Correspondence 0001971213-24-000032 from Sinclair, Inc. (SBGI) (CIK 0001971213) (SBGI)
Sinclair, Inc. (SBGI) (CIK 0001971213)
Date: May 8, 2024 · CIK: 0001971213 · Accession: 0001971213-24-000032
AI Filing Summary & Sentiment
File numbers found in text: 333-271072
Referenced dates: April 24, 2024
Letter
Attention: Inessa Kessman Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549-3628
Re: Sinclair, Inc.
Dear Ms. Kessman and Mr. Littlepage:
Sinclair, Inc. (the “Company”, “we”, “us” or “our”) has submitted today to the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”), via EDGAR, this letter setting forth the Company’s responses to the comments of the Staff contained in your letter dated April 24, 2024 (the “Comment Letter”), relating to the Company’s Form 10-K for the Fiscal Year Ended December 31, 2023 and Form 8-K, filed with the SEC on February 28, 2024, (the “Form 10-K” and “Form 8-K”, respectively).
The numbered paragraphs and headings below correspond to those set forth in the Comment Letter. Each of the Staff’s comments is set forth in bold, followed by the Company’s response to each comment. Capitalized terms used in this letter but not defined herein have the meaning given to such terms in the Form 10-K and Form 8-K. All references to page numbers in these responses are to pages of the Company’s Form 10-K and/or Form 8-K, whichever is applicable.
Form 10-K for the Fiscal Year Ended December 31, 2023
Management’s Discussion and Analysis of Financial Conditions and Results of Operations Sinclair, Inc. Results of Operations Local Media Segment Revenues, page 57
1.You disclose that “Distributors for our broadcast signals, decreased $40 million in 2023, when compared to the same period in 2022, primarily due to a decrease in subscribers, partially offset by an increase in contractual rates.” Since subscribers and contractual rates are the drivers of your revenue, please disclose those key statistical measures in your MD&A for all periods presented. We refer to guidance in Item 303 of Regulation S-K.
Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
Response: We respectfully acknowledge the Staff’s comment and respectfully advise the Staff that the Company does not consider the number of Distributors’ subscribers or our contractual rates with Distributors to be key performance indicators. Our internal segment reports and variance analyses provided to our chief operating decision maker do not focus on these metrics. The Company also believes quantifying the number of Distributors’ subscribers or our contractual rates with Distributors will cause competitive harm as broadcast networks may use this information in programming fee negotiations with the Company. We also note that the number of subscribers to our Distributors’ is not within the Company’s control. However, we do believe a discussion of trends in the number of Distributors’ subscribers or our contractual rates with Distributors to be helpful to investors in evaluating our financial results and business. Beginning with the Company’s second quarter earnings release and quarterly report on Form 10-Q for the three months ended June 30, 2024, the Company will revise its disclosure such that, when discussing changes in the number of Distributors’ subscribers or our contractual rates with Distributors from period to period, the Company will provide greater specificity and quantify such changes.
2.We note you discuss local advertising revenue by categories such as political, automotive, retail, home products, pharma, food, etc. in your earnings presentation. To help investors understand the drivers of your local advertising revenue, please consider disclosing revenue by these different categories in future filings for all periods presented. Provide us with your proposed future disclosure.
Response: We respectfully acknowledge the Staff’s comment. We continually evaluate our disclosures to ensure we are providing meaningful information to our investors to help them understand and evaluate our financial performance and to comply with the requirements of Item 303 of Regulation S-K and GAAP. Political advertising revenue is generally the primary driver of annual changes in local advertising revenue. The residual local advertising revenue (excluding political advertising revenue) is referred to as core advertising revenue. In general, changes in core advertising revenue are influenced by many factors including the general macroeconomic environment, the cyclical nature of certain sectors of our economy, major sporting events, displacement from political advertising, etc. Between fiscal year 2022 and 2023, there were no material key drivers of changes by category in core advertising revenue. While there have been no significant changes to our advertising business or changes in how we evaluate the performance of our advertising revenues, in response to the Staff’s comment, as well as to help investors better understand the drivers or our local advertising revenue, in filings beginning with the Company’s quarterly report on Form 10-Q for the three months ended March 31, 2024, the Company will describe the key drivers of changes in core advertising revenue including specific categories, to the extent material. Additionally, in filings beginning with the Company’s first quarter earnings release and quarterly report on Form 10-Q for the three months ended March 31, 2024, the Company will separately disclose political advertising revenue within both the MD&A and disaggregated revenue disclosure. An example of such disclosure is below.
