CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2020

Condensed Financial Information Disclosure [Abstract]

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

Sinclair Television Group, Inc. (STG), a wholly-owned subsidiary and the television operating subsidiary of Sinclair Broadcast Group, Inc. (SBG), is the primary obligor under the STG Bank Credit Agreement, 5.625% Notes, 5.875% Notes, 5.125% Notes, and 5.500% Notes (collectively, the Notes are referred to as the "STG Notes"), and, until they were redeemed, STG's 5.375% Notes and 6.125% Notes. STG’s 5.625% Notes were publicly registered on a Registration Statement on Form S-3ASR (No. 333-203483), effective April 17, 2015, and, until they were redeemed, STG’s 6.125% Notes were publicly registered on a Registration Statement on Form S-4 (No. 333-187724), effective April 16, 2013. Our Class A Common Stock and Class B Common Stock as of September 30, 2020, were obligations or securities of SBG and not obligations or securities of STG. SBG is a guarantor under the STG Bank Credit Agreement, 5.625% Notes, 5.875% Notes, 5.125% Notes, 5.500% Notes and, until they were redeemed, STG's 5.375% Notes and 6.125% Notes. As of September 30, 2020, our consolidated total debt, net of deferred financing costs and debt discounts, of $12,463 million included $4,415 million related to STG and its subsidiaries of which SBG guaranteed $4,375 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.

These statements are presented in accordance with the disclosure requirements under SEC Regulation S-X, Rule 3-10.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2020

(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	$	—		$	262	$	4	$	366		$	—		$	632
Accounts receivable, net	—			—		510		598			—			1,108
Other current assets	9			55		403		416			(82		)	801
Total current assets	9			317		917		1,380			(82		)	2,541
Property and equipment, net	1			32		704		104			(27		)	814
Investment in equity of consolidated subsidiaries	331			3,516		—		—			(3,847		)	—
Restricted cash	—			—		—		1			—			1
Goodwill	—			—		2,082		10			—			2,092
Indefinite-lived intangible assets	—			—		149		14			—			163
Definite-lived intangible assets, net	—			—		1,299		4,491			(43		)	5,747
Other long-term assets	84			1,768		282		1,225			(2,234		)	1,125
Total assets	$	425		$	5,633	$	5,433	$	7,225		$	(6,233	)	$	12,483
Accounts payable and accrued liabilities	$	15		$	61	$	262	$	210		$	(82	)	$	466
Current portion of long-term debt	—			27		5		41			(1		)	72
Other current liabilities	1			1		192		242			—			436
Total current liabilities	16			89		459		493			(83		)	974
Long-term debt	700			4,331		35		8,363			(1,038		)	12,391
Investment in deficit of consolidated subsidiaries	1,434			—		—		—			(1,434		)	—
Other long-term liabilities	12			121		1,427		457			(1,416		)	601
Total liabilities	2,162			4,541		1,921		9,313			(3,971		)	13,966
Redeemable noncontrolling interests	—			—		—		194			—			194
Total Sinclair Broadcast Group (deficit) equity	(1,737		)	1,092		3,512		(2,338		)	(2,266		)	(1,737		)
Noncontrolling interests in consolidated subsidiaries	—			—		—		56			4			60
Total liabilities, redeemable noncontrolling interests, and equity	$	425		$	5,633	$	5,433	$	7,225		$	(6,233	)	$	12,483

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2019

(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	$	—	$	357	$	3	$	973	$	—		$	1,333
Accounts receivable, net	—		—		561		571		—			1,132
Other current assets	5		41		264		188		(50		)	448
Total current assets	5		398		828		1,732		(50		)	2,913
Property and equipment, net	1		31		659		96		(22		)	765
Investment in consolidated subsidiaries	2,270		3,558		—		—		(5,828		)	—
Goodwill	—		—		2,091		2,625		—			4,716
Indefinite-lived intangible assets	—		—		144		14		—			158
Definite-lived intangible assets, net	—		—		1,426		6,598		(47		)	7,977
Other long-term assets	82		1,611		279		618		(1,749		)	841
Total assets	$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370
Accounts payable and accrued liabilities	$	142	$	109	$	286	$	296	$	(51	)	$	782
Current portion of long-term debt	—		27		4		41		(1		)	71
Other current liabilities	—		1		133		147		—			281
Total current liabilities	142		137		423		484		(52		)	1,134
Long-term debt	700		4,348		32		8,317		(1,030		)	12,367
Other long-term liabilities	13		53		1,418		547		(934		)	1,097
Total liabilities	855		4,538		1,873		9,348		(2,016		)	14,598
Redeemable noncontrolling interests	—		—		—		1,078		—			1,078
Total Sinclair Broadcast Group equity	1,503		1,060		3,554		1,069		(5,684		)	1,502
Noncontrolling interests in consolidated subsidiaries	—		—		—		188		4			192
Total liabilities, redeemable noncontrolling interests, and equity	$	2,358	$	5,598	$	5,427	$	11,683	$	(7,696	)	$	17,370

