CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

9 Months Ended

Sep. 30, 2011

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS:

8. 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 Bank Credit Agreement, the 8.375% Notes and the 9.25% Notes and was the primary obligor under the 8.0% Senior Subordinated Notes due 2012 (the 8.0% Notes) until they were fully redeemed in 2010.  Our Class A Common Stock, Class B Common Stock, the 4.875% Notes and the 3.0% Notes, as of September 30, 2011 were obligations or securities of SBG and not obligations or securities of STG.  SBG was the obligor of the 6.0% Notes until they were fully redeemed in 2011.  SBG is a guarantor under the Bank Credit Agreement, the 9.25% Notes and the 8.375% Notes.  As of September 30, 2011 our consolidated total debt of $1,179.3 million included $1,125.2 million of debt related to STG and its subsidiaries of which SBG guaranteed $1,075.3 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 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 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, 2011

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—		$	45,690		$	453		$	15,224		$	—		$	61,367
Accounts and other receivables	36			131			109,670			5,155			(142		)	114,850
Other current assets	2,087			5,133			58,109			4,370			(271		)	69,428
Total current assets	2,123			50,954			168,232			24,749			(413		)	245,645
Property and equipment, net	8,651			2,577			174,008			98,056			(6,622		)	276,670
Investment in consolidated subsidiaries	—			572,787			—			—			(572,787		)	—
Restricted cash — long-term	—			20,001			223			—			—			20,224
Other long-term assets	84,691			335,056			20,586			96,130			(400,301		)	136,162
Total other long-term assets	84,691			927,844			20,809			96,130			(973,088		)	156,386
Acquired intangible assets	—			—			826,815			69,582			(11,248		)	885,149
Total assets	$	95,465		$	981,375		$	1,189,864		$	288,517		$	(991,371	)	$	1,563,850
Accounts payable and accrued liabilities	$	307		$	35,534		$	49,930		$	7,703		$	(2,186	)	$	91,288
Current portion of long-term debt	405			9,769			541			15,844			—			26,559
Current portion of affiliate long-term debt	965			—			1,961			45			(45		)	2,926
Other current liabilities	(10		)	—			78,741			395			—			79,126
Total current liabilities	1,667			45,303			131,173			23,987			(2,231		)	199,899
Long-term debt	12,879			1,054,406			37,668			51,804			—			1,156,757
Affiliate long-term debt	7,663			—			9,668			241,735			(241,736		)	17,330
Dividends in excess of investment in consolidated subsidiaries	159,804			—			—			—			(159,804		)	—
Other liabilities	46,644			1,598			439,090			55,489			(227,599		)	315,222
Total liabilities	228,657			1,101,307			617,599			373,015			(631,370		)	1,689,208
Common stock	809			—			10			—			(10		)	809
Additional paid-in capital	617,584			19,663			291,988			50,030			(361,681		)	617,584
Accumulated (deficit) earnings	(747,793		)	(137,279		)	281,941			(133,446		)	(11,216		)	(747,793		)
Accumulated other comprehensive (loss) income	(3,792		)	(2,316		)	(1,674		)	(1,082		)	5,072			(3,792		)
Total Sinclair Broadcast Group (deficit) equity	(133,192		)	(119,932		)	572,265			(84,498		)	(367,835		)	(133,192		)
Noncontrolling interests in consolidated subsidiaries	—			—			—			—			7,834			7,834
Total liabilities and equity (deficit)	$	95,465		$	981,375		$	1,189,864		$	288,517		$	(991,371	)	$	1,563,850

