) contributions from member, net ( 31 ) 32

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

Other, net — ( 3 )

Net cash flows used in financing activities ( 33 ) ( 4 )

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

NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH ( 14 ) 18

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period 291 319

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Sinclair Broadcast Group, LLC (“SBG”), a Maryland limited liability company and a wholly owned subsidiary of Sinclair, Inc.

("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.

(“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 platforms.

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 September 30, 2024, SBG had one reportable segment:

For the quarter ended March 31, 2025, 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 September 30, 2024.

These stations broadcast 640 channels as of March 31, 2025.

For the purpose of this report, these 185 stations and 640 channels are referred to as “SBG” stations and channels.

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Noncontrolling interests represent a minority owner’s proportionate share of the equity in certain of SBG’s consolidated entities.

Noncontrolling interests which may be redeemed by the holder, and the redemption is outside of SBG's control, are presented as redeemable noncontrolling interests.

All intercompany transactions and account balances have been eliminated in consolidation.

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Income from equity method investments represents SBG’s proportionate share of net income generated by equity method investees.

Company Reorganization

On April 3, 2023, the company formerly known as Sinclair Broadcast Group, Inc., a Maryland corporation ("Old Sinclair"), entered into an Agreement of Share Exchange and Plan of Reorganization (the "Share Exchange Agreement") with Sinclair and Sinclair Holdings, LLC, a Maryland limited liability company ("Sinclair Holdings").

Effective at 12:00 am Eastern U.S.

Immediately following the Share Exchange Effective Time, Old Sinclair converted from a Maryland corporation to a Maryland limited liability company named Sinclair Broadcast Group, LLC.

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

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

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

Interim Financial Statements

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.

SBG’s consolidated financial statements for the three months ended March 31, 2025 and 2024 are unaudited.

In the opinion of management, such financial statements have been presented on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive (loss) income, consolidated statements of member’s deficit and 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”), 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, 2024 filed with the SEC.

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Actual results could differ from those estimates.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

In October 2021, the FASB issued guidance to improve the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice.

The guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

SBG adopted this guidance during the first quarter of 2023.

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

In November 2023, the FASB issued guidance to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, applied retrospectively.

Early adoption is permitted.

SBG is currently evaluating the impact of this guidance.

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Early adoption is permitted.

SBG is currently evaluating the impact of this guidance.

SBG is currently evaluating the impact of this guidance but does not expect it to have a material impact on SBG’s consolidated financial statements.

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

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SBG is currently evaluating the impact of this guidance.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Broadcast Television Programming

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

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

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

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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.

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Notes Payable, Finance Leases, and Commercial Bank Financing for further discussion.

Non-cash Investing and Financing Activities

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

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental Information - Statements of Cash Flows

Leased assets obtained in exchange for new operating lease liabilities were $ 3 million and $ 2 million for the three months ended March 31, 2025 and 2024, respectively.

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

Non-cash investing activities included property and equipment purchases of $ 5 million for both the three months ended March 31, 2025 and 2024.

SBG received equity shares in investments valued at $ 8 million and $ 3 million for the three months ended March 31, 2025 and 2024, respectively, in exchange for an equivalent value of advertising spots.

Included in (distributions to) contributions from member, net within cash flows used in financing activities in SBG’s consolidated statements of cash flows, were dividends to Sinclair to fund its portion of the dividends to Sinclair shareholders and parent company expenses of $ 30 million and $ 25 million for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2024 these dividends were offset by a contribution from member related to the $ 50 million from Sinclair Ventures, LLC (“Ventures”) related to the Diamond Sports Group, LLC (“DSG”) litigation settlement (see Note 4.

Commitments and Contingencies for further detail).

Revenue Recognition

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

For the three months ended September 30, 2024 Local Media

For the three months ended March 31, 2025 Local Media

Distribution revenue $ 395

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Total revenues $ 694

For the nine months ended September 30, 2024 Local Media

For the three months ended March 31, 2024 Local Media

Distribution revenue $ 384

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Total revenues $ 727

For the three months ended September 30, 2023 Local Media

Distribution Revenue.

Core advertising revenue 281

Political advertising revenue 11

Other media, non-media, and intercompany revenues 40

Total revenues $ 697

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

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

Core advertising revenue 861 29 ( 5 ) 885

Political advertising revenue 20 — — 20

Other media, non-media, and intercompany revenues 102 14 ( 2 ) 114

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

Distribution Revenue.

