CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

12 Months Ended

Dec. 31, 2011

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

14.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

Sinclair Television Group, Inc. (STG), a wholly-owned subsidiary and the television operating subsidiary of Sinclair Broadcast Group, Inc. (SBG), was 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% 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 December 31, 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 December 31, 2011 our consolidated total debt of $1,206.0 million included $1,119.1 million of debt related to STG and its subsidiaries of which SBG guaranteed $1,067.6 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 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 CONSOLIDATED BALANCE SHEET

AS OF DECEMBER 31, 2011

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non-Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Cash	$	—		$	188		$	313		$	12,466		$	—		$	12,967
Restricted cash - current	—			—			—			—			—			—
Accounts and other receivables	60			348			126,590			6,308			(139		)	133,167
Other current assets	2,430			2,561			55,855			3,021			(284		)	63,583
Total current assets	2,490			3,097			182,758			21,795			(423		)	209,717
Property and equipment, net	8,234			7,783			171,749			100,362			(6,607		)	281,521
Investment in consolidated subsidiaries	—			575,848			—			—			(575,848		)	—
Restricted cash — long term	—			58,503			223			—			—			58,726
Other long-term assets	86,186			353,929			17,209			99,683			(418,014		)	138,993
Total other long-term assets	86,186			988,280			17,432			99,683			(993,862		)	197,719
Acquired intangible assets	—			—			826,175			70,492			(14,207		)	882,460
Total assets	$	96,910		$	999,160		$	1,198,114		$	292,332		$	(1,015,099	)	$	1,571,417
Accounts payable and accrued liabilities	$	1,499		$	30,888		$	51,119		$	7,555		$	(2,491	)	$	88,570
Current portion of long-term debt	420			14,450			589			22,736			—			38,195
Current portion of affiliate long-term debt	998			—			2,016			210			(210		)	3,014
Other current liabilities	—			—			65,431			372			—			65,803
Total current liabilities	2,917			45,338			119,155			30,873			(2,701		)	195,582
Long-term debt	12,811			1,055,446			37,502			42,512			—			1,148,271
Affiliate long-term debt	7,405			—			9,140			246,552			(246,552		)	16,545
Dividends in excess of investment in consolidated subsidiaries	143,857			—			—			—			(143,857		)	—
Other liabilities	51,095			2,222			457,003			58,222			(246,161		)	322,381
Total liabilities	218,085			1,103,006			622,800			378,159			(639,271		)	1,682,779
Common stock	809			—			10			—			(10		)	809
Additional paid-in capital	617,375			7,755			264,413			54,304			(326,472		)	617,375
Accumulated (deficit) earnings	(734,511		)	(108,558		)	313,269			(140,581		)	(64,130		)	(734,511		)
Accumulated other comprehensive (loss) income	(4,848		)	(3,043		)	(2,378		)	450			4,971			(4,848		)
Total Sinclair Broadcast Group shareholders’ (deficit) equity	(121,175		)	(103,846		)	575,314			(85,827		)	(385,641		)	(121,175		)
Noncontrolling interest in consolidated subsidiaries	—						—			—			9,813			9,813
Total liabilities and equity (deficit)	$	96,910		$	999,160		$	1,198,114		$	292,332		$	(1,015,099	)	$	1,571,417

CONDENSED CONSOLIDATED 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	(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 interest 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 CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2011

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	721,936		$	52,295		$	(8,943	)	$	765,288
Program and production	—			1,298			185,038			338			(8,062		)	178,612
Selling, general and administrative	2,396			25,160			121,391			3,765			(464		)	152,248
Depreciation, amortization and other operating expenses	1,622			688			160,432			45,903			163			208,808
Total operating expenses	4,018			27,146			466,861			50,006			(8,363		)	539,668
Operating (loss) income	(4,018		)	(27,146		)	255,075			2,289			(580		)	225,620
Equity in earnings of consolidated subsidiaries	83,354			134,996			—			—			(218,350		)	—
Interest expense	(3,285		)	(94,556		)	(4,931		)	(23,978		)	20,622			(106,128		)
Gain on Sales of Securities	—			—			—			391			(391		)	—
Other income (expense)	1,781			35,255			(36,142		)	1,560			(573		)	1,881
Total other income (expense)	81,850			75,695			(41,073		)	(22,027		)	(198,692		)	(104,247		)
Income tax (provision) benefit	(2,034		)	29,783			(75,449		)	2,915			—			(44,785		)
Loss from discontinued operations, net of taxes	—			(411		)	—			—			—			(411		)
Net income (loss)	75,798			77,921			138,553			(16,823		)	(199,272		)	76,177
Net loss attributable to the noncontrolling interest	—						—			—			(379		)	(379		)
Net income (loss) attributable to Sinclair Broadcast Group	$	75,798		$	77,921		$	138,553		$	(16,823	)	$	(199,651	)	$	75,798