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2010

(in thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—		$	5,071		$	1,022		$	15,881		$	—		$	21,974
Restricted cash - current	—			5,058			—			—			—			5,058
Accounts and other receivables	43			99			115,615			5,765			(151		)	121,371
Other current assets	1,477			5,492			46,231			2,962			(284		)	55,878
Total current assets	1,520			15,720			162,868			24,608			(435		)	204,281
Property and equipment, net	9,856			2,669			169,260			97,219			(6,773		)	272,231
Investment in consolidated subsidiaries	—			609,737			—			—			(609,737		)	—
Restricted cash — long term	—			—			223			—			—			223
Other long-term assets	79,184			318,137			10,207			89,956			(380,339		)	117,145
Total other long-term assets	79,184			927,874			10,430			89,956			(990,076		)	117,368
Acquired intangible assets	—			—			829,884			64,694			(2,534		)	892,044
Total assets	$	90,560		$	946,263		$	1,172,442		$	276,477		$	(999,818	)	$	1,485,924
Accounts payable and accrued liabilities	$	512		$	19,733		$	46,734		$	8,110		$	(1,066	)	$	74,023
Current portion of long-term debt	363			3,300			391			15,502			—			19,556
Current portion of affiliate long-term debt	870			—			2,326			113			(113		)	3,196
Other current liabilities	—			—			70,428			693			—			71,121
Total current liabilities	1,745			23,033			119,879			24,418			(1,179		)	167,896
Long-term debt	79,091			995,269			38,098			57,282			—			1,169,740
Affiliate long-term debt	8,403			—			11,170			224,207			(224,207		)	19,573
Dividends in excess of investment in consolidated subsidiaries	122,994			—			—			—			(122,994		)	—
Other liabilities	43,750			1,709			394,192			47,154			(201,008		)	285,797
Total liabilities	255,983			1,020,011			563,339			353,061			(549,388		)	1,643,006
Common stock	804			—			10			282			(292		)	804
Additional paid-in capital	609,640			123,695			445,577			78,637			(647,909		)	609,640
Accumulated (deficit) earnings	(771,953		)	(195,049		)	165,316			(154,656		)	184,389			(771,953		)
Accumulated other comprehensive (loss) income	(3,914		)	(2,394		)	(1,800		)	(847		)	5,041			(3,914		)
Total Sinclair Broadcast Group shareholders’ (deficit) equity	(165,423		)	(73,748		)	609,103			(76,584		)	(458,771		)	(165,423		)
Noncontrolling interests in consolidated subsidiaries	—			—			—			—			8,341			8,341
Total liabilities and equity (deficit)	$	90,560		$	946,263		$	1,172,442		$	276,477		$	(999,818	)	$	1,485,924

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	169,499		$	13,583		$	(2,214	)	$	180,868
Program and production	—			331			43,062			83			(1,983		)	41,493
Selling, general and administrative	505			5,178			30,546			1,058			(157		)	37,130
Depreciation, amortization and other operating expenses	397			121			38,432			11,030			32			50,012
Total operating expenses	902			5,630			112,040			12,171			(2,108		)	128,635
Operating (loss) income	(902		)	(5,630		)	57,459			1,412			(106		)	52,233
Equity in earnings of consolidated subsidiaries	19,456			35,862			—			—			(55,318		)	—
Interest expense	(355		)	(21,942		)	(1,228		)	(6,154		)	5,216			(24,463		)
Other income (expense)	1,563			5,285			(5,169		)	928			(61		)	2,546
Total other income (expense)	20,664			19,205			(6,397		)	(5,226		)	(50,163		)	(21,917		)
Income tax (provision) benefit	(523		)	3,894			(14,457		)	211			—			(10,875		)
Loss from discontinued operations	—			(110		)	—			—			—			(110		)
Net income (loss)	19,239			17,359			36,605			(3,603		)	(50,269		)	19,331
Net income attributable to the noncontrolling interests	—			—			—			—			(93		)	(93		)
Net income (loss) attributable to Sinclair Broadcast Group	$	19,239		$	17,359		$	36,605		$	(3,603	)	$	(50,362	)	$	19,238

