Sinclair Inc.
05/06/2026 | Press release | Distributed by Public on 05/06/2026 10:13
Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management's Discussion and Analysis provides qualitative and quantitative information about Sinclair's and SBG's financial performance and condition and should be read in conjunction with Sinclair's and SBG's consolidated financial statements and the accompanying notes to those statements. This discussion consists of the following sections:
Summary of Significant Events - financial events during the three months ended March 31, 2026 and through the date this Report on Form 10-Q is filed.
Results of Operations - an analysis of Sinclair's and SBG's revenue and expenses for the three months ended March 31, 2026 and 2025.
Liquidity and Capital Resources - a discussion of Sinclair's and SBG's primary sources of liquidity and an analysis of Sinclair's and SBG's cash flows from or used in operating activities, investing activities, and financing activities during the three months ended March 31, 2026.
SUMMARY OF SIGNIFICANT EVENTS
Content and Distribution
•In January 2026, Sinclair's AMP Media launched Cousins, a weekly podcast series hosted by NBA icons Vince Carter and Tracy McGrady.
Corporate Social Responsibility Practices
•In March 2026, Sinclair announced a partnership with Disabled American Veterans ("DAV") to launch Sinclair Cares: DAV Community Impact Day, a nationwide volunteer campaign dedicated to supporting America's veterans and their families.
•To date in 2026, our newsrooms have won a total of 24 journalism awards.
Transactions
•In February 2026, Sinclair acquired KMTR, KMCB, and KTCW in Eugene, OR from Roberts Media. Sinclair previously provided services to the stations under JSAs and SSAs.
•In February 2026, Sinclair acquired the non-license assets of KMYT and KOKI in Tulsa, OK.
•In February 2026, Sinclair disposed of the non-license assets of KLEW in Spokane, WA and KEPR, KIMA, KUNW, KORX, and KVVK in Yakima, WA.
•In March 2026, Sinclair acquired WHAM in Rochester, NY, WGTU/WGTQ in Traverse City, MI, WEYI in Flint, MI, KCVU/KBVU in Eureka/Chico-Redding, CA, WEMT in Tri-Cities, TN, WYDO in Greenville, NC and WPFO Portland, Maine from various partners. Sinclair previously provided services to the stations under JSAs and SSAs.
Financing, Capital Allocation, and Shareholder Returns
•In February 2026, Sinclair declared a quarterly dividend of $0.25 per share. In April 2026, Sinclair declared a quarterly dividend of $0.25 per share.
•In April 2026, STG repurchased $93 million aggregate principal amount of the Term Loan B-6 and $72 million aggregate principal amount of the Term Loan B-7, both at discounts of face value.
SINCLAIR, INC. RESULTS OF OPERATIONS
SINCLAIR, INC. RESULTS OF OPERATIONS
Any references to the second, third, or fourth quarters are to the three months ended June 30, September 30, or December 31, respectively, for the year being discussed. As of March 31, 2026, we had two reportable segments for accounting purposes, local media and tennis.
Seasonality / Cyclicality
The operating results of our local media segment are usually subject to cyclical fluctuations from political advertising. In even numbered years, political spending is usually significantly higher than in odd numbered years due to advertising expenditures preceding local and national elections. Additionally, every four years, political spending is usually elevated further due to advertising expenditures preceding the presidential election. Also, the second and fourth quarter operating results are usually higher than the first and third quarters' operating results because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.
The operating results of our tennis segment are usually subject to cyclical fluctuations due to the number and significance of tournaments that take place in the respective quarters during the year. The first and fourth quarter operating results are usually higher than the second and third quarters' because of the number and significance of tournaments that are played during those periods.