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2010

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	732,214		$	45,351		$	(9,921	)	$	767,644
Program and production	—			893			161,746			369			(8,875		)	154,133
Selling, general and administrative	2,205			23,530			125,106			3,597			(547		)	153,891
Depreciation, amortization and other operating expenses	1,756			518			179,345			37,022			164			218,805
Total operating expenses	3,961			24,941			466,197			40,988			(9,258		)	526,829
Operating (loss) income	(3,961		)	(24,941		)	266,017			4,363			(663		)	240,815
Equity in earnings of consolidated subsidiaries	85,974			136,815			—			—			(222,789		)	—
Interest expense	(13,611		)	(95,089		)	(5,204		)	(22,334		)	20,192			(116,046		)
Other income (expense)	1,666			33,389			(36,506		)	(7,026		)	(441		)	(8,918		)
Total other income (expense)	74,029			75,115			(41,710		)	(29,360		)	(203,038		)	(124,964		)
Income tax benefit (provision)	6,080			31,654			(84,073		)	6,113			—			(40,226		)
Loss from discontinued operations, net of taxes	—			(577		)	—			—			—			(577		)
Net income (loss)	76,148			81,251			140,234			(18,884		)	(203,701		)	75,048
Net loss attributable to the noncontrolling interest	—			—			—			—			1,100			1,100
Net income (loss) attributable to Sinclair Broadcast Group	$	76,148		$	81,251		$	140,234		$	(18,884	)	$	(202,601	)	$	76,148

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2009

(In thousands)

	Sinclair Broadcast Group, Inc.			Sinclair Television Group, Inc.			Guarantor Subsidiaries and KDSM, LLC			Non- Guarantor Subsidiaries			Eliminations			Sinclair Consolidated
Net revenue	$	—		$	—		$	614,388		$	52,278		$	(9,676	)	$	656,990
Program and production	—			721			149,528			480			(8,314		)	142,415
Selling, general and administrative	16,249			8,701			119,779			4,334			(598		)	148,465
Depreciation, amortization and other operating expenses	17,893			541			427,559			38,250			(7,416		)	476,827
Total operating expenses	34,142			9,963			696,866			43,064			(16,328		)	767,707
Operating (loss) income	(34,142		)	(9,963		)	(82,478		)	9,214			6,652			(110,717		)
Equity in losses of consolidated subsidiaries	(101,049		)	(115,681		)	—			—			216,730			—
Interest income	844			21,853			—			1,805			(24,443		)	59
Interest expense	(36,454		)	(35,828		)	(5,871		)	(27,346		)	25,478			(80,021		)
Other income (expense)	32,611			23,523			(35,746		)	(699		)	530			20,219
Total other (expense) income	(104,048		)	(106,133		)	(41,617		)	(26,240		)	218,295			(59,743		)
Income tax benefit	2,577			7,749			10,421			11,765			—			32,512
Loss from discontinued operations, net of taxes	(81		)	—			—			—			—			(81		)
Net (loss) income	(135,694		)	(108,347		)	(113,674		)	(5,261		)	224,947			(138,029		)
Net loss attributable to the noncontrolling interest	—						—			—			2,335			2,335
Net (loss) income attributable to Sinclair Broadcast Group	$	(135,694	)	$	(108,347	)	$	(113,674	)	$	(5,261	)	$	227,282		$	(135,694	)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2011

(In thousands)

	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	$	(10,424	)	$	(65,150	)	$	225,516		$	728		$	(2,157	)	$	148,513
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(3,503		)	(30,950		)	(1,382		)	—			(35,835		)
Purchase of alarm monitoring contracts	—			—			—			(8,850		)	—			(8,850		)
Increase in restricted cash	—			(53,445		)	—			—			—			(53,445		)
Distributions from investments	—			—			—			2,632			—			2,632
Investments in equity and cost method investees	(4,000		)	—			—			(7,577		)	—			(11,577		)
Investment in debt securities	—			—			—			(4,911		)	—			(4,911		)
Payments for acquisitions of assets of other operating divisions	—			—			—			(3,072		)	—			(3,072		)
Proceeds from sale of assets	—			—			59			10			—			69
Proceeds from sale of securities	—			—			—			1,808			(1,808		)	—
Proceeds from insurance settlement	—			—			1,739			—			—			1,739
Proceeds from the sale of equity method investment	—			—			—			1,166			—			1,166
Loans to affiliates	(194		)	(212		)	—			—			—			(406		)
Proceeds from loans to affiliates	199			—			—			43			—			242
Net cash flows used in investing activities	(3,995		)	(57,160		)	(29,152		)	(20,133		)	(1,808		)	(112,248		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			136,719			—			15,014			—			151,733
Repayments of notes payable, commercial bank financing and capital leases	(57,120		)	(70,234		)	(432		)	(22,661		)	—			(150,447		)
Proceeds from share based awards	1,794			—			—			—			—			1,794
Purchase of subsidiary shares from noncontrolling interests	—			—			—			(2,501		)	—			(2,501		)
Dividends paid on Class A and Class B Common Stock	(38,820		)	—			—			—			464			(38,356		)
Payments for deferred financing costs	—			(5,417		)	—			(66		)	—			(5,483		)
Proceeds from Class A Common Stock sold by variable interest entity	—			—			—			—			1,808			1,808
Distributions from noncontrolling interests	—			—			—			(610		)	—			(610		)
Repayments of notes and capital leases to affiliates	(869		)	—			(2,341		)	—			—			(3,210		)
Increase (decrease) in intercompany payables	109,434			56,359			(194,300		)	26,814			1,693			—
Net cash flows from (used in) financing activities	14,419			117,427			(197,073		)	15,990			3,965			(45,272		)
NET DECREASE IN CASH AND CASH EQUIVALENTS	—			(4,883		)	(709		)	(3,415		)	—			(9,007		)
CASH AND CASH EQUIVALENTS, beginning of period	—			5,071			1,022			15,881			—			21,974
CASH AND CASH EQUIVALENTS, end of period	$	—		$	188		$	313		$	12,466		$	—		$	12,967