Local Media Segment
The following table sets forth our revenue for our local media segment for the years ended December 31, 2023 and 2022 (in millions):
Percent Change
Increase / (Decrease)
2023 2022 ‘23 vs.’22
Revenue:
Distribution revenue $ 1,491 $ 1,531 (3)%
Core advertising revenue 1,193 1,187 0.5%
Political advertising revenue 43 331 (87%)
Other media revenue (a) 139 144 (3)%
Media revenues (b) $ 2,866 $ 3,193 (10)%
Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
(a)Includes $26 million for the year ended December 31, 2022 of intercompany revenue related to certain services provided by the local media segment to other and the local sports segment, prior to the Deconsolidation, under management services agreements, which was eliminated in consolidation, and $52 million and $39 million of revenue for the years ended December 31, 2023 and 2022, respectively, for services provided by the local media segment under management services agreements after the Deconsolidation, which is not eliminated in consolidation.
(b)Includes $6 million and $4 million for the years ended December 31, 2023 and 2022, respectively, of intercompany revenue related to certain advertising services provided by the local media segment to the tennis segment, which is eliminated in consolidation.
Revenues
Advertising revenue. Political advertising revenue decreased $288 million in 2023, when compared to the same period in 2022, primarily due to the mid-term elections which concluded in 2022.
Revenue Recognition
The following table presents our revenue disaggregated by type and segment for the year ended December 31, 2023 (in millions):
For the year ended December 31, 2023 Local media Tennis Other Eliminations Total
Distribution revenue $ 1,491 $ 189 $ — $ — $ 1,680
Core advertising revenue 1,193 37 25 (13) 1,242
Political advertising revenue 43 — — — 43
Other media, non-media, and intercompany revenue 139 2 37 (9) 169
Total revenues $ 2,866 $ 228 $ 62 $ (22) $ 3,134
3. We note the value of your goodwill significantly exceeds your market capitalization. Please provide us with a reconciliation of the aggregate fair value of your reporting units to your market capitalization as of or around the goodwill impairment test date. Refer to ASC 350-20-35-22 to 35-24. In future filings if goodwill continues to exceed your market capitalization, provide a discussion of how you considered market capitalization when performing your goodwill impairment analysis.
Response: We respectfully acknowledge the Staff’s comment. We note that ASC 350-20-35-4 indicates “The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill.” The market capitalization of the Company is an indication of the fair value of the common equity of the total Company which includes all reporting units. Accordingly, the Company’s market capitalization compared to the total carrying value of equity exceeded its carrying value as of the annual impairment test date and as of year-end.
Additionally, we note that the goodwill balance primarily consists of $2,016 million attributable to our Local Media reporting unit and $61 million attributable to our Tennis reporting unit. These reporting units represent approximately 98% of consolidated revenue. The most recent quantitative impairment analyses associated with our Local Media and Tennis reporting units were performed in 2022 and 2019, respectively. The results of these assessments indicated the fair value of the Local Media reporting unit was 38% greater than the carrying value and the fair value of the Tennis reporting unit was 107% greater than the carrying value. For the year ended December 31, 2023, the Company performed a qualitative goodwill impairment analysis for these reporting units noting no indications of impairment.
Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
Since the Company did not perform a quantitative assessment, we are unable to provide a reconciliation between the fair value of our reporting units to our market capitalization as of October 1, 2023, the date of our most recent goodwill impairment analysis. Alternatively, we noted that the carrying value of the Local Media reporting unit, Tennis reporting unit and other net assets (excluding debt) of the Company as of October 1, 2023 was $3,565 million, $259 million, and $961 million, respectively, for a total carrying value of $4,785 million. On this date, the Company’s equity market capitalization was $712 million and we had outstanding debt of $4,201 million. The summation of our equity market capitalization and outstanding debt results in an invested capital value indication of $4,913 million which is $128 million greater than the aggregate carrying value of the business before considering the effect of a control premium. The application of a control premium would further increase this differential. Management would expect a sum-of-the-parts valuation to be greater than the market capitalization because of the customary drivers of control premiums as well as the fact that Sinclair is a controlled company with the Smith Family owning an 82% voting interest in the company primarily through their ownership of our Class B common stock, which have ten (10) votes per share. Management believes that this voting structure results in the market discounting certain value unlocking activities such as M&A transactions. Accordingly, Management believes that the market value of the Company’s underlying stock may not be based upon the sum-of-the-parts methodology used by the Company in its goodwill testing.
12. Income Taxes, page F-34
4. We note that in 2022 you increased your valuation allowance by $56 million and then in 2023 you decreased it by $212 million. Both the increase and decrease in the valuation allowance were associated with the federal interest expense carryforwards under IRC Section 163(j). With a view towards expanded disclosure, please tell us specifically what occurred in relation to the federal interest expense carryforward under IRC Section 163(j) between 2022 and 2023 that caused the significant change in the valuation allowance.
Response: We respectfully acknowledge the Staff’s comment and respectfully advise the Staff that in 2022, the legal entity that owned the Diamond Sports business was treated as a partnership for federal income tax purposes. The $212 million section 163(j) carryforward from the Diamond Sports partnership was tracked as a separate deferred tax asset (“DTA”) by Sinclair, as the partnership section 163(j) rules only allow for that attribute to be utilized to the extent excess taxable income is specifically allocated from the Diamond Sports partnership to Sinclair. In addition, a full valuation allowance was recorded against this DTA as it was not expected to be utilized since there was no expectation of excess taxable income from the Diamond Sports partnership based on historical results and forecasted losses.
On February 10, 2023, the tax classification of the legal entity owning the Diamond Sports business changed for income tax purposes from a partnership to a disregarded entity because of the exit of the sole minority investor. As a result of the partnership termination, all the assets of the partnership were deemed to be distributed and the section 163(j) attribute was recharacterized for income tax purposes from a separate tax attribute to instead increasing the tax basis of the Diamond Sports assets. Since the section 163(j) carryforward DTA related to the Diamond Sports partnership ceased to exist after this transaction, a removal of the valuation allowance associated with that asset had to take place.
In future filings, we will include expanded disclosure regarding the change in valuation allowance, if material.
Form 8-K filed February 28, 2024
Exhibit 99.1, page 1
Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
5. We note your statement that “As of December 31, 2023, the Company estimated the fair market value of Ventures’ minority investment portfolio, which includes Ventures’ cash of $343 million, and investments in real estate, private equity, and venture capital funds, as well as direct investments in companies, at approximately $1.2 billion, or approximately $18 per share.” Please tell us specific information about Ventures’ minority investment portfolio and how it is reflected in your Form 10-K for the fiscal year ended December 31, 2023. Disclose how these balances were calculated and why you believe it is appropriate to present them in your Form 8-K. As applicable, refer to your basis in accounting literature.
Response: We respectfully acknowledge the Staff’s comment and advise the Staff that as of December 31, 2023, the Company’s investment portfolio consisted of approximately fifty investments. These investments are reflected within the Company’s Form 10-K as follows:
Equity Method Investments – $128 million Investments Measured at Fair Value – $162 million Investments Reflected at Net Asset Value (NAV) – $189 million Measurement Alternative Investments - $36 million Ventures’ cash - $343 million
Total Book Value of Investments and Ventures’ cash - $858 million
The difference between the book value of these investments reflected within the Company’s Form 10-K and the $1.2 billion estimated fair value presented in the Company’s Form 8-K primarily relates to the Company’s investments accounted for under the equity method since these investments are not reflected at fair value within our financial statements. The fair value of these investments was estimated utilizing a market approach where an income metric is multiplied by a market multiple; or in the case of real estate investments, net operating income is divided by a market capitalization rate. The Company’s proportionate interest in these estimated values was utilized in deriving the estimated fair value.
After further reflection on these disclosures, the Company no longer plans to disclose the estimated fair values associated with these inves
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Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
Sinclair, Inc.