Operating Data
The following table sets forth our consolidated operating data for the periods presented (in millions):
|
Three Months Ended March 31, |
|||||||||||
| 2026 | 2025 | ||||||||||
| Media revenue | $ | 801 | $ | 770 | |||||||
| Non-media revenue | 6 | 6 | |||||||||
| Total revenue | 807 | 776 | |||||||||
| Media programming and production expenses | 412 | 418 | |||||||||
| Media selling, general and administrative expenses | 214 | 192 | |||||||||
| Depreciation and amortization expenses | 65 | 62 | |||||||||
| Amortization of program costs | 18 | 19 | |||||||||
| Non-media expenses | 15 | 11 | |||||||||
| Corporate general and administrative expenses | 49 | 52 | |||||||||
| Loss on asset dispositions and other, net | 7 | 8 | |||||||||
| Operating income | $ | 27 | $ | 14 | |||||||
| Net income (loss) attributable to Sinclair | $ | 20 | $ | (156) | |||||||
SINCLAIR, INC. RESULTS OF OPERATIONS
Local Media Segment
The following table sets forth our revenue and expenses for our local media segment for the periods presented (in millions):
| Three Months Ended March 31, | Percent Change Increase / (Decrease) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| Distribution revenue | $ | 402 | $ | 395 | 2% | ||||||||||||
| Core advertising revenue | 261 | 271 | (4)% | ||||||||||||||
| Political advertising revenue | 18 | 6 | n/m | ||||||||||||||
| Other media revenue | 20 | 22 | (9)% | ||||||||||||||
| Media revenue (a) | $ | 701 | $ | 694 | 1% | ||||||||||||
| Operating Expenses: | |||||||||||||||||
| Media programming and production expenses | $ | 382 | $ | 390 | (2)% | ||||||||||||
| Media selling, general and administrative expenses (b) | 171 | 170 | 1% | ||||||||||||||
| Depreciation and amortization expenses | 60 | 56 | 7% | ||||||||||||||
| Amortization of program costs | 18 | 19 | (5)% | ||||||||||||||
| Corporate general and administrative expenses | 34 | 37 | (8)% | ||||||||||||||
| Non-media expenses | 2 | 2 | -% | ||||||||||||||
| (Gain) loss on asset dispositions and other, net | (1) | 8 | n/m | ||||||||||||||
| Operating income | $ | 35 | $ | 12 | n/m | ||||||||||||
| Interest expense including amortization of debt discount and deferred financing costs | $ | 85 | $ | 144 | (41)% | ||||||||||||
| Gain on extinguishment of debt | $ | - | $ | 2 | n/m | ||||||||||||
| Other income, net | $ | 4 | $ | 3 | 33% | ||||||||||||
n/m - not meaningful
(a)Includes $3 million for both the three months ended March 31, 2026 and 2025 of intercompany revenue related to certain services provided to the tennis segment, which is eliminated in consolidation.
(b)Includes $8 million and $4 million for the three months ended March 31, 2026 and 2025, respectively, of intercompany expense related to certain services provided by other, which is eliminated in consolidation.
Revenue
Distribution revenue. Distribution revenue, which represents fees earned from Distributors for our broadcast signals, increased $7 million or 2% for the three months ended March 31, 2026, when compared to the same period in 2025. Contractual rate increases favorably impacted period-over-period distribution revenue by single-digit percentages for the three months ended March 31, 2026, partially offset by subscriber decreases by low single-digit percentages.
Core advertising revenue. Core advertising revenue decreased $10 million for the three months ended March 31, 2026, when compared to the same period in 2025, with no particular product/services category dominating the variance.
Political advertising revenue. Political advertising revenue increased $12 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to 2026 being a midterm election year and therefore having a higher number of political races and correspondingly more political advertising spending compared to 2025, which was an off-year election cycle.
SINCLAIR, INC. RESULTS OF OPERATIONS
Other media revenue. Other media revenue decreased $2 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to a decrease related to certain services provided under trade and barter agreements.
The following table sets forth our primary types of programming and their approximate percentages of advertising revenue for the periods presented:
| Percent of Advertising Revenue for the | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Syndicated/Other programming | 38% | 39% | |||||||||
| Local news | 28% | 27% | |||||||||
| Sports programming (a) | 16% | 16% | |||||||||
| Network programming (a) | 14% | 15% | |||||||||
| Paid programming | 4% | 3% | |||||||||
(a)Sports programming includes both local and network sports programming. Network programming is exclusive of any network sports programming.
The following table sets forth our affiliate percentages of advertising revenue for the periods presented:
| Percent of Advertising Revenue for the | |||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||
| # of Channels | 2026 | 2025 | |||||||||||||||
| ABC | 41 | 27% | 27% | ||||||||||||||
| FOX | 61 | 21% | 26% | ||||||||||||||
| CBS | 32 | 21% | 19% | ||||||||||||||
| NBC | 25 | 17% | 12% | ||||||||||||||
| CW | 46 | 4% | 5% | ||||||||||||||
| MNT | 43 | 3% | 3% | ||||||||||||||
| Other | 398 | 7% | 8% | ||||||||||||||
| Total | 646 | ||||||||||||||||
Expenses
Media programming and production expenses. Media programming and production expenses decreased $8 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to a decrease related to costs associated with our network affiliation agreements and other programming contracts and a decrease in consulting expenses.