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2010

(In thousands)

	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	$	(25,213	)	$	(76,450	)	$	265,706		$	(5,729	)	$	(3,353	)	$	154,961
CASH FLOWS (USED IN) FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	—			(3,686		)	(6,173		)	(1,835		)	—			(11,694		)
Purchase of alarm monitoring contracts	—			—			—			(10,106		)	—			(10,106		)
Decrease in restricted cash	—			59,342			260			—			—			59,602
Distributions from investments	709			—			—			185			—			894
Investments in equity and cost method investees	(2,000		)	—			—			(5,224		)	—			(7,224		)
Proceeds from sale of assets	—			—			110			—			—			110
Loans to affiliates	(136		)	—			—			—			—			(136		)
Proceeds from loans to affiliates	117			—			—			—			—			117
Proceeds from insurance settlement	—			—			372			—			—			372
Net cash flows (used in) from investing activities	(1,310		)	55,656			(5,431		)	(16,980		)	—			31,935
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			264,068			—			19,862			—			283,930
Repayments of notes payable, commercial bank financing and capital leases	(103,878		)	(302,350		)	(317		)	(20,876		)	—			(427,421		)
Dividends paid on Class A and Class B Common Stock	(34,557		)	—			—			—			332			(34,225		)
Payments for deferred financing costs	—			(7,016		)	—			(4		)	—			(7,020		)
Distributions from noncontrolling interests	—			—			—			(287		)	—			(287		)
Repayments of notes and capital leases to affiliates	(753		)	—			(2,370		)	—			—			(3,123		)
Increase (decrease) in intercompany payables	165,711			60,799			(256,783		)	27,252			3,021			—
Net cash flows from (used in) financing activities	26,523			15,501			(259,470		)	25,947			3,353			(188,146		)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	—			(5,293		)	805			3,238			—			(1,250		)
CASH AND CASH EQUIVALENTS, beginning of period	—			10,364			217			12,643			—			23,224
CASH AND CASH EQUIVALENTS, end of period	$	—		$	5,071		$	1,022		$	15,881		$	—		$	21,974

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2009

(In thousands)

	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	$	(56,248	)	$	(3,833	)	$	171,883		$	(1,364	)	$	(5,002	)	$	105,436
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Acquisition of property and equipment	(43		)	(1,215		)	(4,508		)	(1,927		)	—			(7,693		)
Purchase of alarm monitoring contracts	—			—			—			(12,291		)	—			(12,291		)
Increase in restricted cash	—			(64,399		)	(484		)	—			—			(64,883		)
Distributions from investments	—			—			—			1,501			—			1,501
Investments in equity and cost method investees	(3,333		)	—			—			(7,268		)	—			(10,601		)
Proceeds from sale of assets	—			—			126			—			—			126
Loans to affiliates	(162		)	—			—			—			—			(162		)
Proceeds from loans to affiliates	157			—			—			—			—			157
Net cash flows used in investing activities	(3,381		)	(65,614		)	(4,866		)	(19,985		)	—			(93,846		)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Proceeds from notes payable, commercial bank financing and capital leases	—			946,184			—			34,691			—			980,875
Repayments of notes payable, commercial bank financing and capital leases	(378,183		)	(536,100		)	(447		)	(16,836		)	—			(931,566		)
Purchase of subsidiary shares from noncontrolling interest	—			—			—			(5,000		)	—			(5,000		)
Repurchase of Class A Common Stock	(1,454		)	—			—			—			—			(1,454		)
Dividends paid on Class A and Class B Common Stock	(16,193		)	—			—			—			155			(16,038		)
Payments for deferred financing costs	—			(28,278		)	—			(537		)	—			(28,815		)
Contributions to noncontrolling interests	—			—			—			26			—			26
Repayments of notes and capital leases to affiliates	(648		)	—			(2,216		)	—			—			(2,864		)
Increase (decrease) in intercompany payables	456,107			(311,643		)	(164,366		)	15,055			4,847			—
Net cash flows from (used in) financing activities	59,629			70,163			(167,029		)	27,399			5,002			(4,836		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	—			716			(12		)	6,050			—			6,754
CASH AND CASH EQUIVALENTS, beginning of period	—			9,649			227			6,594			—			16,470
CASH AND CASH EQUIVALENTS, end of period	$	—		$	10,365		$	215		$	12,644		$	—		$	23,224