May 8, 2024
Re: Sinclair, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2023
Form 8-K filed February 28, 2024
SEC File No. 333-271072
Attention: Inessa Kessman
Robert Littlepage
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549-3628
Dear Ms. Kessman and Mr. Littlepage:
Sinclair, Inc. (the “Company”, “we”, “us” or “our”) has submitted today to the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”), via EDGAR, this letter setting forth the Company’s responses to the comments of the Staff contained in your letter dated April 24, 2024 (the “Comment Letter”), relating to the Company’s Form 10-K for the Fiscal Year Ended December 31, 2023 and Form 8-K, filed with the SEC on February 28, 2024, (the “Form 10-K” and “Form 8-K”, respectively).
The numbered paragraphs and headings below correspond to those set forth in the Comment Letter. Each of the Staff’s comments is set forth in bold, followed by the Company’s response to each comment. Capitalized terms used in this letter but not defined herein have the meaning given to such terms in the Form 10-K and Form 8-K. All references to page numbers in these responses are to pages of the Company’s Form 10-K and/or Form 8-K, whichever is applicable.
Form 10-K for the Fiscal Year Ended December 31, 2023
Management’s Discussion and Analysis of Financial Conditions and Results of Operations Sinclair, Inc. Results of Operations Local Media Segment Revenues, page 57
1.You disclose that “Distributors for our broadcast signals, decreased $40 million in 2023, when compared to the same period in 2022, primarily due to a decrease in subscribers, partially offset by an increase in contractual rates.” Since subscribers and contractual rates are the drivers of your revenue, please disclose those key statistical measures in your MD&A for all periods presented. We refer to guidance in Item 303 of Regulation S-K.
Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
Response: We respectfully acknowledge the Staff’s comment and respectfully advise the Staff that the Company does not consider the number of Distributors’ subscribers or our contractual rates with Distributors to be key performance indicators. Our internal segment reports and variance analyses provided to our chief operating decision maker do not focus on these metrics. The Company also believes quantifying the number of Distributors’ subscribers or our contractual rates with Distributors will cause competitive harm as broadcast networks may use this information in programming fee negotiations with the Company. We also note that the number of subscribers to our Distributors’ is not within the Company’s control. However, we do believe a discussion of trends in the number of Distributors’ subscribers or our contractual rates with Distributors to be helpful to investors in evaluating our financial results and business. Beginning with the Company’s second quarter earnings release and quarterly report on Form 10-Q for the three months ended June 30, 2024, the Company will revise its disclosure such that, when discussing changes in the number of Distributors’ subscribers or our contractual rates with Distributors from period to period, the Company will provide greater specificity and quantify such changes.
2.We note you discuss local advertising revenue by categories such as political, automotive, retail, home products, pharma, food, etc. in your earnings presentation. To help investors understand the drivers of your local advertising revenue, please consider disclosing revenue by these different categories in future filings for all periods presented. Provide us with your proposed future disclosure.
Response: We respectfully acknowledge the Staff’s comment. We continually evaluate our disclosures to ensure we are providing meaningful information to our investors to help them understand and evaluate our financial performance and to comply with the requirements of Item 303 of Regulation S-K and GAAP. Political advertising revenue is generally the primary driver of annual changes in local advertising revenue. The residual local advertising revenue (excluding political advertising revenue) is referred to as core advertising revenue. In general, changes in core advertising revenue are influenced by many factors including the general macroeconomic environment, the cyclical nature of certain sectors of our economy, major sporting events, displacement from political advertising, etc. Between fiscal year 2022 and 2023, there were no material key drivers of changes by category in core advertising revenue. While there have been no significant changes to our advertising business or changes in how we evaluate the performance of our advertising revenues, in response to the Staff’s comment, as well as to help investors better understand the drivers or our local advertising revenue, in filings beginning with the Company’s quarterly report on Form 10-Q for the three months ended March 31, 2024, the Company will describe the key drivers of changes in core advertising revenue including specific categories, to the extent material. Additionally, in filings beginning with the Company’s first quarter earnings release and quarterly report on Form 10-Q for the three months ended March 31, 2024, the Company will separately disclose political advertising revenue within both the MD&A and disaggregated revenue disclosure. An example of such disclosure is below.