Media selling, general and administrative expenses. Media selling, general and administrative expenses increased $1 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to a $2 million increase in employee compensation cost and in costs relating to our digital business, respectively, partially offset by a $2 million decrease in information technology costs.
SINCLAIR, INC. RESULTS OF OPERATIONS
Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.
(Gain) loss on asset dispositions and other, net. During the three months ended March 31, 2025, we recognized a loss associated with the sale of certain local media assets of approximately $17 million (see Acquisitions and Station Disposals under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements), which was offset by $9 million of proceeds related to our cyber and directors and officers insurance policies.
Depreciation and amortization expenses. Depreciation of property and equipment and amortization of definite-lived intangibles and other assets increased $4 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to an increase in intangible assets related to our acquisitions during the first quarter of 2026 and the third quarter of 2025, as well as amortization expense associated with our FCC licenses which began on January 1, 2026. See Acquisitions and Station Disposals and Changes in Accounting Estimates under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements.
Interest expense including amortization of debt discount and deferred financing costs. Interest expense decreased $59 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to $68 million of one-time financing costs related to the financing transactions that occurred in the first quarter of 2025. See Credit Agreement and Notes under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair's Consolidated Financial Statements.
Gain on extinguishment of debt. 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. See Credit Agreement and Notes under Note 3. Notes Payable, Finance Leases, and Commercial Bank Financing within Sinclair's Consolidated Financial Statements.
Tennis Segment
The following table sets forth our revenue and expenses for our tennis segment for the periods presented (in millions):
| Three Months Ended March 31, | Percent Change Increase / (Decrease) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| Distribution revenue | $ | 56 | $ | 56 | -% | ||||||||||||
| Core advertising revenue | 13 | 11 | 18% | ||||||||||||||
| Other media revenue | 1 | 1 | -% | ||||||||||||||
| Media revenue | $ | 70 | $ | 68 | 3% | ||||||||||||
| Operating Expenses: | |||||||||||||||||
| Media programming and production expenses | $ | 30 | $ | 27 | 11% | ||||||||||||
| Media selling, general and administrative expenses (a) | 19 | 18 | 6% | ||||||||||||||
| Depreciation and amortization expenses | 5 | 5 | -% | ||||||||||||||
| Corporate general and administrative expenses | 1 | - | n/m | ||||||||||||||
| Operating income | $ | 15 | $ | 18 | (17)% | ||||||||||||
n/m - not meaningful
(a)Includes $3 million for both the three months ended March 31, 2026 and 2025 of intercompany expense related to certain services provided by the local media segment, which is eliminated in consolidation.
SINCLAIR, INC. RESULTS OF OPERATIONS
Revenue
Distribution revenue. Distribution revenue, which represents fees earned from Distributors for the right to distribute Tennis Channel, remained flat for the three months ended March 31, 2026, when compared to the same period in 2025.
Core advertising revenue. Core advertising revenue is primarily generated from sales of commercial time within Tennis Channel programming. Core advertising revenue increased $2 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to stronger linear sales.
Expenses
Media programming and production expenses. Media programming and production expenses increased $3 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to an increase in tournament production costs.
Media selling, general and administrative expenses. Media selling, general and administrative expenses increased $1 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to increased employee compensation cost.
Corporate general and administrative expenses. See explanation under Corporate and Unallocated Expenses.
Other
The following table sets forth our revenue and expenses for our non-broadcast digital and internet solutions, technical services, and non-media investments (collectively, other) for the periods presented (in millions):
| Three Months Ended March 31, | Percent Change Increase / (Decrease) | ||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Revenue: | |||||||||||||||||
| Media revenue (a) | $ | 40 | $ | 15 | n/m | ||||||||||||
| Non-media revenue | $ | 6 | $ | 6 | -% | ||||||||||||
| Operating Expenses: | |||||||||||||||||
| Media expenses | $ | 34 | $ | 12 | n/m | ||||||||||||
| Non-media expenses | $ | 13 | $ | 9 | 44% | ||||||||||||
| Loss on asset dispositions and other, net | $ | 8 | $ | - | n/m | ||||||||||||
| Operating loss | $ | (10) | $ | (1) | n/m | ||||||||||||
| Loss from equity method investments | $ | (1) | $ | (5) | (80)% | ||||||||||||
| Other expense, net | $ | (81) | $ | (69) | 17% | ||||||||||||
n/m - not meaningful
(a)Media revenue for the three months ended March 31, 2026 and 2025 includes $8 million and $4 million, respectively, of intercompany revenue related to certain services and sales provided to the local media segment, which is eliminated in consolidation.