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	25		$	774		$	786		$	(46	)	$	1,539
Media programming and production expenses	—			—			322			772			(17		)	1,077
Selling, general and administrative expenses	2			27			160			77			(24		)	242
Impairment of goodwill and definite-lived intangible assets	—			—			—			4,264			—			4,264
Depreciation, amortization and other operating expenses	1			1			40			133			(3		)	172
Total operating expenses	3			28			522			5,246			(44		)	5,755
Operating (loss) income	(3		)	(3		)	252			(4,460		)	(2		)	(4,216		)
Equity in (loss) earnings of consolidated subsidiaries	(3,252		)	302			—			—			2,950			—
Interest expense	(3		)	(45		)	(1		)	(114		)	6			(157		)
Other income (expense)	1			5			(11		)	168			(4		)	159
Total other (expense) income	(3,254		)	262			(12		)	54			2,952			2
Income tax benefit	1			55			64			727			—			847
Net (loss) income	(3,256		)	314			304			(3,679		)	2,950			(3,367		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(19		)	—			(19		)
Net loss attributable to the noncontrolling interests	—			—			—			130			—			130
Net (loss) income attributable to Sinclair Broadcast Group	$	(3,256	)	$	314		$	304		$	(3,568	)	$	2,950		$	(3,256	)
Comprehensive (loss) income	$	(3,256	)	$	314		$	304		$	(3,679	)	$	2,950		$	(3,367	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	9		$	702		$	445		$	(31	)	$	1,125
Media programming and production expenses	—			—			312			262			(14		)	560
Selling, general and administrative expenses	122			24			162			124			(10		)	422
Depreciation, amortization and other operating expenses	—			(6		)	55			104			(4		)	149
Total operating expenses	122			18			529			490			(28		)	1,131
Operating (loss) income	(122		)	(9		)	173			(45		)	(3		)	(6		)
Equity in earnings of consolidated subsidiaries	35			202			—			—			(237		)	—
Interest expense	(1		)	(55		)	(1		)	(76		)	4			(129		)
Other income (expense)	1			(2		)	(12		)	6			(2		)	(9		)
Total other income (expense)	35			145			(13		)	(70		)	(235		)	(138		)
Income tax benefit	27			4			43			21			—			95
Net (loss) income	(60		)	140			203			(94		)	(238		)	(49		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(11		)	—			(11		)
Net (loss) income attributable to Sinclair Broadcast Group	$	(60	)	$	140		$	203		$	(105	)	$	(238	)	$	(60	)
Comprehensive (loss) income	$	(60	)	$	140		$	203		$	(94	)	$	(238	)	$	(49	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	74		$	2,140		$	2,350		$	(133	)	$	4,431
Media programming and production expenses	—			—			962			1,371			(45		)	2,288
Selling, general and administrative expenses	8			97			479			207			(72		)	719
Impairment of goodwill and definite-lived intangible assets	—			—			—			4,264			—			4,264
Depreciation, amortization and other operating expenses	1			6			143			416			(9		)	557
Total operating expenses	9			103			1,584			6,258			(126		)	7,828
Operating (loss) income	(9		)	(29		)	556			(3,908		)	(7		)	(3,397		)
Equity in (loss) earnings of consolidated subsidiaries	(2,866		)	542			—			—			2,324			—
Interest expense	(10		)	(147		)	(3		)	(361		)	19			(502		)
Other income (expense)	—			11			(30		)	180			(10		)	151
Total other (expense) income	(2,876		)	406			(33		)	(181		)	2,333			(351		)
Income tax benefit	4			75			24			702			—			805
Net (loss) income	(2,881		)	452			547			(3,387		)	2,326			(2,943		)
Net income attributable to the redeemable noncontrolling interests	—			—			—			(51		)	—			(51		)
Net loss attributable to the noncontrolling interests	—			—			—			113			—			113
Net (loss) income attributable to Sinclair Broadcast Group	$	(2,881	)	$	452		$	547		$	(3,325	)	$	2,326		$	(2,881	)
Comprehensive (loss) income	$	(2,881	)	$	452		$	547		$	(3,396	)	$	2,326		$	(2,952	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in millions) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	9		$	2,064		$	616		$	(71	)	$	2,618
Media programming and production expenses	—			—			931			325			(41		)	1,215
Selling, general and administrative expenses	143			82			481			133			(12		)	827
Depreciation, amortization and other operating expenses	—			(3		)	203			193			(10		)	383
Total operating expenses	143			79			1,615			651			(63		)	2,425
Operating (loss) income	(143		)	(70		)	449			(35		)	(8		)	193
Equity in earnings of consolidated subsidiaries	116			410			—			—			(526		)	—
Interest expense	(2		)	(160		)	(2		)	(85		)	12			(237		)
Other income (expense)	2			3			(35		)	5			(1		)	(26		)
Total other income (expense)	116			253			(37		)	(80		)	(515		)	(263		)
Income tax benefit	31			33			3			21			—			88
Net income (loss)	4			216			415			(94		)	(523		)	18
Net income attributable to the redeemable noncontrolling interests	—			—			—			(11		)	—			(11		)
Net income attributable to the noncontrolling interests	—			—			—			(3		)	—			(3		)
Net income (loss) attributable to Sinclair Broadcast Group	$	4		$	216		$	415		$	(108	)	$	(523	)	$	4
Comprehensive income (loss)	$	4		$	216		$	415		$	(94	)	$	(523	)	$	18