Local Media Segment
The following table sets forth our revenue for our local media segment for the years ended December 31, 2023 and 2022 (in millions):
Percent Change
Increase / (Decrease)
2023 2022 ‘23 vs.’22
Revenue:
Distribution revenue $ 1,491 $ 1,531 (3)%
Core advertising revenue 1,193 1,187 0.5%
Political advertising revenue 43 331 (87%)
Other media revenue (a) 139 144 (3)%
Media revenues (b) $ 2,866 $ 3,193 (10)%
Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
(a)Includes $26 million for the year ended December 31, 2022 of intercompany revenue related to certain services provided by the local media segment to other and the local sports segment, prior to the Deconsolidation, under management services agreements, which was eliminated in consolidation, and $52 million and $39 million of revenue for the years ended December 31, 2023 and 2022, respectively, for services provided by the local media segment under management services agreements after the Deconsolidation, which is not eliminated in consolidation.
(b)Includes $6 million and $4 million for the years ended December 31, 2023 and 2022, respectively, of intercompany revenue related to certain advertising services provided by the local media segment to the tennis segment, which is eliminated in consolidation.
Revenues
Advertising revenue. Political advertising revenue decreased $288 million in 2023, when compared to the same period in 2022, primarily due to the mid-term elections which concluded in 2022.
Revenue Recognition
The following table presents our revenue disaggregated by type and segment for the year ended December 31, 2023 (in millions):
For the year ended December 31, 2023 Local media Tennis Other Eliminations Total
Distribution revenue $ 1,491 $ 189 $ — $ — $ 1,680
Core advertising revenue 1,193 37 25 (13) 1,242
Political advertising revenue 43 — — — 43
Other media, non-media, and intercompany revenue 139 2 37 (9) 169
Total revenues $ 2,866 $ 228 $ 62 $ (22) $ 3,134
3. We note the value of your goodwill significantly exceeds your market capitalization. Please provide us with a reconciliation of the aggregate fair value of your reporting units to your market capitalization as of or around the goodwill impairment test date. Refer to ASC 350-20-35-22 to 35-24. In future filings if goodwill continues to exceed your market capitalization, provide a discussion of how you considered market capitalization when performing your goodwill impairment analysis.
Response: We respectfully acknowledge the Staff’s comment. We note that ASC 350-20-35-4 indicates “The first step of the goodwill impairment test, used to identify potential impairment, compares the fair value of a reporting unit with its carrying amount, including goodwill.” The market capitalization of the Company is an indication of the fair value of the common equity of the total Company which includes all reporting units. Accordingly, the Company’s market capitalization compared to the total carrying value of equity exceeded its carrying value as of the annual impairment test date and as of year-end.
Additionally, we note that the goodwill balance primarily consists of $2,016 million attributable to our Local Media reporting unit and $61 million attributable to our Tennis reporting unit. These reporting units represent approximately 98% of consolidated revenue. The most recent quantitative impairment analyses associated with our Local Media and Tennis reporting units were performed in 2022 and 2019, respectively. The results of these assessments indicated the fair value of the Local Media reporting unit was 38% greater than the carrying value and the fair value of the Tennis reporting unit was 107% greater than the carrying value. For the year ended December 31, 2023, the Company performed a qualitative goodwill impairment analysis for these reporting units noting no indications of impairment.
Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
Since the Company did not perform a quantitative assessment, we are unable to provide a reconciliation between the fair value of our reporting units to our market capitalization as of October 1, 2023, the date of our most recent goodwill impairment analysis. Alternatively, we noted that the carrying value of the Local Media reporting unit, Tennis reporting unit and other net assets (excluding debt) of the Company as of October 1, 2023 was $3,565 million, $259 million, and $961 million, respectively, for a total carrying value of $4,785 million. On this date, the Company’s equity market capitalization was $712 million and we had outstanding debt of $4,201 million. The summation of our equity market capitalization and outstanding debt results in an invested capital value indication of $4,913 million which is $128 million greater than the aggregate carrying value of the business before considering the effect of a control premium. The application of a control premium would further increase this differential. Management would expect a sum-of-the-parts valuation to be greater than the market capitalization because of the customary drivers of control premiums as well as the fact that Sinclair is a controlled company with the Smith Family owning an 82% voting interest in the company primarily through their ownership of our Class B common stock, which have ten (10) votes per share. Management believes that this voting structure results in the market discounting certain value unlocking activities such as M&A transactions. Accordingly, Management believes that the market value of the Company’s underlying stock may not be based upon the sum-of-the-parts methodology used by the Company in its goodwill testing.