Revenue. Media revenue increased $25 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to an increase in advertising revenue related to the acquisition of Digital Remedy which was not reflected for the full period within the prior year, as discussed in Acquisitions and Station Disposals under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements. Non-media revenue remained flat for the three months ended March 31, 2026, when compared to the same period in 2025.
SINCLAIR, INC. RESULTS OF OPERATIONS
Expenses. Media expenses increased $22 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to an increase in selling, general and administrative expenses related to the acquisition of Digital Remedy which was not reflected for the full period within the prior year, as discussed in Acquisitions and Station Disposals under Note 1. Nature of Operations and Summary of Significant Accounting Policies within Sinclair's Consolidated Financial Statements. Non-media expenses increased $4 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to increased employee compensation cost.
Loss on asset dispositions and other, net. During the three months ended March 31, 2026, we recorded a non-cash impairment of $8 million related to one of our real estate investments.
Other expense, net. During the three months ended March 31, 2026 and 2025, we recognized fair value adjustment losses of $85 million and $73 million, respectively, associated with investments measured at fair value and NAV.
Corporate and Unallocated Expenses
The following table presents our corporate and unallocated expenses for the periods presented (in millions):
| Three Months Ended March 31, |
Percent Change Increase/ (Decrease) |
||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Corporate general and administrative expenses | $ | 49 | $ | 52 | (6)% | ||||||||||||
| Loss on asset dispositions and other, net | $ | 7 | $ | 8 | (13)% | ||||||||||||
| Income tax benefit | $ | 158 | $ | 46 | n/m | ||||||||||||
n/m - not meaningful
The table above and explanations that follow cover total consolidated corporate and unallocated expenses.
Corporate general and administrative expenses. Corporate general and administrative expenses decreased $3 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to a decrease in employee compensation cost and a decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 4. Commitments and Contingencies within Sinclair's Consolidated Financial Statements.
Income tax benefit. The effective tax rate for the three months ended March 31, 2026, was a benefit of 114.9% as compared to a benefit of 23.0% during the same period in 2025. The increase in the effective tax rate for the three months ended March 31, 2026, when compared to the same period in 2025, is primarily due to substantially magnified impact of many 2026 items as a result of small estimated annual pre-tax income.
SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS
SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS
Any references to the second, third, or fourth quarters are to the three months ended June 30, September 30, or December 31, respectively, for the year being discussed. As of March 31, 2026, SBG had one reportable segment for accounting purposes, local media.
Seasonality / Cyclicality
The operating results of SBG's local media segment are usually subject to cyclical fluctuations from political advertising. In even numbered years, political spending is usually significantly higher than in odd numbered years due to advertising expenditures preceding local and national elections. Additionally, every four years, political spending is usually elevated further due to advertising expenditures preceding the presidential election. Also, the second and fourth quarter operating results are usually higher than the first and third quarters' operating results because advertising expenditures are increased in anticipation of certain seasonal and holiday spending by consumers.
Operating Data
The following table sets forth SBG's consolidated operating data for the periods presented (in millions):
|
Three Months Ended March 31, |
|||||||||||
| 2026 | 2025 | ||||||||||
| Total media revenue | $ | 701 | $ | 694 | |||||||
| Media programming and production expenses | 382 | 390 | |||||||||
| Media selling, general and administrative expenses | 171 | 170 | |||||||||
| Depreciation and amortization expenses | 60 | 56 | |||||||||
| Amortization of program costs | 18 | 19 | |||||||||
| Non-media expenses | 2 | 2 | |||||||||
| Corporate general and administrative expenses | 34 | 37 | |||||||||
| (Gain) loss on asset dispositions and other, net | (1) | 8 | |||||||||
| Operating income | $ | 35 | $ | 12 | |||||||
| Net loss attributable to SBG | $ | (24) | $ | (102) | |||||||
Local Media Segment
Refer to Local Media Segment above under Sinclair, Inc.'s Results of Operations for a discussion of SBG's local media segment, which is the same as Sinclair's local media segment for the three months ended March 31, 2026 and 2025.
