CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2023

Condensed Financial Information Disclosure [Abstract]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

STG is the primary obligor under the Bank Credit Agreement, 5.125% Notes, 5.500% Notes, and 4.125% Secured Notes (collectively, the notes are referred to as the "STG Notes"). Our Class A Common Stock and Class B Common Stock as of March 31, 2023, were obligations or securities of SBG and not obligations or securities of STG. SBG is a guarantor under the STG Notes. As of March 31, 2023, our consolidated total debt, net of deferred financing costs and debt discounts, of $4,258 million included $4,243 million related to STG and its subsidiaries of which we guaranteed $4,211 million.

SBG, KDSM, LLC, a wholly-owned subsidiary of SBG, and STG’s wholly-owned subsidiaries ("guarantor subsidiaries") have fully and unconditionally guaranteed, subject to certain customary automatic release provisions, all of STG’s obligations. Those guarantees are joint and several. There are certain contractual restrictions on the ability of SBG, STG, or KDSM, LLC to obtain funds from their subsidiaries in the form of dividends or loans.

The following condensed consolidating financial statements present the consolidated balance sheets, consolidated statements of operations and comprehensive income, and consolidated statements of cash flows of SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG, and the eliminations necessary to arrive at our information on a consolidated basis and are provided pursuant to the terms of certain of our debt agreements. Investments in the subsidiaries of SBG, STG, KDSM, LLC and the guarantor subsidiaries, the direct and indirect non-guarantor subsidiaries of SBG are presented in each column under the equity method of accounting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. As such, these condensed consolidating financial statements should be read in conjunction with the accompanying notes to consolidated financial statements

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF MARCH 31, 2023

(in millions) (unaudited)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
Cash and cash equivalents	$	48	$	461	$	1	$	113	$	—	$	623
Accounts receivable, net	—		—		581		22		—		603
Other current assets	26		57		165		25		(52)		221
Total current assets	74		518		747		160		(52)		1,447

Property and equipment, net	—		30		666		50		(21)		725

Investment in equity of consolidated subsidiaries	1,091		3,492		—		—		(4,583)		—

Goodwill	—		—		2,081		1		—		2,082
Indefinite-lived intangible assets	—		—		136		14		—		150
Definite-lived intangible assets, net	—		—		894		38		(28)		904
Other long-term assets	536		944		550		736		(1,638)		1,128
Total assets	$	1,701	$	4,984	$	5,074	$	999	$	(6,322)	$	6,436

Accounts payable and accrued liabilities	$	—	$	70	$	315	$	18	$	(1)	$	402
Current portion of long-term debt	—		28		6		4		(1)		37
Other current liabilities	3		11		123		79		(50)		166
Total current liabilities	3		109		444		101		(52)		605

Long-term debt	—		4,176		23		389		(367)		4,221

Other long-term liabilities	808		54		1,116		305		(1,504)		779
Total liabilities	811		4,339		1,583		795		(1,923)		5,605


Total Sinclair Broadcast Group equity	890		645		3,491		267		(4,403)		890
Noncontrolling interests in consolidated subsidiaries	—		—		—		(63)		4		(59)
Total liabilities and equity	$	1,701	$	4,984	$	5,074	$	999	$	(6,322)	$	6,436

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2022

(in millions)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
Cash and cash equivalents	$	47	$	750	$	1	$	86	$	—	$	884
Accounts receivable, net	—		—		555		57		—		612
Other current assets	32		42		159		19		(65)		187
Total current assets	79		792		715		162		(65)		1,683

Property and equipment, net	—		31		668		51		(22)		728

Investment in equity of consolidated subsidiaries	962		3,463		—		—		(4,425)		—

Goodwill	—		—		2,081		7		—		2,088
Indefinite-lived intangible assets	—		—		136		14		—		150
Definite-lived intangible assets, net	—		—		935		42		(31)		946
Other long-term assets	542		938		512		573		(1,456)		1,109
Total assets	$	1,583	$	5,224	$	5,047	$	849	$	(5,999)	$	6,704

Accounts payable and accrued liabilities	$	—	$	80	$	300	$	18	$	(1)	$	397
Current portion of long-term debt	—		28		6		5		(1)		38
Other current liabilities	4		8		139		87		(65)		173
Total current liabilities	4		116		445		110		(67)		608

Long-term debt	—		4,181		24		387		(365)		4,227

Other long-term liabilities	831		52		1,120		314		(1,323)		994
Total liabilities	835		4,349		1,589		811		(1,755)		5,829

Redeemable noncontrolling interests	—		—		—		194		—		194
Total Sinclair Broadcast Group equity (deficit)	748		875		3,458		(86)		(4,247)		748
Noncontrolling interests in consolidated subsidiaries	—		—		—		(70)		3		(67)
Total liabilities, redeemable noncontrolling interests, and equity	$	1,583	$	5,224	$	5,047	$	849	$	(5,999)	$	6,704

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2023

(in millions) (unaudited)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
Net revenue	$	—	$	10	$	739	$	43	$	(19)	$	773

Media programming and production expenses	—		3		376		34		(15)		398
Selling, general and administrative expenses	25		35		187		5		(3)		249

Depreciation, amortization and other operating expenses	1		1		82		22		(1)		105
Total operating expenses	26		39		645		61		(19)		752

