Sinclair, Inc.

Certain matters discussed on this call may include forward-looking statements regarding, among other things, future operating results. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ from those described in the forward-looking statements as a result of various important factors. Such factors have been set forth in the company's most recent reports as filed with the SEC and included in the company undertakes no obligation to update these forward-looking statements. The company uses its website as a key source of company information, which can be accessed at www.sbgi.net. In accordance with Regulation FD, this call is being made available to the public. A webcast replay will be available on our website and will remain available until the next quarterly earnings release. Included on the call will be a discussion of non-GAAP financial measures, specifically adjusted EBITDA, adjusted free cash flow, and leverage. The company considers adjusted EBITDA to be an indicator of the operating performance of its assets. The company also believes that adjusted EBITDA is frequently used by industry analysts, investors, and lenders as a measure of valuation. These measures are not formulated in accordance with GAAP and are not meant to replace GAAP measurements and may differ from other companies' uses or formulations. The company does not provide reconciliations on a forward-looking basis. Further discussions and reconciliations of the company's non-GAAP financial measures Chris Ripley will now take you through our operating highlights.

Good morning, everyone, and thank you for joining us today. Two weeks ago, we notified the investment community via an 8 filing that we would be deconsolidating Diamond from our financials. This is a consequence of Diamond's new financing, which dictated how Diamond's board of managers would be selected and certain significant operating decisions approved. While on the surface, this may seem to add complexity, we believe it will result in a more simplified, transparent, and focused valuation and credit story for our various stakeholders. While Diamond will no longer be included in Sinclair's financial results beginning on March 1, 2022, Sinclair continues to own nearly 100% of the equity of Diamond, and the deconsolidation is not intended to indicate a change in our commitment to Diamond's success or a change in Diamond's future business plans. I'll turn it over to Lucy to speak more about the mechanics and implications of the deconsolidation.

Thank you, Chris. The deconsolidation of Diamond is a required GAAP accounting treatment, and all impacts from it are non-cash in nature. The date of the deconsolidation was March 1, 2022, which was the date the Diamond first lien financing closed. The deconsolidation of Diamond resulted in a non-cash gain of approximately 3.4 billion, which was primarily driven by the fact that Diamond was in a net liability position at the time of deconsolidation. Post-March 1st, Diamond is accounted for under the equity method of accounting. And as a reminder, DSG is a separate debt silo which is non-recourse to Sinclair. In addition, marquee will be deconsolidated from diamonds financials as of March 1st and will be accounted for under the equity method of accounting. Later today, we will follow a form 8K, which will contain pro forma financial statements for the year ended December 31st, 2021, reflecting Sinclair as if deconsolidation of diamond occurred as of January 1st, 2021. On our website, we've included supplemental and historical pro forma numbers for Sinclair so you can align your models. If you have any questions, please reach out to our investor relations department. Because of the deconsolidation, our earnings releases will no longer include guidance for Diamond as you saw in this morning's release. However, our website will include some high-level estimates as well as Diamond's quarterly and annual financials, which we will continue to post there each quarter. Lastly, the format of our earnings calls will change. Today, we will bifurcate the call and do a Sinclair-only portion addressing Sinclair's pro forma results, followed by a Diamond portion of the call. Next quarter, we will have two separate calls. We remain committed to continuing to provide financial information and commentary regardless of the format.