As of March 31, 2026, the unrestricted subsidiaries (as defined in the New Credit Agreement, "Unrestricted Subsidiaries") represented 0% of SBG's total assets. For the three months ended March 31, 2026, the Unrestricted Subsidiaries represented 0% of SBG's total revenue. For the three months ended March 31, 2026, the Unrestricted Subsidiaries decreased SBG's total operating income by 7%.
As of March 31, 2026 and for the three months ended March 31, 2026, there were no restricted subsidiaries that were non-guarantors (as defined in the New Credit Agreement).
SINCLAIR BROADCAST GROUP, LLC RESULTS OF OPERATIONS
Corporate and Unallocated Expenses
The following table presents SBG's corporate and unallocated expenses for the periods presented (in millions):
| Three Months Ended March 31, |
Percent Change Increase/ (Decrease) |
||||||||||||||||
| 2026 | 2025 | ||||||||||||||||
| Corporate general and administrative expenses | $ | 34 | $ | 37 | (8)% | ||||||||||||
| (Gain) loss on asset dispositions and other, net | $ | (1) | $ | 8 | n/m | ||||||||||||
| Income tax benefit | $ | 24 | $ | 26 | (8)% | ||||||||||||
n/m - not meaningful
The table above and explanations that follow cover SBG's total consolidated corporate and unallocated expenses.
Corporate general and administrative expenses. Corporate general and administrative expenses decreased $3 million for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to a decrease in legal, consulting, and regulatory costs, primarily related to the litigation discussed under Note 4. Commitments and Contingencies within SBG's Consolidated Financial Statements and a decrease in employee compensation cost.
Income tax benefit. The effective tax rate for the three months ended March 31, 2026, was a benefit of 50.9% as compared to a benefit of 20.1% during the same period in 2025. The increase in the effective tax rate for the three months ended March 31, 2026, when compared to the same period in 2025, is primarily due to a 2026 release of a valuation allowance on certain state net operating losses resulting from a change in the filing methodology that impacted the realizability of the associated deferred tax assets.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity and Capital Resources
As of March 31, 2026, Sinclair had net working capital of approximately $956 million, including $844 million in cash and cash equivalent balances, and $613 million of available borrowing capacity, including $575 million under the New Credit Agreement and $38 million under the Amended Credit Agreement. Cash on hand, cash generated by Sinclair's operations, and borrowing capacity under the New Credit Agreement and the Amended Credit Agreement are used as Sinclair's primary sources of liquidity.
As of March 31, 2026, SBG had net working capital of approximately $481 million, including $392 million in cash and cash equivalent balances, and $613 million of available borrowing capacity, including $575 million under the New Credit Agreement and $38 million under the Amended Credit Agreement. Cash on hand, cash generated by SBG's operations, and borrowing capacity under the New Credit Agreement and the Amended Credit Agreement are used as SBG's primary sources of liquidity.
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 3.5x, 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, 2026, STG was not subject to the financial maintenance covenant under the New Credit Agreement. As of March 31, 2026, the STG first-out first lien leverage ratio was below 3.5x. The New Credit Agreement contains other restrictions and covenants with which STG was in compliance as of March 31, 2026.
In April 2026, STG repurchased $93 million aggregate principal amount of the Term Loan B-6 and $72 million aggregate principal amount of the Term Loan B-7, both at discounts of face value.
During the three months ended March 31, 2026, there were no material changes to Sinclair's or SBG's contractual cash obligations as of March 31, 2026.