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	176,892		$	12,023		$	(2,463	)	$	186,452
Program and production	—			214			40,551			104			(2,250		)	38,619
Selling, general and administrative	498			5,444			31,649			1,006			(131		)	38,466
Depreciation, amortization and other operating expenses	481			105			43,255			9,422			9			53,272
Total operating expenses	979			5,763			115,455			10,532			(2,372		)	130,357
Operating (loss) income	(979		)	(5,763		)	61,437			1,491			(91		)	56,095
Equity in earnings of consolidated subsidiaries	16,409			32,631			—			—			(49,040		)	—
Interest expense	(3,560		)	(25,969		)	(1,265		)	(5,667		)	5,112			(31,349		)
Other income (expense)	882			2,086			(5,224		)	(3,091		)	(32		)	(5,379		)
Total other income (expense)	13,731			8,748			(6,489		)	(8,758		)	(43,960		)	(36,728		)
Income tax benefit (provision)	1,524			13,215			(21,475		)	1,582			—			(5,154		)
Loss from discontinued operations	—			—			(68		)	—			—			(68		)
Net income (loss)	14,276			16,200			33,405			(5,685		)	(44,051		)	14,145
Net loss attributable to the noncontrolling interests	—			—			—			—			131			131
Net income (loss) attributable to Sinclair Broadcast Group	$	14,276		$	16,200		$	33,405		$	(5,685	)	$	(43,920	)	$	14,276

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	520,893		$	37,958		$	(6,727	)	$	552,124
Program and production	—			958			131,677			254			(6,134		)	126,755
Selling, general and administrative	1,830			18,962			90,440			2,738			(349		)	113,621
Depreciation, amortization and other operating expenses	1,205			404			117,409			30,900			98			150,016
Total operating expenses	3,035			20,324			339,526			33,892			(6,385		)	390,392
Operating (loss) income	(3,035		)	(20,324		)	181,367			4,066			(342		)	161,732
Equity in earnings of consolidated subsidiaries	57,906			102,960			—			—			(160,866		)	—
Interest expense	(2,934		)	(69,463		)	(3,717		)	(17,851		)	15,401			(78,564		)
Gain on sales of securities	—			—			—			391			(391		)	—
Other (expense) income	(793		)	16,047			(14,818		)	1,610			(278		)	1,768
Total other income (expense)	54,179			49,544			(18,535		)	(15,850		)	(146,134		)	(76,796		)
Income tax benefit (provision)	1,953			22,647			(57,278		)	977			—			(31,701		)
Loss from discontinued operations	—			(300		)	—			—			—			(300		)
Net income (loss)	53,097			51,567			105,554			(10,807		)	(146,476		)	52,935
Net loss attributable to the noncontrolling interests	—			—			—			—			161			161
Net income (loss) attributable to Sinclair Broadcast Group	$	53,097		$	51,567		$	105,554		$	(10,807	)	$	(146,315	)	$	53,096

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

(in thousands) (unaudited)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	516,907		$	32,496		$	(7,772	)	$	541,631
Program and production	—			681			119,139			274			(6,912		)	113,182
Selling, general and administrative	1,623			17,649			92,078			2,575			(436		)	113,489
Depreciation, amortization and other operating expenses	1,342			303			127,597			26,734			(29		)	155,947
Total operating expenses	2,965			18,633			338,814			29,583			(7,377		)	382,618
Operating (loss) income	(2,965		)	(18,633		)	178,093			2,913			(395		)	159,013
Equity in earnings of consolidated subsidiaries	50,692			94,189			—			—			(144,881		)	—
Interest expense	(11,371		)	(71,907		)	(3,921		)	(16,547		)	15,046			(88,700		)
Other income (expense)	2,058			12,453			(15,127		)	(4,390		)	(82		)	(5,088		)
Total other income (expense)	41,379			34,735			(19,048		)	(20,937		)	(129,917		)	(93,788		)
Income tax benefit (provision)	4,655			31,199			(62,030		)	3,244			—			(22,932		)
Loss from discontinued operations	—			—			(202		)	—			—			(202		)
Net income (loss)	43,069			47,301			96,813			(14,780		)	(130,312		)	42,091
Net loss attributable to the noncontrolling interests	—			—			—			—			978			978
Net income (loss) attributable to Sinclair Broadcast Group	$	43,069		$	47,301		$	96,813		$	(14,780	)	$	(129,334	)	$	43,069