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

(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	$	(115	)	$	(39	)	$	481		$	510		$	2		$	839
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(7		)	(110		)	(19		)	6			(130		)
Acquisition of businesses, net of cash acquired	—			—			(7		)	—			—			(7		)
Spectrum repack reimbursements	—			—			72			—			—			72
Proceeds from the sale of assets	—			—			36			—			—			36
Purchases of investments	(2		)	(30		)	(33		)	(20		)	—			(85		)
Other, net	1			—			(2		)	17			—			16
Net cash flows used in investing activities	(1		)	(37		)	(44		)	(22		)	6			(98		)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			648			—			299			—			947
Repayments of notes payable, commercial bank financing and finance leases	—			(670		)	(3		)	(272		)	—			(945		)
Repurchase of outstanding Class A Common Stock	(343		)	—			—			—			—			(343		)
Dividends paid on Class A and Class B Common Stock	(49		)	—			—			—			—			(49		)
Dividends paid on redeemable subsidiary preferred equity	—			—			—			(32		)	—			(32		)
Redemption of redeemable subsidiary preferred equity	—			—			—			(547		)	—			(547		)
Debt issuance costs	—			—			—			(7		)	—			(7		)
Distributions to noncontrolling interests, net	—			—			—			(19		)	—			(19		)
Distributions to redeemable noncontrolling interests	—			—			—			(378		)	—			(378		)
Increase (decrease) in intercompany payables	507			3			(433		)	(69		)	(8		)	—
Other, net	1			—			—			(69		)	—			(68		)
Net cash flows from (used in) financing activities	116			(19		)	(436		)	(1,094		)	(8		)	(1,441		)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(95		)	1			(606		)	—			(700		)
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			357			3			973			—			1,333
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	262		$	4		$	367		$	—		$	633

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(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	$	(4	)	$	(188	)	$	538		$	157		$	(9	)	$	494
NET CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment	—			(2		)	(99		)	(4		)	9			(96		)
Acquisition of businesses, net of cash acquired	—			—			—			(9,006		)	—			(9,006		)
Spectrum repack reimbursements	—			—			50			—			—			50
Purchases of investments	(2		)	(36		)	(42		)	(351		)	—			(431		)
Other, net	—			2			—			4			—			6
Net cash flows used in investing activities	(2		)	(36		)	(91		)	(9,357		)	9			(9,477		)
NET CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES
Proceeds from notes payable and commercial bank financing	—			1,294			—			8,159			—			9,453
Repayments of notes payable, commercial bank financing and finance leases	—			(706		)	(3		)	(26		)	20			(715		)
Proceeds from the issuance of redeemable subsidiary preferred equity, net	—			—			—			985			—			985
Repurchase of outstanding Class A Common Stock	(125		)	—			—			—			—			(125		)
Dividends paid on Class A and Class B Common Stock	(55		)	—			—			—			—			(55		)
Dividends paid on redeemable subsidiary preferred equity	—			—			—			(10		)	—			(10		)
Debt issuance costs	—			(15		)	—			(167		)	—			(182		)
Distributions to noncontrolling interests	—			—			—			(30		)	—			(30		)
Increase (decrease) in intercompany payables	186			(1,074		)	(454		)	1,362			(20		)	—
Other, net	—			1			—			—			—			1
Net cash flows from (used in) financing activities	6			(500		)	(457		)	10,273			—			9,322
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	—			(724		)	(10		)	1,073			—			339
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period	—			962			19			79			—			1,060
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, end of period	$	—		$	238		$	9		$	1,152		$	—		$	1,399