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

SBG generates distribution revenue through fees received from these Distributors for the right to distribute SBG's stations and other properties.

SBG generates distribution revenue through fees received from multi-channel video programming distributors (“MVPD”) and virtual MVPDs (“vMVPD,” and together with MVPDs, “Distributors”) for the right to distribute SBG’s stations and other properties.

Distribution arrangements are generally governed by multi-year contracts and the underlying fees are based upon a contractual monthly rate per subscriber.

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

Deferred revenue was $ 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.

Deferred revenue was $ 177 million and $ 163 million as of March 31, 2025 and December 31, 2024, respectively, of which $ 107 million and $ 112 million, respectively, was reflected in other long-term liabilities in SBG’s consolidated balance sheets.

Deferred revenue recognized for the three months ended March 31, 2025 and 2024, included in the deferred revenue balance as of December 31, 2024 and 2023, was $ 19 million and $ 15 million, respectively.

For the three months ended March 31, 2025, two customers accounted for 11 % and 10 %, respectively, of SBG’s total revenues.

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

As of March 31, 2025, three customers accounted for 12 %, 12 %, and 11 %, respectively, of SBG’s accounts receivable, net.

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

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

Station Disposals

During the three months ended March 31, 2025, SBG entered into an asset purchase agreement with a counterparty to sell SBG’s owned stations within Milwaukee, WI (WVTV), Springfield, IL (WICS/WICD), Ottumwa, IA (KTVO), and Quincy, IL (KHQA) for approximately $ 30 million.

As of March 31, 2025, SBG classified the related assets and liabilities as held-for-sale in SBG’s consolidated balance sheets.

As of March 31, 2025, amounts classified as assets held-for-sale in SBG’s consolidated balance sheets primarily consist of accounts receivable of $ 10 million, property and equipment of $ 23 million, and other assets of $ 3 million and amounts classified as liabilities held-for-sale in SBG’s consolidated balance sheets primarily consist of accounts payable and accrued liabilities of $ 3 million and current portion of program contracts payable of $ 1 million.

Additionally, during the three months ended March 31, 2025, SBG accrued the estimated loss expected to be recognized upon closing of the sale of approximately $ 17 million, which is included within loss on asset dispositions and other, net within SBG’s consolidated statements of operations and SBG’s local media segment within Note 5.

Segment Data .

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

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

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

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

SBG’s effective income tax rate for the three months ended March 31, 2025 approximated the statutory rate.

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

SBG believes that its liability for unrecognized tax benefits could be reduced by up to $ 3 million, 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.

Reclassifications

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OTHER ASSETS:

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

As of September 30,

Other assets as of March 31, 2025 and December 31, 2024 consisted of the following (in millions):

As of March 31,

2025 As of December 31,

Equity method investments $ 2 $ 1

Other investments 4 —

Investments $ 21 $ 14

Income tax receivable 146 144

Total other assets $ 219 $ 212

Equity Method Investments

Prior to the Reorganization, SBG had a portfolio of investments, including a number of entities that are primarily focused on the development of real estate and other media and non-media businesses.

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

Diamond Sports Intermediate Holdings LLC.

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

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

SBG's investments, excluding equity method investments, were accounted for at fair value or, in situations where fair value is not readily determinable, SBG had the option to value investments at cost plus observable changes in value, less impairment.

SBG’s investments, excluding equity method investments, are accounted for at fair value or, in situations where fair value is not readily determinable, SBG has the option to value investments at cost plus observable changes in value, less impairment.

Additionally, certain investments were measured at net asset value (“NAV”).

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

SBG recognized a fair value adjustment loss of $ 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.

Investments measured at NAV were $ 9 million and $ 5 million as of March 31, 2025 and December 31, 2024, respectively.

Investments accounted for utilizing the measurement alternative were $ 11 million and $ 8 million as of March 31, 2025 and December 31, 2024, respectively.

There were no adjustments to the carrying amount of investments accounted for utilizing the measurement alternative for the three months ended March 31, 2025 and 2024.

NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Credit Agreement and Notes

During the first quarter of 2025, Sinclair Television Group, Inc.