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

(in thousands) (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	$	(14,407	)	$	(47,986	)	$	189,301		$	3,213		$	(1,771	)	$	128,350
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(403		)	(25,126		)	(1,265		)	—			(26,794		)
Acquisition of intangibles	—			—			—			(242		)	—			(242		)
Purchase of alarm monitoring contracts	—			—			—			(6,930		)	—			(6,930		)
Increase in restricted cash	—			(14,943		)	—			—			—			(14,943		)
Dividends and distributions from equity and cost method investments	—			—			—			2,632			—			2,632
Investment in equity and cost method investees	(2,000		)	—			—			(7,414		)	—			(9,414		)
Purchase of investments	—			—			—			(4,820		)	—			(4,820		)
Proceeds from insurance settlement	—			—			1,736			—			—			1,736
Proceeds from sales of assets	—			—			56			10			—			66
Proceeds from sale of securities	—			—			—			1,808			(1,808		)	—
Proceeds from sale of equity investment	—			—			—			1,166			—			1,166
Loans to affiliates	(143		)	—			—			—			—			(143		)
Proceeds from loans to affiliates	152			—			—			—			—			152
Net cash flows used in investing activities	(1,991		)	(15,346		)	(23,334		)	(15,055		)	(1,808		)	(57,534		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			124,719			—			11,630			—			136,349
Repayments of notes payable, commercial bank financing and capital leases	(57,022		)	(60,976		)	(313		)	(16,839		)	—			(135,150		)
Proceeds from exercise of stock options, including excess tax benefits of share based payments	1,730			—			—			—			—			1,730
Dividends paid on Class A and Class B Common Stock	(29,105		)	—			—			—			169			(28,936		)
Payments for deferred financing costs	—			(4,299		)	—			(66		)	—			(4,365		)
Proceeds from Class A Common Stock sold by variable interest entity	—			—			—			—			1,808			1,808
Noncontrolling interests distributions	—			—			—			(346		)	—			(346		)
Repayment of notes and capital leases to affiliates	(645		)	—			(1,868		)	—			—			(2,513		)
Increase (decrease) in intercompany payables	101,440			44,507			(164,355		)	16,806			1,602			—
Net cash flows from (used in) financing activities	16,398			103,951			(166,536		)	11,185			3,579			(31,423		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			40,619			(569		)	(657		)	—			39,393
CASH AND CASH EQUIVALENTS, beginning of period	—			5,071			1,022			15,881			—			21,974
CASH AND CASH EQUIVALENTS, end of period	$	—		$	45,690		$	453		$	15,224		$	—		$	61,367

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

(in thousands) (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	$	(13,966	)	$	(59,095	)	$	183,105		$	(589	)	$	(2,520	)	$	106,935
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(3,351		)	(4,725		)	(1,722		)	—			(9,798		)
Purchase of alarm monitoring contracts	—			—			—			(7,656		)	—			(7,656		)
Dividends and distributions from equity and cost method investments	709			—			—			185			—			894
Investments in equity and cost method investees	(2,000		)	—			—			(8,509		)	—			(10,509		)
Decrease in restricted cash	—			59,342			197			—			—			59,539
Loans to affiliates	(102		)	—			—			—			—			(102		)
Proceeds from loans to affiliates	115			—			—			—			—			115
Net cash flows (used in) from investing activities	(1,278		)	55,991			(4,528		)	(17,702		)	—			32,483
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			17,650			—			15,406			—			33,056
Repayments of notes payable, commercial bank financing and capital leases	(56,806		)	(77,687		)	(224		)	(15,706		)	—			(150,423		)
Payments for deferred financing costs	—			(1,304		)	—			—			—			(1,304		)
Noncontrolling interests distributions	—			—			—			(175		)	—			(175		)
Repayments of notes and capital leases to affiliates	(559		)	—			(1,740		)	—			—			(2,299		)
Increase (decrease) in intercompany payables	72,609			80,012			(176,597		)	21,456			2,520			—
Net cash flows from (used in) financing activities	15,244			18,671			(178,561		)	20,981			2,520			(121,145		)
NET INCREASE IN CASH AND CASH EQUIVALENTS	—			15,567			16			2,690			—			18,273
CASH AND CASH EQUIVALENTS, beginning of period	—			10,364			217			12,643			—			23,224
CASH AND CASH EQUIVALENTS, end of period	$	—		$	25,931		$	233		$	15,333		$	—		$	41,497