12. Income Taxes, page F-34
4. We note that in 2022 you increased your valuation allowance by $56 million and then in 2023 you decreased it by $212 million. Both the increase and decrease in the valuation allowance were associated with the federal interest expense carryforwards under IRC Section 163(j). With a view towards expanded disclosure, please tell us specifically what occurred in relation to the federal interest expense carryforward under IRC Section 163(j) between 2022 and 2023 that caused the significant change in the valuation allowance.
Response: We respectfully acknowledge the Staff’s comment and respectfully advise the Staff that in 2022, the legal entity that owned the Diamond Sports business was treated as a partnership for federal income tax purposes. The $212 million section 163(j) carryforward from the Diamond Sports partnership was tracked as a separate deferred tax asset (“DTA”) by Sinclair, as the partnership section 163(j) rules only allow for that attribute to be utilized to the extent excess taxable income is specifically allocated from the Diamond Sports partnership to Sinclair. In addition, a full valuation allowance was recorded against this DTA as it was not expected to be utilized since there was no expectation of excess taxable income from the Diamond Sports partnership based on historical results and forecasted losses.
On February 10, 2023, the tax classification of the legal entity owning the Diamond Sports business changed for income tax purposes from a partnership to a disregarded entity because of the exit of the sole minority investor. As a result of the partnership termination, all the assets of the partnership were deemed to be distributed and the section 163(j) attribute was recharacterized for income tax purposes from a separate tax attribute to instead increasing the tax basis of the Diamond Sports assets. Since the section 163(j) carryforward DTA related to the Diamond Sports partnership ceased to exist after this transaction, a removal of the valuation allowance associated with that asset had to take place.
In future filings, we will include expanded disclosure regarding the change in valuation allowance, if material.
Form 8-K filed February 28, 2024
Exhibit 99.1, page 1
Sinclair, Inc.
10706 Beaver Dam Road
Hunt Valley, Maryland 21030
5. We note your statement that “As of December 31, 2023, the Company estimated the fair market value of Ventures’ minority investment portfolio, which includes Ventures’ cash of $343 million, and investments in real estate, private equity, and venture capital funds, as well as direct investments in companies, at approximately $1.2 billion, or approximately $18 per share.” Please tell us specific information about Ventures’ minority investment portfolio and how it is reflected in your Form 10-K for the fiscal year ended December 31, 2023. Disclose how these balances were calculated and why you believe it is appropriate to present them in your Form 8-K. As applicable, refer to your basis in accounting literature.
Response: We respectfully acknowledge the Staff’s comment and advise the Staff that as of December 31, 2023, the Company’s investment portfolio consisted of approximately fifty investments. These investments are reflected within the Company’s Form 10-K as follows:
Equity Method Investments – $128 million
Investments Measured at Fair Value – $162 million
Investments Reflected at Net Asset Value (NAV) – $189 million
Measurement Alternative Investments - $36 million
Ventures’ cash - $343 million
Total Book Value of Investments and Ventures’ cash - $858 million
The difference between the book value of these investments reflected within the Company’s Form 10-K and the $1.2 billion estimated fair value presented in the Company’s Form 8-K primarily relates to the Company’s investments accounted for under the equity method since these investments are not reflected at fair value within our financial statements. The fair value of these investments was estimated utilizing a market approach where an income metric is multiplied by a market multiple; or in the case of real estate investments, net operating income is divided by a market capitalization rate. The Company’s proportionate interest in these estimated values was utilized in deriving the estimated fair value.
After further reflection on these disclosures, the Company no longer plans to disclose the estimated fair values associated with these inves