(“STG”), a wholly-owned subsidiary of Sinclair Broadcast Group, LLC (“SBG”), completed a series of financing transactions (the “Transactions”) as follows:

Exchanged $ 711.4 million aggregate principal amount outstanding of $ 714 million Term Loan B-3, which mature April 1, 2028 and bear interest at SOFR plus 3.00 % , into second-out first lien Term Loan B-6 issued under a new credit agreement dated February 12, 2025 (the “New Credit Agreement”), which mature December 31, 2029 and bear interest at SOFR plus 3.30 % .

Exchanged all of the $ 731.3 million aggregate principal amount outstanding of Term Loan B-4, which matured on April 21, 2029, and bore interest at SOFR plus 3.75 %, into second-out first lien Term Loan B-7 issued under the New Credit Agreement, which mature December 31, 2030 and bear interest at SOFR plus 4.10 % .

As a result, the remaining $ 3 million of Term Loan B-3 and the remaining $ 75 million of commitments under the existing revolving credit facility are ranked as third lien obligations.

STG issued $ 1,430 million aggregate principal amount of 8.125 % first-out first lien secured notes due 2033 (the “ 8.125 % First-Out Notes”), which mature on February 15, 2033.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTES PAYABLE, FINANCE LEASES, AND COMMERCIAL BANK FINANCING:

Bank Credit Agreement and Notes

The bank credit agreement of Sinclair Television Group, Inc.

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 nine months ended September 30, 2024.

For the three months ended March 31, 2025 , we recognized a gain on extinguishment of the 4.125 % Senior Secured Notes due 2030 and 5.125 % Senior Notes due 2027 of $ 5 million and $ 3 million, respectively, and a loss on extinguishment of the Term Loan B-2 of $ 6 million.

These covenants are subject to a number of exceptions and limitations as described in the New Credit Agreement and New Indentures.

Since there was no utilization under the First-Out Revolving Credit Facility as of March 31, 2025, STG was not subject to the financial maintenance covenant under the New Credit Agreement.

As of March 31, 2025, the STG first-out first lien leverage ratio was below 3.5 x.

The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of March 31, 2025.

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

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

STG recognized a gain on extinguishment of the Term Loan B-2 of $ 1 million for the three months ended March 31, 2024.

In April 2025, STG repurchased $ 66 million aggregate principal amount of the 5.125 % Senior Notes due 2027 for consideration of $ 62 million.

The 5.125 % Senior Notes due 2027 acquired in April 2025 were canceled immediately following their acquisition.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 $ 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.

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 as of both March 31, 2025 and December 31, 2024.

Notes payable, finance leases, and commercial bank financing, less current portion, in SBG’s consolidated balance sheets includes finances leases to affiliates of $ 8 million and $ 9 million as March 31, 2025 and December 31, 2024, respectively.

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 September 30, 2024, it is not probable that SBG would have to perform under any of these guarantees.

Commitments and Contingencies for additional information.

SBG provides a guarantee of certain obligations of a regional sports network subject to a maximum annual amount of $ 122 million with annual escalations of 4 % for the next four years .

As described under Note 4.

Commitments and Contingencies , SBG believes that as of January 1, 2025, SBG has no further obligations related to this guarantee, however the counterparty associated with the related agreement may not agree with SBG’s conclusion.

Interest Rate Swap

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

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:

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

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

Redeemable Subsidiary Preferred Equity .

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

As of both March 31, 2025 and December 31, 2024, the fair value of the interest rate swap was an asset o f $ 1 million which is recorded in other assets in SBG’s consolidated balance sheets.

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 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:

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The Company submitted the $ 48 million payment on August 19, 2020.

As part of the consent decree, the Company also agreed to implement a 4 -year compliance plan.

As part of the consent decree, the Company also agreed to implement a four-year compliance plan (which terminated on May 29, 2024).

Two petitions were filed on June 8, 2020 seeking reconsideration of the Order and Consent Decree.

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

The consent decree expired on May 29, 2024.

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An opposition was filed to the motion to dismiss on February 5, 2024, and the Company timely filed its reply on February 13, 2024, and the matter remains pending.

Licensees are authorized to continue operating stations in accordance with their existing licenses while their renewal applications are pending before the FCC.

The Company timely opposed the petition on April 24, 2025, the petitioner filed a reply on May 1, 2025, and the matter remains pending.

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

SINCLAIR BROADCAST GROUP, LLC

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

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

As of September 30, 2024, SBG has accrued $ 3.4 million.

As of March 31, 2025, SBG has accrued $ 3.4 million.