Operating (loss) income	(26)		(29)		94		(18)		—		21

Equity in earnings of consolidated subsidiaries	207		69		—		—		(276)		—
Interest expense	—		(73)		(1)		(3)		3		(74)
Other (expense) income	(3)		8		—		37		—		42

Total other income (expense)	204		4		(1)		34		(273)		(32)

Income tax benefit (provision)	7		19		(23)		201		—		204
Net income (loss)	185		(6)		70		217		(273)		193
Net loss attributable to the redeemable noncontrolling interests	—		—		—		4		—		4
Net income attributable to the noncontrolling interests	—		—		—		(12)		—		(12)
Net income (loss) attributable to Sinclair Broadcast Group	$	185	$	(6)	$	70	$	209	$	(273)	$	185
Comprehensive income (loss)	$	185	$	(9)	$	70	$	217	$	(273)	$	190

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(in millions) (unaudited)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
Net revenue	$	—	$	29	$	791	$	531	$	(63)	$	1,288

Media programming and production expenses	—		—		362		412		(16)		758
Selling, general and administrative expenses	3		48		199		63		(46)		267

Gain on deconsolidation of subsidiary	(3,357)		—		—		—		—		(3,357)
Depreciation, amortization and other operating expenses	—		2		84		70		(2)		154
Total operating (gains) expenses	(3,354)		50		645		545		(64)		(2,178)

Operating income (loss)	3,354		(21)		146		(14)		1		3,466

Equity in (loss) earnings of consolidated subsidiaries	(38)		100		—		—		(62)		—
Interest expense	(4)		(44)		(1)		(75)		9		(115)

Other income (expense)	4		1		3		(50)		(6)		(48)
Total other (expense) income	(38)		57		2		(125)		(59)		(163)

Income tax (provision) benefit	(729)		20		(47)		69		—		(687)
Net income (loss)	2,587		56		101		(70)		(58)		2,616
Net income attributable to the redeemable noncontrolling interests	—		—		—		(4)		—		(4)
Net income attributable to the noncontrolling interests	—		—		—		(25)		—		(25)
Net income (loss) attributable to Sinclair Broadcast Group	$	2,587	$	56	$	101	$	(99)	$	(58)	$	2,587
Comprehensive income (loss)	$	2,587	$	56	$	101	$	(67)	$	(58)	$	2,619

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2023

(in millions) (unaudited)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(26)	$	(74)	$	83	$	77	$	2	$	62

NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—		—		(19)		(1)		—		(20)

Spectrum repack reimbursements	—		—		1		—		—		1


Purchases of investments	(2)		—		(21)		(10)		—		(33)
Distributions from investments	—		—		—		8		—		8

Net cash flows used in investing activities	(2)		—		(39)		(3)		—		(44)

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES

Repayments of notes payable, commercial bank financing and finance leases	—		(7)		(1)		(1)		—		(9)
Repurchase of outstanding Class A Common Stock	(53)		—		—		—		—		(53)
Dividends paid on Class A and Class B Common Stock	(18)		—		—		—		—		(18)

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

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

Increase (decrease) in intercompany payables	105		(208)		(43)		148		(2)		—
Other, net	(5)		—		—		—		—		(5)
Net cash flows from (used in) financing activities	29		(215)		(44)		(47)		(2)		(279)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	1		(289)		—		27		—		(261)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	47		750		1		86		—		884
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	48	$	461	$	1	$	113	$	—	$	623

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(in millions) (unaudited)


	Sinclair Broadcast Group, Inc.		Sinclair Television Group, Inc.		Guarantor Subsidiaries and KDSM, LLC		Non- Guarantor Subsidiaries		Eliminations		Sinclair Consolidated
NET CASH FLOWS (USED IN) FROM OPERATING ACTIVITIES	$	(5)	$	(45)	$	327	$	(209)	$	2	$	70

NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES
Acquisition of property and equipment	—		(1)		(18)		(2)		—		(21)

Spectrum repack reimbursements	—		—		1		—		—		1
Proceeds from the sale of assets	—		—		4		—		—		4
Deconsolidation of subsidiary cash	—		—		—		(315)		—		(315)
Purchases of investments	(2)		(1)		(1)		(1)		—		(5)
Distributions from investments	50		—		10		10		—		70

Net cash flows from (used in) investing activities	48		(2)		(4)		(308)		—		(266)

NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES

Repayments of notes payable, commercial bank financing and finance leases	—		(5)		(1)		(1)		—		(7)
Repurchase of outstanding Class A Common Stock	(68)		—		—		—		—		(68)
Dividends paid on Class A and Class B Common Stock	(18)		—		—		—		—		(18)
Dividends paid on redeemable subsidiary preferred equity	—		—		—		(1)		—		(1)


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

Increase (decrease) in intercompany payables	100		151		(323)		74		(2)		—
Other, net	(5)		—		—		—		—		(5)
Net cash flows from (used in) financing activities	9		146		(324)		69		(2)		(102)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	52		99		(1)		(448)		—		(298)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	2		316		2		499		—		819
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	54	$	415	$	1	$	51	$	—	$	521

SINCLAIR BROADCAST GROUP INC 10-Q