Sinclair and SBG anticipate that existing cash and cash equivalents, cash flow from the local media segment's operations, and borrowing capacity under the New Credit Agreement, the Amended Credit Agreement, and the A/R Facility will be sufficient to satisfy the local media segment's debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months. Sinclair anticipates that existing cash and cash equivalents and cash flow from SBG, the tennis segment, and other's operations will be sufficient to satisfy SBG's, the tennis segment's, and other's debt service obligations, capital expenditure requirements, and working capital needs for the next twelve months. However, certain factors, including but not limited to the war in Ukraine, conflict in the Middle East, other geopolitical matters, natural disasters, pandemics and their resulting effect on the economy, Sinclair's and SBG's advertisers, and Sinclair's and SBG's Distributors and their subscribers, could affect Sinclair's and SBG's liquidity and first-out first lien leverage ratio which could affect Sinclair's and SBG's ability to access the full borrowing capacity under the New Credit Agreement. In addition to the sources described above, Sinclair and SBG may rely upon various sources for long-term liquidity needs, such as but not limited to, the issuance of long-term debt, the issuance of Sinclair equity, for Sinclair only, the issuance of Ventures equity or debt, or other instruments convertible into or exchangeable for Sinclair equity, or the sale of assets. However, there can be no assurance that additional financing or capital or buyers of assets will be available, or that the terms of any transactions will be acceptable or advantageous to Sinclair or SBG.
LIQUIDITY AND CAPITAL RESOURCES
Sinclair, Inc. Sources and Uses of Cash
The following table sets forth Sinclair's cash flows for the periods presented (in millions):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash flows from operating activities | $ | 43 | $ | 5 | |||||||
| Cash flows used in investing activities: | |||||||||||
| Acquisition of property and equipment | $ | (15) | $ | (16) | |||||||
| Acquisition of businesses, net of cash acquired | (15) | (25) | |||||||||
| Purchases of investments | (8) | (8) | |||||||||
| Distributions and proceeds from investments | 11 | 7 | |||||||||
| Other, net | 3 | - | |||||||||
| Net cash flows used in investing activities | $ | (24) | $ | (42) | |||||||
| 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 | (9) | (1,331) | |||||||||
| Dividends paid on Class A and Class B Common Stock | (18) | (17) | |||||||||
| Debt issuance costs | - | (99) | |||||||||
| Distributions to noncontrolling interests | (3) | (3) | |||||||||
| Other, net | (11) | (9) | |||||||||
| Net cash flows used in financing activities | $ | (41) | $ | (29) | |||||||
Operating Activities
Net cash flows from Sinclair's operating activities increased for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to an increase in cash collections from Distributors, an increase in cash collections related to political revenue, and a decrease in production costs.
Investing Activities
Net cash flows used in Sinclair's investing activities decreased for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to the acquisition of Digital Remedy in the first quarter of 2025.
Financing Activities
Net cash flows used in Sinclair's financing activities increased for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to the financing transactions that occurred in the first quarter of 2025.
Sinclair declared a quarterly dividend of $0.25 per share in February 2026 and $0.25 per share in April 2026. Future dividends on Sinclair's shares of common stock, if any, will be at the discretion of Sinclair's Board of Directors and will depend on several factors including Sinclair's results of operations, cash requirements and surplus, financial condition, covenant restrictions, and other factors that Sinclair's Board of Directors may deem relevant.
LIQUIDITY AND CAPITAL RESOURCES
Sinclair Broadcast Group, LLC Sources and Uses of Cash
The following table sets forth SBG's cash flows for the periods presented (in millions):
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash flows from operating activities | $ | 58 | $ | 34 | |||||||
| Cash flows used in investing activities: | |||||||||||
| Acquisition of property and equipment | $ | (14) | $ | (15) | |||||||
| Acquisition of businesses, net of cash acquired | (15) | - | |||||||||
| Other, net | 3 | - | |||||||||
| Net cash flows used in investing activities | $ | (26) | $ | (15) | |||||||
| 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 | (9) | (1,331) | |||||||||
| Debt issuance costs | - | (99) | |||||||||
| Distributions to member, net | (29) | (31) | |||||||||
| Distributions to noncontrolling interests | (3) | (2) | |||||||||
| Net cash flows used in financing activities | $ | (41) | $ | (33) | |||||||
Operating Activities
Net cash flows from SBG's operating activities increased for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to an increase in cash collections from Distributors, an increase in cash collections related to political revenue, and a decrease in production costs.
Investing Activities
Net cash flows used in SBG's investing activities increased for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to the acquisition of the non-license assets of KMYT and KOKI in Tulsa, OK in the first quarter of 2026.
Financing Activities
Net cash flows used in SBG's financing activities increased for the three months ended March 31, 2026, when compared to the same period in 2025, primarily due to the financing transactions that occurred in the first quarter of 2025.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There were no changes to the critical accounting policies and estimates from those disclosed in Critical Accounting Policies and Estimates under Part II. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the year ended December 31, 2025.
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